Question 1

If the price of train tickets decreases,what will be the impact in the market for bus travel?

Accepted Answer

A)  The demand curve for bus travel shifts to the right.
B)  The quantity of bus travel demanded increases.
C)  The demand curve for bus travel shifts to the left.
D)  The quantity of bus travel demanded decreases.

Question 2

Figure 3-4 
-Refer to Figure 3-4.At a price of $20,how many units will be supplied?

Accepted Answer

A)  400
B)  500
C)  600
D)  800

Question 3

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

Accepted Answer

A)  D increases,S no change,P and Q increase
B)  S increases,D no change,P decreases,Q increases
C)  D and S increase,P and Q decrease
D)  D no change,S increases,P decreases,Q decreases

Question 4

At a product's equilibrium price

Accepted Answer

A)  anyone who needs the product will be able to buy the product,regardless of ability to pay.
B)  the federal government will provide the product to anyone who cannot afford it.
C)  not all sellers who are willing to accept the price will find buyers for their products.
D)  any buyer who is willing and able to pay the price will find a seller for the product.

Question 5

Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.

Accepted Answer

The answer of Use the following supply schedule for cherries...

Question 6

Table 3-2
 
-Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market.If the price of cashews falls from $4 to $2,the market quantity demanded would

Accepted Answer

A)  decrease by 28 lbs.
B)  increase by 36 lbs.
C)  increase by 28 lbs.
D)  decrease by 36 lbs.

Question 7

Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

Accepted Answer

A)  The supply curve for airline tickets has shifted to the left while the demand curve for airline tickets has shifted to the right.
B)  The demand curve for airline tickets has shifted to the left more than the supply curve has shifted to the left.
C)  The demand curve and the supply curve for airline tickets have both shifted to the right.
D)  The supply curve for airline tickets has shifted to the left more than the demand curve has shifted to the left.

Question 8

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

Accepted Answer

A)  The quantity of green tea demanded increases because of a change in tastes in favor of green tea.
B)  The green tea demand curve shifts to the right because of a change in tastes in favor of green tea.
C)  The green tea demand curve shifts to the left because this new information will increase the price of green tea.
D)  The quantity of green tea demanded decreases because this new information will increase the price of green tea.

Question 9

Farmers can raise either goats or ostriches on their land.Which of the following would cause the supply of goats to decrease?

Accepted Answer

A)  an increase in the price of ostriches
B)  a decrease in the price of goats
C)  an increase in the demand for goats
D)  an increase in the price of ostrich feed

Question 10

The substitution effect of a price change refers to

Accepted Answer

A)  the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.
B)  the shift of a demand curve when the price of a substitute good changes.
C)  the movement along the demand curve due to a change in purchasing power brought about by the price change.
D)  the shift in the demand curve due to a change in purchasing power brought about by the price change.

Question 11

Table 3-2
 
-Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market.At a price of $10,the quantity demanded in the market would be

Accepted Answer

A)  2 lbs.
B)  48 lbs.
C)  50 lbs
D)  52 lbs.

Question 12

A demand curve shows the relationship between

Accepted Answer

A)  the price of a product and the quantity of the product demanded.
B)  the amount of a product sellers are willing to sell at a particular price and the amount consumers are willing to buy at that price.
C)  the quantity that consumers are willing and able to buy and the quantity that sellers are willing and able to offer.
D)  the price of a produce and the demand for the product.

Question 13

Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

Accepted Answer

A)  decrease demand and decrease supply,resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of cigarettes.
B)  increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cigarettes.
C)  decrease demand and increase supply,resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of cigarettes.
D)  decrease demand and increase supply,resulting in an increase in both the equilibrium price and the equilibrium quantity of cigarettes.

Question 14

Figure 3-1 
-Refer to Figure 3-1.A decrease population would be represented by a movement from

Accepted Answer

A)  A to B.
B)  B to A.
C)  D1 to D2.
D)  D2 to D1.

Question 15

Figure 3-7 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for coffee.What happens in this market if buyers expect the price of coffee to rise?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 16

An increase in the equilibrium price for a product will result

Accepted Answer

A)  when the quantity of the product demanded exceeds the quantity supplied.
B)  when there is a decrease in supply and an increase in demand for the product.
C)  when there is a decrease in supply and a decrease in demand for the product.
D)  when there is an increase in demand and an increase in the number of firms producing the product.

Question 17

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Accepted Answer

A) True 
 B)False

Question 18

If,in response to an increase in the price of pineapples,the quantity of pineapples demanded decreases,economists would describe this as

Accepted Answer

A)  an decrease in demand.
B)  a decrease in quantity demanded.
C)  a change in consumer income.
D)  a decrease in consumers' taste for pineapples.

Question 19

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

Accepted Answer

A)  The demand curve for prerecorded DVDs shifts to the right.
B)  The quantity of prerecorded DVDs demanded decreases.
C)  The quantity of prerecorded DVDs demanded increases.
D)  The demand curve for prerecorded DVDs shifts to the left.

Question 20

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Accepted Answer

A)  an increase in the price of soybeans
B)  a decrease in the price of corn
C)  an increase in the demand for corn
D)  an increase in the price of soybean seeds

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

A demand curve shows the relationship between

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Figure 3-1 -Refer to Figure 3-1.A decrease population would be represented by a movement from

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Use the following supply schedule for cherries to draw a graph of the supply curve.Be sure to label the supply curve and each axis,and show each point on the supply curve.

Correct AnswerverifiedShow Answer

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for coffee.What happens in this market if buyers expect the price of coffee to rise?

Correct AnswerverifiedShow Answer

Several studies have shown promising links between green tea consumption and cancer prevention.How does this affect the market for green tea?

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Studies have shown that smoking cigarettes can cause heart disease.Assume this is true,and favorable weather has increased the tobacco harvest in North Carolina.In the market for cigarettes,these two developments would

Correct AnswerverifiedShow Answer

An increase in the equilibrium price for a product will result

Correct AnswerverifiedShow Answer

Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market.If the price of cashews falls from $4 to $2,the market quantity demanded would

Correct AnswerverifiedShow Answer

How does the decreasing use of DVD players affect the market for prerecorded DVDs?

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Table 3-2 -Refer to Table 3-2.The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market.At a price of $10,the quantity demanded in the market would be

Correct AnswerverifiedShow Answer

Figure 3-4 -Refer to Figure 3-4.At a price of $20,how many units will be supplied?

Correct AnswerverifiedShow Answer

The substitution effect of a price change refers to

Correct AnswerverifiedShow Answer

Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months.Over this same period,the price of jet fuel has risen and consumer incomes have fallen.Which of the following best explains the falling prices of airline tickets?

Correct AnswerverifiedShow Answer

A normal good is a good for which the demanded decreases as income decreases,holding everything else constant.

Correct AnswerverifiedShow Answer

Farmers can raise either goats or ostriches on their land.Which of the following would cause the supply of goats to decrease?

Correct AnswerverifiedShow Answer

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for solar panels if the government offers tax breaks to encourage manufacturers to produce more solar panels?

Correct AnswerverifiedShow Answer

If,in response to an increase in the price of pineapples,the quantity of pineapples demanded decreases,economists would describe this as

Correct AnswerverifiedShow Answer

At a product's equilibrium price

Correct AnswerverifiedShow Answer

If the price of train tickets decreases,what will be the impact in the market for bus travel?

Correct AnswerverifiedShow Answer

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Correct AnswerverifiedShow Answer

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