Question 1

Which of the following will cause the demand curve for a good to shift to the left?

Accepted Answer

A)   an increase in the price of the good
B)   a decrease in the price of the good
C)   a decrease in the price of a complementary good
D)   an expectation of a future price decline
E)   an increase in the price of a substitute goodF) A) and C)
G) None of the above

Question 2

If demand decreases and supply increases,price will

Accepted Answer

A)   always increase
B)   always decrease
C)   increase only if supply increases more than demand decreases
D)   increase only if supply increases less than demand decreases
E)   decrease only if supply increases more than demand decreasesF) B) and D)
G) A) and D)

Question 3

Which of the following is most likely to be an inferior good?

Accepted Answer

A)   airline travel
B)   restaurant meals
C)   a subscription to the Wall Street Journal
D)   soft drinks
E)   used clothingF) A) and D)
G) A) and E)

Question 4

A decrease in demand will result in a(n)

Accepted Answer

A)   increase in equilibrium price and quantity
B)   decrease in equilibrium price and quantity
C)   decrease in equilibrium price and an increase in equilibrium quantity
D)   increase in equilibrium price and a decrease in equilibrium quantity
E)   change in equilibrium price and quantity only if supply changes tooF) A) and B)
G) B) and C)

Question 5

If demand decreases,then quantity supplied will increase.

Accepted Answer

A) True 
 B)False

Question 6

The law of demand says that as the price of a good rises,

Accepted Answer

A)   buyers recognize that price may be even higher in the future,and so they buy now
B)   buyers purchase less in hopes that the price will fall in the future
C)   buyers purchase less,in part because their real income has fallen
D)   buyers purchase more,in part because the price of a substitute has risen
E)   buyers purchase more,in part because it has higher status at a higher priceF) C) and E)
G) C) and D)

Question 7

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.If these attempts are successful,what will happen to the equilibrium price and quantity of potatoes?

Accepted Answer

A)   Price will increase and quantity decrease.
B)   Price will increase and quantity increase.
C)   Price will decrease and quantity increase.
D)   Price will decrease and quantity decrease.
E)   No change in equilibrium price and quantity will occur.F) A) and B)
G) A) and D)

Question 8

Movements along a demand curve are called changes in

Accepted Answer

A)   demand
B)   opportunity costs
C)   quantity demanded
D)   the substitution effect
E)   preferencesF) C) and E)
G) B) and D)

Question 9

Exhibit 4-5 
-Exhibit 4-5 depicts the milk market.The horizontal line,P,represents a price ceiling imposed by the government.Which of the following is true?

Accepted Answer

A)   In equilibrium,the quantity demanded is 800 gallons.
B)   At the ceiling price,there is a surplus.
C)   The quantity demanded at the price ceiling will equal the quantity supplied.
D)   The equilibrium price would be $1 per unit without the price ceiling.
E)   The quantity supplied at the price ceiling will equal the quantity sold.F) D) and E)
G) A) and B)

Question 10

Saccharin and aspartame are both low-calorie substitutes for sugar.If saccharin is found to cause cancer,

Accepted Answer

A)   the price of aspartame will increase
B)   the price of sugar will decrease
C)   the price of saccharin will increase
D)   the demand curves for aspartame and sugar will shift leftward
E)   aspartame and sugar will be complementsF) A) and E)
G) A) and B)

Question 11

Assume that supply increases slightly and demand increases greatly.Which of the following will happen?

Accepted Answer

A)   equilibrium price will fall and equilibrium quantity will rise
B)   equilibrium price will rise and equilibrium quantity will fall
C)   equilibrium price will rise and equilibrium quantity will rise
D)   equilibrium price will fall and equilibrium quantity will fall
E)   neither equilibrium price nor equilibrium quantity will changeF) A) and B)
G) B) and E)

Question 12

Which of the following will cause the demand curve for a normal good to shift to the right?

Accepted Answer

A)   a decrease in income
B)   an increase in the price of a complementary good
C)   a decrease in the price of the good
D)   an increase in the price of a substitute good
E)   an expectation of a future price declineF) All of the above
G) B) and C)

Question 13

The effect of an increase in consumer income on equilibrium price and quantity of Florida orange juice (a normal good) is

Accepted Answer

A)   to increase equilibrium price and quantity
B)   to decrease equilibrium price and quantity
C)   to increase equilibrium price and decrease equilibrium quantity
D)   to increase equilibrium quantity and decrease equilibrium price
E)   that equilibrium price and quantity remain constantF) C) and D)
G) A) and E)

Question 14

If the price of vanilla ice cream decreases,it is likely that

Accepted Answer

A)   demand for vanilla ice cream will increase
B)   demand for vanilla ice cream will decrease
C)   demand for chocolate ice cream will increase
D)   demand for chocolate ice cream will decrease
E)   the quantity demanded of vanilla ice cream will decreaseF) D) and E)
G) A) and D)

Question 15

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which is the exception?

Accepted Answer

A)   an increase in the number of new apartment complexes being built
B)   long waiting lists for apartment seekers
C)   lower maintenance of existing apartments
D)   conversion of some apartment complexes to condos
E)   a shortageF) A) and C)
G) A) and B)

Question 16

A new hormone will increase the amount of milk each cow produces.If this hormone is adopted by many dairies,what will be the effect on the milk market?

Accepted Answer

A)   an increase in supply,higher equilibrium price,and lower equilibrium quantity
B)   a decrease in supply,lower equilibrium price,and lower equilibrium quantity
C)   an increase in supply,lower equilibrium price,and higher equilibrium quantity
D)   an increase in supply,higher equilibrium price,and higher equilibrium quantity
E)   a decrease in supply,lower equilibrium price,and higher equilibrium quantityF) B) and D)
G) A) and D)

Question 17

Which of the following could shift the demand for a good to the right?

Accepted Answer

A)   a decrease in income,if the good is a normal good
B)   an increase in the price of a complementary good
C)   a decrease in the good's price,if the good is normal
D)   an increase in the good's price,if the good is inferior
E)   an expectation of a future price increaseF) A) and B)
G) C) and D)

Question 18

Recently it has been discovered that lobsters grown on lobster farms can feed on algae,which is a cheaper lobster food.As a result of this discovery,

Accepted Answer

A)   the supply curve for lobster will shift to the left
B)   the supply curve for lobster will shift to the right
C)   there will be an increase in the quantity of lobsters supplied
D)   there will be a decrease in the quantity of lobsters supplied
E)   both supply and demand curves will shift to the rightF) B) and E)
G) All of the above

Question 19

Exhibit 4-1
 
-If the price of the good described in Exhibit 4-1 is $1.20,then there is a

Accepted Answer

A)   shortage of 30 units
B)   surplus of 30 units
C)   shortage of 60 units
D)   surplus of 60 units
E)   surplus of 20 unitsF) C) and E)
G) A) and D)

Question 20

If the price of potato chips increases,other things constant,demand for potato-chip dip will

Accepted Answer

A)   not change; only quantity demanded will change
B)   increase because the goods are substitutes
C)   decrease because the goods are substitutes
D)   decrease because the goods are complements
E)   increase because the goods are complementsF) B) and C)
G) C) and D)

Exam 4: Demand, Supply, and Markets

Which of the following could shift the demand for a good to the right?

Correct AnswerverifiedShow Answer

If the government imposes a ceiling price on apartment rents,we would expect to observe all of the following except one.Which is the exception?

Correct AnswerverifiedShow Answer

The law of demand says that as the price of a good rises,

Correct AnswerverifiedShow Answer

The effect of an increase in consumer income on equilibrium price and quantity of Florida orange juice (a normal good) is

Correct AnswerverifiedShow Answer

A decrease in demand will result in a(n)

Correct AnswerverifiedShow Answer

Which of the following is most likely to be an inferior good?

Correct AnswerverifiedShow Answer

A new hormone will increase the amount of milk each cow produces.If this hormone is adopted by many dairies,what will be the effect on the milk market?

Correct AnswerverifiedShow Answer

Exhibit 4-5 -Exhibit 4-5 depicts the milk market.The horizontal line,P,represents a price ceiling imposed by the government.Which of the following is true?

Correct AnswerverifiedShow Answer

Recently it has been discovered that lobsters grown on lobster farms can feed on algae,which is a cheaper lobster food.As a result of this discovery,

Correct AnswerverifiedShow Answer

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.If these attempts are successful,what will happen to the equilibrium price and quantity of potatoes?

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for a good to shift to the left?

Correct AnswerverifiedShow Answer

If the price of potato chips increases,other things constant,demand for potato-chip dip will

Correct AnswerverifiedShow Answer

Saccharin and aspartame are both low-calorie substitutes for sugar.If saccharin is found to cause cancer,

Correct AnswerverifiedShow Answer

If the price of vanilla ice cream decreases,it is likely that

Correct AnswerverifiedShow Answer

Exhibit 4-1 -If the price of the good described in Exhibit 4-1 is $1.20,then there is a

Correct AnswerverifiedShow Answer

Movements along a demand curve are called changes in

Correct AnswerverifiedShow Answer

Assume that supply increases slightly and demand increases greatly.Which of the following will happen?

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for a normal good to shift to the right?

Correct AnswerverifiedShow Answer

If demand decreases,then quantity supplied will increase.

Correct AnswerverifiedShow Answer

If demand decreases and supply increases,price will

Correct AnswerverifiedShow Answer

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