Question 1(1 point)

(I) The height of the supply curve indicates the opportunity cost of producing additional units of the good. (II) The height of the demand curve indicates the value consumers place on additional units of the good.

Question 1 options:

a)	Both I and II are false.

b)	I is true; II is false.

c)	I is false; II is true.

d)	Both I and II are true.

Question 2(1 point)

If MC < MB for the last unit produced, then ________________ of the good is being produced.

Question 2 options:

a)	the equilibrium quantity

b)	too little

c)	the economically efficient quantity

d)

too much

Question 3(1 point)

Which is true?

Question 3 options:

a)	Equilibrium, or the market outcome, is found at the intersection of S & D.

b)	Economic efficiency, or the socially optimal outcome, is found at the intersection of S & D.

c)	both a & b are true

d)	neither a nor b are true

Question 4(1 point)

When peoples' income goes down, they buy less of Good 1. Good 1 is a

Question 4 options:

a)	complement.

b)	substitute.

c)	inferior good

d)	normal good.

Question 5(1 point)

Good 1 & Good 2 are substitutes. If the price of Good 1 increases, the demand for Good 2 will

Question 5 options:

a)

decrease.

b)

increase.

c)	not change.

Question 6(1 point)

If the price of chocolate chip cookies falls, then

Question 6 options:

a)	the demand curve for chocolate chip cookies shifts to the left.

b)	the demand curve for chocolate chip cookies shifts to the right.

c)	there is a movement to the right along the demand curve for chocolate chip cookies.

d)	there is a movement to the leftalong the demand curve for chocolate chip cookies.

Question 7(1 point)

The price of the steel used to make car engines decreases. The demand for cars will

Question 7 options:

a)	shift to the left.

b)	not shift.

c)	shift to the right.

Question 8(1 point)

Incomes go down. The demand for bubble gum, a normal good,

Question 8 options:

a)	increases.

b)

decreases

c)	neither increases nor decreases.

Question 9(1 point)

The price of rice decreases. The demand for kebabs, a complement to rice,

Question 9 options:

a)	doesn't shift.

b)	shifts left.

c)	shifts right.

Question 10(1 point)

The price of hamburgers is expected to fall. The current demand for hamburgers will

Question 10 options:

a)	not change.

b)

decrease.

c)

increase.

Question 11(1 point)

We discover that eating broccoli makes you smarter. The demand for broccoli will

Question 11 options:

a)	not shift.

b)	shift to the left.

c)	shift to the right.

Question 12(1 point)

We expect it to rain for the next three weeks. The demand for mangos will

Question 12 options:

a)	shift to the left.

b)	shift to the right.

c)	not shift.

Question 13(1 point)

Less of Good 1 is produced when the price of Good 2 rises. These goods are

Question 13 options:

a)	complements.

b)	complements in production.

c)	substitutes in production.

d)	substitutes.

Question 14(1 point)

Which does NOT increase supply?

Question 14 options:

a)	a higher price for the good

b)	an increase in the number of sellers

c)	a lower price on an input of the good

d)	an increase in the technology used to produce the good

Question 15(1 point)

The demand for cars decreases. The supply curve for cars will

Question 15 options:

a)	not shift.

b)	shift to the right.

c)	shift to the left.

Question 16(1 point)

The price of the steel used to make car engines increases. The supply curve for cars will

Question 16 options:

a)	shift to the right.

b)	shift to the left.

c)	not shift.

Question 17(1 point)

New technology allows televisions to be made faster. The supply of televisions will

Question 17 options:

a)	shift left.

b)	not change.

c)	shift right.

Question 18(1 point)

A new tax on oil producers is put in effect. The supply of oil will

Question 18 options:

a)

decrease.

b)	not change.

c)

increase.

Question 19(1 point)

A hurricane destroys banana trees in the Philippines. The supply of bananas will

Question 19 options:

a)

increase.

b)	not change.

c)

decrease.

Question 20(1 point)

If the price of rice is below its equilibrium price, there will be a ________________ of rice and the price will ________________.

Question 20 options:

a)	surplus; decrease

b)	shortage; increase

c)	shortage; decrease

d)	surplus; increase

Question 21(1 point)

If supply increases,

Question 21 options:

a)	price would decrease and quantity would increase.

b)	price and quantity would decrease.

c)	price would increase and quantity would decrease.

d)	price and quantity would increase.

Question 22(1 point)

The price of leather decreases. The price of leather shoes will ________________ and the quantity will ________________.

Question 22 options:

a)	decrease; decrease

b)	decrease; increase

c)	increase; increase

d)	increase; decrease

Question 23(1 point)

Long-distance travel by plane is a normal good. As people's incomes decrease, then the price of plane travel will ________________ and the quantity will ________________.

Question 23 options:

a)	increase; decrease

b)	decrease; increase

c)	increase; increase

d)	decrease; decrease

Question 24(1 point)

If people find out that taking one aspirin per day reduces the risk of heart attaches, then the price of aspirin will ________________ and the quantity will ________________.

Question 24 options:

a)	decrease; decrease

b)	increase; decrease

c)	decrease; increase

d)	increase; increase

Question 25(1 point)

If an earthquake destroys the area where many computers are produced, then the price of computers will ________________ and the quantity will ________________.

Question 25 options:

a)	decrease; increase

b)	increase; increase

c)	decrease; decrease

d)	increase; decrease

Question 26(1 point)

Coffee and sugar are complements. If the price of coffee increases, then the price of sugar will ________________ and the quantity will ________________.

Question 26 options:

a)	decrease; increase

b)	increase; decrease

c)	decrease; decrease

d)	increase; increase

Question 27(1 point)

Producers canmake fish burgers and then use the left over parts of the fish to make fertilizer. Therefore, when the price of fish burgers decreases, the price offertilizer will ________________ and the quantity will ________________.

Question 27 options:

a)	decrease; decrease

b)	increase; decrease

c)	decrease; increase

d)	increase; increase

Question 28(1 point)

If lemons are inputs to lemonade and the cost of lemons goes up, then price of lemonade will ________________ and the quantity will ________________.

Question 28 options:

a)	increase; increase

b)	increase; decrease

c)	decrease; decrease

d)	decrease; increase

Question 29(1 point)

If suppliers can produce either hats or mittens and the price of mittens decreases, the price of hats will ________________ and the quantity will ________________.

Question 29 options:

a)	decrease; decrease

b)	increase; increase

c)	decrease; increase

d)	increase; decrease

Question 30(1 point)

Which would lower the price and raise quantity of used cars?

Question 30 options:

a)	a reduction in the price of new cars, a substitute for used cars

b)	an increase in the number of people selling their used cars

c)	a reduction in incomes, if used cars are an inferior good

d)	an increase in wages paid to used car salespeople

Question 31(1 point)

Which would explain why both the equilibrium price and quantity of digital cameras increased?

Question 31 options:

a)	a decrease in the price of cell phones that take pictures

b)	consumers' preferences changed in favor of digital cameras

c)	technological advances in digital camera production

d)	workers who make digital cameras received a pay raise

Question 32(1 point)

Which would cause the equilibrium price of soda to decrease and the quantity to increase?

Question 32 options:

a)	a decrease in consumer income, assuming soda is a normal good

b)	an increase in the price of coffee, a substitute for soda

c)	an increase in the price for energy drinks, a good that soda-makers could make instead

d)	a decrease in the price of sugar, an input for making soda

Question 33(1 point)

Which would happen if supply increased and demand decreased?

Question 33 options:

a)	quantity would go up

b)	price would go down

c)	price would go up

d)	quantity would go down

Question 34(1 point)

Market prices generally promote social cooperation because they

Question 34 options:

a)	encourage government officials to levy taxes to provide people with the necessities of life.

b)	clarify the options available to people and encourage individuals to help others in exchange for income.

c)	reward only altruistic actions, whereby, people seek to help others without the expectation of personal gain.

d)	eliminate scarcity by allowing prices to rise.