Question 1

What will a decrease in the supply of chocolate chips usually result in?

Accepted Answer

A)   a higher equilibrium price and a lower equilibrium quantity 
B)   a lower equilibrium price and a lower equilibrium quantity 
C)   a lower equilibrium price and a higher equilibrium quantity 
D)   a higher equilibrium price and a higher equilibrium quantityE) All of the above
F) A) and D)

Question 2

Suppose people believe that prices are going to be higher in the future then they are today.What will people likely do?

Accepted Answer

A)   wait until the future to purchase the things they want 
B)   decrease their demand now 
C)   increase their demand now 
D)   increase their supply nowE) None of the above
F) A) and B)

Question 3

Suppose the price of vanilla ice cream decreases.All things being equal, what will likely happen to the demand for chocolate ice cream?

Accepted Answer

A)   It will likely increase. 
B)   It will likely decrease. 
C)   It will likely not change. 
D)   It could either increase or decrease.E) C) and D)
F) None of the above

Question 4

In a competitive market what happens to price when there is a decrease in the supply curve?

Accepted Answer

A)   It increases. 
B)   It decreases. 
C)   It stays the same. 
D)   It may increase or decrease.E) C) and D)
F) A) and B)

Question 5

Which of the following would shift a product's supply curve to the right?

Accepted Answer

A)   an increase in the price of a resource used in the good's production 
B)   an increase in the price of the product 
C)   an increase in the price of an alternative good 
D)   an improvement in the technology for producing the goodE) A) and C)
F) A) and D)

Question 6

Assume coffee is a substitute for tea.Suppose the tea harvest is bad this year.What may happen in the coffee market?

Accepted Answer

A)   The quantity demanded for coffee may increase. 
B)   The quantity demanded for coffee may increase
C)   The demand for coffee may decrease. 
D)   The demand for coffee may increase.E) A) and C)
F) A) and B)

Question 7

Exhibit 4-9
 
-Refer to the exhibit.Which of the following could NOT cause the shift from D to D'?

Accepted Answer

A)   a decrease in the price of a complement 
B)   an increase in the price of a substitute 
C)   a decrease in the price of the good in question 
D)   an increase in the number of consumersE) None of the above
F) A) and C)

Question 8

Which event is likely to reduce the demand for on-campus student housing?

Accepted Answer

A)   a rise in rents for off-campus housing 
B)   more students enrolling at the university 
C)   a growing trend where it is less fashionable to live on campus 
D)   a rise in dorm feesE) A) and D)
F) None of the above

Question 9

Which of the following will cause the supply of leather jackets to decrease?

Accepted Answer

A)   an increase in the price of leather jackets 
B)   an increase in the price of leather 
C)   a decrease in the price of zippers 
D)   an increase in the number of motorcyclesE) B) and D)
F) C) and D)

Question 10

For a given supply curve, what will an increase in demand typically do to price and quantity?

Accepted Answer

A)   It will increase price, but quantity could change in either direction. 
B)   It will increase quantity, but price could change in either direction. 
C)   It will decrease both quantity and price. 
D)   It will increase both quantity and price.E) A) and B)
F) All of the above

Question 11

According to the law of demand, what will occur as the price of a good rises?

Accepted Answer

A)   Buyers will purchase less, hoping that the price of the good will fall in the future. 
B)   Buyers will purchase less, in part because their real income has fallen. 
C)   Buyers will purchase more, in part because the price of a substitute good has risen. 
D)   Buyers will purchase more, in part because the good has higher status when the price is high.E) All of the above
F) A) and B)

Question 12

What will a decrease in demand cause?

Accepted Answer

A)   a normal equilibrium price 
B)   a constant equilibrium price 
C)   an increase in equilibrium price 
D)   a decrease in equilibrium priceE) None of the above
F) All of the above

Question 13

Suppose there is a shortage in the market for jeans.What should happen to the price of jeans?

Accepted Answer

A)   It should remain the same. 
B)   It should begin to rise. 
C)   It should begin to fall. 
D)   It should cause people to buy other types of pants.E) A) and B)
F) All of the above

Question 14

Which statement best describes what happens when there is a change in quantity demanded?

Accepted Answer

A)   A change in quantity demanded is shown by a shift in a given demand curve. 
B)   The demand curve shifts whenever the quantity demanded of a substitute good changes. 
C)   A change in the price of a good, other things constant, will lead to a change in quantity demanded. 
D)   The lower the price of a product, other things constant, the lower the quantity demanded.E) B) and C)
F) A) and B)

Question 15

Which of the following could cause a decrease in the demand for peanut butter?

Accepted Answer

A)   an increase in the supply of peanut butter 
B)   an increase in the price of peanut butter 
C)   A doubling of the price of bread 
D)   a drought in Georgia that destroys 30 percent of the peanut cropE) A) and D)
F) B) and C)

Question 16

Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?

Accepted Answer

A)   a rise in the price of milk (a complement)  
B)   a rise in the price of cookie dough 
C)   a drop in the price of cookie dough 
D)   a rise in the price of crackers (a substitute) E) None of the above
F) All of the above

Question 17

What will occur if the price of gasoline (a normal good)  decreases, other things constant?

Accepted Answer

A)   The demand for gasoline will increase. 
B)   The demand for gasoline will decrease. 
C)   The quantity demanded of gasoline will increase. 
D)   The quantity demanded of gasoline will decrease.E) A) and B)
F) A) and D)

Question 18

What will be the result of a decrease in demand?

Accepted Answer

A)   an increase in equilibrium price and quantity 
B)   a decrease in equilibrium price and quantity 
C)   a decrease in equilibrium price and an increase in equilibrium quantity 
D)   an increase in equilibrium price and a decrease in equilibrium quantityE) C) and D)
F) A) and D)

Question 19

Suppose a market is in equilibrium, and then a price floor is established below the equilibrium price.What will happen to the price and quantity?

Accepted Answer

A)   A surplus will develop. 
B)   A shortage will develop. 
C)   The quantity sold will rise. 
D)   The market will remain in equilibrium.E) B) and C)
F) A) and B)

Question 20

Suppose the price of potato chips increases.Other things constant, what will happen to the demand for potato-chip dip?

Accepted Answer

A)   It will increase because the goods are substitutes. 
B)   It will decrease because the goods are substitutes. 
C)   It will decrease because the goods are complements. 
D)   It will increase because the goods are complements.E) A) and B)
F) C) and D)

Exam 4: Demand, Supply, and Markets

Which of the following could cause a decrease in the demand for peanut butter?

Correct AnswerverifiedShow Answer

Which statement best describes what happens when there is a change in quantity demanded?

Correct AnswerverifiedShow Answer

In a competitive market what happens to price when there is a decrease in the supply curve?

Correct AnswerverifiedShow Answer

Which of the following would cause both the equilibrium price and equilibrium quantity of cookies to decrease?

Correct AnswerverifiedShow Answer

Suppose a market is in equilibrium, and then a price floor is established below the equilibrium price.What will happen to the price and quantity?

Correct AnswerverifiedShow Answer

Which event is likely to reduce the demand for on-campus student housing?

Correct AnswerverifiedShow Answer

What will occur if the price of gasoline (a normal good) decreases, other things constant?

Correct AnswerverifiedShow Answer

According to the law of demand, what will occur as the price of a good rises?

Correct AnswerverifiedShow Answer

What will a decrease in demand cause?

Correct AnswerverifiedShow Answer

Suppose people believe that prices are going to be higher in the future then they are today.What will people likely do?

Correct AnswerverifiedShow Answer

For a given supply curve, what will an increase in demand typically do to price and quantity?

Correct AnswerverifiedShow Answer

What will a decrease in the supply of chocolate chips usually result in?

Correct AnswerverifiedShow Answer

Suppose there is a shortage in the market for jeans.What should happen to the price of jeans?

Correct AnswerverifiedShow Answer

Which of the following would shift a product's supply curve to the right?

Correct AnswerverifiedShow Answer

What will be the result of a decrease in demand?

Correct AnswerverifiedShow Answer

Suppose the price of potato chips increases.Other things constant, what will happen to the demand for potato-chip dip?

Correct AnswerverifiedShow Answer

Exhibit 4-9 -Refer to the exhibit.Which of the following could NOT cause the shift from D to D'?

Correct AnswerverifiedShow Answer

Suppose the price of vanilla ice cream decreases.All things being equal, what will likely happen to the demand for chocolate ice cream?

Correct AnswerverifiedShow Answer

Which of the following will cause the supply of leather jackets to decrease?

Correct AnswerverifiedShow Answer

Assume coffee is a substitute for tea.Suppose the tea harvest is bad this year.What may happen in the coffee market?

Correct AnswerverifiedShow Answer

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