Liberty University ECON 213 quiz 3 complete solutions correct answers A+ work

Liberty University ECON 213 quiz 3 complete solutions correct answers A+ work

There are more than 8 different versions

Question 1

As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

Question 2

Which of the quantity (Q) and price (P) combinations in the accompanying figure represents the market at competitive equilibrium?

Question 3

If the price and quantity for an inferior good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Question 4

The price of good X increases by 25%, causing the quantity consumed of good Y to decrease by 10%. If everything else is held constant in the economy, we can say with certainty that good X and good Y are:

Question 5

Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will:

Question 6

The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would:

Selected Answer: b. rise and the equilibrium price would fall

Question 7

If the price and quantity for a normal good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Question 8

Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explains:

Question 9

What would you expect to happen to the price and quantity of Pepsi if the price of Coke increases and Pepsi develops a new technology that makes its production process more efficient?

Question 10

If the price of Gatorade increases, the

Question 11

According to the figure below, at the price of $5:

Question 12

Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n):

Question 13

Consider the following demand schedules for New York Mets Tshirts: Holding all else constant, which of the following demand schedules is most likely to represent New York Mets Tshirts if they win the World Series?

Question 14

The change in equilibrium shown in the accompanying figure would be explained by a(n):

Question 15

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the _________ curve in the market for hybrid cars to _________.

Question 16

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to _________, causing the price to _________.

Question 17

Refer to the accompanying figure. What event would cause the supply curve to shift out?

Question 18

Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve would:

Question 19

When the demand curve shifts to the right and the supply curve is held constant,

Question 20

If the price of a good increases, holding all else constant,

According to the figure below, at the price of $5:

Which of the quantity (Q) and price (P) combinations in the accompanying figure represents the market at competitive equilibrium

When both supply and demand decrease, the equilibrium price

When people move to an area of the world that was previously unpopulated, we expect more consumers and more producers to spring up in that area. What would we expect to happen to the price and quantity in the markets where this happens?

In agriculture, a “bumper crop” refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

Assume that the price of rubber increased at the same time that Michael Jordan, arguably the best NBA basketball player of all time, became famous. What do you expect to happen to the equilibrium price and equilibrium quantity of the basketball shoes that are promoted by Michael Jordan?

When supply shifts left and demand shifts right, the

When the government places a tax on the producer of a good or service

The price of good X increases by 25%, causing the quantity consumed of good Y to decrease by 10%. If everything else is held constant in the economy, we can say with certainty that good X and good Y are

Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n):

Which of the following scenarios best describes the change in the equilibrium shown in the accompanying graph

Which of the following could cause the supply curve for the market for oranges to shift to the left?

A supply schedule

According to the supply and demand model, when the cotton gin was invented and if all else was held constant, we would expect the equilibrium price of cotton to _________ and the equilibrium quantity of cotton to _________.

Which following change in the coffee market would shift the supply curve to the right?

The demand curve for a good will shift to the right if, holding all else constant

Leading economic indicators suggest that incomes will be going up next year. In response to these reports, companies are forecasting increased prices for future sales of their goods. As a result of these increases, the supply curve will

When firms in a market expect the price of their product to rise, the supply curve of their good:

Which of the following scenarios would explain the change in equilibrium shown in the accompanying figure

Oil is a main component in the manufacture of plastic bags. If the price of oil were to increase, the price of plastics bags would

Question 1 According to the supply and demand model, when the cotton gin was invented and if all else was held constant, we would expect the equilibrium price of cotton to _________ and the equilibrium quantity of cotton to _________.

Question 2 A subsidy:

Question 3 As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

Question 4 The law of supply states that, all other things being equal,

Question 5 In 1993, the government increased the tax on gasoline producers from 14.1 cents per gallon to 18.4 cents per gallon. Our model of supply and demand predicts that:

Question 6 What would you expect to happen to the price and quantity of Pepsi if the price of Coke increases and Pepsi develops a new technology that makes its production process more efficient?

Question 7 When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price.

Question 8 Consider the following demand schedules for New York Mets T­shirts: Holding all else constant, which of the following demand schedules is most likely to represent New York Mets T­shirts if they win the World Series?

Question 9 The demand curve shift shown in the figure was caused by a(n):

Question 10 Assume that the market for nachos has only two suppliers: Firm 1 and Firm 2. According to this table, if the price of nachos is $6, the market will supply:

Question 11 What would you expect to happen to the price of bagels if the price of flour decreased and the price of cream cheese decreased?

Question 12 The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would:

Question 13 Which of the following will cause the demand curve for burgers to shift to the right?

Question 14 Refer to the accompanying graph. If a tax is placed on a good and all else is held constant, we would assume that the supply curve would:

Question 15 When the government places a tax on a good and all else is held constant, which of the following would most likely happen?

Question 16 If the price and quantity for a normal good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Question 17 Which following change in the coffee market would shift the supply curve to the right?

Question 18 When supply shifts left and demand shifts right, the:

Question 19 Higher input costs:

Question 20 On January 30, 2012, Starbucks India announced plans to open 50 cafés. What would you expect to happen to the market for coffee in India, assuming all other factors are held constant?

Question 1 In agriculture, a “bumper crop” refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

Question 2 Something is a normal good if the demand for the good:

Question 3 During the winter months, many elderly persons leave their homes in northern New York and travel south to Florida or Arizona. What would you expect to happen to the equilibrium price and quantity of items most used by the elderly in northern New York?

Question 4 If the price of Gatorade increases, the

Question 5 The change in equilibrium shown in the accompanying figure would be explained by a(n):

Question 6 Oil is a main component in the manufacture of plastic bags. If the price of oil were to increase, the price of plastics bags would:

Question 7 Refer to the accompanying figure. What event would cause the supply curve to shift out?

Question 8 Changes in population can:

Question 9 Refer to the table below: Assume that the market for iPods has only two consumers: Chuck and Ryan. According the table above, if the price of an iPod is $85, the market will demand:

Question 10 Shoes are considered to be a normal good. What would happen to the equilibrium price and equilibrium quantity of shoes if income increases and the cost of labor to produce shoes increases?

Question 11 Which of the following scenarios would explain the change in equilibrium shown in the accompanying figure?

Question 12 If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant, what would you expect to happen to the supply curve of tires that are sold separately from automobiles?

Question 13 The demand curve for a good will shift to the right if, holding all else constant,

Question 14 If the number of buyers in a market increases from 50 to 100, you would expect the equilibrium price to _________ and the equilibrium quantity to _________, holding all else constant.

Question 15 The equilibrium price of teddy bears is $5. A study comes out that says owning a teddy bear causes you to earn a lower salary. If all other factors are held constant, which of the following scenarios could happen?

Question 16 A monopoly:

Question 17 Kim attends the farmer’s market in her hometown of Bakersfield every Sunday. She notices that all of the oranges sold by the many different farmers at the market have roughly the same price, as do most other products that are alike. Which statement best explains why the prices are so similar?

Question 18 The law of supply states that, all other things being equal,

Question 19 When the number of firms in a market decreases,

Question 20 Firm A notices that Firm B is making a profit by producing footballs. There is nothing stopping Firm A from entering the football market, so it does. Holding all else constant, the number of firms in the market will:

Question 1 In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the _________ curve in the market for hybrid cars to _________.

Question 2 When the number of firms in a market decreases,

Question 3 A shortage occurs whenever:

Question 4 Companies use advertising to shift consumer demand. Which of the following demand shifters do you think advertisers most often rely on?

Question 5 A subsidy:

Question 6 When firms in a market expect the price of their product to rise, the supply curve of their good:

Question 7 Old Navy stocks more Bermuda shorts during the summer months than in the winter months. The resulting shift in supply explains:

Question 8 If the price of rubber were to increase by 20% over the fiscal year and if all else were held constant, what would you expect to happen to the supply curve of tires that are sold separately from automobiles?

Question 9 The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would:

Question 10 As more people migrated West during the gold rush, what do you think happened to the demand curve in most Western markets, holding all else constant?

Question 11 As the life expectancy in the United States increases, which of the following could likely happen to the demand curve for items such as health care, cancer treatments, and nursing facilities, holding all else constant, and why?

Question 12 Something is a normal good if the demand for the good:

Question 13 Which of the following would cause the demand curve to shift to the right?

Question 14 According to the law of demand, all other things being equal,

Question 15 Which of the quantity (Q) and price (P) combinations in the accompanying figure represents the market at competitive equilibrium?

Question 16 The law of supply states that, all other things being equal,

Question 17 When both curves shift:

Question 18 Assume that the market for nachos has only two suppliers: Firm 1 and Firm 2. According to this table, if the price of nachos is $6, the market will supply:

Question 19 The demand curve for a good will shift to the right if, holding all else constant,

Question 20 The change in equilibrium shown in the accompanying figure would be explained by a(n):

When the price of an hour of tutoring increases

Something is a normal good if the demand for the good

If the price of a good increases, holding all else constant

Pepsi and Coke are considered substitute goods. Because of this, one would predict that, holding all else constant, if the price of Pepsi increases, we would see

Which of the following will cause the demand curve for burgers to shift to the right

The demand curve shift shown in the figure was caused by a(n):

Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Which of the following will cause a movement along a good’s supply curve

Inputs are:

Which following change in the coffee market would shift the supply curve to the right?

Which of the following could cause the supply curve for the market for oranges to shift to the left?

When the demand curve shifts to the right and the supply curve is held constant

The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and _________ the equilibrium quantity, whereas when the government places a subsidy on a good, it _________ the equilibrium price and _________ the equilibrium quantity

Susie decided to start selling lemonade on her street. The other kids in the neighborhood noticed that Susie was making a lot of money selling lemonade. These kids decided to open their own lemonade stand. When they opened their own lemonade stand, the equilibrium price

Refer to the accompanying figure. What event would cause the supply curve to shift out?

Spam is considered an inferior good. What would happen to the equilibrium price and quantity of Spam if income decreased and more firms started producing Spam?

According to a supply and demand model for apples, if the average household income decreases at the same time ten apple orchards go out of business, one would expect the:

What happens to the equilibrium price and equilibrium quantity of a good if both the producers and the consumers of that good expect its price to be higher in the future?

In agriculture, a “bumper crop” refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would:

When the price is the equilibrium price, we would expect there to be a causing the market to put pressure on the price until it went back to the equilibrium price.

Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

What would you expect to happen to the price of bagels if the price of flour decreased and the price of cream cheese decreased?

To determine which of two producers has a comparative advantage, you would need to know their

The area inside (within) the production possibilities frontier (PPF) contains

Economics professors are well aware of the importance of incentives. Which of the following situations shows the use of a positive incentive

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand

The accompanying figures depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. If Jim and Pam were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?

Use the following table to answer the questions that follow. What is the surplus when the price floor is $0.75 in the market for public transportation?

Why are binding price ceiling laws passed?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. Which statement best describes absolute advantage?

Which of the following will cause a movement along a good’s supply curve?

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%, what is the income elasticity of demand for pizza?

If the price and quantity for a normal good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Chris runs a sporting goods store and knows that the price elasticity of demand for his sports clothing line is –1.5. He is planning to lower prices by 10%. The percentage change in quantity demanded will be

If the cross-price elasticity of demand for two goods is zero, the two goods are

The price of peanut butter increases from $2.50 to $3.00 and the quantity of jelly demanded falls from 30 jars to 24 jars. Calculate the cross-price elasticity of demand

During the winter months, many elderly persons leave their homes in northern New York and travel south to Florida or Arizona. What would you expect to happen to the equilibrium price and quantity of items most used by the elderly in northern New York?

When Heavenly Cookies prices its sugar cookies at $1.00, they sell 75 cookies. They lowered the price to $0.50 and sold 200 cookies. Their total revenue because the price elasticity of demand for sugar cookies is

For a market to be competitive

If a good is subject to a binding price ceiling and you purchase it on the black market, what do you expect to happen to the price over time?

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow. Suppose a great plague wipes out half of the society’s population. Which of the following graphs best depicts how this would affect the PPF?

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the curve in the market for hybrid cars to

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an

Use the following scenario to answer the questions that follow: Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore.

While there are many pizza places in Curtisville, Pappy’s Pizza is known for its distinctive deep-dish pizza with an almost pie-like crust, whereas Momma’s Pizza Pizzazz is comparable to many other restaurants. Pappy’s is likely to find that it can prices to increase total revenue, and Mommas must              prices to increase total revenue.

The scientific method and the tools of economics are useful in examining

A positive statement

When the price of a basketball is $15, the quantity supplied is 5,000. When the price increases to $20, the quantity supplied is 10,000. The price elasticity of supply is

Which of the following will cause the demand curve for burgers to shift the right?

You have an absolute advantage in producing something whenever

From the accompanying table, we would expect that, for recreational skaters, the price elasticity of demand for ice skates between $10 and $20 to be than that of hockey players because

Refer to the accompanying figure. What event would cause the supply curve to shift out?

The production possibilities frontier (PPF) shows

With no barriers to entry or exit and when firms in a market are operating at a loss, you can expect other firms to exit, causing the curve to shift to the and making the equilibrium price and the equilibrium quantity

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available?

According to economists, one reason few professional athletes have PhD’s is that the

What will happen in a market where a binding price floor is removed?

What would you expect to happen to the price and quantity of Pepsi if the price of Coke increases and Pepsi develops a new technology that makes its production process more efficient?

Which statement best describes the absolute advantage as shown in the graphs?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is DiNozzo’s opportunity cost for solving a crime?

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by

In the accompanying table, assume that the price of ice skates increases from $10 to $20 per pair. Using the midpoint method, calculate the price elasticity of demand for ice skates for hockey players.

Refer to the following figure for the questions that follow. As you move from points N to M to L, the opportunity cost of additional apple pie

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is

Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n)

Use the following scenario to answer the questions that follow. Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore. The owners raised the price because they believed that the demand for ice cream sandwiches is

Spam is considered an inferior good. What would happen to the equilibrium price and quantity of Spam if income decreased and more firms started producing Spam?

Refer to the accompanying table to answer the questions that follow. The price of erasers increases from $0.50 to $1.00 per eraser. Use the midpoint method to calculate the cross-price elasticity of demand between pencils and erasers.

When the price is _________ the equilibrium price, we would expect there to be a _________, causing the market to put _________ pressure on the price until it went back to the equilibrium price

Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF)?

What would you expect to happen to the price of bagels if the price of flour decreased and the price of cream cheese decreased?

To determine which of two producers has a comparative advantage, you would need to know their

The area inside (within) the production possibilities frontier (PPF) contains

Economics professors are well aware of the importance of incentives. Which of the following situations shows the use of a positive incentive

Which one of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

The accompanying figures depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. If Jim and Pam were to specialize and trade, at what exchange rate would they find some quantity of trade to be mutually beneficial?

Use the following table to answer the questions that follow.

What is the surplus when the price floor is $0.75 in the market for public transportation?

Why are binding price ceiling laws passed?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. Which statement best describes absolute advantage?

Which of the following will cause a movement along a good’s supply curve?

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

If the percentage change in the quantity consumed of pizza is 8% and the percentage change in income is 2%, what is the income elasticity of demand for pizza?

If the price and quantity for a normal good, Good X, is $8 and 6 units at the original equilibrium, what is one possibility for the new equilibrium of Good X if we see income increase and all other factors stay constant?

Chris runs a sporting goods store and knows that the price elasticity of demand for his sports clothing line is –1.5. He is planning to lower prices by 10%. The percentage change in quantity demanded will be:

If the cross-price elasticity of demand for two goods is zero, the two goods are

The price of peanut butter increases from $2.50 to $3.00 and the quantity of jelly demanded falls from 30 jars to 24 jars. Calculate the cross-price elasticity of

During the winter months, many elderly persons leave their homes in northern New York and travel south to Florida or Arizona. What would you expect to happen to the equilibrium price and quantity of items most used by the elderly in northern New York?

When Heavenly Cookies prices its sugar cookies at $1.00, they sell 75 cookies. They lowered the price to $0.50 and sold 200 cookies. Their total revenue ________ because the price elasticity of demand for sugar cookies is ________.

For a market to be competitive:

If a good is subject to a binding price ceiling and you purchase it on the black market, what do you expect to happen to the price over time?

Use these production possibilities frontier (PPF) curves, which compare the ancient production of agricultural products to art and literature, to answer the questions that follow. Suppose a great plague wipes out half of the society’s population. Which of the following graphs best depicts how this would affect the PPF?

In the first few months of 2012, the price of gasoline increased by approximately 15%. Because of this increase, we would expect the _________ curve in the market for hybrid cars to _________.

An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an

Use the following scenario to answer the questions that follow: Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore. The demand for ice cream sandwiches is:

While there are many pizza places in Curtisville, Pappy’s Pizza is known for its distinctive deep-dish pizza with an almost pie-like crust, whereas Momma’s Pizza Pizzazz is comparable to many other restaurants. Pappy’s is likely to find that it can ________ prices to increase total revenue, and Mommas must ________ prices to increase total revenue.

The scientific method and the tools of economics are useful in examining:

A positive statement:

When the price of a basketball is $15, the quantity supplied is 5,000. When the price increases to $20, the quantity supplied is 10,000. The price elasticity of supply is:

Which of the following will cause the demand curve for burgers to shift the right?

You have an absolute advantage in producing something whenever:

From the accompanying table, we would expect that, for recreational skaters, the price elasticity of demand for ice skates between $10 and $20 to be ________ than that of hockey players because ________.

Refer to the accompanying figure. What event would cause the supply curve to shift out?

The production possibilities frontier (PPF) shows:

With no barriers to entry or exit and when firms in a market are operating at a loss, you can expect other firms to exit, causing the _________ curve to shift to the _________ and making the equilibrium price _________ and the equilibrium quantity _________.

Google has started a project to scan all books and make those that are not copyrighted available to people free of charge. Why is it important that only books without a copyright are available

According to economists, one reason few professional athletes have PhD’s is that the

What will happen in a market where a binding price floor is removed?

What would you expect to happen to the price and quantity of Pepsi if the price of Coke increases and Pepsi develops a new technology that makes its production process more efficient?

Which statement best describes the absolute advantage as shown in the graphs?

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between building wooden boats and solving crimes. Refer to these figures to answer the questions that follow. What is DiNozzo’s opportunity cost for solving a crime?

Ceteris paribus, if a society is producing at a point on the production possibilities frontier (PPF), it can only increase the production of one good by:

In the accompanying table, assume that the price of ice skates increases from $10 to $20 per pair. Using the midpoint method, calculate the price elasticity of demand for ice skates for hockey players.

Refer to the following figure for the questions that follow. As you move from points N to M to L, the opportunity cost of additional apple pie:

Assume that the market for pencils is in equilibrium and that demand is very price elastic. The popularity of digital tablets and electronic pens increases and demand for pencils declines. The equilibrium change in quantity demanded is:

Refer to the accompanying figure. When the price changes from P1 to P2, we will see a(n):

Use the following scenario to answer the questions that follow: Dairy Dream, a local ice cream store, finds that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its revenues and finds that no one buys ice cream sandwiches anymore. The owners raised the price because they believed that the demand for ice cream sandwiches is:

Spam is considered an inferior good. What would happen to the equilibrium price and quantity of Spam if income decreased and more firms started producing Spam?

Refer to the accompanying table to answer the questions that follow. The price of erasers increases from $0.50 to $1.00 per eraser. Use the midpoint method to calculate the cross-price elasticity of demand between pencils and erasers.

Question 1

When the price of an hour of tutoring increases,

Select one:

a. the quantity demanded for tutoring decreases.

b. the demand curve for tutoring shifts.

c. the demand for tutoring increases.

d. the quantity demanded for tutoring increases.

e. the demand for tutoring decreases.

Question 2

Something is a normal good if the demand for the good:

Select one:

a. increases as the consumer’s income increases.

b. increases if the price of a complement good increases.

c. decreases if the price of a substitute good increases.

d. increases as the consumer’s income decreases.

e. decreases as the income of the consumer increases.

Question 3

If the price of a good increases, holding all else constant,

Select one:

a. the demand for all of that good’s substitutes will decrease.

b. the demand curve will shift to the left.

c. the demand for all of that good’s substitutes will increase.

d. the quantity demanded for that good will increase.

e. the demand for all of that good’s complements will increase.

Question 4

Pepsi and Coke are considered substitute goods. Because of this, one would predict that, holding all else constant, if the price of Pepsi increases, we would see:

Select one:

a. the demand curve for Coke shift to the left.

b. the demand curve for Pepsi shift to the left.

c. the demand curve for Coke shift to the right.

d. no change in the demand for Coke.

e. the demand curve for Pepsi shift to the right.

Question 5

Which of the following will cause the demand curve for burgers to shift to the right?

Select one:

a. A study is published by the National Association for Burger Research that says eating burgers can reduce the risk for bad acne.

b. The price of burgers increases.

c. The price of burger buns increases.

d. The price of steak decreases.

e. The price of burgers decreases.

Question 6

The demand curve shift shown in the figure was caused by a(n):

Select one:

a. decrease in the number of buyers in the market for the good.

b. decrease in the number of firms selling the good.

c. increase in the input cost of the good.

d. increase in the price of a substitute of the good.

e. expectation that the future price of this good will be higher than it is currently.

Question 7

Refer to the accompanying diagram. An increase in the number of buyers would cause the demand curve to:

Select one:

a. shift from D1 to D3.

b. shift from D2 to D3.

c. shift from D1 to D2.

d. shift from D2 to D1.

e. remain at D1.

Question 8

Which of the following will cause a movement along a good’s supply curve?

Select one:

a. an increase in the price of an input

b. more firms enter the market

c. the production process of the good becomes more efficient

d. the price of the good increases

e. the government places a subsidy on the producer of the good

Question 9

Inputs are:

Select one:

a. resources that firms use in the production of final goods and services.

b. goods that you demand less of as your income increases.

c. goods that you demand more of as your income increases.

d. goods that are used together.

e. goods that are used in place of one another.

Question 10

Which following change in the coffee market would shift the supply curve to the right?

Select one:

a. A study finds that drinking coffee leads to higher grades.

b. The wage for employees in the coffee business decreases.

c. Firms expect the price of coffee to increase in the future.

d. Fifty Starbucks coffee shops close down.

e. The income in the economy increases.

Question 11

Which of the following could cause the supply curve for the market for oranges to shift to the left?

Select one:

a. a severe hurricane in Florida

b. a new study saying that eating oranges will give you heart disease

c. an increase in the price of orange juice

d. a decrease in the cost of workers

e. an increase in the income of consumers of oranges

Question 12

When the demand curve shifts to the right and the supply curve is held constant,

Select one:

a. the equilibrium price and quantity decrease.

b. the equilibrium price increases, and the equilibrium quantity decreases.

c. the equilibrium price decreases, and the equilibrium quantity increases.

d. the equilibrium price and quantity increase.

e. you see a movement along the demand curve.

Question 13

The difference between a tax and a subsidy is that when the government places a tax on a good, it _________ the equilibrium price and _________ the equilibrium quantity, whereas when the government places a subsidy on a good, it _________ the equilibrium price and _________ the equilibrium quantity.

Select one:

a. increases; does not change; does not change; increases

b. increases; increases; decreases; decreases

c. decreases; decreases; increases; increases

d. decreases; increases; increases; decreases

e. increases; decreases; decreases; increases

Question 14

Susie decided to start selling lemonade on her street. The other kids in the neighborhood noticed that Susie was making a lot of money selling lemonade. These kids decided to open their own lemonade stand. When they opened their own lemonade stand, the equilibrium price:

Select one:

a. increased and the equilibrium quantity increased.

b. stayed the same and the equilibrium quantity stayed the same.

c. decreased and the equilibrium quantity decreased.

d. increased and the equilibrium quantity decreased.

e. decreased and the equilibrium quantity increased.

Question 15

Refer to the accompanying figure. What event would cause the supply curve to shift out?

Select one:

a. The price of an input increased.

b. Consumers earn lower incomes.

c. Consumers earn higher incomes.

d. Firms entered the market.

e. Firms expected the price to rise in the future.

Question 16

Spam is considered an inferior good. What would happen to the equilibrium price and quantity of Spam if income decreased and more firms started producing Spam?

Select one:

a. Equilibrium price will go up and equilibrium quantity will go down.

b. Equilibrium price will go up and equilibrium quantity will go up.

c. Equilibrium price will go up and equilibrium quantity will be indeterminate.

d. Equilibrium price will be indeterminate and equilibrium quantity will go up.

e. Equilibrium price will go down and equilibrium quantity will be indeterminate.

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Question 17

According to a supply and demand model for apples, if the average household income decreases at the same time ten apple orchards go out of business, one would expect the:

Select one:

a. equilibrium price of apples to be indeterminate and the equilibrium quantity of apples in the market to increase.

b. equilibrium price of apples to increase and the equilibrium quantity of apples in the market to decrease.

c. equilibrium quantity of apples in the market to decrease and the equilibrium price of apples to stay the same.

d. equilibrium quantity of apples in the market to be indeterminate and the equilibrium price of apples to increase.

e. equilibrium quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.

Question 18

What happens to the equilibrium price and equilibrium quantity of a good if both the producers and the consumers of that good expect its price to be higher in the future?

Select one:

a. The equilibrium price will go down and equilibrium quantity will be indeterminate.

b. The equilibrium price will be indeterminate and equilibrium quantity will go up.

c. The equilibrium price will stay the same and equilibrium quantity will be indeterminate.

d. The equilibrium price will go up and equilibrium quantity will be indeterminate.

e. The equilibrium price will go up and equilibrium quantity will go up.

Question 19

In agriculture, a “bumper crop” refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat?

Select one:

a. The equilibrium price will be indeterminate and equilibrium quantity will go up.

b. The equilibrium price will go up and equilibrium quantity will be indeterminate.

c. The equilibrium price will go down and equilibrium quantity will be indeterminate.

d. The equilibrium price will be indeterminate and equilibrium quantity will go down.

e. The equilibrium price will go up and equilibrium quantity will go up.

Question 20

The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would:

Select one:

a. rise and the equilibrium price would fall.

b. rise and the equilibrium price would rise.

c. fall and the equilibrium price would remain constant.

d. fall and the equilibrium price would fall.

e. fall and the equilibrium price would rise.

The measurement of personal savings may be distorted by:

If foreign entities save less and governments run more deficits, we would correctly say that:

If nominal income increases, then:

Let’s say a company invents a very popular device called a Zorgon, which allows you to send small items via a transporter from one place to another. This would affect the consumer price index (CPI) in the sense that the CPI:

An index of the average prices of all goods and services throughout the economy is called:

One misconception that people often have about unemployment is that:

Deflation is occurring in a nation; the implication(s) of this is/are:

An increase in the supply of loanable funds means:

Consider a nation in which the price index last year was 130 and this year it is 150. Which statement is correct?

When the price of ground beef increases and all else is held constant, we would expect the supply of hamburgers to _________, causing the price to _________.

The phase of the business cycle where the economy is growing slower than usual is called:

Consider a nation in which the price index was 150 last year and this year it is 130. Which statement is correct?

I asked my neighbor to rake the leaves on his lawn because they are blowing into my yard. He responded that it wouldn’t be rational for him to do so. Why would this be the case?

The business cycle measures:

Typically if real wages fall, the quantity demanded of labor rises. If workers agree to 3% wage increases for a four­year period and inflation is more than 3%, then, based on this information alone:

Does the value of cleaning your house count toward the value of GDP?

Jamal works in a factory in Lake Zurich, Illinois, assembling toy trains. The factory owner updates the current equipment and installs new robots that can do Jamal’s job. As a result, Jamal is laid off and is now unemployed. Jamal would be considered:

Changes in population can:

Which foll