Economics 3rd Edition Paul Krugman Test bank

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Economics 3rd Edition Paul Krugman Test bank

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Add, modify, and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish which default options, such as feedback and images, are available for question creation.
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TestBank Chapter 03: Supply and Demand Question pool for Chapter 03: Supply and Demand
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Multiple Choice
Question
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The Kansas market for corn is considered a competitive market. This means there are ________ buyers and ________ sellers of corn in Kansas.
Answer
Multiple Choice Question
many; few few; many many; many few; few
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Answer
as the price increases, the quantity demanded will increase. as the price decreases, the demand curve will shift to the right. as the price increases, the demand will decrease.
as the price increases, the quantity demanded will decrease.
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The law of demand states that, other things equal:
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Multiple Choice 0 points
Question
In much of the country, homeowners choose to heat their houses with either natural gas or home heating oil. Which of the following could cause the demand for natural gas to change?
Answer
a change in the price of home heating oil
a change in income
an increase in consumer tastes for natural gas as an energy source
a change in the price of home heating oil, a change in income, and an increase in consumer tastes for natural gas as an energy source
Multiple Choice 0 points Question
Which of the following factors cause a movement along the demand curve?
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Answer
change in the prices of related goods
change in the price of the good
change in the population
both a change in the price of the good and a change in the population
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Question
Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boiled new potatoes. If the price of this cheese decreased, we would expect:
Answer
an increase in demand for the cheese. an increase in demand for new potatoes.
there to be no effect on the demand for either of the Raclette ingredients, since this is a traditional dish and its consumption does not depend on the prices of the ingredients.
an increase in demand for the cheese and for new potatoes.
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Question
When the economy suffers a downturn, vacationers are more likely to take car trips than to fly. Which of the following provides the most reasonable explanation for this phenomenon?
Answer
Air travel and vacation travel by car are complementary goods.
Air travel and vacation travel by car are both normal goods.
Air travel is a normal good and vacation travel by car is an inferior good. Air travel is an inferior good and vacation travel by car is a normal good.
Multiple Choice 0 points Question
A shift of the demand curve for Luiss Pizza would not be caused by a change in the:
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Answer
Multiple Choice Question
buyers incomes.
price of Luiss Pizza.
price of Humbertos Pizza. popularity of Luiss Pizza.
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If goods A and B are substitutes, a decrease in the price of good B will:
Answer
increase the demand for good A.
increase the demand for good B.
decrease the demand for good A.
increase the demand for good B and decrease the demand for good A.
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If goods A and Z are complements, an increase in the price of good Z will:
Answer
increase the demand for good A.
decrease the demand for good A.
decrease the demand for good Z.
decrease the demand for good A and decrease the demand for good Z.
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Question
Suppose you manage a corner grocery store. If peanut butter is an inferior good, what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession?
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Multiple Choice
Question
The price would increase and the quantity would decrease. The price and quantity would both increase.
The price and quantity would both decrease.
The price would decrease and the quantity would increase.
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A newspaper story recently reported that the price of new cars has decreased, and the quantity of new cars sold has dropped. The price and quantity changes were probably caused by:
Answer
Multiple Choice
Question
a decrease in buyers incomes. an increase in buyers incomes. an increase in production costs. a decrease in production costs.
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Over the past several years, consumer tastes for tattoos have increased. This means that the ________ for tattoos has ________.
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Multiple Choice Question
quantity demanded; increased demand; decreased
demand; increased
quantity demanded; decreased
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Which of the following will not cause an increase in demand for good X?
Answer
a decrease in income if good X is an inferior good an increase in income if good X is a normal good a decrease in the price of good X
an increase in consumers taste for good X
Multiple Choice Question
A good is normal if:
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Answer
when income increases, the demand remains unchanged. when income increases, the demand decreases.
when income increases, the demand increases.
income and the demand are unrelated.
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A good is inferior if:
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Answer
when income increases, the demand remains unchanged. when income increases, the demand decreases.
when income increases, the demand increases.
income and the demand are unrelated.
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Multiple Choice
Question
Figure: Demand for Coconuts
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Reference: Ref 3-1
(Figure: Demand for Coconuts) If a coconut is a normal good and the price of coconuts increases, then the movement that would take place in the model could be:
Answer
Multiple Choice
Question
Figure: Demand for Coconuts
A to B. B to A. C to A. E to B.
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Reference: Ref 3-1
(Figure: Demand for Coconuts) If fish is a substitute good for coconuts and the price of fish increases, then the movement that would take place in the model could be:
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Answer
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Question
Figure: Demand for Coconuts
A to C. B to A. C to A. B to E.
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Reference: Ref 3-1
(Figure: Demand for Coconuts) If coconuts are considered a normal good and the overall income level of consumers is falling, then the movement that would take place in the model could be:
Answer
Multiple Choice
Question
Figure: Demand for Coconuts
A to C. B to A. C to A. E to B.
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Reference: Ref 3-1
(Figure: Demand for Coconuts) If there is an overall increase in taste and preference for coconuts, then the movement that would take place in the model could be:
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Answer
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Question
Figure: Demand for Coconuts
A to C. B to A. C to A. B to E.
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Reference: Ref 3-1
(Figure: Demand for Coconuts) If coconuts are considered a normal good and there is an expectation on the part of consumers that the prices of coconuts will rise significantly in the near future, then the movement that would take place in the model could be:
Answer
Multiple Choice Question
C to A. A to B. B to E. E to B.
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A decrease in the price of eggs will result in a(n):
Answer
increase in the demand for eggs. increase in the supply of eggs. greater amount of eggs supplied. greater amount of eggs demanded.
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Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.60 the quantity demanded by George is ________ bags per month.
Answer
Multiple Choice Question
10 15 25 30
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Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is .________
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$0.90 $0.80 $0.70 $0.60
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Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is $0.80, the total market demand is ________ bags per month.
Answer
Multiple Choice Question
70 80 105 280
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Reference: Ref 3-2
(Table: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is $0.50, the total market demand is ________ bags per month.
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Multiple Choice
Question
80 105 210 280
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A negative relationship between the quantity demanded and price is called the law of:
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Answer
Multiple Choice Question
demand. increasing returns. market clearing. supply.
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The law of demand is illustrated when:
Answer
an increase in tuition encourages more students to enroll in college because the quality of education has risen.
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an increase in the purchases of personal computers results from lower prices. higher oil prices causes oil companies to drill for new sources of oil.
higher incomes cause more people to adopt golf as a sport.
Multiple Choice Question
A decrease in the price of a good will result in:
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Answer
an increase in demand.
an increase in supply.
an increase in the quantity demanded. more being supplied.
Multiple Choice Question
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The demand curve for videos has shifted to the right. What could have caused it?
Answer
Multiple Choice Question
a fall in the price of videos
an increase in the price of videos
an increase in the supply of videos an increase in the incomes of buyers
Answer
a change in demand is a movement along the demand curve and a change in quantity demanded is a shift in the demand curve.
a change in quantity demanded is a movement along the demand curve and a change in demand is a shift in the demand curve.
both a change in quantity demanded and a change in demand are shifts in the demand curve, only in different directions.
both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.
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The primary difference between a change in demand and a change in the quantity demanded is:
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Figure: Demand for DVDs
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Reference: Ref 3-3
(Figure: Demand for DVDs) A decrease in the price of DVD rentals would result in a change illustrated by:
Answer
Multiple Choice
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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Figure: Demand for DVDs
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Reference: Ref 3-3
(Figure: Demand for DVDs) A decrease in the price of DVD players (a complement) would result in a change illustrated by:
Answer
Multiple Choice
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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Figure: Demand for DVDs
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Reference: Ref 3-3
(Figure: Demand for DVDs) A decrease in the price of movie tickets (a substitute) would result in a change illustrated by:
Answer
Multiple Choice Question
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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If people demand more of product A when the price of B falls, then A and B are:
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not related. substitutes. complements. inferior goods.
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When the price of gas goes up and the demand for tires goes down, this means tires and gas are:
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substitutes. complements. both expensive. both inexpensive.
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Question
If the price of hamburgers increases, it would probably result in ________ in the demand for hamburger buns.
Answer
Multiple Choice Question
a decrease
an increase
no change
random fluctuations
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An announcement that smoking will harm your ability to think clearly will most likely result in:
Answer
an increase in the quantity of cigarettes demanded. a decrease in the demand for cigarettes.
no change in smoking habits.
an increase in the price of cigarettes.
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If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:
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Multiple Choice
Question
shifts to the right.
shifts to the left.
stays the same.
shifts to the right and then moves back.
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Answer
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Question
an increase in the demand for beef.
a decrease in the demand for beef.
a decrease in the quantity demanded of beef. no change in the demand for beef.
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Given that chicken and beef are substitute goods, if the price of chicken decreases substantially, there would be:
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For most goods, purchases tend to rise with increases in buyers incomes and to fall with decreases in buyers incomes. Such goods are known as:
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Question
inferior goods. direct goods. normal goods. indirect goods.
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Economists know that a particular good can be classified as an inferior good if a(n) ________ in buyers income causes a(n) ________.
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Answer
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Question
increase; increase in demand
increase; increase in quantity demanded increase; decrease in demand decrease; decrease in demand
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Given that pizza is a normal good, if students incomes at your college increase substantially, there would be:
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Multiple Choice
Question
an increase in the demand for pizza.
an increase in the quantity of pizza demanded. a decrease in the demand for pizza.
no change in the demand for pizza.
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After graduation from college, you will receive a substantial increase in your income from a new job. If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):
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Question
normal good. substitute good. complementary good. inferior good.
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An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which of the following?
Answer
Multiple Choice Question
income
consumer expectations consumer preferences prices of other goods
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Which of the following would shift the demand curve for new textbooks to the right?
Answer
Multiple Choice Question
a decrease in the price of paper
a fall in the price of used textbooks an increase in college enrollments a fall in the price of new textbooks
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Which of the following best describes the law of demand?
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As income taxes rise, fewer new cars are purchased.
As the price of corn rises, more acres of corn are planted.
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As the price of a DVD rental rises, fewer DVDs are rented. As the population rises, more electricity is consumed.
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Which of the following is likely to cause a rightward shift in the demand for home-delivered pizza?
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a lower price of pizza
a lower price of fast-food hamburgers a higher price of pepperoni
a larger population
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Which of the following describe two goods that are most likely substitutes in consumption?
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Multiple Choice Question
loaves of bread and sticks of butter loaves of bread and toasters
loaves of bread and hamburger buns loaves of bread and gasoline
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The demand for meals at a local Applebees will fall if:
Answer
the Olive Garden offers a 10% discount coupon in the local newspaper. the price of a meal at Applebees rises.
local incomes increase and Applebees is a normal good.
the price of gasoline falls in the local area.
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An inverse relationship between price and quantity is represented by:
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the demand curve.
the supply curve.
the production possibility frontier. equilibrium.
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The ________ apples will decrease due to higher apple prices.
Answer
demand for
quantity demanded of supply for
equilibrium for
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Question
Which will not increase the demand curve for desktop computers?
Answer
An increase in the incomes of computer users. Cool new computer games are developed. Dell Computers goes out of business.
The price of notebook computers increases.
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What would happen in the market for canned pinto beans if your income increases?
Answer
Demand increases if pinto beans are an inferior good. Demand increases if pinto beans are a normal good. Supply increases if pinto beans are an inferior good. Supply increases if pinto beans are a normal good.
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In the market for milk, when milk prices increased in 2008 one milk consumer stated that the reason he cut down on milk consumption is so that he can drive his car. This comment represents a:
Answer
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movement along the demand curve. movement along the supply curve. shift of the demand curve.
shift of the supply curve.
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A direct relationship between price and quantity is represented by:
Answer
the demand curve.
the supply curve.
the production possibility frontier. equilibrium.
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The ________ for tomatoes has decreased because of higher fertilizer prices.
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Question
demand
quantity demanded supply
equilibrium price
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A decrease in the price of eggs will result in a(n):
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Answer
increase in the demand for eggs.
increase in the supply of eggs.
shift in the supply curve for eggs.
movement along the demand curve for eggs.
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A negative relationship between the quantity demanded and price is called the law of ________.
Answer
demand marginality efficiency supply
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The law of demand is illustrated by a demand curve that is:
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Answer
horizontal. downward-sloping. vertical. upward-sloping.
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The law of demand implies that:
Answer
consumers are not responsive to price changes. consumers will buy more at lower prices.
sellers will offer more on the market at higher prices. sellers will offer less on the market at lower prices.
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Which of the following will result in an increased price of milk?
Answer
a shift to the right of the supply curve for milk a shift to the right of the demand curve for milk an increase in the number of milk suppliers
a decrease in the number of milk buyers
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A decrease in the price of a good will result in:
Answer
an increase in demand (a rightward shift in the demand curve).
an increase in supply (a rightward shift in the supply curve).
an increase in the quantity demanded along a given demand curve. more being supplied along a given supply curve.
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A shift of a demand curve to the right, all other things unchanged, will:
Answer
increase equilibrium price and quantity.
decrease equilibrium price and quantity.
decrease equilibrium quantity and increase equilibrium price. increase equilibrium quantity and decrease equilibrium price.
Multiple Choice 0 points Question
The demand curve for running shoes has shifted to the right. What could have caused it?
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Answer
a fall in the price of running shoes
an increase in the price of running shoes
an increase in the supply of running shoes
an increase in the income of buyers of running shoes
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Which of the following statements is correct?
Answer
A change in demand is a movement along the demand curve and a change in quantity demanded is a shift of the demand curve.
Both a change in quantity demanded and a change in demand are movements along the demand curve, only in different directions.
Both a change in quantity demanded and a change in demand are shifts of the demand curve, only in different directions.
A change in quantity demanded is a movement along the demand curve and a change in demand is a shift of the demand curve.
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Figure: Market for DVD Rentals
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Reference: Ref 3-4
(Figure: Market for DVD Rentals) Four possible outcomes in the market for rentals of DVDs are shown in the figure provided. An increase in the fee charged for DVD rentals would result in a change illustrated by:
Answer
Multiple Choice
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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Question
Figure: Market for DVD Rentals
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Reference: Ref 3-4
(Figure: Market for DVD Rentals) Four possible outcomes in the market for rentals of DVDs are shown in the figure provided. An increase in the price of DVD players would result in a change illustrated by:
Answer
Multiple Choice
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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Figure: Market for DVD Rentals
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Reference: Ref 3-4
(Figure: Market for DVD Rentals) Four possible outcomes in the market for DVD rentals are shown in the figure provided. An increase in the price of movie tickets (a substitute for renting DVDs) would result in a change illustrated by:
Answer
Multiple Choice Question
the move from f to g in panel A. the move from h to i in panel B. the move from j to k in panel C. the move from l to m in panel D.
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Given a supply curve for lamps, when the price of lamps increases, the:
Answer
Multiple Choice Question
supply increases.
quantity supplied increases. supply decreases.
quantity supplied decreases.
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In the market for tacos, each of the following shifts the supply curve to the left except:
Answer
an increase in the price of beef.
an increase in the wages of taco shop workers. fewer taco shops.
a decrease in the price of tacos.
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Given a supply curve for armchairs, when the price of armchairs increases, the:
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Multiple Choice Question
quantity supplied increases. supply increases.
quantity supplied decreases. supply decreases.
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The typical supply curve illustrates that:
Answer
other things equal, the quantity supplied for a good is inversely related to the price of a good.
other things equal, the supply of the good creates its own demand for the good.
other things equal, the quantity supplied for a good is positively related to the price of a good.
price and quantity supplied are unrelated.
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Which of the following will not cause an increase in the supply of cornflakes?
Answer
an increase in the price of cornflakes
a cost-saving improvement in the technology of corn production a reduction in the price of corn
the expectation by producers that the price of cornflakes will fall in the future, because they anticipate the release of a government report that claims that oat bran is healthier than cornflakes
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Which of the following is not a determinant of supply?
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Answer
expectations regarding future prices the technology of production
the cost of production
consumer tastes
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Which of the following influences does not shift the supply curve?
Answer
people deciding that they want to buy more of the product a decrease in the price firms expect to receive in the future a rise in the wages paid to workers
development of new technology
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Question
Which of the following will not cause an increase in supply of good X?
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an improvement in the technology used to produce good X
an increase in the price of good X
an increase in the price of inputs used to produce good X
an increase in the price of good X and an increase in the price of inputs used to produce good X
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Consider the supply curve for cotton shirts. An increase in the price of cotton will:
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Answer
increase the supply of cotton shirts. decrease the supply of cotton shirts.
not shift the supply curve for cotton shirts. decrease the demand for cotton shirts.
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Question
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Over the past few years the technology associated with producing flat-panel televisions has improved. This has led to a(n) ________ in ________ flat-panel televisions.
Answer
Multiple Choice Question
increase; the supply of
increase; the demand for decrease; the supply of decrease; the quantity supplied of
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A technological advance in the production of automobiles will:
Answer
increase the demand for automobiles. increase the supply of automobiles. decrease the demand for automobiles. decrease the supply of automobiles.
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Question
Figure: Supply of Coconuts
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Reference: Ref 3-5
(Figure: Supply of Coconuts) If the price of coconuts decreases, then the movement that would take place in the model could be:
Answer
Multiple Choice
Question
Figure: Supply of Coconuts
A to B. B to A. C to A. E to B.
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Reference: Ref 3-5
(Figure: Supply of Coconuts) If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are increasing, then the movement in the model could be:
Answer
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Question
Figure: Supply of Coconuts
A to B. B to A. C to A. E to B.
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Reference: Ref 3-5
(Figure: Supply of Coconuts) If the prices of inputs (e.g., labor, fertilizer, and fuel) used to produce and transport coconuts are decreasing, then the movement in the model could be:
Answer
Multiple Choice
Question
Figure: Supply of Coconuts
A to B. B to A. C to A. E to B.
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Reference: Ref 3-5
(Figure: Supply of Coconuts) If there is an improvement in the technology used to harvest coconuts (e.g., a faster, less expensive coconut picker), then the movement in the model could be:
Answer
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Question
Figure: Supply of Coconuts
A to C. B to A. C to A. B to E.
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Reference: Ref 3-5
(Figure: Supply of Coconuts) If there is an expectation on the part of coconut suppliers that the price of coconuts will be significantly higher in the very near future, then the movement in the model to reflect todays market behavior would be:
Answer
Multiple Choice Question
A decrease in supply means:
A to B. B to A. A to C. B to E.
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Answer
a shift to the left of the entire supply curve.
moving downward (to the left) along the supply curve with lower prices. less will be demanded at every price.
more will be supplied at every price.
Multiple Choice Question
An increase in supply of a good is caused by:
0 points
Answer
resource prices rising.
a fall in the price of the good.
an increase in the number of sellers. expectations of future price increases.
Multiple Choice Question
0 points
The primary difference between a change in supply and a change in the quantity supplied is that:
Answer
a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve.
both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions.
a change in supply is related to the supply curve, while a change in quantity supplied is related to shifts in the demand curve that elicit a change in supply.
a change in supply is a movement along the supply curve, while a change in quantity supplied is a shift in the supply curve.
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Multiple Choice Question
If the price of a commodity increases, you would expect the:
0 points
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Answer
supply to increase.
quantity supplied to increase. quantity supplied to decrease. supply curve to shift to the right.
Multiple Choice
Question
Figure: The Supply of DVDs
0 points
Reference: Ref 3-6
(Figure: The Supply of DVDs) A decrease in the fee charged for DVD rentals would result in a change illustrated by the move from:
Answer
Multiple Choice
Question
Figure: The Supply of DVDs
n to o in panel A. p to q in panel B. s to t in panel C. u to v in panel D.
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Reference: Ref 3-6
(Figure: The Supply of DVDs) A decrease in the price of DVDs sold by movie producers to rental stores would result in a change illustrated by:
Answer
Multiple Choice Question
the move from n to o in panel A. the move from p to q in panel B. the move from s to t in panel C. the move from u to v in panel D.
0 points
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An increase in supply is caused by:
Answer
an increase in input prices.
suppliers expectations of higher prices in the future.
an increase in the price of the good.
a decrease in prices of goods that are substitutes in production.
Multiple Choice 0 points Question
A decrease in supply is caused by:
Answer
an increase in prices of goods that are substitutes in production. suppliers expectations of lower prices in the future.
an advancement in the technology for producing the good.
an increase in the number of producers.
Multiple Choice 0 points
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Question
If the price of mozzarella cheese (an ingredient in pizza) declines due to a major technological breakthrough in the dairy industry, there would be:
Answer
Multiple Choice Question
An increase in supply is caused by:
a decrease in the supply of pizza.
an increase in the supply of pizza.
an increase in the quantity of pizza supplied. no change in the supply of pizza.
0 points
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Answer
an increase in resource prices.
a decrease in the number of sellers in the market. suppliers expectations of higher prices in the future.
an advancement in the technology for producing the good.
Multiple Choice Question
A decrease in supply is caused by:
0 points
Answer
a decrease in resource prices.
an increase in the number of sellers in the market. suppliers expectations of higher prices in the future.
an advancement in the technology for producing the good.
Multiple Choice Question
Which would not cause the supply curve to shift?
0 points
Answer
a change in technology
a change in factor costs
a change in the price of the good
a change in suppliers expectations of prices
Multiple Choice Question
A shift to the left of a supply curve is caused by:
0 points
Answer
an increase in the number of sellers. a technological improvement.
an increase in the cost of an input. an increase in the number of buyers.
Multiple Choice Question
When the price of corn is rising, we would expect:
0 points
Answer
the quantity demanded for corn to be rising. the quantity supplied of corn to be rising. the demand for corn to be shifting inward.
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the supply of corn to be shifting outward.
Multiple Choice 0 points Question
Reference: Ref 3-7
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(Table: Supply of Lemonade) When the price of lemonade is $1 per cup, the quantity of lemonade supplied by Eli will be:
Answer
Multiple Choice Question
40 cups. 90 cups. 10 cups. 25 cups.
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0 points
Reference: Ref 3-7
(Table: Supply of Lemonade) If the price of lemonade is $1 per cup, total quantity of lemonade supplied will be:
Answer
Multiple Choice
Question
50 cups. 80 cups. 25 cups. 90 cups.
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0 points
Which of the following is most likely to shift the supply of milk to the right?
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Answer
a tax on each gallon of milk produced
an increase in household income and milk is a normal good a decrease in the price of feed given to dairy cows
the bankruptcy of many small dairy farms
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Question
If the market for buffalo meat is in equilibrium, it means that the price of buffalo meat will probably ________ in the near future.
Answer
Multiple Choice
Question
increase
not change
decrease
increase considerably
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The market for milk is initially in equilibrium. Milk producers now engage in a costly advertising program to encourage milk drinking. Assume that the advertising campaign succeeds in shifting consumer tastes toward drinking milk and that milk producers provide more milk to the market. More milk producers enter the market. Standard demand and supply analysis tells us that:
Answer
the equilibrium price and quantity of milk will rise. the equilibrium price and quantity of milk will fall.
the equilibrium quantity of milk will rise, but we cant determine how the equilibrium price will be affected.
the equilibrium price of milk will rise, but we cant determine how the equilibrium quantity will be affected.
0 points
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Question
Assume that corn is an input in the production of beef but not in the production of pork. Further, beef and pork are substitutes. A decrease in the price of corn will:
Answer
Multiple Choice
Question
increase the supply of beef and increase the demand for pork. decrease the supply of beef and increase the demand for pork. decrease the supply of beef and decrease the demand for pork. increase the supply of beef and decrease the demand for pork.
0 points
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The market for soybeans is initially in equilibrium. Because of mad cow disease, producers decide to replace bone meal with soybeans in cattle feed. The likely effect is that:
Answer
the equilibrium price and quantity of soybeans will rise. the equilibrium price and quantity of soybeans will fall.
the equilibrium quantity of soybeans will rise, but we cant determine what will happen to the equilibrium price.
the equilibrium price of soybeans will rise, but we cant determine what will happen to the equilibrium quantity.
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Question
Market equilibrium occurs when:
Answer
there is no incentive for prices to change in the market.
quantity demanded equals quantity supplied.
the market clears.
there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.
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Question
Figure: DVD Market
0 points
Reference: Ref 3-8
(Figure: DVD Market) The figure shows the weekend rental market for DVDs in Collegetown. The equilibrium price for DVD rentals is ________ and the equilibrium quantity is ________.
Answer
Multiple Choice
Question
Figure: DVD Market
$5; 50 $3; 30 $9; 90 $6; 40
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0 points
Reference: Ref 3-8
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(Figure: DVD Market) If the rental price of DVDs rises from $5 per rental to $7 per rental, then:
Answer
demand will decrease from 50 to 30 rentals per weekend.
quantity demanded will decrease from 50 rentals per weekend to 30 rentals per weekend.
supply will increase from 50 to 70 rentals per weekend.
quantity supplied will increase from 50 to 60 rentals per weekend.
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Question
Figure: DVD Market
Reference: Ref 3-8
(Figure: DVD Market) At a rental price of $3, there will be
0 points
Answer
equilibrium in the rental market for DVDs. an increase in demand.
an excess supply of 40 DVD rentals.
an excess demand of 40 DVD rentals.
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Question
Figure: DVD Market
0 points
Reference: Ref 3-8
(Figure: DVD Market) At a rental price of $6, there will be:
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Answer
equilibrium in the rental market for DVDs. a decrease in demand.
an excess supply of 20 DVD rentals.
an excess demand of 20 DVD rentals.
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Question
0 points
Suppose the equilibrium price of Good X is $25 and the equilibrium quantity is 124 units. If the price of Good X is $2:
Answer
there will be an excess demand for Good X.
there will be an excess supply of Good X.
the market will clear.
the quantity demanded of Good X will be less than 124 units.
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Question
Suppose the equilibrium price of Good Y is $5 and the equilibrium quantity is 150 units. If the price of Good Y is $12:
Answer
Multiple Choice Question
Excess supply occurs when:
the quantity demanded will be greater than 150 units. the quantity supplied will be less than 150 units. there will be an excess demand for Good Y.
there will be an excess supply of Good Y.
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0 points
Answer
the price is above the equilibrium price.
the quantity demanded exceeds the quantity supplied.
the price is below the equilibrium price.
the quantity demanded exceeds the quantity supplied and when the price is below the equilibrium price.
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Question
Figure: Demand and Supply of Gasoline
0 points
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Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) The initial price and quantity (at intersection of S1 and D) of gasoline in equilibrium are:
Answer
Multiple Choice
$2.00 $1.50 $2.00 $2.50
and 450 gallons. and 400 gallons. and 200 gallons. and 300 gallons.
Gasoline
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0 points
Question
Figure: Demand and Supply of
Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) A factor that may have changed supply from S1 to S2 is:
Answer
better technology in the production of gasoline. increased demand.
lower labor productivity.
increased prices of substitutes for gasoline.
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Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S1 to S2:
Answer
at the old price of $2.50, there will be pressure for the price to fall. the new price will be $2.00.
the new quantity will be 600.
the price will remain constant.
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Multiple Choice
Question
Figure: Demand and Supply of Gasoline
0 points
Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) Given the initial equilibrium of S1 and D, any price lower than ________ will create pressure for the price to ________.
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Answer
Multiple Choice
$2.00; fall $2.50; rise $3.00; rise $2.50; fall
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0 points
Question
Figure: Demand and Supply of Gasoline
Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) When the supply curve shifted from the initial equilibrium, the new intersection of supply and demand has a price of ________ and quantity of 400. This could have resulted from ________.
Answer
Multiple Choice
$1.50; an increase in consumers income $1.50; an increase in refining technology $2.00; an increase in the number of buyers $2.00; an increase in consumers income
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Figure: Demand and Supply of Gasoline
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Reference: Ref 3-9
(Figure: Demand and Supply of Gasoline) What might cause the supply curve to shift from S2 back to the initial supply curve S1?
Answer
The Organization of Petroleum Exporting Countries (OPEC) restricts the production of crude oil.
The Organization of Petroleum Exporting Countries (OPEC) increases the production of crude oil.
Americans want to buy more gas.
Technology in the refinement of gasoline greatly improves.
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Multiple Choice 0 points
Question
If the quantity supplied in a market exceeds the quantity demanded in a market, we would expect prices to:
Answer
Multiple Choice Question
stay the same.
rise.
fall.
rise in order to clear the market.
0 points
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A competitive market with flexible prices and many buyers and sellers will:
Answer
eliminate surpluses.
eliminate shortages.
reach an equilibrium.
eliminate surpluses and shortages and reach an equilibrium.
Multiple Choice 0 points Question
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Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.60, the price will:
Answer
Multiple Choice Question
remain unchanged. fall to $0.30.
fall to $0.50.
rise to $0.70.
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0 points
Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) The equilibrium quantity and the equilibrium price are ________ bags and ________.
Answer
Multiple Choice Question
140; $0.40 175; $0.60 175; $0.80 210; $0.50
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Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.80, there is:
Answer
Multiple Choice Question
a surplus of 140 bags per month. a shortage of 140 bags per month. a surplus of 70 bags per month.
a shortage of 70 bags per month.
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0 points
Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) A surplus of 210 bags of chocolate-covered peanuts exists if the price is ________ per bag.
Answer
Multiple Choice Question
$0.90 $0.80 $0.60 $0.40
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Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.50, there is:
Answer
Multiple Choice Question
a surplus of 35 bags per month. a shortage of 35 bags per month. a surplus of 70 bags per month. a shortage of 70 bags per month.
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0 points
Reference: Ref 3-10
(Table: The Market for Chocolate-Covered Peanuts) A shortage of 210 bags of chocolate-covered peanuts exists if the price is ________ per bag.
Answer
Multiple Choice
Question
$0.80 $0.60 $0.40 $0.30
0 points
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If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:
Answer
is above the market equilibrium price. will rise to clear the market.
will either rise or remain unchanged. is below the market equilibrium price.
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Multiple Choice 0 points Question
What is the difference between a shortage and scarcity?
Answer
Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level.
Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages.
A shortage will exist when a good is scarce.
There is no distinction between the two. They are the same thing.
Multiple Choice 0 points Question
Which of the following always results in an increase in price and quantity?
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Answer
an increase in supply and a decrease in demand an increase in demand with no change in supply an increase in supply with no change in demand a decrease in demand and supply
Multiple Choice
Question
Figure: Demand and Supply of Wheat
0 points
Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) What is the equilibrium price in this wheat market?
Answer
$6 $4 $2 $8
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0 points
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Question
Figure: Demand and Supply of Wheat
Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) If a price of $10 temporarily exists in this market, a:
Answer
Multiple Choice
shortage of 10,000 bushels will result. shortage of 8,000 bushels will result. surplus of 8,000 bushels will result. surplus of 4,000 bushels will result.
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0 points
Question
Figure: Demand and Supply of Wheat
Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) A price of ________ will result in a ________.
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Answer
Multiple Choice
$6; shortage $8; surplus $8; shortage $4; surplus
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0 points
Question
Figure: Demand and Supply of Wheat
Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) If there were an increase in demand of 2,000 bushels at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.
Answer
Multiple Choice
Question
Figure: Demand and Supply of Wheat
$5; 5,000 $6; 7,000 $7; 7,000 $8; 8,000
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Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) If there were a decrease in supply of 2,000 bushels at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.
Answer
Multiple Choice
$5; 5,000 $7; 5,000 $6; 4,000 $8; 6,000
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0 points
Question
Figure: Demand and Supply of Wheat
Reference: Ref 3-11
(Figure: Demand and Supply of Wheat) A temporary price of $2 in this market would result in:
Answer
a surplus of 4,000 bushels. a shortage of 8,000 bushels.
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a shortage of 10,000 bushels. a surplus of 10,000 bushels.
Multiple Choice Question
0 points
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The market equilibrium is found at the:
Answer
price where quantity demanded exceeds quantity supplied. price where quantity demanded equals quantity supplied. price where quantity supplied exceeds quantity demanded. highest price the market will bear.
Multiple Choice 0 points Question
Reference: Ref 3-12
(Table: The Lemonade Market) If the price of a cup of lemonade is $1.00, what will exist in the market?
Answer
Multiple Choice Question
equilibrium
a shortage of 150 cups a shortage of 75 cups a surplus of 75 cups
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0 points
Reference: Ref 3-12
(Table: The Lemonade Market) If the price of lemonade were $1.25 per cup, we would expect to
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see:
Answer
Multiple Choice
Question
a rising price to eliminate the shortage. a rising price to eliminate the surplus.
a falling price to eliminate the shortage. a market in equilibrium.
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If the supply and demand curves intersect at a price of $47, then any price above that would result in a(n):
Answer
Multiple Choice
Question
shortage.
surplus.
equilibrium. increase in demand.
0 points
Add Question Here
0 points
If the supply and demand curves intersect at a price of $14, then any price below that would result in a(n):
Answer
Multiple Choice
shortage.
surplus.
equilibrium. increase in demand.
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0 points
Question
Figure: Demand and Supply of Wheat
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Reference: Ref 3-13
(Figure: Demand and Supply of Wheat) What is the equilibrium quantity in this wheat market?
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Answer
Multiple Choice
12,000 bushels 2,000 bushels 10,000 bushels 6,000 bushels
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0 points
Question
Figure: Demand and Supply of Wheat
Reference: Ref 3-13
(Figure: Demand and Supply of Wheat) If a price of $8 temporarily exists in this market, a:
Answer
Multiple Choice
shortage of 2,000 bushels will result. surplus of 4,000 bushels will result. shortage of 4,000 bushels will result. surplus of 6,000 bushels will result.
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Question
Figure: Demand and Supply of Wheat
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Reference: Ref 3-13
(Figure: Demand and Supply of Wheat) A temporary price of $4 in this market would result in:
Answer
Multiple Choice
Question
a surplus of 4,000 bushels. a shortage of 2,000 bushels. a shortage of 4,000 bushels. a surplus of 2,000 bushels.
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0 points
You notice that the price of DVD players falls and the quantity of DVD players sold increases. This set of observations can be the result of the:
Answer
Multiple Choice Question
demand for DVD players shifting to the right. demand for DVD players shifting to the left. supply of DVD players shifting to the right. supply of DVD players shifting to the left.
0 points
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In the market for corn tortilla chips, what would cause a price increase?
Answer
Your doctor tells you that you cannot have junk food anymore.
There is a technological advancement in the tortilla chip production process. There is a fungus that kills much of the corn crop in Nebraska.
The price of salsa triples.
Multiple Choice 0 points
Question
The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. They believe that in the market for flights:
Answer
supply increased. supply decreased. demand increased.
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demand decreased.
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Question
0 points
The market price of airline flights increased recently. Some economists suggest that the price increased because jet fuel is much more expensive than before. They believe that in the market for flights:
Answer
Multiple Choice
Question
supply increased. supply decreased. demand increased. demand decreased.
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The market price of airline flights increased recently. Some economists suggest that the price increased because there has been an increase in the number of business travelers. They believe that in the market for flights:
Answer
Multiple Choice Question
supply increased. supply decreased. demand increased. demand decreased.
0 points
0 points
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Add Question Here
In the market for beef, what would cause a price increase?
Answer
The price of chicken decreases.
Your doctor tells you that you cannot have saturated fat anymore. The prices of grass and corn increase.
There is a movement in the United States towards vegetarianism.
Multiple Choice 0 points
Question
An increase in which of the following determinants of demand will have an ambiguous (uncertain) effect on price?
Answer
Multiple Choice
Question
tastes and preferences price of a substitute price of a complement income
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If tortilla chips are a normal good, what happens to equilibrium price and quantity when there is an increase in income?
Answer
Equilibrium price decreases and equilibrium quantity increases. Equilibrium price decreases and equilibrium quantity decreases. Equilibrium price increases and equilibrium quantity increases.
0 points
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Equilibrium price increases and equilibrium quantity decreases.
Multiple Choice 0 points
Question
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In the local market for coffee, what would happen if Joyces Java and Everyday Joes coffee shops go out of business?
Answer
Multiple Choice
The supply curve shifts to the right. The demand curve shifts to the left. The supply curve shifts to the left. The demand curve shifts to the right.
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0 points
Question
Figure: Supply and Demand in the Orange Juice Market
Reference: Ref 3-14
(Figure: Supply and Demand in the Orange Juice Market) Assume that a hurricane hits Florida. In response, what would be the most likely equilibrium point in the orange juice market illustrated?
Answer
Multiple Choice
A B D E
0 points
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Question
Figure: Supply and Demand in the Orange Juice Market
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Reference: Ref 3-14
(Figure: Supply and Demand in the Orange Juice Market) Suppose most people only drink orange juice with champagne. What will be the new equilibrium point in the orange juice market if a law banning alcohol passes?
Answer
Multiple Choice
A B D E
0 points
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Question
Figure: Supply and Demand in the Orange Juice Market
Reference: Ref 3-14
(Figure: Supply and Demand in the Orange Juice Market) A reputable scientist asserts in a major scientific publication that drinking orange juice will increase your life span. We can expect the new equilibrium point in the orange juice market to be at:
Answer
Multiple Choice
Question
A. B. D. E.
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0 points
In the market for wheat, what would happen if the price of ethanol (which is made from corn) increases dramatically?
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Answer
Multiple Choice
Question
an increase in supply of wheat a decrease in supply of wheat an increase in demand of wheat a decrease in demand of wheat
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0 points
In the market for tacos, you observe that the equilibrium price and quantity have increased. This can only be caused by:
Answer
Multiple Choice
Question
an increase in the price of beef.
an increase in the wages of taco shop workers. fewer taco shops.
an increase in the incomes of people who eat tacos.
0 points
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Consider the market for iPods. What happens if a fantastic new alternative MP3 player is developed and, at the same time, a boat carrying a large shipment of iPods is attacked by sea monsters and sunk?
Answer
Multiple Choice
Question
Price decreases and quantity increases.
Price increases and quantity increases.
The change in price is indeterminate and quantity decreases. Price increases and the change in quantity is indeterminate.
0 points
Add Question Here
Consider the market for corn. What happens if there is an increased demand for corn tortillas and, at the same time, a new corn seed becomes available that increased the per-acre yield dramatically?
Answer
Multiple Choice
Question
Price and quantity decrease.
The change in price is indeterminate, quantity decreases. The change in price is indeterminate, quantity increases. Price increases, the change in quantity is indeterminate.
0 points
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In the market for local Starbucks coffee, the price will ________ and the quantity will ________ if Deja Vu Coffeehouse opens nearby and consumers incomes decrease due to a recession.
Answer
Multiple Choice
Question
increase; be indeterminate decrease; be indeterminate be indeterminate; increase be indeterminate; decrease
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The market for corn is currently in equilibrium. Which of the following is most likely to increase the equilibrium price of corn?
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Answer
a bountiful harvest
increasing production of corn-based ethanol
decreasing household incomes and corn is a normal good a subsidy given by the government to growers of corn
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Multiple Choice 0 points
Question
The market for lemonade is currently in equilibrium and the price of lemons rises. How will this affect the lemonade market?
Answer
Demand will decrease, decreasing the price and decreasing the quantity. Demand will decrease, increasing the price and decreasing the quantity. Supply will increase, decreasing the pric

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If you have questions, you can contact us here