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45. If goods A and B are complements, then an increase in the price of good A will result in
a. more of good A being sold. b. more of good B being sold. c. less of good B being sold.
d. no difference in the quantity sold of either good. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Complements MSC: Applicative 46. Holding all other things constant, a higher price for ski lift tickets would
a. increase the number of skiers. b. increase the price of skis.
c. decrease the number of skis sold.
d. decrease the demand for other winter recreational activities. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Complements MSC: Applicative 47. Which of the following events will definitely cause equilibrium quantity to fall?
a. demand increases and supply decreases b. demand and supply both decrease
c. demand decreases and supply increases d. demand and supply both increase ANS: B PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative 48. If the demand for a product increases, we would expect
a. equilibrium price to increase and equilibrium quantity to decrease. b. equilibrium price to decrease and equilibrium quantity to increase. c. equilibrium price and equilibrium quantity both to increase. d. equilibrium price and equilibrium quantity both to decrease. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium price | Demand MSC: Interpretive
49. If the demand for a product decreases, we would expect
a. equilibrium price to increase and equilibrium quantity to decrease. b. equilibrium price to decrease and equilibrium quantity to increase. c. equilibrium price and equilibrium quantity to both increase. d. equilibrium price and equilibrium quantity to both decrease. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand MSC: Interpretive 50. If the supply of a product increases, we would expect
a. equilibrium price to increase and equilibrium quantity to decrease. b. equilibrium price to decrease and equilibrium quantity to increase. c. equilibrium price and equilibrium quantity both to increase. d. equilibrium price and equilibrium quantity both to decrease. ANS: B PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Supply MSC: Interpretive 51. If the supply of a product decreases, we would expect
a. equilibrium price to increase and equilibrium quantity to decrease. b. equilibrium price to decrease and equilibrium quantity to increase. c. equilibrium price and equilibrium quantity both to increase. d. equilibrium price and equilibrium quantity both to decrease. ANS: A PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Supply MSC: Interpretive
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52. Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we
expect to happen in the market?
a. The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. b. The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. c. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. d. Both equilibrium price and equilibrium quantity would increase. ANS: C PTS: 1 DIF: 3 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative 53. Suppose that demand decreases and supply decreases. What would you expect to occur in the market for the good?
a. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Both equilibrium price and equilibrium quantity would increase. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Interpretive 54. Which of the following events would result in an increase in equilibrium price and an ambiguous change in
equilibrium quantity?
a. an increase in supply and an increase in demand b. an increase in supply and a decrease in demand c. a decrease in supply and an increase in demand d. a decrease in supply and a decrease in demand ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative 55. Suppose that a decrease in the price of good X results in fewer units of good Y being sold. This implies that X and Y
are
a. complementary goods. b. normal goods. c. inferior goods. d. substitute goods. ANS: D PTS: 1 DIF: 3 REF: 4-4 TOP: Substitutes MSC: Applicative
56. A weaker demand together with a stronger supply would necessarily result in
a. a lower price. b. a higher price.
c. an increase in equilibrium quantity. d. a decrease in equilibrium quantity. ANS: A PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative
57. Which of the following events would cause the price of oranges to fall?
a. There is a shortage of oranges.
b. An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines
are substitutes.
c. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation’s
oranges.
d. All of the above are correct. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium price MSC: Applicative 58. Which of the following quantities would increase in response to a decrease in the price of ironing boards?
a. the quantity of irons demanded at each possible price of irons b. the equilibrium quantity of irons c. the equilibrium price of irons d. All of the above are correct. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Complements MSC: Applicative
Table 4-3. The demand schedule below pertains to sandwiches demanded per week.
154 ? Chapter 4/The Market Forces of Supply and Demand
Alfred Belinda Charissa
59. Refer to Table 4-3. Regarding Alfred and Belinda, whose demand for sandwiches conforms to the law of demand?
a. only Alfred’s b. only Belinda’s
c. both Alfred’s and Belinda’s d. neither Alfred’s nor Belinda’s ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Law of demand MSC: Applicative 60. Refer to Table 4-3. Regarding Alfred and Belinda, for whom are sandwiches a normal good?
a. only for Alfred b. only for Bellinda
c. for Alfred and for Belinda
d. This cannot be determined from the given information. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Normal goods MSC: Applicative
61. Refer to Table 4-3. Suppose x = 1. Then it must be true that
a. Alfred and Charissa have the same income, which is lower than Belinda’s income.
b. if sandwiches and potato chips are complements for Alfred, then those two goods are also complements for
Charissa.
c. Alfred’s demand curve is identical to Charissa’s demand curve. d. All of the above are correct. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Demand curve MSC: Applicative 62. Refer to Table 4-3. Suppose x = 1. Then the slope of the market demand curve is
a. -1/3. b. -1/2. c. -2. d. -3. ANS: A PTS: 1 DIF: 2 REF: 4-4 TOP: Market demand curve MSC: Applicative
63. Refer to Table 4-3. Suppose Alfred, Belinda, and Charissa are the only demanders of sandwiches. Also suppose x =
2. Then
a. the slope of Charissa’a demand curve is -1/2 and the slope of the market demand curve is -5/2. b. the slope of Charissa’a demand curve is -1/2 and the slope of the market demand curve is -2/5 c. the slope of Charissa’a demand curve is -2 and the slope of the market demand curve is -5/2. d. the slope of Charissa’a demand curve is -2 and the slope of the market demand curve is -2/5. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Individual demand | Market demand MSC: Applicative
Price $3.00
$5.00
$3.00 $5.00
$3.00 $5.00
Quantity Demanded 3 1 4 2 3 x
Chapter 4/The Market Forces of Supply and Demand ? 155
64. Refer to Table 4-3. Suppose Alfred, Belinda, and Charissa are the only demanders of sandwiches and that the
market demand violates the law of demand. Then, in the table, a. x < 5. b. x > 5. c. x > 7. d. x > 10. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Market demand MSC: Applicative 65. Refer to Table 4-3. Suppose Alfred, Belinda, and Charissa are the only demanders of sandwiches. Also suppose: ? x = 2;
? the current price of a sandwich is $5.00;
? the market quantity supplied of sandwiches is 10; ? the law of supply applies to the supply of sandwiches. Then
a. there is a shortage of 3 sandwiches and the price would be expected to rise from its current level of $5.00. b. there is a shortage of 3 sandwiches and the price would be expected to fall from its current level of $5.00. c. there is a surplus of 5 sandwiches and the price would be expected to rise from its current level of $5.00. d. there is a surplus of 5 sandwiches and the price would be expected to fall from its current level of $5.00. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Surpluses MSC: Applicative
66. Refer to Table 4-3. Suppose Alfred, Belinda, and Charissa are the only demanders of sandwiches. Also suppose: ? x = 2;
? the current price of a sandwich is $3.00;
? the market quantity supplied of sandwiches is 4; ? the slope of the supply curve is 2. Then
a. there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. b. there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00.
c. there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. d. there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is higher than $5.00. ANS: B PTS: 1 DIF: 3 REF: 4-4 TOP: Equilibrium MSC: Analytical 67. Refer to Table 4-3. Suppose Alfred, Belinda, and Charissa are the only demanders of sandwiches. Also suppose: ? x = 2;
? the current price of a sandwich is $3.00;
? the market quantity supplied of sandwiches is 5; ? the slope of the supply curve is 1. Then
a. there is currently a shortage of 5 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. b. there is currently a shortage of 5 sandwiches and the equilibrium price of a sandwich is $5.00.
c. there is currently a shortage of 7 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. d. there is currently a shortage of 7 sandwiches and the equilibrium price of a sandwich is higher than $5.00. ANS: A PTS: 1 DIF: 3 REF: 4-4 TOP: Equilibrium MSC: Analytical 68. In a given market, how are the equilibrium price and the market-clearing price related?
a. There is no relationship. b. They are the same price.
c. The market-clearing price exceeds the equilibrium price. d. The equilibrium price exceeds the market-clearing price. ANS: B PTS: 1 DIF: 1 REF: 4-4 TOP: Equilibrium price MSC: Definitional
156 ? Chapter 4/The Market Forces of Supply and Demand
69. The current price of neckties is $30 and the equilibrium price of neckties is $25. As a result,
a. the quantity supplied of neckties exceeds the quantity demanded of neckties at the $30 price. b. the equilibrium quantity of neckties exceeds the quantity demanded at the $30 price. c. There is a surplus of neckties at the $30 price. d. All of the above are correct. ANS: D PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Surpluses MSC: Interpretive 70. The law of supply and demand asserts that
a. demand curves and supply curves tend to shift to the right as time goes by.
b. the price of a good will eventually rise in response to an excess demand for that good. c. when the supply curve for a good shifts, the demand curve for that good shifts in response. d. the equilibrium price of a good will be rising more often than it will be falling. ANS: B PTS: 1 DIF: 2 REF: 4-4 TOP: Law of supply and demand MSC: Interpretive
71. Suppose buyers of computers and printers regard those two goods as complements. Then an increase in the price of
computers will cause
a. a decrease in the demand for printers and a decrease in the quantity supplied of printers. b. a decrease in the supply of printers and a decrease in the quantity demanded of printers.
c. a decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. d. an increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers. ANS: A PTS: 1 DIF: 2 REF: 4-4 TOP: Complements | Equilibrium MSC: Applicative
72. During the last few decades in the United States, health officials have argued that eating too much beef might be
harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?
a. Beef producers, concerned about the health of their customers, decided to produce relatively less beef.
b. Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. c. Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the
relative price of beef, making it less attractive to produce.
d. Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace. ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative 73. What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more
expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls and more firms decide to manufacture traditional film?
a. Price will fall and the effect on quantity is ambiguous. b. Price will rise and the effect on quantity is ambiguous. c. Quantity will fall and the effect on price is ambiguous. d. The effect on both price and quantity is ambiguous. ANS: A PTS: 1 DIF: 3 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Analytical 74. Which of the following events would result in an increase in equilibrium price and an ambiguous change in
equilibrium quantity?
a. an increase in supply and an increase in demand b. an increase in supply and a decrease in demand c. a decrease in supply and an increase in demand d. a decrease in supply and a decrease in demand ANS: C PTS: 1 DIF: 2 REF: 4-4 TOP: Equilibrium | Demand | Supply MSC: Applicative