Question 1

If a good or service is labeled normal,then
A) as income falls,demand for the item increases.
B) as income rises,the quantity demanded of the item decreases.
C) as income rises,the quantity demanded of the item increases.
D) as income rises,demand for the item increases.
E) as income falls,the quantity demanded of the item increases.

Accepted Answer

The answer of If a good or service is labeled...

Question 2

As consumers' incomes increase,the demand for some goods decreases.These types of goods are called
A) normal goods.
B) complement goods.
C) substitute goods.
D) defective goods.
E) inferior goods.

Accepted Answer

Inferior goods are goods for which demand decreases as consumers' incomes increase. This is because higher incomes usually lead to a higher standard of living, and consumers tend to shift their preferences towards better-quality goods. Examples of inferior goods include low-quality and low-priced products such as generic brands or fast food.

Question 3

If,when the price of X increases,the demand for Y decreases,one can conclude that X and Y are
A) complements.
B) substitutes.
C) normal.
D) inferior.
E) superior.

Accepted Answer

Complementary goods are those that are typically consumed together. For example, if the price of coffee increases, the demand for sugar will decrease as people might reduce their consumption of coffee. In this scenario, X and Y are complements, where X is the good that experiences a price increase and Y is the complementary good that experiences a decrease in demand. Therefore, option A) is the correct answer.

Question 4

Without the aid of a graph,one can say definitively that,if both supply and demand increase simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Accepted Answer

The answer of Without the aid of a graph,one can...

Question 5

As the price of flour (an input in the cookie production process)increases,firms that produce cookies will
A) increase the supply of cookies.
B) increase the quantity of cookies supplied.
C) decrease the supply of cookies.
D) decrease the quantity of cookies supplied.
E) leave their production unchanged.

Accepted Answer

An increase in input cost, specifically flour, will lead to an increase in production costs for firms that produce cookies. This will decrease the profitability of these firms and they will be less willing or able to supply the same quantity of cookies at every price. As a result, there will be a decrease in the supply of cookies.

Question 6

At the beginning of the fall semester,university towns experience large increases in their populations,causing a(n)
A) increase in the quantity of apartments demanded.
B) increase in the supply of apartments.
C) increase in the demand for apartments.
D) decrease in the quantity of apartments supplied.
E) decrease in the supply of apartments.

Accepted Answer

The increased population of students creates an increase in the demand for housing, specifically apartments. This leads to a higher quantity demanded and potentially higher prices. The supply of apartments does not necessarily increase immediately in response, as it takes time to build new units or convert existing ones. Therefore, there is not a decrease in the quantity supplied or supply overall.

Question 7

If the price of tea increases and,as a result,the demand for sugar decreases,then
A) tea and sugar are complements.
B) tea is a normal good and sugar is inferior.
C) tea and sugar are substitutes.
D) tea is an inferior good and sugar is normal.
E) tea and sugar are unrelated to each other.

Accepted Answer

The answer of If the price of tea increases and,as...

Question 8

If the demand for a good increases as consumers' incomes rise,the good is termed a(n)
A) inferior good.
B) complement good.
C) normal good.
D) substitute good.
E) typical good.

Accepted Answer

If the demand for a good increases as consumers' incomes rise, it is known as a normal good.

Question 9

Which of the following will NOT cause a shift in the supply curve for Athlon processors?
A) An increase in the price of memory.
B) A decrease in the price of Intel processors.
C) A decrease in the price of motherboards.
D) A decrease in the price of Athlon processors.
E) An increase in the wages paid to high-tech workers.

Accepted Answer

The answer of Which of the following will NOT cause...

Question 10

Without the aid of a graph,one can say definitively that,if supply decreases while demand increases simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Accepted Answer

The answer of Without the aid of a graph,one can...

Question 11

-Assume that the technology used by firms improves.As a result,supply shifts from ___ to ____ and the equilibrium price moves from _____ to _____.
A) S2;S1;$30;$60
B) S1;S2;$30;$60
C) S2;S1;$60;$30
D) S1;S2;$60;$30
E) S1;S2;$60;$60

Accepted Answer

The answer of 
-Assume that the technology used by firms...

Question 12

If supply shifts from S2 to S1,the market adjusts to the new equilibrium price and quantity through
A) an increase in demand.
B) a decrease in the quantity demanded.
C) an increase in the quantity demanded.
D) a decrease in demand.
E) a decrease in the quantity supplied.

Accepted Answer

The answer of If supply shifts from S2 to S1,the...

Question 13

Suppose that one observes that,when the price of peanut butter increases,the demand for crackers increases.One must conclude that
A) peanut butter and crackers are complements.
B) peanut butter and crackers are substitutes.
C) peanut butter and crackers are normal goods.
D) peanut butter and crackers are inferior goods.
E) peanut butter and crackers are superior goods.

Accepted Answer

The answer of Suppose that one observes that,when the price...

Question 14

Which of the following would cause an increase in the quantity supplied in a market?
A) The price farmers receive for their crops rises.
B) The United Auto Workers negotiates a wage increase for its union members.
C) The price firms pay for insurance falls.
D) New,faster computer processors are introduced.
E) OPEC limits the production of crude oil.

Accepted Answer

When the price received for crops by farmers rises, it becomes more profitable for them to produce and sell the crops. This encourages them to increase the quantity supplied in the market.

Question 15

An increase in the price of Colgate toothpaste,a substitute for Crest toothpaste,will cause
A) the quantity of Crest toothpaste demanded to increase.
B) the quantity of Colgate toothpaste demanded to increase.
C) the demand for Colgate toothpaste to decrease.
D) the demand for Colgate toothpaste to increase.
E) the demand for Crest toothpaste to increase.

Accepted Answer

An increase in the price of Colgate toothpaste, a substitute for Crest toothpaste, will make Crest toothpaste relatively cheaper in comparison. This will make consumers switch from buying Colgate to buying Crest, leading to an increase in the demand for Crest toothpaste. Therefore, the best choice is E, "the demand for Crest toothpaste to increase."

Question 16

Which of the following is NOT a determinant of demand for gasoline?
A) The price of gasoline.
B) The price of diesel.
C) The price of automobiles.
D) The quantity of gasoline supplied.
E) Consumers' incomes.

Accepted Answer

The quantity of gasoline supplied is a determinant of supply, not demand. The price of gasoline, the price of diesel, the price of automobiles, and consumers' incomes are all determinants of demand for gasoline.

Question 17

Suppose that the price of gasoline increases.One would expect that the
A) demand for gasoline to decrease.
B) demand for sport utility vehicles to decrease.
C) demand for sport utility vehicles to increase.
D) quantity of gasoline demanded to increase.
E) quantity of sport utility vehicles demanded to increase.

Accepted Answer

When the price of gasoline increases, consumers are likely to seek more fuel-efficient vehicles, leading to a decrease in the demand for sport utility vehicles, which typically consume more gasoline.

Question 18

"Improvements in personal computer technology and its widespread adoption in the workplace have served to increase productivity." Assuming the statement is true,one would expect this to cause
A) an increase in supply.
B) an increase in the quantity supplied.
C) a decrease in supply.
D) a decrease in the quantity supplied.
E) no change in the marketplace.

Accepted Answer

Improvements in technology typically lead to an increase in supply because they make production more efficient, allowing more goods to be produced at the same cost.

Question 19

Without the aid of a graph,one can say definitively that,if supply increases while demand decreases simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Accepted Answer

The answer of Without the aid of a graph,one can...

Question 20

Without the aid of a graph,one can say definitively that,if both supply and demand decrease simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Accepted Answer

The answer of Without the aid of a graph,one can...

Quiz 3: Supply and Demand: an Introduction

If a good or service is labeled normal,then

As consumers' incomes increase,the demand for some goods decreases.These types of goods are called

If,when the price of X increases,the demand for Y decreases,one can conclude that X and Y are

Without the aid of a graph,one can say definitively that,if both supply and demand increase simultaneously,the new equilibrium price is _ and the new equilibrium quantity is _______.

As the price of flour (an input in the cookie production process) increases,firms that produce cookies will

At the beginning of the fall semester,university towns experience large increases in their populations,causing a(n)

If the price of tea increases and,as a result,the demand for sugar decreases,then

If the demand for a good increases as consumers' incomes rise,the good is termed a(n)

Which of the following will NOT cause a shift in the supply curve for Athlon processors?

Without the aid of a graph,one can say definitively that,if supply decreases while demand increases simultaneously,the new equilibrium price is _ and the new equilibrium quantity is _______.

-Assume that the technology used by firms improves.As a result,supply shifts from _ to and the equilibrium price moves from _ to ___.

If supply shifts from S2 to S1,the market adjusts to the new equilibrium price and quantity through

Suppose that one observes that,when the price of peanut butter increases,the demand for crackers increases.One must conclude that

Which of the following would cause an increase in the quantity supplied in a market?

An increase in the price of Colgate toothpaste,a substitute for Crest toothpaste,will cause

Which of the following is NOT a determinant of demand for gasoline?

Suppose that the price of gasoline increases.One would expect that the

"Improvements in personal computer technology and its widespread adoption in the workplace have served to increase productivity." Assuming the statement is true,one would expect this to cause

Without the aid of a graph,one can say definitively that,if supply increases while demand decreases simultaneously,the new equilibrium price is _ and the new equilibrium quantity is _______.

Without the aid of a graph,one can say definitively that,if both supply and demand decrease simultaneously,the new equilibrium price is _ and the new equilibrium quantity is _______.