Question 1(1 point)

(I) The height of the supply curve indicates the minimum price the seller would accept for an additional unit. (II) The height of the demand curve indicates the maximum amount the consumer would be willing to pay for an additional unit.

Question 1 options:

a)	I is true; II is false.

b)	I is false; II is true.

c)	Both I and II are false.

d)	Both I and II are true.

Question 2(1 point)

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

Question 2 options:

a)	the economically efficient quantity

b)	the equilibrium quantity

c)	too little

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 MB & MC.

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)

Good 1 is an inferior good. If income goes up, demand for Good 1 will

Question 4 options:

a)

decrease.

b)	not change.

c)

increase.

Question 5(1 point)

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

Question 5 options:

a)

increase.

b)

decrease.

c)	not change.

Question 6(1 point)

A change in ________________ changes the amount that consumers demand but does NOT change demand.

Question 6 options:

	the price of the good
	the preference for the good
	people's income
	the price of a related good

Question 7(1 point)

The cost of producing hamburgers increases. The demand for hamburgers will

Question 7 options:

a)

increase.

b)

decrease.

c)	not change.

Question 8(1 point)

Incomes go down. The demand for used furniture, an inferior good,

Question 8 options:

a)	increases.

b)

decreases

c)	doesn't change.

Question 9(1 point)

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

Question 9 options:

a)	shifts left.

b)	doesn't shift.

c)	shifts right.

Question 10(1 point)

The price of falafel is expected to decrease. The current demand for falafel will

Question 10 options:

a)	not change.

b)

rise.

c)

fall.

Question 11(1 point)

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

Question 11 options:

a)	not shift.

b)	shift to the right.

c)	shift to the left.

Question 12(1 point)

Mangos are found to slow the aging process. The demand for mangos will

Question 12 options:

a)

increase.

b)	not change.

c)

decrease.

Question 13(1 point)

More of Good 1 is produced when the price of Good 2 falls. These goods are

Question 13 options:

a)	substitutes in production.

b)	complements.

c)	complements in production.

d)	substitutes.

Question 14(1 point)

If the price of chocolate chip cookies falls, then

Question 14 options:

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

b)	there is a movement to the left along the supply curve for chocolate chip cookies.

c)	the supply curve for chocolate chip cookies shifts to the left.

d)	the supply curve for chocolate chip cookies shifts to the right.

Question 15(1 point)

Consumers' incomes increase. The supply curve for Ipods, a normal good, will

Question 15 options:

a)	not change.

b)

decrease.

c)

increase.

Question 16(1 point)

The cost of sugar decreases. The supply of candy will

Question 16 options:

a)

decrease.

b)	not change.

c)

increase.

Question 17(1 point)

The secret recipe for making KFC's chicken is lost. The supply of KFC chicken will

Question 17 options:

a)

increase.

b)

decrease.

c)	not change.

Question 18(1 point)

There are new labor laws which make hiring and firing workers more difficult. The supply of fast food, a labor intensive good, will

Question 18 options:

a)	not shift.

b)	shift to the right.

c)	shift to the left.

Question 19(1 point)

A severe drought affects the Middle East. The supply of oil will

Question 19 options:

a)	not shift.

b)	shift left.

c)	shift right.

Question 20(1 point)

How is a shortage eliminated?

Question 20 options:

a)	As the price rises, the quantity demanded decreases while the quantity supplied increases.

b)	As the price rises, the quantity demanded increases while the quantity supplied decreases.

c)	As the price falls, the quantity demanded decreases while the quantity supplied increases.

d)	As the price falls, the quantity demanded increases while the quantity supplied decreases.

Question 21(1 point)

If supply decreases,

Question 21 options:

a)	price would increase and quantity would decrease.

b)	price would decrease and quantity would increase.

c)	price and quantity would decrease.

d)	price and quantity would increase.

Question 22(1 point)

Bicycles are made out of aluminum. If the price of aluminum increases, then the price of bicycles will ________________ and the quantity will ________________.

Question 22 options:

a)	increase; decrease

b)	decrease; decrease

c)	increase; increase

d)	decrease; increase

Question 23(1 point)

If whole grain bread is a normal good and incomes go up, then price of whole grain bread will ________________ and the quantity will ________________.

Question 23 options:

a)	decrease; decrease

b)	decrease; increase

c)	increase; increase

d)	increase; decrease

Question 24(1 point)

If people learn that eating fish is bad for their health, then the price of fish will ________________ and the quantity will ________________.

Question 24 options:

a)	increase; increase

b)	decrease; decrease

c)	decrease; increase

d)	increase; decrease

Question 25(1 point)

If a tree disease kills off a large portion of our forests, then the price of wooden desks will ________________ and the quantity will ________________.

Question 25 options:

a)	decrease; increase

b)	increase; increase

c)	increase; decrease

d)	decrease; decrease

Question 26(1 point)

Coffee and tea are substitutes. If the price of coffee increases, then the price of tea will ________________ and the quantity will ________________.

Question 26 options:

a)	increase; decrease

b)	decrease; increase

c)	decrease; decrease

d)	increase; increase

Question 27(1 point)

Producing lumber results in sawdust, a major input for making paper. If the price of lumber rises, the price of paper will ________________ and the quantity will ________________.

Question 27 options:

a)	decrease; decrease

b)	increase; increase

c)	decrease; increase

d)	increase; decrease

Question 28(1 point)

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

Question 28 options:

a)	decrease; decrease

b)	increase; increase

c)	decrease; increase

d)	increase; decrease

Question 29(1 point)

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

Question 29 options:

a)	increase; decrease

b)	decrease; decrease

c)	increase; increase

d)	decrease; increase

Question 30(1 point)

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

Question 30 options:

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

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

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

d)	an increase in wages paid to used car salespeople

Question 31(1 point)

Which would explain why the equilibrium price of digital cameras increased while the quantity has decreased?

Question 31 options:

a)	workers who make digital cameras received a pay raise

b)	consumers' preferences changed in favor of digital cameras

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

d)	technological advances in digital camera production

Question 32(1 point)

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

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 decreased and demand increased?

Question 33 options:

a)	quantity would go down

b)	price would go up

c)	quantity would go up

d)	price would go down

Question 34(1 point)

Market prices provide information to consumers, helping them coordinate their activities so long as

Question 34 options:

a)	prices are legally kept equal in all markets, preventing unfair price increases in markets with shortages and unfair price decreases when a market surplus is present.

b)	prices are not allowed to rise too high, causing a shortage.

c)	competition is present and buyers and sellers are free to choose mutually agreeable prices.

d)	the government carefully screens producers and effectively keeps inefficient producers out of the market.