Chapter 4 Demand and Supply | Test Bank – 9th Edition - Foundations of Microeconomics 9e | Test Bank with Answer Key by Robin Bade by Robin Bade. DOCX document preview.
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Foundations of Microeconomics, 9e (Bade)
Chapter 4 Demand and Supply
4.1 Demand
1) A market is defined as
A) a physical place where people buy only goods.
B) a physical place where people buy both goods and services.
C) a store where people buy physical goods.
D) any arrangement that brings buyers and sellers together.
E) a place where one good is bartered for another.
Topic: Markets
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
2) eBay
A) is considered a market because eBay is profitable.
B) is a market because buyers and sellers are brought together to buy and sell.
C) would be a market if there was only one physical location.
D) cannot function as a market.
E) is not a market because buyers can buy from only one seller at any point in time.
Topic: Markets
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
3) Which of the following are examples of a market?
i. the New York Stock Exchange
ii. a used car lot
iii. a website selling vacations to Disney World
A) i, ii and iii
B) i only
C) iii only
D) i and iii only
E) ii and iii only
Topic: Markets
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
4) Which of the following statements is TRUE about a competitive market? A competitive market
A) must have a physical location.
B) includes markets for goods and services but not for inputs.
C) has so many buyers and sellers that no one can influence the price.
D) has one seller competing to sell his or her product.
E) has a handful of sellers but always has many buyers.
Topic: Markets
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
5) What is the "quantity demanded"?
A) the amount of a good people desire
B) the amount of a good people are able and willing to buy during a specific time period and at a given price
C) the amount of a good people are able and willing to buy at all possible prices
D) the maximum amount of a good that can be consumed during a specific time period
E) the minimum amount of a good that people are willing to buy during a specific time period and at a given price
Topic: Quantity demanded
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
6) The "quantity demanded" of any good or service is ________ during a specified time period and at a specified price.
A) the amount people are willing to buy
B) the amount people are able to buy
C) the amount people are willing and able to offer
D) the amount people are willing and able to buy
E) the amount people are willing to buy because it is the amount sellers are willing to sell
Topic: Quantity demanded
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
7) The "law of demand" refers to the fact that, other things remaining the same, when the price of a good rises
A) the demand curve shifts rightward.
B) the demand curve shifts leftward.
C) there is a movement down along the demand curve to a larger quantity demanded.
D) there is a movement up along the demand curve to a smaller quantity demanded.
E) the demand curve shifts rightward and there is a movement up along the demand curve to a smaller quantity demanded.
Topic: Law of demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
8) The law of demand refers to how
A) demand changes when people's incomes change.
B) demand changes when the prices of substitutes and complements change.
C) the quantity demanded changes when the price of the good changes.
D) the price of the good changes when people's demand for the good changes.
E) the quantity demanded changes when the demand for the good changes.
Topic: Law of demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
9) Which of the following describes the law of demand? When other things remain the same, as
A) the price of gas falls, the quantity demanded of gas increases.
B) the quantity demanded of bread increases, the price of bread falls.
C) the price of peanut butter increases, the quantity demanded of jelly decreases.
D) your income increases, you'll buy more hamburgers.
E) more people decide to eat pizza, the demand for pizza increases.
Topic: Law of demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
10) Gasoline prices increase by 50 percent and other things remain the same. As a result, there is
A) an increase in the demand for gasoline.
B) a decrease in the demand for gasoline.
C) no change in the quantity of gasoline demanded.
D) a decrease in the quantity of gasoline demanded.
E) More information is needed to determine if the demand for gasoline increases or decreases.
Topic: Law of demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
11) In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?
A) The law of demand is being used to increase the quantity demanded.
B) The store is trying to increase its customers' demand for the product.
C) The store manager must be trying to drive away customers by selling low quality products.
D) The store is trying to increase its customers' incomes by increasing their purchasing power.
E) The store is trying to sell the goods and realizes that they are substitutes for other goods whose prices have risen.
Topic: Law of demand
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
12) The law of demand implies that, other things remaining the same
A) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded increases.
B) as the price of a cheeseburger rises, the quantity of cheeseburgers demanded decreases.
C) as income increases, the quantity of cheeseburgers demanded increases.
D) as the demand for cheeseburgers increases, the price of a cheeseburger falls.
E) as more people demand cheeseburgers, the quantity demanded increases.
Topic: Law of demand
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
13) An increase in the quantity demanded is shown as
A) a movement along the demand curve.
B) a movement toward the demand curve.
C) a rightward shift of the demand curve.
D) a leftward shift of the demand curve.
E) both a movement along the demand curve and a shift of the demand curve.
Topic: Quantity demanded
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
14) Which of the following results in a movement upward along the demand curve for movies?
A) an increase in the price of movie tickets
B) a decrease in the price of movie tickets
C) an increase in income, assuming that movies are a normal good
D) a decrease in income, assuming that movies are a normal good
E) a decrease in the price of Netflix, a substitute for movies
Topic: Quantity demanded
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
15) Which of the following is TRUE regarding demand?
i. Demand is the relationship between quantity demanded and the price of a good when all other influences on buying plans remain the same.
ii. Demand refers to one quantity at one time.
iii. "Demand" and "quantity demanded" are the same thing.
A) i only
B) ii only
C) i and ii
D) iii only
E) ii and iii
Topic: Quantity demanded versus demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
16) The price of cotton clothing falls. As a result
A) the quantity demanded of cotton clothing increases.
B) the demand for cotton clothing increases.
C) the quantity demanded of cotton clothing decreases.
D) the demand for cotton clothing decreases.
E) both the demand for cotton clothing increases and the quantity demand of cotton clothing increases.
Topic: Quantity demanded versus demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
17) The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk. As a result
A) the demand for milk increases.
B) the quantity demanded of milk increases.
C) the price of milk falls to encourage people to drink more milk.
D) the demand for milk is not affected.
E) the demand for milk decreases because the price of milk rises.
Topic: Quantity demanded versus demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
18) A demand schedule shows
A) the quantities that people plan to buy in all possible circumstances.
B) the quantities that people plan to buy at each different price when all other influences on buying plans remain the same.
C) the quantities that people would plan to buy if they could afford them at each different price when all other influences on buying plans remain the same.
D) the quantities that people plan to buy at each different income when all other influences on buying plans remain the same.
E) the quantities that people plan to buy at each different price as long as producers are willing to supply that quantity.
Topic: Demand schedule
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
19) A demand schedule
A) shows the quantity demanded at one price.
B) is a graph showing a relationship between the quantity demanded and the price of a good.
C) is a list of the quantities demanded at each different price when all other influences on buying plans remain the same.
D) shows that demand is on schedule.
E) shows how the demand changes when the supply changes.
Topic: Demand schedule
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
20) The downward slope of a demand curve
A) represents the law of demand.
B) shows that as the price of a good rises, consumers increase the quantity they demand.
C) indicates how the quantity demanded changes when incomes rise and the good is a normal good.
D) indicates how demand changes when incomes rise and the good is a normal good.
E) indicates how demand changes when the price changes and the good is a normal good.
Topic: Demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
21) A demand curve
A) has an upward slope.
B) has a downward slope.
C) is a graph of the relationship between quantity demanded of a good and its price.
D) Both answers B and C are correct.
E) Both answers A and C are correct.
Topic: Demand curve
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
22) Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded ________.
A) downward; decreases
B) downward; increases
C) upward; decreases
D) upward; increases
E) downward; does not change
Topic: Demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
23) The market demand curve
A) cannot show how quantity demanded changes in response to a change in price.
B) cannot show a change in demand for a good.
C) is the horizontal sum of individual demand curves.
D) is the vertical sum of individual demand curves.
E) is upward sloping.
Topic: Individual and market demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
24) The figure above shows the market for sports drinks. Consider this statement: regarding the figure:
"If the price falls from $3 to $1 per bottle, quantity demanded changes from 10 to 25 bottles."
Which of the following states the same idea?
A) A change in quantity demanded can be shown as a movement from point A to B.
B) As demand changes from January to June, demand will increase from 10 to 25 bottles.
C) If the price changes from $1 to $3, 15 more bottles are demanded.
D) A change in demand from June to January decreases the demand for sports drinks.
E) As the price of sports drinks falls, demand decreases.
Topic: Changes in quantity demanded versus change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
25) The figure above shows the market for sports drinks. Which of the statements are TRUE?
i. A change in demand is shown as a movement from C to A.
ii. A change from point C to point B represents a change in the quantity demanded.
iii. If the price increases from $1 to $3, quantity demanded will decrease from 25 to 10 bottles.
A) i, ii and iii
B) ii only
C) i and iii
D) iii only
E) i and ii
Topic: Changes in quantity demanded versus change in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
26) Consider a demand curve for apples. "A change in the price of apples leads to a ________ the demand curve for apples because ________.
A) movement along; all other factors influencing buying plans are held constant
B) shift in; all other factors influencing demand are held constant
C) movement along; all other factors influencing demand are allowed to change
D) shift in; changes in the prices of other fruit affect demand
E) movement along; changes in the prices of other fruit affect demand
Topic: Changes in quantity demanded
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
27) Consider the market for burritos. The law of demand can be illustrated by
A) a shift in the demand curve for burritos due to a change in the price of a burrito.
B) a shift in the demand curve for burritos due to a change in the price of a taco.
C) a movement along the demand curve for burritos when the price of a taco changes.
D) a movement along the demand curve for burritos due to a change in the price of a burrito.
E) a shift in the demand curve for burritos due to a shift in the supply curve of burritos.
Topic: Law of demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
28) The market demand curve for mangos is
A) the same as the demand curve of one buyer in a market with many buyers.
B) upward sloping because rich people can afford more mangos than poor people can buy.
C) the horizontal sum of the individual demand curves of all the buyers.
D) the vertical sum of the individual demand curves of all the buyers.
E) the horizontal average of the individual demand curves of all the buyers.
Topic: Individual and market demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
29) There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand, we must
A) add the prices that each buyer will pay at every quantity.
B) add the quantities that each buyer will purchase at every price.
C) multiply the price times quantity for each buyer and then add the resulting products together.
D) average the price each buyer is willing to pay for each given quantity.
E) give up because there is no way to find the market demand.
Topic: Individual and market demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
30) Market demand curves are obtained by
A) determining the price each consumer is willing to pay for the good and summing those prices across all consumers.
B) observing the prices and quantities sold in a market over time and plotting those price-quantity combinations in a graph.
C) summing the quantities every consumer is willing to buy at each different price.
D) observing the behavior of an individual consumer in a market.
E) averaging the quantities every consumer is willing to buy at each different price.
Topic: Individual and market demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
31) The market demand curve for mousetraps is
A) found by summing the quantities of mousetraps demanded at each income level by each buyer.
B) found by summing the prices of mousetraps at each quantity of mousetraps demanded by each buyer.
C) the horizontal sum of the individual demand curves for mousetraps of all the buyers.
D) Both answers B and C are correct.
E) Both answers A and C are correct.
Topic: Individual and market demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
32) To find the market demand curve for in-line skates, we must
A) add the quantities demanded at every price and every income by every buyer of in-line skates.
B) add the quantities demanded at prices that all buyers can afford to pay.
C) sum horizontally the individual demand curves of all the buyers.
D) take account of the skate buying plans of all actual and potential buyers in all possible situations.
E) None of the above answers is correct because we need also to take account of the supply of in-line skates.
Topic: Individual and market demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
33) The table below shows the market for frozen yogurt and the three people who make up the market.
Price Quantity demanded
($ per serving) (servings per week)
Jo | Eli | Sam | |
7.00 | 1 | 0 | 0 |
6.00 | 2 | 1 | 0 |
5.00 | 4 | 3 | 1 |
If the price is $6 per serving, ________ each week.
A) the market demand is 3 servings
B) the market supply is 3 servings
C) the market demand is 7 servings
D) there will be a shortage of frozen yogurt.
E) there will be a surplus of frozen yogurt.
Topic: Market demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
34) The phrase "a change in demand" refers to a
A) movement along a demand curve.
B) movement along the price curve.
C) change in the quantity demanded of a good.
D) shift of the demand curve.
E) movement along the quantity curve.
Topic: Changes in demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
35) When demand increases
A) consumers are willing to buy more at any price.
B) consumers buy more of the good only if its price falls.
C) the price is lower at any level of quantity demanded.
D) consumers buy more of the good only if its price rises.
E) the demand curve shifts leftward.
Topic: Changes in demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
36) A change in the demand for apples could result from any of the following EXCEPT
A) a change in the number of buyers.
B) increased preferences for fresh fruit consumption for health reasons.
C) a change in the price of an apple.
D) a change in the price of a banana.
E) a change in income.
Topic: Changes in demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
37) Changes in which of the following factors do NOT shift the demand curve?
A) the price of the good
B) buyers' incomes
C) the price of a substitute good
D) the number of buyers
E) the price expected in the future
Topic: Shifts of the demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
38) If the demand for used cars decreases after the price of a new car falls, used cars and new cars are
A) inferior goods.
B) substitute goods.
C) complementary goods.
D) normal goods.
E) The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.
Topic: Changes in demand, price of a substitute
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
39) Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the
A) demand for Dell computers increases.
B) demand for Apple computers increases.
C) demand for Apple computers decreases.
D) supply of Dell computers increases.
E) demand for Dell computers decreases.
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
40) Which of the following increases the demand for a good or service?
A) a fall in the price of the good or service
B) a smaller number of consumers wanting to buy the good or service
C) a rise in the price of the good or service
D) a rise in the price of a substitute good or service
E) a rise in the price of a complement
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
41) Consider the market for smart phones. Which of the following shifts the demand curve rightward?
A) an increase in the price of smart phones
B) a decrease in the price of smart phones
C) an increase in the price of land-line phone service, a substitute for smart phones
D) a decrease in the number of smart phone buyers
E) an increase in the supply of smart phones
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
42) Which of the following shifts the demand curve for movies rightward?
A) an increase in the price of Netflix, a substitute for movies
B) an increase in the price of movie tickets
C) a decrease in the price of move tickets
D) an increase in movie star salaries
E) an increase in the price of HDTV sets
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
43) Which of the following shifts the demand curve for movies leftward?
A) a decrease in the price of Netflix, a substitute for movies
B) a decrease in the price of movie tickets
C) an increase in the price of movie tickets
D) an increase in movie star salaries
E) an increase in incomes, assuming movies are a normal good
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
44) Two brands of water, Natural Water and Mountain Water, are close substitutes. If the price of Mountain Water decreases, the fall in price
A) shifts the demand curve for Natural Water rightward.
B) shifts the demand curve for Natural Water leftward.
C) increases the price of Natural Water.
D) increases the demand for Mountain Water.
E) More information is needed to determine if the demand curve for Natural Water shifts rightward or leftward.
Topic: Changes in demand, price of a substitute
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
45) Car insurance and cars are complements. If the price of car insurance increases, the
A) demand for cars decreases.
B) demand for cars increases.
C) quantity of cars demanded decreases.
D) quantity of cars demanded increases.
E) More information is needed to determine if the demand increases or decreases.
Topic: Changes in demand, price of a complement
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
46) Consumers eat salsa with taco chips. The price of salsa rises. How does the increase in the price of salsa affect the demand for taco chips?
A) It decreases the demand for taco chips.
B) It increases the demand for taco chips.
C) It has no effect on the demand for taco chips.
D) It will decrease the demand for taco chips only if taco chips are a normal good.
E) It could increase, decrease, or have no effect on the demand for taco chips, but more information is needed to determine the impact.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
47) What happens to the demand for a good if a complement's price increases?
A) The demand decreases and the demand curve shifts rightward.
B) The demand increases and the demand curve shifts rightward.
C) The demand decreases and the demand curve shifts leftward.
D) The demand increases and the demand curve shifts leftward.
E) There is no impact on demand for the good and the demand curve does not shift.
Topic: Changes in demand, price of a complement
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
48) Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
A) the demand for hot dogs will increase.
B) the demand for hot dog buns will decrease.
C) the quantity demanded of hotdogs will decrease.
D) the demand for hot dog buns will increase.
E) the quantity demanded of hot dog buns will increase.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
49) A popular dinner among college students today is sushi, green tea, and wasabi dip so these foods are complements. If the price of green tea increases and the price of wasabi dip increases, what would be the effect on demand for sushi at lunch?
A) The demand for sushi would decrease.
B) The demand for sushi would be unaffected, but the price would increase.
C) The demand for sushi could increase or decrease.
D) The demand for sushi would increase.
E) The demand for sushi would be unaffected, but the price would decrease.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
50) Soda and hot dogs are complements for one another. If a shortage of carbonated water leads to an increase in the price of soda, then the
A) demand for hot dogs increases.
B) demand for hot dogs decreases.
C) quantity of hot dogs demanded increases.
D) quantity of hot dogs demanded decreases.
E) More information is needed to determine if the demand increases or decreases.
Topic: Changes in demand, price of a complement
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
51) A student at New York University used to take the Redhound bus when she visited her grandmother in Boston. After graduating, although the bus fare and the plane fare were the same as they were when she was a student, with a well-paid job on Wall Street she now takes the plane to Boston to visit her grandmother. For this student, travel by Redhound bus is
A) a normal good.
B) an inferior good.
C) a substitute good.
D) a complement good.
E) a good with negative preferences.
Topic: Inferior goods
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
52) If the demand for digital cameras increases when consumers' incomes rise, then digital cameras are
A) a normal good.
B) an inferior good.
C) a substitute for camcorders.
D) a complement to camcorders.
E) made using advanced technology.
Topic: Normal goods
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
53) If the demand for a good increases when people's incomes increase
A) the good is an inferior good.
B) the law of demand is violated.
C) the good's demand curve must be slope upward.
D) the good is a normal good.
E) the good is a substitute good for an inferior good.
Topic: Changes in demand, normal good
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
54) In a recession, consumers have less income to spend. As a result, if dining out is a normal good, then which of the following would happen to the demand curve for dining out?
A) The demand curve would shift leftward.
B) The demand curve would not shift but the price of dining out would rise.
C) The effect on the demand curve is unknown.
D) The demand curve would shift rightward.
E) The demand curve would not shift but the price of dining out would fall.
Topic: Changes in demand, normal good
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
55) If macaroni and cheese is an inferior good, then a decrease in income results in
A) an increase in the demand for macaroni and cheese.
B) a decrease in the demand for macaroni and cheese.
C) an increase in the supply of macaroni and cheese.
D) a decrease in the supply of macaroni and cheese.
E) Both answers A and D are correct.
Topic: Changes in demand, inferior good
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
56) If income increases and the demand for bus rides decreases
A) bus rides are a normal good.
B) consumers are behaving irrationally.
C) bus rides are an inferior good.
D) bus rides are a substitute good.
E) bus rides must be a complement good with some other good.
Topic: Changes in demand, inferior good
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
57) Which of the following is TRUE?
A) For an inferior good, when income increases, the demand curve shifts leftward.
B) If the price of a substitute rises, the demand curve shifts leftward.
C) If people expect the price of a good will rise in the future, the demand curve shifts leftward.
D) An increase in population shifts the demand curve leftward.
E) An increase in the cost of producing a good shifts the demand curve leftward.
Topic: Changes in demand, inferior good
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
58) Ramen noodles are a staple food item for many college students. Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly. In this case, Ramen noodles are
A) a normal good.
B) an inferior good.
C) a complement for higher income people.
D) a substitute good.
E) None of the above answers is correct.
Topic: Changes in demand, inferior good
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
59) Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?
A) The quantity of bottled water demanded increases.
B) The quantity of bottled water demanded decreases.
C) The demand for bottled water decreases.
D) The demand for bottled water increases.
E) None of the above answers is correct because it is the supply that immediately changes, not the demand.
Topic: Changes in demand, expectations
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
60) A huge 50 percent off sale on golf clubs is advertised for next week. What happens this week in the market for golf clubs?
A) The supply of golf clubs increases.
B) The supply of golf clubs decreases.
C) The demand for golf clubs increases.
D) The demand for golf clubs decreases.
E) The demand for and the supply of golf clubs decreases.
Topic: Changes in demand, expectations
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
61) You are just about to finish college and are about to start a high paying job. Because of this new job, what is the most likely outcome in the market for cars?
A) Your demand for cars will decrease.
B) The market supply of cars will increase.
C) Your demand for cars will increase.
D) The market supply of cars will decrease.
E) The demand and the supply for cars will decrease.
Topic: Changes in demand, expectations
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
62) Which of the following increases the demand for a good?
A) a rise in the price of a complement
B) the expectation that future income will be higher
C) an increase in income, assuming the good is an inferior good
D) a decrease in the number of buyers
E) a fall in the price of a substitute
Topic: Changes in demand, expectations
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
63) Suppose that tattoos gained immense popularity with retired people as well as college students. This gain in popularity best reflects which of the following influences on buying plans?
A) the price of a substitute good
B) income
C) expectations
D) preferences
E) the price of a complement good
Topic: Changes in demand, preferences
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
64) Consider the market for cellular phones. Which of the following shifts the demand curve leftward?
A) studies showing using cellular phones can cause brain cancer
B) a decrease in the price of cellular phones
C) a decrease in the quantity demanded of cellular phones
D) an increase in the services provided by cellular phones, such as text messaging
E) an increase in the price of cellular phones
Topic: Changes in demand, preferences
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
65) Scooters and bicycles are substitutes. Suppose that the price of a bicycle falls. Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve.
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
66) Scooters are a normal good and buyers' incomes decrease. Which of the figures above best illustrates how this change affects the demand curve for scooters?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above answers is correct because the decrease in income will affect the supply curve not the demand curve.
Topic: Changes in demand, normal good
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
67) Over the next few years more and more people prefer to ride on scooters. Which of the figures above best illustrates how this change affects the demand curve for scooters?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above answers is correct because the change in tastes will affect the supply curve not the demand curve.
Topic: Changes in demand, number of buyers
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
68) A scooter uses much less gasoline than does a car. Suppose the price of gasoline rises substantially. Which of the figures above best illustrates how this change affects the demand curve for scooters?
A) Figure A only
B) Figure B only
C) Figure C only
D) Figure D only
E) Both Figure A and Figure D
Topic: Changes in demand, preferences
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
69) In the above figure, the movement from point a to point b reflects
A) a decrease in the price of pizza.
B) an increase in the demand for pizza.
C) an increase in the number of people who eat pizza.
D) an increase in the price of the tomato sauce used to produce pizza.
E) a decrease in the number of firms producing pizza.
Topic: Changes in quantity demanded
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
70) In the above figure, the shift in the demand curve from D to D1 can be the result of
A) an increase in the price of pizza.
B) an increase in the price of a sub sandwich, a substitute for pizza.
C) an increase in the price of soda, a complement to pizza.
D) a change in quantity demanded.
E) a decrease in income if pizza is a normal good.
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
71) In the above figure, the shift in the demand curve from D to D2 can be the result of
A) an increase in income if pizza is a normal good.
B) an increase in the price of a sub sandwich, a substitute for pizza.
C) an increase in the price of soda, a complement to pizza.
D) a change in quantity demanded.
E) a decrease in the supply of pizza that raises the price of pizza.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
72) The figure above shows the market for iPods. Which of the following creates a movement from point A to point B?
A) a requirement that all students at universities have an iPod
B) a decrease in the price of iPods
C) a decrease in the price of Zunes, a substitute for iPods
D) an increase in the price of iPods
E) an increase in people's incomes
Topic: Changes in quantity demanded
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
73) The figure above shows the market for iPods. Which of the following shifts the demand curve from D0 to D1?
A) a decrease in the price of Zunes, a substitute for iPods
B) an increase in the price of iPods
C) a requirement that all students at universities have an iPod
D) a decrease in the price of iPods
E) an increase in people's incomes
Topic: Changes in demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
74) The figure above shows the market for iPods. Which of the following shifts the demand curve from D0 to D2?
A) a decrease in the price of Zunes, a substitute for iPods
B) an increase in the price of iPods
C) a requirement that all students at universities have an iPod
D) a decrease in the price of iPods
E) a decrease in people's incomes if iPods are a normal good
Topic: Changes in demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
75) Pizza is a normal good. In the above figure, the shift in the demand curve from D to D2 can be the result of
A) a decrease in the price of soda, a complement to pizza.
B) an increase in the price of hamburgers, a substitute for pizza.
C) a decrease in income.
D) a study that shows that pizza is a very healthy food.
E) an increase in the cost of producing pizza.
Topic: Changes in demand, normal good
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
76) In the above figure, the shift in the demand curve from D to D1 can be the result of
A) a decrease in income if pizza is a normal good.
B) a decrease in the price of a sub sandwich, a substitute for pizza.
C) an increase in the price of soda, a complement to pizza.
D) an increase in the number of teenagers, all of whom demand more pizza than do other age groups.
E) new technology that increases the profit from producing pizza.
Topic: Changes in demand, number of buyers
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
77) In the above figure, ________ will shift in the demand curve from D to D1.
A) an increase in income if pizza is an inferior good
B) a decrease in the price of a sub sandwich, a substitute for pizza
C) buyers' expectation that pizza will be less expensive next week
D) a scientific article published that demonstrates eating pizza is good for one's health
E) a fall in the cost of producing pizza
Topic: Changes in demand, preferences
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
78) Which of the following brings only an increase in the quantity demanded of a good?
A) a decrease in income, assuming the good is an inferior good
B) a rise in the price of a substitute good
C) a fall in the price of the good itself
D) an expectation that the good's price will rise in the future
E) a decrease in income, assuming the good is a normal good
Topic: Quantity demanded versus demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
79) People consume more soup as temperatures falls. So, as cold weather approaches
A) the quantity of soup demanded increases.
B) the demand for soup increases.
C) people move closer to their demand curve for soup.
D) people move farther beyond their demand curves.
E) both the demand and the quantity demanded of soup increase.
Topic: Quantity demanded versus demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
80) The impact of an increase in the price of a particular good is illustrated as a
A) leftward shift in its demand curve.
B) rightward shift in its demand curve.
C) movement upward and to the left along its demand curve.
D) movement downward and to the right along its demand curve.
E) rightward shift in its demand curve and a movement upward and to the left along its demand curve.
Topic: Movement along the demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
81) According to the figure above, which of the following events will increase the quantity demanded of bottled water?
A) a fall in the price of soda
B) a rise in the price of a fitness club membership
C) an increase in the number of buyers of bottled water
D) a fall in the price of bottled water
E) a rise in the price of bottled water
Topic: Changes in quantity demanded
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
82) The table above gives the demand schedule for lattes at the Bottomless Cup. If the price of a latte is $3, then the quantity of lattes demanded is ________ an hour.
A) 90
B) 30
C) 80
D) 60
E) 230
Topic: Quantity demanded
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
83) Other things remaining the same, the quantity of a good or service demanded will increase if the price of the good or service
A) rises.
B) falls.
C) does not change.
D) rises or does not change.
E) rises or falls.
Topic: Law of demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
84) The "law of demand" indicates that if the University of Maine increases tuition, all other things remaining the same
A) the demand for classes will decrease at the University of Maine.
B) the demand for classes will increase at the University of Maine.
C) the quantity of classes demanded will increase at the University of Maine.
D) the quantity of classes demanded will decrease at the University of Maine.
E) both the demand for and the quantity of classes demanded will decrease at the University of Maine.
Topic: Law of demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
85) The graph illustrates the demand for peanuts. Peanuts are a normal good because the
A) demand curve for peanuts slopes downward.
B) demand for peanuts increases when income increases.
C) demand for peanuts increases when the price of one of its substitutes rises.
D) peanuts have both substitutes and complements.
E) demand curve shows that if the price of peanuts rises, there is a movement along the demand curve to a lower quantity demanded.
Topic: Normal goods
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
86) A normal good is defined as a good
A) with a downward sloping demand curve.
B) for which demand increases when the price of a substitute rises.
C) for which demand increases when income increases.
D) for which demand increases when the number of demanders increases.
E) for which demand increases when the price of a complement falls.
Topic: Normal goods
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
87) Soda and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soda
A) increases the demand for peanuts.
B) decreases the demand for peanuts.
C) decreases the demand for soda.
D) increases the demand for soda.
E) has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts.
Topic: Changes in demand, price of a complement
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
88) People come to expect that the price of a gallon of gasoline will rise next week. As a result
A) today's supply of gasoline increases.
B) today's demand for gasoline increases.
C) the price of a gallon of gasoline falls today.
D) next week's supply of gasoline decreases.
E) today's demand for gasoline and today's supply of gasoline do not change.
Topic: Changes in demand, expectations
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
89) One reason the demand for laptop computers might increase is a
A) fall in the price of a laptop computers.
B) fall in price of desktop computers.
C) change in preferences as laptops have become more portable, with faster processors and larger hard drives.
D) poor quality performance record for laptop computers.
E) decrease in income if laptops are a normal good.
Topic: Changes in demand, preferences
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
90) Teenagers drink more soda than other age groups. If the number of teenagers increases, everything else remaining the same
A) market demand for soda increases.
B) market demand for soda decreases.
C) market demand for soda does not change.
D) there is a movement along the market demand curve for soda.
E) None of the above answers is correct because the effect on the demand depends whether the supply curve shifts rightward, leftward, or not at all.
Topic: Changes in demand, number of buyers
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
91) The number of buyers of sport utility vehicles, SUV, decreases sharply. So the
A) demand curve for SUVs shifts leftward.
B) demand curve for SUVs shifts rightward.
C) demand curve for SUVs does not shift, nor is there a movement along then demand curve.
D) demand curve for SUVs does not shift, but there is a movement downward along it.
E) supply curve for SUVs shifts rightward.
Topic: Changes in demand, number of buyers
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
92) When moving along a demand curve, which of the following changes?
A) the consumers' incomes
B) the prices of other goods
C) the number of buyers
D) the price of the good
E) the consumers' preferences
Topic: Movement along the demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
93) The graph illustrates the demand curve for soda. After a rise in the price of a soda from $1.00 a can to $2.00 a can, the quantity of soda demanded
A) decreases from 2 cans to 0 cans a day.
B) increases from 0 cans to 2 cans a day.
C) remains unchanged.
D) decreases from 1 can to 0 cans a day.
E) cannot be determined from the figure because the demand curve will shift to a new curve.
Topic: Movement along the demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
94) Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
A) The demand for pizzas decreases and the demand for tacos increases.
B) The demand for both goods decreases.
C) The quantity of tacos demanded increases and the quantity of pizza demanded decreases.
D) The quantity of pizza demanded decreases and the demand for tacos increases.
E) The demand for each decreases because both are normal goods.
Topic: Changes in quantity demanded versus change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
95) If the price of a DVD falls
i. the demand curve for DVDs will shift rightward.
ii. the demand curve for DVDs will not shift.
iii. there will be a movement along the demand curve for DVDs.
A) i only
B) ii only
C) iii only
D) ii and iii
E) i and iii
Topic: Shifts in the demand curve versus movements along the demand curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
96) The figure shows the market for sports drinks. If the price of bottled water (a substitute for sports drinks)
A) increases, then the demand curve for sports drinks shifts from D0 to D1.
B) increases, then there will be a movement from point A to point B.
C) decreases, then the demand curve for sports drinks shifts from D0 to D1.
D) increases, then there will be a movement from point B to point A.
E) increases, then the demand curve for sports drinks shifts from D0 to D2.
Topic: Changes in demand, price of a substitute
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
97) The figure shows the market for sports drinks. If the price of sports drinks decreases (with all other factors influencing buying plans unchanged), which of the following is TRUE?
i. There will be a movement from point A to point B.
ii. The law of demand must be applied.
iii. There will be a shift from D0 to D1.
iv. There will be a shift from D0 to D2.
A) ii and iii
B) i and ii
C) ii and iv
D) iii only
E) iv only
Topic: Changes in quantity demanded versus change in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.1
Status: Old
AACSB: Application of knowledge
4.2 Supply
1) To be part of the supply for a good, a producer must be
A) only able to supply the good.
B) only willing to supply the good.
C) both able and willing to supply the good.
D) both able and willing to supply the good, and have already identified a buyer.
E) both able and willing to supply the good, and have already sold the good.
Topic: Producers
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
2) The quantity supplied of a good or service is the
A) list of all quantities at different prices, as illustrated by a supply schedule and a supply curve.
B) list of all quantities at different prices, as illustrated by a demand schedule and a demand curve.
C) one quantity produced at a variety of prices.
D) quantity produced at one price.
Topic: Quantity supplied
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
3) The law of supply states that, other things remaining the same
A) demand increases when supply increases.
B) if the price of a good increases, firms buy less of it.
C) if the price of a good increases, the quantity supplied increases.
D) as people's income increase, the supply of goods increases.
E) if the price of a good increases, the supply increases.
Topic: Law of supply
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
4) The law of supply states that other things remaining the same, a decrease in the price of a kayak leads to
A) a decrease in the supply of kayaks.
B) a decrease in the quantity of kayaks supplied.
C) an increase in the supply of kayaks.
D) an increase in the quantity of kayaks supplied.
E) an increase in the supply of kayaks and a decrease in the quantity of kayaks supplied.
Topic: Law of supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
5) Which of the following helps explain why the law of supply exists?
A) Larger outputs result in lower costs of production.
B) the law of increasing opportunity cost
C) The costs of production remain constant throughout all levels of output.
D) Sellers realize that if the price increases, they make larger profits and do not need to change their production.
E) the law of demand
Topic: Law of supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
6) The law of supply reflects the fact that
A) people buy more of a good when its price falls.
B) suppliers have an incentive to use their resources in the way that brings the biggest return.
C) higher prices are more attractive to consumers because they signal a higher quality product.
D) businesses can sell more goods at lower prices.
E) the demand curve is downward sloping.
Topic: Law of supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
7) The supply schedule
A) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans remain the same.
B) is a curve showing the relationship between the amount the sellers are willing and able to sell and the price of that good when all relevant factors change.
C) shows one quantity at one price.
D) is the schedule that suppliers have to keep or else they will be late.
E) shows the relationship between the quantity supplied and the price of a good when all other influences on selling plans change.
Topic: Supply schedule
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
8) A supply curve
A) slopes downward.
B) slopes upward.
C) is a graph of the relationship between quantity supplied of a good and its price.
D) Both answers B and C are correct.
E) Both answers A and C are correct.
Topic: Supply curve
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
9) Which of the following results in a movement upward along the supply curve for movies in theaters?
A) an increase in the price of movie tickets
B) a decrease in the price of movie tickets
C) a decrease in the price of downloaded movies
D) a decrease in movie star salaries
E) an increase in the number of theaters
Topic: Changes in quantity supplied
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
10) If the price of iPads decreases
A) there will be a movement down along the supply curve for iPads.
B) there will be a rightward shift in the iPad supply curve.
C) there will be a movement up along the supply curve for iPads.
D) the supply curve for iPads shifts leftward.
E) there has been a decrease in the price of iTunes songs.
Topic: Changes in quantity supplied
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Revised
AACSB: Analytical thinking
11) Which of the following increases the quantity supplied of yoga pants but does NOT increase the supply of yoga pants?
A) a decrease in the price of a yoga pants
B) an increase in the price of a yoga pants
C) a decrease in the number of suppliers of yoga pants
D) an increase in the price of the resources used to produce yoga pants
E) new technology that lowers the cost of producing yoga pants
Topic: Changes in quantity supplied versus change in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
12) When the price of oranges increases
A) the supply of oranges increases.
B) the quantity of oranges demanded increases.
C) the quantity of oranges supplied increases.
D) the supply of oranges decreases.
E) none of the above
Topic: Changes in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
13) Which of the following increases the supply of a product?
A) lower prices for the resources used to produce the product
B) some producers going bankrupt and leaving the industry
C) a higher price for the product
D) an increase in the expected future price of the product
E) a decrease in productivity
Topic: Changes in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
14) Which of the following does NOT increase the supply of personal computers, that is, does NOT shift the supply curve of personal computers?
A) an advance in the technology used to produce personal computers
B) an increase in the number of firms producing personal computer
C) a fall in the cost of the components used to assemble personal computers
D) a rise the price of a personal computer
E) a change in the expected future price of a personal computer
Topic: Changes in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
15) Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a potato-like vegetable.)
A) an increase in the price of a rutabaga
B) an exceptionally cold summer that killed much of the rutabaga crop
C) a fall in the price of fertilizer used to grow rutabagas
D) Both answers A and C shift the supply curve of rutabagas rightward.
E) Both answers A and B shift the supply curve of rutabagas rightward.
Topic: Shifts of the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
16) Mulch is shredded wood and is a by-product in the production of lumber. Because these two goods are produced together, they are
A) complements in production.
B) substitutes in production.
C) inputs into the same production process.
D) not related.
E) normal goods in production.
Topic: Complements in production
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
17) A decrease in the price of a complement in production leads to
A) a decrease in the supply of the good in question.
B) an increase in the supply of the good in question.
C) no change in the supply of the good in question.
D) a decrease in the quantity supplied of the good in question.
E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.
Topic: Changes in supply, price of a complement in production
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
18) Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?
A) The supply of cheese increases.
B) The supply of cheese decreases.
C) The supply of cheese stays the same, and there is no change in the quantity supplied of cheese.
D) The supply of cheese stays the same, and there is a decrease in the quantity supplied of cheese.
E) The supply of cheese could increase, decrease, or stay the same depending on what happens to the supply of butter.
Topic: Changes in supply, price of a substitute in production
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
19) Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel. If the price of diesel fuel falls, there is
A) an increase in the supply of home heating oil.
B) a decrease in the supply of home heating oil.
C) an increase in the quantity of home heating oil supplied.
D) a decrease in the quantity of home heating oil supplied.
E) an increase in the demand for home heating oil.
Topic: Changes in supply, price of a substitute in production
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
20) Which of the following increases the supply of gasoline?
A) a situation where the quantity of gasoline demanded exceeds the quantity supplied
B) an increase in the price of gasoline
C) a decrease in the price of a resource used to produce gasoline, such as crude oil
D) a decrease in the demand for gas-guzzling, sport utility vehicles
E) an increase in income if gas-guzzling, sport utility vehicles are a normal good
Topic: Changes in supply, price of a resource
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
21) The United Auto Workers bargained for higher wages and more benefits for autoworkers. As a result of the higher wages and increased benefits
i. the quantity of new automobiles supplied decreases.
ii. the supply of new automobiles decreases.
iii. the supply of new automobiles increases.
A) only i
B) only ii
C) only iii
D) both i and ii
E) Neither i, ii, nor iii is correct.
Topic: Changes in supply, price of a resource
Skill: Level 4: Applying models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
22) If the automobile workers' union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles?
A) The supply increases.
B) The supply decreases.
C) The quantity supplied increases.
D) The quantity supplied decreases.
E) Both answers B and D are correct.
Topic: Changes in supply, price of a resource
Skill: Level 4: Applying models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
23) Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
A) The supply increases so that the supply curve shifts rightward.
B) The supply decreases so that the supply curve shifts leftward.
C) The quantity supplied increases, but there is no shift in the supply curve.
D) The quantity supplied decreases, but there is no shift in the supply curve.
E) The quantity supplied decreases, and the supply curve shifts leftward.
Topic: Changes in supply, price of a resource
Skill: Level 4: Applying models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
24) It is expected that the price of a bushel of wheat will increase in one month. This belief will result in
A) an increase in the current supply of wheat.
B) a decrease in the current supply of wheat.
C) a decrease in the future supply of wheat.
D) no change in the current or future supply of wheat.
E) an increase in the current quantity supplied of wheat.
Topic: Changes in supply, expectations
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
25) If the number of companies producing memory chips increases, then the
A) supply of memory chips does not change.
B) supply of memory chips increases.
C) supply of memory chips decreases.
D) quantity of memory chips supplied increases.
E) demand for memory chips increases.
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
26) An increase in the number of fast-food restaurants
A) raises the price of fast-food meals.
B) increases the demand for fast-food meals.
C) increases the supply of fast-food meals.
D) increases the demand for substitutes for fast-food meals.
E) increases both the demand and supply of fast-food meals.
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
27) An increase in the number of pineapple growers results in
A) an increase in the quantity of pineapples supplied and no shift in the supply curve of pineapples.
B) an increase in the supply of pineapples and a rightward shift in the supply curve of pineapples.
C) an increase in the supply of pineapples and a leftward shift in the supply curve of pineapples.
D) no change in the supply of pineapples and a movement along the supply curve of pineapples.
E) None of the above answers is correct.
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
28) If the number of sellers decreases, then the supply curve ________ and the supply ________.
A) shifts rightward; increases
B) shifts rightward; decreases
C) shifts leftward; increases
D) shifts leftward; decreases
E) does not shift; does not change, but there is a decrease in the quantity supplied
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
29) Which of the following results in an increase in the supply of a good or service?
A) a fall in the price of the good or service
B) a smaller number of sellers producing the good or service
C) an increase in foreign imports of the good or service
D) higher taxes imposed upon producers of the good or service
E) a rise in the price of the good or service
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
30) Researchers have found a hybrid of corn that is cheaper to grow. This technological breakthrough
A) increases the demand for hybrid corn.
B) increases the supply of hybrid corn.
C) decreases the supply of hybrid corn.
D) Both answers A and C are correct.
E) Both answers A and B are correct.
Topic: Changes in supply, productivity
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
31) Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
A) a decrease in the supply of electric cars so that the supply curve shifts leftward.
B) a decrease in the supply of electric cars so that the supply curve shifts rightward.
C) an increase in the supply of electric cars so that the supply curve shifts leftward.
D) an increase in the supply electric cars so that the supply curve shifts rightward.
E) no change in the supply of electric cars, only a change in the quantity supplied of electric cars.
Topic: Changes in supply, shifts of the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
32) Which of the following increases the supply of a good and shifts its supply curve rightward?
A) a smaller number of producers
B) a higher wage paid to workers in the industry
C) a technological advance in how the good is produced
D) an increase in the cost of the resources used to produce the good
E) an increase in the price of the good
Topic: Changes in supply, productivity
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
33) Which of the following increases the supply of a good?
A) The price of a complement in production decreases.
B) Producers expect higher prices for the good in the future.
C) Productivity improves.
D) Prices of inputs used to produce the good rise.
E) The number of producers decreases.
Topic: Changes in supply, productivity
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
34) Advances in productivity increase supply because they might
A) increase the price expected in the future.
B) decrease the number of goods available.
C) decrease the cost of production.
D) raise the prices of resources used to produce the good.
E) increase the number of firms producing the good.
Topic: Changes in supply, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
35) The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________.
A) increases; shifts rightward
B) increases; shifts leftward
C) decrease; shifts rightward
D) decreases; shifts leftward
E) increases; does not shift
Topic: Changes in supply, shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
36) Which of the following shifts the supply curve for oranges?
A) disastrous weather that destroys about half of this year's orange crop
B) a newly discovered increase in the nutritional value of oranges
C) an increase in the price of bananas, a substitute in consumption for oranges
D) an increase in income for all orange consumers if oranges are a normal good
E) an increase in the number of orange consumers
Topic: Shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
37) Because of the high cost of fuel, railroads such as Union Pacific Corp and CSX Corp have increased the price they charge to haul freight. This change means that
A) the demand curve for hauling freight has shifted leftward.
B) the supply curve for hauling freight has shifted leftward.
C) the demand curve for hauling freight has shifted rightward.
D) the supply curve for hauling freight has shifted rightward.
E) neither the supply curve nor the demand curve for hauling freight has shifted; the only change is that the price is higher.
Topic: Shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
38) Which of the following shifts the supply curve of popcorn leftward?
A) a decrease in the price of popcorn
B) an increase in the price of popcorn
C) a technological development in the production of popcorn
D) a decrease in the number of popcorn suppliers
E) a decrease in the cost of producing popcorn
Topic: Shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
39) In the above figure, the movement from point a to point b reflects
A) an increase in the price of pizza.
B) an increase in the supply of pizza.
C) an increase in the number of producers of pizza.
D) a decrease in the cost of the tomato sauce used to produce pizza.
E) a decrease in income if pizza is a normal good.
Topic: Changes in quantity supplied
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
40) In the above figure, the shift in the supply curve from S to S1 reflects
A) an increase in the quantity of pizza supplied.
B) a decrease in the quantity of pizza supplied.
C) an increase in the supply of pizza.
D) a decrease in the supply of pizza.
E) None of the above answers is correct.
Topic: Changes in supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
41) In the above figure, the shift in the supply curve from S to S2 reflects
A) an increase in the quantity of pizza supplied.
B) a decrease in the quantity of pizza supplied.
C) an increase in the supply of pizza.
D) a decrease in the supply of pizza.
E) a decrease in the supply of pizza and a simultaneous decrease in the quantity of pizza supplied.
Topic: Changes in supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
42) In the above figure, the shift in the supply curve from S to S2 might reflect
A) a decrease in the cost of the tomato sauce used to produce pizza.
B) a decrease in the number of pizza producers.
C) an increase in the price of a pizza.
D) an increase in income if pizza is a normal good.
E) an increase in the price of a good that is a substitute for consumers.
Topic: Shifts of the supply curve, number of sellers
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
43) In the above figure, an increase in cost of the cheese used to produce pizza
A) shifts the supply curve from S to S1.
B) shifts the supply curve from S to S2.
C) results in a movement from point a to point b.
D) results in a movement from point b to point a.
E) has no effect.
Topic: Shifts of the supply curve, cost of resources
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
44) In the above figure, an increase in productivity
A) shifts the supply curve from S to S1.
B) shifts the supply curve from S to S2.
C) results in a movement from point a to point b.
D) results in a movement from point b to point a.
E) has no effect.
Topic: Shifts of the supply curve, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
45) The above figure shows the market for laptops. Which of the following causes a movement from A to B?
A) a decrease in the number of laptop manufactures and sellers
B) an increase in the productivity of the workers manufacturing laptops
C) an increase in the cost of hard drives
D) an increase in the price of laptops
E) a decrease in the price of laptops
Topic: Changes in quantity supplied
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
46) The above figure shows the market for laptops. Which of the following causes a movement from B to A?
A) an increase in the cost of hard drives
B) an increase in the productivity of the workers manufacturing laptops
C) a decrease in the price of laptops
D) an increase in the price of laptops
E) an increase in the number of laptop manufactures and sellers
Topic: Changes in quantity supplied
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
47) The above figure shows the market for laptops. Which of the following shifts the supply curve from S0 to S2?
A) an increase in the cost of hard drives
B) an increase in the productivity of the workers manufacturing laptops
C) a decrease in the price of laptops
D) an increase in the price of laptops
E) a decrease in the number of laptop manufactures and sellers
Topic: Changes in supply, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
48) The above figure shows the market for laptops. Which of the following shifts the supply curve from S0 to S1?
A) an increase in the cost of hard drives
B) a decrease in the price of laptops
C) an increase in the number of laptop manufactures and sellers
D) an increase in the price of laptops
E) an increase in the productivity of the workers manufacturing laptops
Topic: Changes in supply, price of a resource
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
49) The above figure illustrates the market for corn. If point "a" represents the original equilibrium and point "b" the new equilibrium, which of the following could have caused the change?
A) an increase in consumers' preferences for corn
B) an increase in consumers' income if corn is a normal good
C) an increase in labor costs of producing corn
D) an improvement in the technology of producing corn
E) an increase in consumers' income if corn is an inferior good
Topic: Shifts of the supply curve, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
50) The above figure illustrates the market for corn. If point "a" represents the original equilibrium and point "b" the new equilibrium, which of the following could have caused the change?
A) an increase in the number of corn growers
B) an increase the price of wheat, a substitute in production for corn
C) an increase in the cost of the fertilizer used to grow the corn
D) a belief among corn farmers that the price of a bushel of corn will be higher next month
E) an increase in income if corn is a normal good
Topic: Shifts of the supply curve, number of sellers
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
51) The above figure illustrates the market for corn. If point "a" represents the original equilibrium and point "b" the new equilibrium, which of the following could have caused the change?
A) a decrease in the number of corn growers
B) a decrease the price of wheat, a substitute in production for corn
C) an increase in the cost of the seed used to grow the corn
D) an decrease in buyers' incomes if corn is an inferior good
E) an increased belief among buyers that corn is healthy
Topic: Shifts of the supply curve, price of a substitute in production
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
52) In the figure above, if point "a" represents the original equilibrium and point "b" the new equilibrium, then
A) there has been an increase in supply.
B) there has been an increase in demand.
C) there has been a change in the quantity supplied and no change in supply.
D) Both answers B and C are correct.
E) Both answers A and B are correct.
Topic: Shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
53) Autoworkers negotiate a wage increase. How does this change affect the supply curve of cars?
A) It shifts the supply curve leftward.
B) It shifts the supply curve rightward.
C) It does not shift the supply curve or create a movement along it.
D) The supply curve will shift but there is not enough information to tell if the change shifts the supply curve rightward, leftward, or not at all.
E) It creates a movement downward along the supply curve.
Topic: Shifts of the supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
54) The figure shows the market for tires. If the price of tires falls from $90 to $60 per tire, this can be shown as a ________ because all other factors affecting selling plans are ________.
A) movement down along S0; held constant
B) movement down along S0; allowed to vary
C) shift from S0 to S1; allowed to vary
D) shift from S1 to S0; held constant
E) movement down along S0; unpredictable
Topic: Law of supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
55) The figure shows the market for tires. A change in the price of tires from $60 to $120
A) is shown as a movement from point B to point A.
B) causes a shift from S1 to S0.
C) is shown as a movement from point A to point C.
D) causes shift from S0 to S1.
E) could be caused a a decrease in the price of rubber.
Topic: Changes in quantity supplied
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
56) The figure shows the market for tires. The effect of an increase in the price of rubber can be shown as a
A) shift from S1 to S0 due to a change in supply.
B) change from point A to point B.
C) shift from S0 to S1 due to a change in supply.
D) change from point B to point A.
E) change from point B to point C due to a change in the quantity supplied.
Topic: Changes in supply, price of a resource
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
57) If the supply of iPads increases, then
i. the supply curve for iPads has shifted rightward.
ii. the price of iPads has decreased.
iii. there will be a movement upward along the iPad supply curve.
A) i only
B) i, ii and iii
C) i and ii
D) ii and iii
E) i and iii
Topic: Quantity supplied versus supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
58) Which of the following leads to an increase in the quantity supplied but not an increase in supply?
A) a decrease in the costs of production
B) an increase in the product's price
C) an advance in the technology used to produce the good
D) an increase in the price of another product that the suppliers can produce
E) an increase in the number of firms producing the good or service
Topic: Quantity supplied versus supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
59) The price of salsa rises. How does the increase in the price of salsa affect the supply of salsa?
A) The supply of salsa increases.
B) The supply of salsa decreases.
C) There is no change to either the supply of salsa or the quantity of salsa supplied.
D) There is no change to the supply of salsa, but the quantity of salsa supplied increases.
E) There is no change to the supply of salsa, but the quantity of salsa supplied decreases.
Topic: Quantity supplied versus supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
60) If a higher price for wheat decreases the quantity of corn being produced, which of the following describes what has occurred?
A) The supply of wheat increased and the supply of corn decreased.
B) The quantity of wheat supplied increased and quantity of corn supplied decreased.
C) The supply of wheat increased and the quantity of corn supplied decreased
D) The quantity of wheat supplied increased and the supply of corn decreased.
E) The supply of wheat decreased and the supply of corn decreased.
Topic: Quantity supplied versus supply
Skill: Level 4: Applying models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
61) "Other things remaining the same, if the price of a good rises, the quantity supplied of that good increases." This sentence describes a
A) shift of a supply curve.
B) shift of the price curve.
C) movement along a supply curve.
D) movement along the price curve.
E) movement along the quantity curve.
Topic: Movement along the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
62) The quantity supplied of a good, service, or resource is ________ during a specified period and at a specified price.
A) the amount that people are able to sell
B) the amount that people are willing to sell
C) the amount that people are able and willing to sell
D) the amount that people are willing and able to buy
E) the amount sold
Topic: Quantity supplied
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
63) The quantity supplied of a good is
A) the same thing as the quantity demanded at each price.
B) the amount that the people are willing and able to sell during a given time period at a specified price.
C) equal to the difference between the quantity available and the quantity desired by all consumers and producers.
D) the amount the firm will sell when it can sell all it wants.
E) always larger than the quantity demanded at each price.
Topic: Quantity supplied
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
64) The graph illustrates the supply of sweaters. Which of the following events will increase the quantity supplied of sweaters?
A) a rise in the price of a sweater
B) a rise in the wage rate paid to the workers who make sweaters
C) a rise in the expected future price of a sweater
D) an increase in the number of sellers of sweaters
E) a decrease in the number of sweater buyers
Topic: Quantity supplied
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
65) Which of the following indicates that the law of supply applies to makers of soda?
A) An increase in the price of a soda leads to an increase in the demand for soda.
B) An increase in the price of a soda leads to an increase in the supply of soda.
C) An increase in the price of a soda leads to an increase in the quantity of soda supplied.
D) A decrease in the price of a soda leads to an increase in the quantity of soda demanded.
E) A decrease in the price of a soda leads to an increase in the supply of soda.
Topic: Law of supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
66) One reason supply curves have an upward slope is because
A) increased supply will require increased technology.
B) people will pay a higher price when less is supplied.
C) a higher price brings a greater profit, so firms want to sell more of that good.
D) to have more of the good supplied requires more firms to open.
E) None of the above answers is correct because supply curves have a downward slope.
Topic: Supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
67) The market supply curve is the ________ of the ________.
A) horizontal sum; individual supply curves
B) vertical sum; individual supply curves
C) horizontal sum; individual supply curves minus the market demand
D) vertical sum; individual supply curves minus the market demand
E) vertical average; of the individual supply curves
Topic: Market supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
68) If the costs of producing pizza increase, which will occur?
A) The supply of pizza will decrease.
B) The quantity of pizzas supplied will increase as sellers try to cover their costs.
C) Pizza will cease to be produced and sold.
D) The demand curve for pizza will shift leftward when the price of a pizza increases.
E) The demand curve for pizza will shift rightward when the price of a pizza increases.
Topic: Changes in supply, costs
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
69) Wheat is used to produce cereal. When the price of wheat falls, the
A) demand for wheat increases.
B) supply of wheat decreases.
C) supply of cereal increases.
D) demand for cereal increases.
E) demand for cereal decreases.
Topic: Changes in supply, costs
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
70) A rise in the price of a substitute in production for a good leads to
A) an increase in the supply of that good.
B) a decrease in the supply of that good.
C) no change in the supply of that good; instead there is a change in the quantity supplied.
D) a decrease in the quantity of that good supplied.
E) no change in either the supply or the quantity supplied of the good.
Topic: Changes in supply, price of a substitute in production
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
71) Suppose the price of leather used to produce shoes increases. The higher price of leather ________ the supply of shoes and the supply curve of shoes ________.
A) increases; shifts rightward
B) increases; shifts leftward
C) decreases; shifts rightward
D) decreases; shifts leftward
E) does not change; does not shift
Topic: Changes in supply, price of a resource
Skill: Level 4: Applying models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
72) An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.
A) increases; rightward
B) increases; leftward
C) decreases; rightward
D) decreases; leftward
E) does not change; rightward
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
73) Which of the following will increase the supply of a product?
A) an increase in the price of the product
B) an increase in the demand for the product
C) an increase in the number of sellers
D) a decrease in the demand for the product
E) an increase in the price of inputs
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
74) The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters?
A) a rise in the price of a sweater
B) a rise in the wage rate paid to the workers who make sweaters
C) a rise in the expected future price of a sweater
D) an increase in the number of sellers of sweaters
E) an increase in income if sweaters are a normal good
Topic: Changes in supply, number of sellers
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
75) The graph illustrates the supply of sweaters. As the technology used to produce sweaters improves, the
A) supply of sweaters decreases and the demand for sweaters does not change.
B) supply of sweaters increases and the demand for sweaters does not change.
C) quantity of sweaters supplied increases.
D) quantity of sweaters supplied decreases.
E) supply of sweaters increases and the demand for sweaters increases.
Topic: Changes in supply, productivity
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
76) An increase in the productivity of producing jeans results in
A) the quantity of jeans supplied increasing.
B) the supply of jeans increasing.
C) buyers demanding more jeans because they are now more efficiently produced.
D) buyers demanding fewer jeans because their price will fall, which signals lower quality.
E) some change, but the impact on the supply of jeans is impossible to predict.
Topic: Changes in supply, productivity
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
77) A change in the price of a good ________ its supply curve and ________ a movement along its supply curve.
A) shifts; causes
B) shifts; does not cause
C) does not shift; causes
D) does not shift; does not cause
E) None of the above because the change in the price might cause either a shift in the supply curve or a movement along the supply curve depending on the size of the change.
Topic: Shifts of the supply curve versus movement along the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
78) The graph illustrates the supply of sweaters. A fall in the price of sweaters brings
A) a movement along the supply curve.
B) a decrease in the quantity supplied of sweaters.
C) a shift of the supply curve.
D) Both answers A and B are correct.
E) Both answers B and C are correct.
Topic: Movement along the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
79) The graph illustrates the supply of soda. If the price of soda rises from $0.50 a can to $1.50 a can, the quantity of soda supplied
A) increases from 0 cans to 4,000 cans a day.
B) decreases from 4,000 cans to 0 cans a day.
C) remains unchanged because the supply increases not the quantity supplied.
D) increases from 0 to 6,000 cans a day.
E) remains unchanged because the supply decreases not the quantity supplied.
Topic: Movement along the supply curve
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
80) When the price of rice rises
A) the market quantity supplied of rice increases.
B) the market supply of rice increases.
C) the market quantity of rice demanded decreases.
D) Both A and C are true.
E) Both A and B are true.
Topic: Changes in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
81) Wheat is used to produce cereal. When the price of wheat falls, the
A) demand for wheat increases.
B) supply of wheat decreases.
C) supply of cereal increases.
D) demand for cereal increases.
E) demand for cereal decreases.
Topic: Changes in supply, expectations
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
82) The table below shows the three firms that are suppliers in the frozen yogurt market.
Price Quantity Supplied
($ per serving) (1,000s of servings supplied)
YoYo | FunFro | Yummy | |
8.00 | 300 | 300 | 400 |
7.00 | 150 | 200 | 300 |
6.00 | 0 | 100 | 200 |
|
If the price in the market is $6.00
A) only 2 firms supply a total of 300 servings.
B) 450 servings are supplied in the market.
C) 600 servings are supplied in the market.
D) all 3 firms supply a total of 900 servings.
E) there will be a shortage of frozen yogurt.
Topic: Market supply curve
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
4.3 Market Equilibrium
1) Market equilibrium occurs when
A) all markets become equal.
B) the quantity demanded equals the quantity supplied.
C) opposing forces pull demand and supply apart.
D) demand and supply move in opposite direction.
E) demand and supply change so that they are equal at all possible prices.
Topic: Market equilibrium
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
2) Market equilibrium occurs when
A) the quantity demanded equals the quantity supplied.
B) the market is changing rapidly.
C) other things remain the same.
D) buyers get the lowest possible price.
E) everyone who wants the good gets the quantity he or she wants.
Topic: Market equilibrium
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
3) Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it.
ii. occurs at the intersection of the supply and demand curves.
iii. is the point where the price equals the quantity.
A) ii only
B) iii only
C) ii and iii
D) i only
E) i and ii
Topic: Market equilibrium
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
4) A surplus of cardboard boxes means that
A) at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied.
B) at the current price of a cardboard box, the quantity demanded is less than the quantity supplied.
C) the current price of a cardboard box is less than the equilibrium price.
D) at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium.
E) More information is needed to determine if the price of cardboard boxes is higher than, lower than, or equal to the equilibrium price.
Topic: Surplus
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
5) When there is a surplus of snowboards, the
A) demand for snowboards is greater than the supply of snowboards.
B) supply of snowboards is greater than the demand for snowboards.
C) quantity of snowboards demanded is greater than the quantity of snowboards supplied.
D) quantity of snowboards supplied is greater than the quantity of snowboards demanded.
E) price rises to restore the equilibrium.
Topic: Surplus
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
6) If there is a surplus of tacos, then the
A) quantity of tacos demanded equals the quantity of tacos supplied.
B) quantity of tacos demanded is greater than the quantity of tacos supplied.
C) quantity of tacos demanded is less than the quantity of tacos supplied.
D) market is at equilibrium.
E) supply curve of tacos will shift leftward to eliminate the surplus.
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
7) When a surplus of rice occurs
A) the price of rice rises.
B) the price of rice falls.
C) there is a balance between the forces of supply and demand.
D) the quantity demanded is greater than quantity supplied at the current price.
E) the demand curve shifts rightward and the supply curve shifts leftward to eliminate the surplus.
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
8) Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a
A) shortage exists and the price falls to restore equilibrium.
B) shortage exists and the price rises to restore equilibrium.
C) surplus exists and the price falls to restore equilibrium.
D) surplus exists and the price rises to restore equilibrium.
E) surplus exists but nothing happens until either the demand or the supply changes.
Topic: Surplus
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
9) Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
A) shortage, so the price falls and quantity demanded increases.
B) surplus, so the price falls and quantity demanded increases.
C) shortage, so the price rises and quantity demanded decreases.
D) surplus, so the price rises and quantity demanded increases.
E) surplus, so the price falls and quantity supplied increases.
Topic: Surplus
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
10) As a falling price eliminates a surplus in the jersey market
A) the demand curve for jerseys shifts leftward, and the supply curve of jerseys shifts rightward.
B) consumers increase the quantity of jerseys they demand.
C) producers increase the quantity of jerseys they supply.
D) producers decrease the quantity of jerseys they supply, and buyers decrease the quantity of jerseys they demand.
E) the demand curve for jerseys shifts rightward, and the supply curve of jerseys shifts leftward.
Topic: Surplus
Skill: Level 5: Critical thinking
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
11) If the price is below the equilibrium price
A) there is a surplus.
B) there is a shortage.
C) the supply curve will shift rightward.
D) the supply curve will shift leftward.
E) the demand curve will shift leftward.
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
12) When there is a shortage of parking spaces at your college, the
A) demand for parking spaces is greater than the supply.
B) supply of parking spaces is greater than the demand.
C) quantity of parking spaces supplied is greater than the quantity of parking spaces demanded.
D) quantity of parking spaces demanded is greater than the quantity of parking spaces supplied.
E) Both answers A and D are correct.
Topic: Shortage
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
13) If the price of carrots is below the equilibrium price, the
A) quantity demanded of carrots exceeds the quantity supplied and a surplus exists.
B) quantity supplied of carrots exceeds the quantity demanded and a surplus exists.
C) quantity demanded of carrots exceeds the quantity supplied and a shortage exists.
D) quantity supplied of carrots exceeds the quantity demanded and a shortage exists.
E) quantity supplied of carrots equals the quantity demanded.
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
14) Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
A) There is a shortage, so the price falls and quantity demanded increases.
B) There is a surplus, so the price falls and quantity demanded increases.
C) There is a shortage, so the price rises and quantity demanded decreases.
D) There is a shortage, so the price rises and quantity demanded increases.
E) There is a shortage, so the price falls and quantity demanded decreases.
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
15) The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.30 then
A) there is a surplus of gasoline in Tulsa.
B) there is a shortage of gasoline in Tulsa.
C) the gasoline market in Tulsa is in equilibrium.
D) Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.
E) There is neither a surplus nor a shortage, but the market is NOT in equilibrium.
Topic: Market equilibrium
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
16) The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.25, then
A) there is a surplus of gasoline in Tulsa.
B) there is a shortage of gasoline in Tulsa.
C) the gasoline market in Tulsa is in equilibrium.
D) Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.
E) There is neither a surplus nor a shortage, but the market is NOT in equilibrium.
Topic: Surplus
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
17) The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.20, then
A) there is a surplus of gasoline in Tulsa.
B) there is a shortage of gasoline in Tulsa.
C) the gasoline market in Tulsa is in equilibrium.
D) Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.
E) There is neither a surplus nor a shortage, but the market is NOT in equilibrium.
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
18) Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone is
A) 50,000 and $100.
B) 80,000 and $80.
C) 60,000 and $50.
D) 40,000 and $20.
E) 100,000 and $20.
Topic: Market equilibrium
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
19) Using the data in the table above, at the price of $80 a phone
A) a shortage of 25,000 cellular telephones occurs.
B) a surplus of 80,000 cellular telephones occurs.
C) a surplus of 25,000 cellular telephones occurs.
D) a shortage of 55,000 cellular telephones occurs.
E) the market is in equilibrium.
Topic: Surplus
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
20) Using the data in the table above, the equilibrium quantity and equilibrium price for a stapler is
A) 10,000 and $8.
B) 90,000 and $8.
C) 100,000 and $5.
D) 70,000 and $6.
E) 60,000 and $5.
Topic: Market equilibrium
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
21) Using the data in the table above, if the price of a stapler is $8, then there is ________ of staplers, and the quantity of staplers demanded ________ the quantity of staplers supplied.
A) a surplus; is greater than
B) a surplus; is less than
C) a shortage; is greater than
D) a shortage; is less than
E) neither a surplus nor a shortage; equals
Topic: Surplus
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
22) Using the data in the table above, if the price of a stapler is $5, then there is ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.
A) a surplus; is greater than
B) a surplus; is less than
C) a shortage; is greater than
D) a shortage; is less than
E) neither a surplus nor a shortage; equals
Topic: Shortage
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
23) In the figure above, a price of $35 per dozen roses results in
A) a shortage.
B) equilibrium.
C) a surplus.
D) upward pressure on the price of roses.
E) an eventual rightward shift of the demand curve and/or leftward shift of the supply curve.
Topic: Surplus
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
24) In the figure above, a price of $15 per dozen roses results in
A) equilibrium.
B) a shortage.
C) a surplus.
D) downward pressure on the price of roses.
E) an eventual leftward shift of the demand curve and/or rightward shift of the supply curve.
Topic: Shortage
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
25) The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then
A) there is a shortage and the price of t-shirts will rise.
B) there is a surplus and the price of t-shirts will rise.
C) the market is in equilibrium.
D) there is a shortage and the price of t-shirts will fall.
E) there is a surplus and the price of t-shirts will fall.
Topic: Surplus, shortage, market equilibrium
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
26) The above figure shows the market for game day t-shirts. If the price of t-shirts is $10, then
A) there is a surplus and the price of t-shirts will rise.
B) there is a shortage and the price of t-shirts will rise.
C) there is a shortage and the price of t-shirts will fall.
D) there is a surplus and the price of t-shirts will fall.
E) the market is in equilibrium.
Topic: Surplus, shortage, market equilibrium
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
27) The above figure shows the market for game day t-shirts. If the price of t-shirts is $12, then
A) there is a shortage and the price of t-shirts will fall.
B) there is a shortage and the price of t-shirts will rise.
C) there is a surplus and the price of t-shirts will rise.
D) there is a surplus and the price of t-shirts will fall.
E) the market is in equilibrium.
Topic: Surplus, shortage, market equilibrium
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
28) The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then
A) the market is in equilibrium.
B) there is a surplus and the price of t-shirts will rise.
C) the quantity demanded is greater than quantity supplied.
D) there is a shortage and the price of t-shirts will fall.
E) there is a surplus and the price of t-shirts will fall.
Topic: Surplus, shortage, market equilibrium
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
29) Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; does not change
C) falls; does not change
D) falls; decreases
E) falls; increases
Topic: Effects of an increase in demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
30) If a market begins in equilibrium and then the demand curve shifts leftward, a
A) shortage is created, which is eliminated by a fall in price.
B) shortage is created, which is eliminated by a rise in price.
C) surplus is created, which is eliminated by a fall in price.
D) surplus is created, which is eliminated by a rise in price.
E) surplus is created, which is eliminated by the supply curve shifting leftward.
Topic: Effects of a decrease in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
31) When the demand curve shifts rightward and the market moves to a new equilibrium, then the
A) supply increases.
B) supply decreases.
C) quantity supplied increases.
D) quantity supplied decreases.
E) price falls to restore the equilibrium.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
32) An increase in both the equilibrium price and quantity can be the result of
A) a decrease in demand.
B) an increase in supply.
C) a decrease in supply.
D) an increase in demand.
E) None of the above answers is correct.
Topic: Effects of an increase in demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
33) Suppose the equilibrium quantity of movie tickets is 1,000. If the demand curve shifts ________, the equilibrium quantity of movie tickets will ________.
A) rightward; increase
B) rightward; decrease
C) leftward; increase
D) rightward; not change
E) leftward; not change
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
34) If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.
A) rise; increase
B) rise; decrease
C) fall; increase
D) fall; decrease
E) not change; increase
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
35) Because of a sharp increase in the price of gasoline, the demand for Sports Utility vehicles (SUVs) has decreased. So, the high price of gasoline leads to a
A) leftward shift of the demand curve for SUVs and the supply curve of SUVs.
B) leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs.
C) leftward shift of the demand curve for SUVs and a rightward shift of the supply curve of SUVs.
D) leftward shift of the supply curve of SUVs and no shift in the demand curve for SUVs.
E) rightward shift of the supply curve of SUVs and no shift in the demand curve for SUVs.
Topic: Effects of an increase in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
36) If the price of tangerines increases, the price of oranges also rises because
A) consumers consider the two goods complements and so sellers decreased the supply of oranges.
B) consumers consider the two goods substitutes and demand for oranges increases.
C) if the supply of tangerines decreased, then the supply of oranges also must decrease.
D) buyers must have expected a higher price for oranges and thus increased their demand for oranges.
E) buyers' incomes must have decreased and oranges are an inferior good.
Topic: Effects of an increase in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
37) Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?
A) Both the supply and the demand for new houses increased, and the supply increased by more than the demand.
B) The demand for new houses increased, and the supply did not change.
C) Both the supply and demand for new houses decreased.
D) The supply of new houses decreased, and the demand for new houses did not change.
E) The supply of new houses increased, and the demand for new houses did not change.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
38) Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?
A) The wage paid carpenters who build new houses might have risen.
B) A technological advance in framing a new house might have occurred.
C) The rent for nearby apartments might have fallen.
D) More home buyers might have moved into the area.
E) The cost of wood framing used to build houses might have fallen.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
39) Suppose that over the next few years the demand for dancing to country and western music decreases. Hence, at country and western dance clubs the equilibrium price of admission ________ and the equilibrium quantity of dancing ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
40) For consumers, taco chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of taco chips?
A) The equilibrium price of taco chips falls, and the equilibrium quantity decreases.
B) The equilibrium price of taco chips rises, and the equilibrium quantity decreases.
C) There is no change in the equilibrium price of taco chips, and the equilibrium quantity increases.
D) The equilibrium price of taco chips could rise, fall, or stay the same, and the equilibrium quantity increases.
E) The equilibrium price of taco chips rises, and the equilibrium quantity increases.
Topic: Effects of a decrease in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
41) Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
E) decreases; does not change
Topic: Effects of a decrease in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
42) Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________, and the equilibrium quantity of cream cheese ________.
A) rises; decreases
B) rises; increases
C) falls; decreases
D) does not change; does not change
E) falls; increases
Topic: Effects of a decrease in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
43) Suppose that people decide riding scooters is no longer fun. The equilibrium price of a scooter ________, and the equilibrium quantity of scooters ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
44) Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) rises; does not change
D) falls; decreases
E) falls; increases
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
45) If the supply of solar panels increases
A) the price and quantity of solar panels increases.
B) the demand for solar panels increases.
C) the quantity demanded of solar panels decreases.
D) the price of solar panels decreases and the quantity increases.
E) None of the above.
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
46) If good weather conditions result in a larger than normal crop of peaches, then the
A) equilibrium price of peaches rises, and the equilibrium quantity of peaches increases.
B) equilibrium price of peaches falls, and the equilibrium quantity of peaches increases.
C) demand curve for peaches shifts leftward.
D) increase in the supply of peaches induces a greater demand for peaches, so that the equilibrium price rises and the equilibrium quantity increases.
E) equilibrium price of peaches falls, and the equilibrium quantity of peaches decreases.
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
47) The initial equilibrium price in the market for Web pages is $200 per page and 1,000 Web pages are created in a month. Many new Web design firms now enter the market. As a result
A) the supply of Web pages increases and the price falls.
B) the supply curve of Web pages shifts leftward and the price falls.
C) the demand for Web pages increases and the price rises.
D) the supply of web pages increase and the price falls, which then increases the demand for Web pages and the demand curve shifts rightward.
E) the demand for Web pages increases and the price falls.
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
48) Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts ________, the equilibrium price will ________.
A) rightward; decrease
B) leftward; decrease
C) rightward; increase
D) leftward; not change
E) rightward; not change
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
49) Which of the following lowers the equilibrium price of a canoe?
A) an increase in the supply of canoes
B) an increase in the demand for canoes
C) an increase in the quantity of canoes supplied
D) a decrease in the supply of canoes
E) Both answers A and B are correct.
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
50) When personal computers were first produced, the price was very high. As time passed, the price of personal computers fell because
A) the demand for personal computers decreased.
B) the initial price was too high and nobody bought personal computers.
C) there were technological advances in the production of personal computers.
D) people's incomes increased and personal computers are an inferior good.
E) None of the above answers is correct.
Topic: Effects of an increase in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
51) An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of
A) a decrease in demand.
B) an increase in supply.
C) a decrease in supply.
D) an increase in demand.
E) None of the above.
Topic: Effects of a decrease in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
52) If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
53) Suppose that the price of bread rises. This rise could be the result of
A) a decrease in the supply of bread.
B) an increase in the supply of bread.
C) a decrease in the demand for bread.
D) Both answers A and C are correct.
E) Both answers B and C are correct.
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
54) If an early frost destroys most of the apple crop, the equilibrium price of an apple ________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
55) In Great Britain, raising taxes on gasoline has increased the costs of supplying gasoline. As a result, the equilibrium quantity of gasoline ________, and the equilibrium price of gasoline ________.
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
E) does not change; rises
Topic: Effects of a decrease in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
56) Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; does not change
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
57) Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________, and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
58) A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A or Figure C
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
59) Contractors can use plywood or brick to construct walls. Suppose the price of bricks increases. Which of the figures above best illustrates the effect of this change on the market for plywood?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A or Figure C depending on how contractors react to the higher price of bricks.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
60) The number of logging firms increases. Which of the figures above best illustrates this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A and Figure D
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
61) New technology for producing plywood is developed. Which of the figures above best illustrates this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A and Figure D
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
62) In an effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington. Which of the figures above best illustrates the effect of this new law?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above because a prohibition cannot be illustrated using demand and supply figures.
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
63) Which figure above shows the effect if research is published claiming that eating pizza is healthy?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure A and Figure D
Topic: Effects of an increase in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
64) Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Topic: Effects of a decrease in demand
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
65) Which figure above shows the effect of a technological advance in the production of pizza?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure A and Figure D
Topic: Effects of an increase in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
66) Which figure above shows the effect of a decrease in the number of pizza sellers?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Topic: Effects of a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
67) Which figure above shows the effect of an increase in the cost of the tomato sauce used to produce pizza?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Both Figure B and Figure C
Topic: Effects of a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
68) The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
69) The above figure shows the market for pizza. The market is in equilibrium when the cheese used to produce pizza falls in price. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
70) The above figure shows the market for pizza. The market is in equilibrium when the wages paid pizza workers increases. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
71) The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
72) The above figure shows the market for pizza. The market is in equilibrium when some of the pizza firms go out of business. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
73) The above figure shows the market for pizza. The market is in equilibrium when people learn that eating pizza helps prevent heart disease. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
74) The above figure shows the market for pizza. The market is in equilibrium. Pizza and tacos are substitutes for consumers. The price of tacos falls. What point represents the most likely new price and quantity?
A) A
B) B
C) C
D) D
E) E
Topic: Effects of a decrease in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
75) If both the supply and demand curves shift simultaneously, we can always predict what will happen to
A) both the price and the quantity.
B) either the price or the quantity, but not both.
C) only the price.
D) only the quantity.
E) neither the price nor the quantity.
Topic: Effects of changes in both demand and supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
76) A competitive market is in equilibrium. Then there is an increase in demand and an increase in supply. The equilibrium price ________, and the equilibrium quantity ________.
A) rises; increases
B) perhaps changes but we can't say if it rises, falls, or stays the same; does not change
C) falls; increases
D) perhaps changes but we can't say if it rises, falls, or stays the same; increases
E) falls; perhaps changes but we can't say if it increases, decreases, or stays the same
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
77) If the demand and supply both increase equally, then the equilibrium price ________ and the equilibrium quantity ________.
A) increases; increases
B) increases; does not change
C) does not change; increases
D) increases; decreases
E) decreases; does not change
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
78) Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.
A) raises; increases
B) probably changes, but more information is needed to determine if it rises or falls; increases
C) raises; probably changes, but more information is needed to determine if it increases or decreases
D) lowers; probably changes, but more information is needed to determine if it increases or decreases
E) lowers; increases
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
79) A competitive market is in equilibrium. Then there is a decrease in demand and a decrease in supply. The equilibrium price ________, and the equilibrium quantity ________.
A) rises; decreases
B) perhaps changes but we can't say if it rises, falls, or stays the same; decreases
C) falls; increases
D) perhaps changes but we can't say if it rises, falls, or stays the same; increases
E) rises; increases
Topic: Effects of a decrease in demand and a decrease in supply.
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
80) If both supply and demand decrease by the same amount, the equilibrium price
A) does not change.
B) rises.
C) falls.
D) cannot be predicted.
E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.
Topic: Effects of a decrease in demand and a decrease in supply.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
81) Both the demand for and supply of cars changes in France. You observe that the quantity of cars does not change but the price rises. Thus, which of the following occurred?
A) Demand and supply increased by an equal amount.
B) Demand and supply decreased by an equal amount.
C) Demand increased and supply decreased by an equal amount.
D) Demand decreased and supply increased by an equal amount.
E) Demand increased by a larger magnitude than supply decreased.
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
82) Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?
A) Desktop computers are a normal good and incomes increased, while more firms entered the market.
B) The price of a laptop computer, a substitute for desktop computers, fell, and the cost of producing desktop computers decreased.
C) Consumers purchased more computers because of the Christmas season, and the labor costs of producing desktop computers decreased.
D) Desktop computers are a normal good and incomes increased, while the labor costs of producing personal computers increased.
E) Desktop computers are a normal good and incomes decreased, while the labor costs of producing personal computers increased.
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
83) If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then
A) the equilibrium price definitely rises.
B) the equilibrium price definitely falls.
C) the equilibrium price definitely remains the same.
D) More information is needed to determine the effect on the equilibrium price.
E) the equilibrium quantity definitely increases.
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
84) If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then
A) the equilibrium quantity definitely increases.
B) the equilibrium quantity definitely decreases.
C) the equilibrium quantity definitely remains the same.
D) More information is needed to determine the effect on the equilibrium quantity.
E) the equilibrium price definitely falls.
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
85) The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.
A) rises; decreases
B) falls; perhaps changes but we can't say if it increases, decreases, or stays the same
C) falls; increases
D) does not change; perhaps changes but we can't say if it increases, decreases, or stays the same
E) rises; perhaps changes but we can't say if it increases, decreases, or stays the same
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
86) The demand for cat food decreases while the supply increases. The equilibrium price of cat food ________, and the equilibrium quantity ________.
A) does not change; increases
B) rises; decreases
C) falls; perhaps changes but we can't say if it increases, decreases, or stays the same
D) rises; perhaps changes but we can't say if it increases, decreases, or stays the same
E) falls; increases
Topic: Effects of a decrease in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
87) Suppose the government imposes a small carbon tax on automakers. But the price of gasoline has doubled due to a Middle East crisis which has reduced oil production. In the market for autos, these changes mean that supply and demand have both changed with the effect on the demand larger than the effect on the supply. The result is that the price of autos will ________ and the number of autos sold will ________.
A) rise; perhaps change but we can't say if it increases, decreases, or stays the same
B) rise; increase
C) rise; decrease
D) fall; perhaps change but we can't say if it increases, decreases, or stays the same
E) fall; decrease
Topic: Effects of a decrease in demand and a decrease in supply.
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
88) If both producers and consumers believe that a product's price will rise in the future, then at the present, demand ________ and supply ________.
A) increases; increases
B) decreases; decreases
C) increases; decreases
D) decreases; increases
E) does not change; does not change
Topic: Changes in both demand and supply, expected future price
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
89) If both producers and consumers believe that a product's price will rise in the future, then at the present, the equilibrium price
A) does not change.
B) rises.
C) falls.
D) might rise, fall, or not change, but the change can never be predicted.
E) might rise, fall, or not change depending on whether the effect from the producers is greater than or less than the effect from the consumers.
Topic: Changes in both demand and supply, expected future price
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
90) The equilibrium price of a good occurs if the
A) quantity of the good demanded equals the quantity of the good supplied.
B) quantity of the good demanded is greater than the quantity of the good supplied.
C) quantity of the good demanded is less than the quantity of the good supplied.
D) demand for the good is equal to the supply of the good.
E) price of the good seems reasonable to most buyers.
Topic: Market equilibrium
Skill: Level 1: Definition
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
91) If there is a surplus of a good, the quantity demanded is ________ the quantity supplied, and the price will ________.
A) less than; rise
B) less than; fall
C) greater than; rise
D) greater than; fall
E) equal to; fall
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
92) The graph illustrates the market for bottled water. When the price exceeds the equilibrium price, the quantity demanded is ________ the quantity supplied and the price of the good will ________.
A) less then; fall
B) greater than; rise
C) greater than; fall
D) less than; rise
E) equal to; fall
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
93) Which of the following is correct?
i. A surplus puts downward pressure on the price of a good.
ii. A shortage puts upward pressure on the price of a good.
iii. There is no surplus or shortage at equilibrium.
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) only iii
Topic: Surplus, shortage, market equilibrium
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
94) Which of the following is the best explanation for why the price of gasoline increases during the summer months?
A) Oil producers have higher costs of production in the summer.
B) Sellers have to earn profits during the summer to cover losses in the winter.
C) There is increased driving by families going on vacation.
D) There is less competition among oil refineries in the summer.
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
95) The number of people looking to buy ceiling fan buyers increases, so there is an increase in the
A) quantity of ceiling fans demanded and a surplus of ceiling fans.
B) demand for ceiling fans and a rise in the price of a ceiling fan.
C) demand for ceiling fans and a surplus of ceiling fans.
D) supply of ceiling fans and no change in the price of a ceiling fan.
E) demand for ceiling fans and in the supply of ceiling fans.
Topic: Effects of an increase in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
96) When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.
A) falls; decreases
B) falls; increases
C) rises; decreases
D) rises; increases
E) falls; does not change
Topic: Effects of a decrease in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
97) A technological improvement lowers the cost of producing corn. As a result, the price of a pound of corn ________ and the quantity of corn ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) falls; does not change
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
98) The technology associated with manufacturing computers has advanced enormously. This change has led to the price of a computer ________ and the quantity ________.
A) rising; increasing
B) rising; decreasing
C) falling; increasing
D) falling; decreasing
E) falling; not changing
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
99) The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the
A) supply of bottled water decreases.
B) quantity demanded of bottled water increases.
C) quantity demanded of bottled water does not change.
D) price of bottled water rises.
E) supply curve shifts leftward.
Topic: Effects of an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
100) Suppose that the price of lettuce used to produce tacos increases. This change means that the equilibrium price of a taco ________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
E) does not change; decreases
Topic: Effects of a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
101) Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will
A) decrease.
B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does.
C) stay the same.
D) increase.
E) definitely either stay the same or decrease.
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
102) Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. As a result, the price of candy ________ and the quantity of candy ________.
A) rises; does not change
B) falls; increases
C) does not change; increases
D) does not change; does not change
E) rises; increases
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
103) Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?
A) Both equilibrium price and quantity increase.
B) Equilibrium price increases.
C) Equilibrium price decreases.
D) Equilibrium quantity increases.
E) Equilibrium quantity decreases.
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
104) The graph illustrates the market for British pounds, the currency of the United Kingdom. As the number of buyers of pounds increases and the number of sellers of pounds increases, the equilibrium price of a pound
A) will rise.
B) will fall.
C) will remain the same.
D) might rise, fall, or remain the same depending on whether the effect on buyers is larger than, less than, or the same as the effect on sellers.
E) None of the above answers is correct.
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
105) The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the
A) equilibrium quantity of computers will increase.
B) equilibrium quantity of computers will decrease.
C) equilibrium price of a computer will rise.
D) equilibrium price of a computer will fall.
E) equilibrium quantity of computers might increase, decrease, or not change.
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
106) Which of the following definitely results in a product's equilibrium price rising?
A) an increase in both demand and supply
B) a decrease in both demand and supply
C) an increase in demand combined with a decrease in supply
D) a decrease in demand combined with an increase in supply
E) an increase in the supply combined with no change in the demand
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
107) During 2008 the supply of gasoline decreased while at the same time the demand for gasoline increased. If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply, then the equilibrium price of gasoline ________ and the equilibrium quantity ________.
A) increased; increased
B) increased; decreased
C) increased; did not change
D) decreased; did not change
E) did not change; increased
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
108) When demand increases and supply decreases by the same amount, the equilibrium quantity ________ and the equilibrium price ________.
A) decreases; rises
B) decreases; falls
C) decreases; does not change
D) decreases; might rise, fall, or not change
E) does not change; might rise, fall, or not change
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
109) The graph illustrates the market for British pounds, the currency of the United Kingdom. As the number of buyers of pounds decreases and the number of sellers of pounds increases, the equilibrium price of a pound
A) will rise.
B) will fall.
C) will remain the same.
D) might rise, fall, or remain the same but more information is needed.
E) will rise if the magnitude of the effect on the buyers is larger than the magnitude of the effect on the sellers.
Topic: Effects of a decrease in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
110) An increase in the equilibrium price and a decrease in the equilibrium quantity can be the result of
A) a decrease in demand.
B) an increase in supply.
C) a decrease in supply.
D) an increase in demand.
E) None of the above is correct.
Topic: Market equilibrium
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
111) Consider the market for frozen yogurt. Assume the market starts at point A. An increase in income causes a movement to point
A) D if frozen yogurt is a normal good.
B) B if frozen yogurt is a normal good.
C) C because the price of resources used to make frozen yogurt will increase.
D) D because the price of resources used to make frozen yogurt will increase.
E) B because the price of resources used to make frozen yogurt will decrease.
Topic: Market equilibrium
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Application of knowledge
112) Consider the market for frozen yogurt. Assume the market starts at point A. Which of the following is TRUE?
A) If frozen yogurt is a normal good, an increase in income leads to a shift from D1 to D2 and a movement along the supply curve.
B) A change in the price of frozen yogurt leads to a shift from D1 to D2.
C) If frozen yogurt is a normal good, an increase in income leads to a movement up along D1 from point A to point C.
D) An increase in the number of firms supplying frozen yogurt leads to a movement from point A to point D.
E) A decrease in the number of firms supplying frozen yogurt leads to a movement from point A to point B.
Topic: Market equilibrium
Skill: Level 4: Applying models
Section: Checkpoint 4.3
Status: Old
AACSB: Application of knowledge
4.4 Integrative Questions
1) Consider the market for bread. If the price of wheat rises, then the
A) demand curve for bread shifts leftward.
B) supply curve of bread shifts leftward.
C) price of bread falls.
D) equilibrium quantity of bread increases.
E) demand curve for bread shifts rightward.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
2) Consider the market for turkeys. In the United States, because of Thanksgiving in the month of November
A) there is a downward movement along the demand curve for turkeys.
B) there is an upward movement along the supply curve for turkeys.
C) the supply curve of turkeys shifts leftward.
D) the demand curve for turkeys shifts leftward.
E) neither the demand curve nor the supply curve shift; instead there is a movement along both curves.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
3) Consider the market for feather pillows. If there is an increase in the price of feather dusters, a substitute in production for feather pillows, then
A) the price of feather pillows decreases.
B) the demand curve for feather pillows shifts leftward.
C) the supply curve for feather pillows shifts leftward.
D) there is a downward movement along the demand curve for feather pillows.
E) the demand curve for feather pillows shifts rightward.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
4) Consider the market for peanut butter. If there is an increase in the price of peanuts
A) there is an upward movement along the supply curve for peanut butter.
B) the supply curve for peanuts shifts rightward.
C) there is a decrease in the supply of peanuts.
D) there is a decrease in the supply of peanut butter.
E) there is a decrease in the demand for peanut butter.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
5) Peanut butter and jelly are complements for many consumers. Consider the market for peanut butter. If there is an increase in the price of jelly
A) there is a movement along the supply curve of peanut butter.
B) the price of peanut butter rises.
C) the quantity of peanut butter increases.
D) there is a shift in the supply curve for jelly.
E) the demand curve for peanut butter does not shift; instead there is a movement along it.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
6) Consider the market for wheat. If there is an improvement in harvesting technology
A) the supply curve for wheat shifts rightward.
B) the demand curve for wheat shifts rightward.
C) there is a movement up along the demand curve.
D) the equilibrium price rises.
E) the demand curve for wheat shifts leftward.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
7) When the price of rice rises
A) the market quantity supplied of rice increases.
B) the market supply of rice increases.
C) the market quantity of rice demanded decreases.
D) Both A and C are true.
E) Both A and B are true.
Topic: Integrative
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
8) Consider the market for camera film. If more people start using digital cameras, which do not require film
A) the supply curve of film shifts rightward.
B) the demand curve for film shifts leftward.
C) there is a movement up along the demand curve for film.
D) there is a movement down along the demand curve for film.
E) neither the demand curve nor the supply curve for film shifts; instead there is a movement along both.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
9) The above figures show the market for HD televisions. If people's incomes increase and HD televisions are a normal good, which figure shows the effect of this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
10) The above figures show the market for HD televisions. Blu-ray players can be used to play HD movies. If the price of blu-ray players falls, then which figure shows the effect of this change in the market for HD televisions?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
11) The above figures show the market for HD televisions. If research is published showing that watching HD television shows causes eye damage, then which figure shows the effect of this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in demand, preferences
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
12) The above figures show the market for HD televisions. If cable television providers lower the price of providing HD cable service, which figure shows the effect of this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
13) The above figures show the market for HD televisions. If the price of the LCD screens used to produce these televisions falls, which figure shows the effect of this change in price?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in supply, price of a resource
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
14) The above figures show the market for HD televisions. If there are severe earthquakes that destroy a significant number of HD television manufacturing plants, which figure shows the effect of the earthquake?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in supply, number of sellers
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
15) The above figures show the market for HD televisions. If more firms start to produce HD televisions, which figure shows the effect of this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in supply, number of sellers
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
16) The above figures show the market for HD televisions. If the technology used to produce these televisions advances so that productivity increases, which figure shows the effect of this change?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the figures represent this change.
Topic: Changes in supply, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
17) Consider the market for leather shoes. If producers believe the price of leather shoes will increase next month, today
A) the supply curve for leather shoes shifts rightward.
B) the supply curve for leather shoes shifts leftward.
C) there is a movement along the supply curve for leather shoes.
D) the equilibrium price of leather shoes falls.
E) the equilibrium quantity of leather shoes increases.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Reflective thinking
18) Consider the market for peanut butter. If there is an increase in the price of bread (a complement for peanut butter) along with a drought in peanut growing areas, the
A) equilibrium quantity of bread increases.
B) equilibrium quantity of peanut butter definitely decreases.
C) equilibrium quantity of peanut butter might increase or might decrease.
D) equilibrium price of peanut butter definitely rises.
E) equilibrium price of peanut butter definitely falls.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Analytical thinking
19) Consider the market for peanut butter. If there is a decrease in the price of deli turkey slices (a substitute in consumption for peanut butter) along with a decrease in the price of peanut brittle (a substitute in production for peanut butter), the
A) equilibrium price of peanut butter definitely falls.
B) equilibrium quantity of peanut definitely decreases.
C) equilibrium price of peanut butter might rise or fall.
D) equilibrium quantity of peanut butter definitely increases.
E) equilibrium price of peanut butter definitely rises.
Topic: Integrative
Skill: Level 3: Using models
Section: Integrative
Status: Old
AACSB: Analytical thinking
20) Millions of people from Mexico have migrated to the United States. This has reduced the supply of labor in Mexico and increased the supply of labor in the United States. Assume that the demand for labor in Mexico and the United States is unchanged. Then wages in the United States ________ and wages in Mexico ________.
A) fall; rise
B) rise; rise
C) rise; do not change
D) fall; fall
E) do not change; fall
Topic: Integrative
Skill: Level 4: Applying models
Section: Integrative
Status: Old
AACSB: Analytical thinking
4.5 Essay: Demand
1) What is the law of demand?
Topic: Law of demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
2) What leads to a decrease in the quantity demanded of a good or service?
Topic: Law of demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Reflective thinking
3) Explain the difference between a change in demand and a change in quantity demanded. What leads to each of these changes?
Only a change in the price of the good brings about a change in the quantity demanded. A change in demand is brought about by a change in any of the other influences on demand, namely, the prices of related goods, income, expectations, the number of buyers, and preferences.
Topic: Changes in quantity demanded versus change in demand
Skill: Level 1: Definition
Section: Checkpoint 4.1
Status: Old
AACSB: Written and oral communication
4) List the factors that change demand and shift the demand curve. Tell what happens to demand and the demand curve when there is an increase in the factor.
Topic: Changes in demand
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Written and oral communication
5) Computers are a complement to computer software. Suppose the price of a computer falls. How does this fall in price affect the demand for computer software and the demand curve for computer software?
Topic: Changes in demand, price of a complement
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Written and oral communication
6) What is the difference between a normal good and an inferior good. Give an example of each.
Topic: Normal and inferior goods
Skill: Level 2: Using definitions
Section: Checkpoint 4.1
Status: Old
AACSB: Written and oral communication
7) Suppose Katie, Mark, and Bobby are the only consumers in the market for ice cream. Using the demand schedules in the table above, what is the market demand curve for ice cream?
Topic: Market demand
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
8) Soft drinks and milk are substitutes for consumers. Draw a graph showing the effect of an increase in the price of milk on the demand for soft drinks.
Topic: Changes in demand, price of a substitute
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
9) Soft drinks are a normal good. Draw a graph showing the effect of an increase in income on the demand for soft drinks.
Topic: Changes in demand, income
Skill: Level 3: Using models
Section: Checkpoint 4.1
Status: Old
AACSB: Analytical thinking
4.6 Essay: Supply
1) What leads to a decrease in the quantity supplied of a good or service?
Topic: Quantity supplied
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
2) What is the difference between quantity supplied and supply?
Topic: Changes in quantity supplied versus change in supply
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
3) List the factors that change supply and shift the supply curve. Tell what happens to supply and the supply curve when there is an increase in the factor.
Topic: Changes in supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Written and oral communication
4) What are substitutes in production?
Topic: Substitutes in production
Skill: Level 1: Definition
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
5) Suppose that the number of companies selling computer software decreases. How does this change affect the supply of computer software and the supply curve of computer software?
Topic: Changes in supply, number of sellers
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
6) Suppose that the productivity used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?
Topic: Changes in supply, productivity
Skill: Level 3: Using models
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
7) The table above indicates how many thousands of containers of ice cream three different companies are willing to produce at different prices. Does this information reflect the law of supply? Why or why not?
Topic: Law of supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Reflective thinking
8) The table above shows supply schedules for the two nail salons in town, Nancy's Nails and Fancy Nails. What is the market supply of manicures?
Topic: Market supply
Skill: Level 2: Using definitions
Section: Checkpoint 4.2
Status: Old
AACSB: Analytical thinking
4.7 Essay: Market Equilibrium
1) When does a shortage occur?
Topic: Shortage
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
2) When does a surplus occur?
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Reflective thinking
3) At prices above the equilibrium price, what occurs?
Topic: Surplus
Skill: Level 2: Using definitions
Section: Checkpoint 4.3
Status: Old
AACSB: Written and oral communication
4) When the demand for blue jeans increases, what happens next?
Topic: Effects of a change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Written and oral communication
5) Suppose Ramen noodles, an inexpensive but a quite tasty dish, are an inferior good. Why do grocery stores in college towns, that is, towns with a large fraction of college students, stock a lot of Ramen noodles?
Topic: Effects of a change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Written and oral communication
6) Why does an increase in supply lead to lower prices?
Topic: Effects of a change in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Written and oral communication
7) Smart phones are becoming less expensive as new technology reduces the cost of production. In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones.
Topic: Effects of a change in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Written and oral communication
8) What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?
Topic: Effects of an increase in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
9) What is the effect on the price and quantity of a product if the demand decreases and the supply simultaneously increases?
Topic: Effects of a decrease in demand and an increase in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
10) For consumers, computers are a complement to computer software. Suppose the price of a computer falls. Simultaneously, suppose that the number of companies selling computer software decreases. How do these changes affect the price and quantity of computer software?
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
11) In early 2019 the price of computer hard disc drives rose. In a demand and supply model, shifts in what curve or curves could have brought about the higher price?
Topic: Effects of an increase in demand and a decrease in supply
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
12) The above table gives the demand and supply schedules for cat food. If the price is $3.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?
Topic: Surplus
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
13) The above table gives the demand and supply schedules for cat food. If the price is $1.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
14) The above table gives the demand and supply schedules for cat food. What is the equilibrium price and quantity?
Topic: Equilibrium price and quantity
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
15) The above table gives the demand and supply schedules for cat food. If the supply increases by 20 tons at every price, what is the new equilibrium price and quantity?
Topic: Effects of a change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
16) The diagram above illustrates the market for apartments in Victoria, British Columbia.
a. If the current rent is $300 per month, is there a shortage or surplus in the apartment market and how much is the shortage or surplus?
b. What is the equilibrium rent and quantity of apartments?
a. If the rent is $300 per month, there is a shortage of 30,000 apartments.
b. The equilibrium rent is $400 per month and the equilibrium quantity is 40,000 apartments.
Topic: Shortage
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
17) In the figure above, if the price is $8 a unit, is there a shortage or surplus and what is the amount of any shortage or surplus?
Topic: Surplus
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
18) In the figure above, what is the equilibrium price and quantity?
Topic: Equilibrium price and quantity
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
19) Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.
Topic: Effects of a change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
20) Consumers can use either natural gas or heating oil to warm their houses. Suppose the price of natural gas increases. Use a demand and supply diagram to show the impact of the higher price of natural gas on the market for home heating oil.
Topic: Effects of a change in demand
Skill: Level 3: Using models
Section: Checkpoint 4.3
Status: Old
AACSB: Analytical thinking
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Connected Book
Foundations of Microeconomics 9e | Test Bank with Answer Key by Robin Bade
By Robin Bade