Question 1

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)  At equilibrium,demand equals supply.
B)  At equilibrium,quantity demanded equals quantity supplied.
C)  At equilibrium,market forces no longer apply.
D)  At equilibrium,scarcity is eliminated.E) B) and C)
F) A) and D)

Question 2

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated.
a.Digital camera and memory stick
b.7Up and Mountain Dew
c.Swimsuits and flip-flops
d.Tylenol and cat food
e.Photocopier and paper

Accepted Answer

a.Complements
b.Subs...

Question 3

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Accepted Answer

A)  both the equilibrium price and quantity of MP3 players will increase.
B)  the equilibrium price of MP3 players will increase;the equilibrium quantity may increase or decrease.
C)  the equilibrium price of MP3 players may increase or decrease;the equilibrium quantity will increase.
D)  the equilibrium price of MP3 players will decrease;the equilibrium quantity may increase or decrease.E) B) and C)
F) A) and C)

Question 4

When the price of a good falls,consumers buy a larger quantity because of the ________ effect and the ________ effect.

Accepted Answer

A)  substitution;income
B)  normal;inferior
C)  substitute;complement;
D)  supply;demandE) A) and D)
F) B) and C)

Question 5

What are the two effects that explain the Law of Demand? Briefly explain each effect.

Accepted Answer

The two effects that explain the Law of ...

Question 6

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Accepted Answer

A)  The supply curve shifts to the right.
B)  The supply curve shifts to the left.
C)  The quantity demanded and the quantity supplied of platinum increase.
D)  The demand curve shifts to the right.E) B) and C)
F) C) and D)

Question 7

If the price of a product is above equilibrium,what forces it down?

Accepted Answer

When the price is above equilibrium,a su...

Question 8

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Accepted Answer

A)  a decrease in the price of flour
B)  an increase in the price of flour
C)  an increase in the price of rye bread,a substitute for white bread
D)  an increase in the price of butter,a complement for white breadE) A) and D)
F) A) and C)

Question 9

Discuss the correct and incorrect economic analysis in the following statements.
"The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers.This increase in the wage rate causes an increase in demand for automobiles,since many consumers now have greater incomes,and also a decrease in the supply of automobiles because the cost of production has increased.These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."

Accepted Answer

The wage rate is a determinant of the su...

Question 10

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Accepted Answer

A)  The supply curve shifted to the left.
B)  The supply curve shifted to the right.
C)  The demand curve shifted to the right.
D)  The demand curve shifted to the left.E) All of the above
F) A) and B)

Question 11

The law of demand implies,holding everything else constant,that

Accepted Answer

A)  as the price of bagels increases,the quantity of bagels demanded will decrease.
B)  as the price of bagels increases,the demand for bagels will decrease.
C)  as the price of bagels increases,the quantity of bagels demanded will increase.
D)  as the price of bagels increases,the demand for bagels will increase.E) A) and C)
F) B) and C)

Question 12

In response to a surplus the market price of a good will fall;as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Accepted Answer

A) True 
 B)False

Question 13

Figure 3-5 
-Refer to Figure 3-5.At a price of $5,the quantity sold

Accepted Answer

A)  is 2 units.
B)  is 4 units.
C)  is 6 units.
D)  cannot be determined.E) A) and D)
F) B) and D)

Question 14

Figure 3-8 1 and S1 (point A) .If the price of oranges,a substitute for apples,decreases and the wages of apple workers increase,how will the equilibrium point change? A) The equilibrium point will move from A to E. B) The equilibrium point will move from A to B. C) The equilibrium point will move from A to C. D) The equilibrium will first move from A to B,then return to A." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A) .If the price of oranges,a substitute for apples,decreases and the wages of apple workers increase,how will the equilibrium point change?

Accepted Answer

A)  The equilibrium point will move from A to E.
B)  The equilibrium point will move from A to B.
C)  The equilibrium point will move from A to C.
D)  The equilibrium will first move from A to B,then return to A.E) A) and B)
F) B) and C)

Question 15

Explain the difference between a normal good and an inferior good.

Accepted Answer

A normal good is something for which the...

Question 16

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Accepted Answer

A)  an increase in the price of sheep
B)  a decrease in the price of cattle
C)  an increase in the demand for cattle
D)  an increase in the price of sheep feedE) B) and C)
F) C) and D)

Question 17

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Accepted Answer

A)  a decrease in demand and an increase in supply
B)  an increase in supply
C)  an increase in supply and an increase in demand greater than the increase in supply
D)  a decrease in demand and a decrease in supplyE) A) and B)
F) A) and C)

Question 18

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

Accepted Answer

A)  The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players.
B)  The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players.
C)  The new technology caused an decrease in the demand for Blu-ray players.
D)  The new technology caused an increase in the quantity of Blu-ray players supplied.E) A) and B)
F) A) and C)

Question 19

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to ________ and the equilibrium quantity of the tablet computers to ________.

Accepted Answer

A)  increase;increase
B)  increase;decrease
C)  decrease;increase
D)  decrease;decreaseE) All of the above
F) A) and C)

Question 20

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Accepted Answer

A)  a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
B)  an increase in the equilibrium price of lobster and no change in the equilibrium quantity.
C)  an increase in the equilibrium price of lobster;the equilibrium quantity may increase or decrease.
D)  a decrease in the equilibrium quantity of lobster;the equilibrium price may increase or decrease.E) All of the above
F) A) and D)

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to and the equilibrium quantity of the tablet computers to .

Correct Answer
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Correct Answer
verified

In response to a surplus the market price of a good will fall;as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Correct Answer
verified

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Correct Answer
verified

When the price of a good falls,consumers buy a larger quantity because of the effect and the effect.

Correct Answer
verified

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Correct Answer
verified

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Correct Answer
verified

Explain the difference between a normal good and an inferior good.

Correct Answer
verified
A normal good is something for which the...
View Answer

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Correct Answer
verified

What are the two effects that explain the Law of Demand? Briefly explain each effect.

Correct Answer
verified
The two effects that explain the Law of ...
View Answer

Figure 3-5 -Refer to Figure 3-5.At a price of $5,the quantity sold

Correct Answer
verified

Which of the following is the correct way to describe equilibrium in a market?

Correct Answer
verified

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Correct Answer
verified

Correct Answer
verified
The wage rate is a determinant of the su...
View Answer

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

Correct Answer
verified

The law of demand implies,holding everything else constant,that

Correct Answer
verified

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Correct Answer
verified

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated. a.Digital camera and memory stick b.7Up and Mountain Dew c.Swimsuits and flip-flops d.Tylenol and cat food e.Photocopier and paper

Correct Answer
verified
a.Complements
b.Subs...
View Answer

If the price of a product is above equilibrium,what forces it down?

Correct Answer
verified
When the price is above equilibrium,a su...
View Answer

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Correct Answer
verified

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to ________ and the equilibrium quantity of the tablet computers to ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In response to a surplus the market price of a good will fall;as the price falls,the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.

Correct AnswerverifiedShow Answer

Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?

Correct AnswerverifiedShow Answer

When the price of a good falls,consumers buy a larger quantity because of the ________ effect and the ________ effect.

Correct AnswerverifiedShow Answer

An increase in the demand for lobster due to changes in consumer tastes,accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster,will result in

Correct AnswerverifiedShow Answer

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve.As a result

Correct AnswerverifiedShow Answer

Explain the difference between a normal good and an inferior good.

Correct AnswerverifiedA normal good is something for which the...View AnswerShow Answer

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

Correct AnswerverifiedShow Answer

What are the two effects that explain the Law of Demand? Briefly explain each effect.

Correct AnswerverifiedThe two effects that explain the Law of ...View AnswerShow Answer

Figure 3-5 -Refer to Figure 3-5.At a price of $5,the quantity sold

Correct AnswerverifiedShow Answer

Which of the following is the correct way to describe equilibrium in a market?

Correct AnswerverifiedShow Answer

In October 2005,the U.S.Fish and Wildlife Service banned the importation of beluga caviar,the most prized of caviars,from the Caspian Sea.What happened in the market for caviar in the U.S.?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe wage rate is a determinant of the su...View AnswerShow Answer

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since the initial introduction.How did this change in technology affect the market for Blu-ray players?

Correct AnswerverifiedShow Answer

The law of demand implies,holding everything else constant,that

Correct AnswerverifiedShow Answer

Ranchers can raise either cattle or sheep on their land.Which of the following would cause the supply of sheep to increase?

Correct AnswerverifiedShow Answer

For each of the following pairs of products state which are complements,which are substitutes,and which are unrelated. a.Digital camera and memory stick b.7Up and Mountain Dew c.Swimsuits and flip-flops d.Tylenol and cat food e.Photocopier and paper

Correct Answerverifieda.Complementsb.Subs...View AnswerShow Answer

If the price of a product is above equilibrium,what forces it down?

Correct AnswerverifiedWhen the price is above equilibrium,a su...View AnswerShow Answer

In October,market analysts predict that the price of platinum will fall in November.What happens in the platinum market in October,holding everything else constant?

Correct AnswerverifiedShow Answer

All else equal,a shortage of display screens used in the manufacture of tablet computers would cause the equilibrium price of the tablet computers to and the equilibrium quantity of the tablet computers to .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When the price of a good falls,consumers buy a larger quantity because of the effect and the effect.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A normal good is something for which the...
View Answer

Correct Answer
verified

Correct Answer
verified
The two effects that explain the Law of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The wage rate is a determinant of the su...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.Complements
b.Subs...
View Answer

Correct Answer
verified
When the price is above equilibrium,a su...
View Answer

Correct Answer
verified