Question 1

The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?

Accepted Answer

A)   Incomes
B)   Preferences
C)   Expectations of future prices
D)   Prices of related goodsE) B) and C)
F) A) and B)

Question 2

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium? The equilibrium:

Accepted Answer

A)   price and quantity will both rise.
B)   quantity will definitely fall, while the equilibrium price cannot be predicted.
C)   price will definitely fall, while the equilibrium quantity cannot be predicted.
D)   price and quantity will both fall.E) B) and D)
F) A) and B)

Question 3

You just heard about Burton's annual tent sale going on next week.This will likely cause your demand for a Burton jacket today to:

Accepted Answer

A)   increase because of your income constraint.
B)   increase because of your expectations of the price of Burton jackets next week.
C)   decrease because of your income constraint.
D)   decrease because of your expectations of the price of Burton jackets next week.E) A) and D)
F) A) and C)

Question 4

The price of house paint,a normal good,has gone up.This change can be shown graphically as a:

Accepted Answer

A)   shift in the demand curve to the right.
B)   shift in the demand curve to the left.
C)   movement along the demand curve to the right.
D)   movement along the demand curve to the left.E) B) and C)
F) A) and C)

Question 5

The advancement of computers has increased the productivity of a paper mill.How will this likely affect the supply of paper? It will likely cause:

Accepted Answer

A)   a rightward shift in the supply of paper.
B)   a leftward shift in the supply of paper.
C)   a shift straight up in the supply of paper.
D)   no shift, but a movement along the supply curve.E) A) and B)
F) None of the above

Question 6

We say that goods are substitutes when they:

Accepted Answer

A)   serve similar-enough purposes that a consumer might purchase one in place of the other.
B)   are consumed together, so that purchasing one will make a consumer more likely to purchase the other.
C)   can replace something consumers typically purchase at a significantly lower price.
D)   change a consumer's preferences for a good or service.E) C) and D)
F) All of the above

Question 7

The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

Accepted Answer

A)   they can supply more at each price because some of the competition will drop out.
B)   they can supply less at each price because the price of a main input has gone up.
C)   they can supply more at each price because the price of a main input has gone up.
D)   they can supply more at each price because of more competition.E) A) and C)
F) A) and D)

Question 8

According to the graph shown,the equilibrium price is ______ and equilibrium quantity is ____.

Accepted Answer

A)   $5; 30
B)   $10; 20
C)   $20; 10
D)   $15; 30E) A) and B)
F) A) and C)

Question 9

2? A)  The price of buttons has increased. B)  The price of ties went up. C)  The price of sweatshirts went up. D)  Income has increased." class="answers-bank-image d-inline" rel="preload" > Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S.What type of shock might cause a shift from D to D2?

Accepted Answer

A)   The price of buttons has increased.
B)   The price of ties went up.
C)   The price of sweatshirts went up.
D)   Income has increased.E) None of the above
F) All of the above

Question 10

Jackie notices everyone wearing Converse sneakers on the first day of school.Ever the fashionista,this will likely affect:

Accepted Answer

A)   Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.
B)   Jackie's preferences for shoes, since she feels as though she needs them now.
C)   Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular.
D)   the prices of related goods, since other shoes will be less popular and cost less now.E) B) and D)
F) C) and D)

Question 11

A recent epidemic of mad cow disease caused the government to mandate that thousands of cows be completely destroyed.This will likely cause:

Accepted Answer

A)   the demand for leather shoes to increase.
B)   the supply of leather shoes to decrease.
C)   the demand and the supply of leather shoes to increase.
D)   It will not affect the market for leather shoes.E) All of the above
F) A) and D)

Question 12

If producers incorrectly set the price of their product too high a:

Accepted Answer

A)   shortage will result and consumers will bid the price down to equilibrium.
B)   surplus will result and excess goods in inventory will signal to producers to lower their prices.
C)   shortage will result and consumers will bid the price up to equilibrium.
D)   surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.E) None of the above
F) A) and B)

Question 13

Oliver just brought home a new kitten.We could expect Oliver's demand for:

Accepted Answer

A)   cat toys, a complementary good, to increase.
B)   cat toys, a complementary good, to decrease.
C)   dog toys, a substitute good, to increase.
D)   dog toys, a substitute good, to decrease.E) A) and B)
F) A) and D)

Question 14

The law of demand can be stated as all else equal:

Accepted Answer

A)   quantity demanded rises as price falls.
B)   quantity demanded rises as price rises.
C)   quantity demanded rises as income rises.
D)   demand rises as price falls.E) B) and C)
F) A) and D)

Question 15

A drought causes most fruit crops to fail,decreasing the amount of available fruit.The fruitcake market would see:

Accepted Answer

A)   an increase in the supply of fruitcake.
B)   a decrease in the supply of fruitcake.
C)   no change in the supply of fruitcake, but the demand would increase.
D)   no change in the supply of fruitcake, but the demand would decrease.E) All of the above
F) C) and D)

Question 16

If producers incorrectly set the price of their product too high:

Accepted Answer

A)   a shortage will result.
B)   a surplus will result.
C)   equilibrium will result.
D)   the industry will die out soon.E) B) and C)
F) None of the above

Question 17

Last year due to the increased rainfall there was a plentiful supply of blueberries which caused their price to drop.Bakeries regularly produce and sell blueberry pie.Considering the market for blueberry pies,what factor of supply has been affected,and what was the overall effect on the supply?

Accepted Answer

A)   The price of an input has been affected; supply will increase.
B)   The price of an input has been affected; supply will decrease.
C)   The new technology has been affected; supply will increase.
D)   The number of sellers has been affected; supply will increase.E) A) and B)
F) B) and C)

Question 18

How have the recent increases in the price of gasoline affected the market for hybrid cars?

Accepted Answer

A)   The demand has increased, increasing the equilibrium price and quantity of hybrid cars.
B)   The supply has increased, decreasing the equilibrium price and increasing the equilibrium quantity of hybrid cars.
C)   The demand has increased, decreasing the equilibrium price and increasing the equilibrium quantity of hybrid cars.
D)   The demand and supply of hybrid cars have both increased in response to changing gas prices, so the equilibrium quantity has definitely decreased, but the effect on price cannot be determined without more information.E) A) and D)
F) None of the above

Question 19

The supply curve is a __________ line that reflects the _______ relationship between price and quantity supplied.

Accepted Answer

A)   downward-sloping; inverse
B)   upward-sloping; inverse
C)   downward-sloping; direct
D)   upward-sloping; directE) C) and D)
F) B) and C)

Question 20

The amount of a particular good that sellers in a market will sell at a given price during a specified period is called:

Accepted Answer

A)   quantity demanded.
B)   quantity supplied.
C)   demand.
D)   supply.E) A) and C)
F) B) and D)

Exam 3: Markets

We say that goods are substitutes when they:

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How have the recent increases in the price of gasoline affected the market for hybrid cars?

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According to the graph shown,the equilibrium price is ______ and equilibrium quantity is ____.

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The amount of a particular good that sellers in a market will sell at a given price during a specified period is called:

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If producers incorrectly set the price of their product too high:

Correct AnswerverifiedShow Answer

You just heard about Burton's annual tent sale going on next week.This will likely cause your demand for a Burton jacket today to:

Correct AnswerverifiedShow Answer

Jackie notices everyone wearing Converse sneakers on the first day of school.Ever the fashionista,this will likely affect:

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium? The equilibrium:

Correct AnswerverifiedShow Answer

The law of demand can be stated as all else equal:

Correct AnswerverifiedShow Answer

Last year due to the increased rainfall there was a plentiful supply of blueberries which caused their price to drop.Bakeries regularly produce and sell blueberry pie.Considering the market for blueberry pies,what factor of supply has been affected,and what was the overall effect on the supply?

Correct AnswerverifiedShow Answer

The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?

Correct AnswerverifiedShow Answer

A drought causes most fruit crops to fail,decreasing the amount of available fruit.The fruitcake market would see:

Correct AnswerverifiedShow Answer

The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

Correct AnswerverifiedShow Answer

The price of house paint,a normal good,has gone up.This change can be shown graphically as a:

Correct AnswerverifiedShow Answer

If producers incorrectly set the price of their product too high a:

Correct AnswerverifiedShow Answer

A recent epidemic of mad cow disease caused the government to mandate that thousands of cows be completely destroyed.This will likely cause:

Correct AnswerverifiedShow Answer

The advancement of computers has increased the productivity of a paper mill.How will this likely affect the supply of paper? It will likely cause:

Correct AnswerverifiedShow Answer

Oliver just brought home a new kitten.We could expect Oliver's demand for:

Correct AnswerverifiedShow Answer

Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S.What type of shock might cause a shift from D to D2?

Correct AnswerverifiedShow Answer

The supply curve is a __________ line that reflects the _______ relationship between price and quantity supplied.

Correct AnswerverifiedShow Answer

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According to the graph shown,the equilibrium price is __ and equilibrium quantity is .

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Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S.What type of shock might cause a shift from D to D₂?

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The supply curve is a ____ line that reflects the _ relationship between price and quantity supplied.

Correct Answer
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