A demand curve that illustrates the law of demand ______.
(i) shows that the quantity demanded increases as the price falls
(i) shows that the quantity demanded decreases as the price falls
(i) slopes downward to a minimum, and then slopes upward
(i) is upward sloping
A demand curve that illustrates the law of demand ______.
(i) shows that the quantity demanded increases as the price falls
(i) shows that the quantity demanded decreases as the price falls
(i) slopes downward to a minimum, and then slopes upward
(i) is upward sloping
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QUESTION 1
The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.
| falls; increases | ||
| falls; perhaps changes but we can't say if it increases, decreases, or stays the same | ||
| rises; decreases | ||
| rises; perhaps changes but we can't say if it increases, decreases, or stays the same |
1 points
QUESTION 2
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 is ________.
| rises; increases | ||
| falls; decreases | ||
| falls; does not change | ||
| rises; does not change |
1 points
QUESTION 3
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 ________.
| does not change; does not change | ||
| rises; increases | ||
| falls; decreases | ||
| rises; decreases |
1 points
QUESTION 4
If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.
| rise; increase | ||
| rise; decrease | ||
| fall; increase | ||
| fall; decrease |
1 points
QUESTION 5
Which of the following shifts the supply curve for oranges?
| an increase in income for all orange consumers if oranges are a normal good | ||
| disastrous weather that destroys about half of this year's orange crop | ||
| an increase in the price of bananas, a substitute in consumption for oranges | ||
| a newly discovered increase in the nutritional value of oranges |
1 points
QUESTION 6
Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a potato-like vegetable.)
| normal goods in production. | ||
| an exceptionally cold summer that killed much of the rutabaga crop. | ||
| a fall in the price of fertilizer used to grow rutabagas. | ||
| an increase in the price of a rutabaga |
1 points
QUESTION 7
Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
| an increase in the supply electric cars so that the supply curve shifts rightward. | ||
| an increase in the supply of electric cars so that the supply curve shifts leftward. | ||
| a decrease in the supply of electric cars so that the supply curve shifts rightward. | ||
| a decrease in the supply of electric cars so that the supply curve shifts leftward. |
1 points
QUESTION 8
Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
| the demand for hot dogs will increase. | ||
| the demand for hot dog buns will decrease. | ||
| the quantity demanded of hotdogs will decrease. | ||
| the demand for hot dog buns will increase. |
1 points
QUESTION 9
Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded ________.
| upward; increases | ||
| downward; decreases | ||
| upward; decreases | ||
| downward; increases |
1 points
QUESTION 10
Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?
| The quantity of bottled water demanded increases. | ||
| The demand for bottled water increases. | ||
| The quantity of bottled water demanded decreases. | ||
| The demand for bottled water decreases. |
1 points
QUESTION 11
If the price of carrots is below the equilibrium price, the
| quantity supplied of carrots exceeds the quantity demanded and a shortage exists. | ||
| quantity demanded of carrots exceeds the quantity supplied and a shortage exists. | ||
| quantity supplied of carrots exceeds the quantity demanded and a surplus exists. | ||
| quantity demanded of carrots exceeds the quantity supplied and a surplus exists. |
1 points
QUESTION 12
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.
| both i and ii | ||
| i only. | ||
| ii only. | ||
| iii only. |
1 points
QUESTION 13
Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
| There is a shortage, so the price rises and quantity demanded decreases. | ||
| There is a shortage, so the price rises and quantity demanded increases. | ||
| There is a shortage, so the price falls and quantity demanded increases. | ||
| There is a surplus, so the price falls and quantity demanded increases. |
1 points
QUESTION 14
The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________.
| decreases; shifts leftward | ||
| decrease; shifts rightward | ||
| increases; shifts rightward | ||
| increases; shifts leftward |
1 points
QUESTION 15
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.
| iii only | ||
| ii and iii | ||
| ii only | ||
| i only |
1 points
QUESTION 16
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?
| The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese. | ||
| The supply of cheese decreases. | ||
| The supply of cheese stays the same and there is no change in the quantity supplied of cheese. | ||
| The supply of cheese increases. |
1 points
QUESTION 17
Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the
| demand for Dell computers decreases. | ||
| demand for Apple computers increases. | ||
| demand for Apple computers decreases. | ||
| demand for Dell computers increases. |
1 points
QUESTION 18
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
| surplus, so the price rises and quantity demanded increases. | ||
| shortage, so the price rises and quantity demanded decreases. | ||
| surplus, so the price falls and quantity demanded increases. | ||
| shortage, so the price falls and quantity demanded increases. |
1 points
QUESTION 19
Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?
| The supply increases so that the supply curve shifts rightward. | ||
| The quantity supplied increases but there is no shift in the supply curve. | ||
| The supply decreases so that the supply curve shifts leftward. | ||
| The quantity supplied decreases but there is no shift in the supply curve. |
1 points
QUESTION 20
In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?
| The store is trying to increase its customers' demand for the product. | ||
| The law of demand is being used to increase the quantity demanded. | ||
| The store manager must be trying to drive away customers by selling low quality products. | ||
| The store is trying to increase its consumer's incomes by increasing their purchasing power. |
1 points
QUESTION 21
Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________.
| rises; increases | ||
| rises; decreases | ||
| falls; increases | ||
| falls; decreases |
1 points
QUESTION 22
If both the supply and demand curves shift simultaneously, we can always predict what will happen to
| either the price or the quantity, but not both. | ||
| only the quantity. | ||
| only the price. | ||
| both the price and the quantity. |
1 points
QUESTION 23
If income increases and the demand for bus rides decreases,
| bus rides are a substitute good. | ||
| consumers are behaving irrationally. | ||
| bus rides are an inferior good. | ||
| bus rides are a normal good. |
1 points
QUESTION 24
A surplus of cardboard boxes means that
| at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium.. | ||
| the current price of a cardboard box is less than the equilibrium price. | ||
| at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied. | ||
| at the current price of a cardboard box, the quantity demanded is less than the quantity supplied. |
1 points
QUESTION 25
If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ and the equilibrium quantity ________.
| rises; increases | ||
| rises; decreases | ||
| falls; increases | ||
| falls; decreases |
1 points
