Question
1.Which of the following would decrease the supply of airline travel? a. Reduced number of airline travelers. b. New airline companies beginning operations. c. Higher
1.Which of the following would decrease the supply of airline travel?
a.
Reduced number of airline travelers.
b.
New airline companies beginning operations.
c.
Higher fuel costs.
d.
Lower prices for airline tickets.
Exhibit 4-6 Demand and supply curves
2.If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:
a.
market price will decrease, and market quantity exchanged will increase.
b.
market price will increase, and market quantity exchanged will decrease.
c.
market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
d.
market price could increase, decrease, or remain the same, and quantity exchanged will increase.
3.Complementary goods are goods:
a.
that are consumed jointly.
b.
that are consumed in place of one another.
c.
for which demand increases when the price of its complementary goods increases.
d.
for which demand decreases when the price of its complementary goods decreases.
4.In Exhibit 3-11, in Panel A the movement from point A to point C describes a(n):
a.
ambiguous change in price and a decrease in quantity.
b.
increase in price and an ambiguous change in quantity.
c.
increase in both price and quantity.
d.
decrease in both price and quantity.
Exhibit 3-8Demand and Supply Data for Video Games
Price
Quantity Demanded
of Video Games
Quantity Supplied
of Video Games
$75
400
900
70
450
850
65
500
800
60
550
750
55
600
700
50
650
650
45
700
600
40
750
550
5.Exhibit 3-8 presents supply and demand data for the video game market. If the price of video games was currently $70, there would be an ____________ of ______________ video games in this market.
a.
excess demand; 450
b.
excess demand; 500
c.
excess supply; 400
d.
excess supply; 850
6.The "ceteris paribus" clause in the law of supply allows which of the following factors to change?
a.
the price of an input
b.
technology
c.
the number of sellers
d.
the price of the good supplied
7.There was an extensive black market (illegal market) for many consumer products in the United States during World War II. A likely explanation of the black market is that:
a.
the prices of goods were artificially held down by price controls.
b.
black markets were legal during the war.
c.
goods were not subject to price controls.
d.
gasoline rationing greatly restricted civilians from driving to stores.
8.Price floors are used as a method to:
a.
ensure buyers that goods won't be cheaper tomorrow.
b.
see that production levels don't fall too low.
c.
guarantee there will be enough food for everyone.
d.
ensure sellers a minimum price for their goods.
9.A shortage of product means a(n):
a.
excess supply of the product.
b.
excess demand of the product.
c.
situation where the quantity demanded is less than the quantity supplied.
d.
situation where the current market price is too high.
10.A surplus of wheat:
a.
is impossible if people are hungry.
b.
is impossible if the price of wheat is below equilibrium.
c.
will result when the quantity demanded exceeds the quantity supplied at the current price.
d.
is unlikely to cause any change in the price of wheat.
Exhibit 4-9 Data on supply and demand
Price
Quantity
Demanded
Quantity
Supplied
$2.00
100
300
1.50
150
250
1.00
200
200
0.50
250
150
11.In Exhibit 4-9, if a price ceiling is set at $1.50 the market result after adjustment is:
a.
a shortage of 150 units.
b.
a surplus of 100 units.
c.
shortage of 100 units.
d.
equilibrium at 200 units.
12.The law of demand shows that:
a.
there is an inverse relationship between price and quantity demanded.
b.
the demand curve is positively sloped.
c.
when the price of a good increases, the quantity demanded increases.
d.
individual demand is the same as market demand.
13.A decrease in quantity demanded is given by a(n):
a.
downward shift of the demand curve.
b.
upward shift of the demand curve.
c.
downward movement to the right along the demand curve.
d.
upward movement to the left along the demand curve.
14.Assuming that travel from New York to Los Angeles is a normal good, a decrease in consumer income, other things being equal, will:
a.
decrease the quantity demanded of travel to Los Angeles.
b.
increase the demand for travel to Los Angeles.
c.
decrease the demand for travel to Los Angeles.
d.
increase the quantity of travel to Los Angeles demanded.
Exhibit 4-5 Supply and demand curves for computers
15.Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?
a.
Lower costs for computer chips and motherboards.
b.
The failure of several computer manufacturers.
c.
Higher prices for computer software.
d.
More features and greater ease of use.
16.According to the law of supply, there is a direct relationship between quantity supplied of pickles and:
a.
the number of sellers of pickles.
b.
costs of cucumbers.
c.
pickling production technology.
d.
the price of the pickles.
17.An improvement in a firm's technology that improves productivity results in a(n):
a.
leftward shift of the supply curve.
b.
upward movement along the supply curve.
c.
willingness to supply a larger quantity than before at any given price.
d.
downward movement along the supply curve.
18.If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:
a.
Y and Z are complements.
b.
Y and Z are substitutes.
c.
Y and Z are unrelated.
d.
Y is a normal good and Z is an inferior good.
19.Ceteris paribus, which of the following would cause a decrease in the demand for HD TVs, a normal good?
a.
decline in the price of HD TVs.
b.
increase in the price of HD TVs.
c.
increase in consumers' income.
d.
decrease in consumers' income.
Exhibit 3-8Demand and Supply Data for Video Games
Price
Quantity Demanded
of Video Games
Quantity Supplied
of Video Games
$75
400
900
70
450
850
65
500
800
60
550
750
55
600
700
50
650
650
45
700
600
40
750
550
20.In Exhibit 3-8, if there is a surplus of video games of 200 units, the current price of video games must be:
a.
$60.
b.
$50.
c.
$45.
d.
$40.
21.Which of the following would increase the supply of laptop computers?
a.
Higher wage rates for the workers that produce laptop computers.
b.
A technological improvement that lowers the cost of producing laptop computers.
c.
An increase in the price of computer chips used to produce laptop computers.
d.
An increase in the price of laptop computers.
22.An increase in demand:
a.
results in a leftward shift of the demand curve.
b.
could be caused by a decrease in the price of the good.
c.
could be caused by an increase in the price of a substitute good.
d.
is shown as movement down along a demand curve.
23.An increase in the quantity supplied of a good is most often due to:
a.
lower prices.
b.
higher prices.
c.
an increase in the price of a substitute.
d.
more buyers entering the market.
24.If each of us relied exclusively on the market to determine what to buy, we would probably end up with few, if any:
a.
streetlights.
b.
strawberries.
c.
televisions.
d.
raincoats.
25.At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?
a.
Yes, Martha is correct. Sam's demand has decreased.
b.
No, Martha is incorrect. Sam's demand has increased.
c.
No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
d.
No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.
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Principles of Economics
Authors: Gregory Mankiw
7th edition
128516587X, 978-1285165875
