Econ201 Quiz 3

OLQ-31. The law of demand states that, other things equal:

A) as the price increases, the quantity demanded will increase.

B) as the price decreases, the demand curve will shift to the right.

C) as the price increases, the demand will decrease.

D) as the price increases, the quantity demanded will decrease.

2. The law of demand implies that:A) consumers are not responsive to price changes.

B) consumers will buy more at lower prices.

C) sellers will offer more on the market at higher prices.

D) sellers will offer less on the market at lower prices.

3. The market equilibrium is found at the:A) price where quantity demanded exceeds quantity supplied.

B) price where quantity demanded equals quantity supplied.

C) price where quantity supplied exceeds quantity demanded.

D) highest price the market will bear.

Use the following to answer question 4:

Table: The Demand for Chocolate-Covered Peanuts

4. (Table: The Demand for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.60, the quantity demanded by George is ________ bags per month.A) 10

B) 15

C) 25

D) 30

5. Which of the following is likely to cause a rightward shift in the demand for home-delivered pizza?A) a lower price of pizza

B) a lower price of fast-food hamburgers

C) a higher price of pepperoni

D) a larger population

Table: Supply of Lemonade

6. (Table: Supply of Lemonade) If the price of lemonade is $1 per cup, total quantity of lemonade supplied will be:A) 50 cups.

B) 80 cups.

C) 25 cups.

D) 90 cups.

7. Suppose the equilibrium price of Good X is $25 and the equilibrium quantity is 124 units. If the price of Good X is $2:A) there will be an excess demand for Good X.

B) there will be an excess supply of Good X.

C) the market will clear.

D) the quantity demanded of Good X will be less than 124 units.


Figure: Demand and Supply of Wheat

8. (Figure: Demand and Supply of Wheat) What is the equilibrium price in this wheat market?A) $6

B) $4

C) $2

D) $8

9. High-fructose corn syrup, which is derived from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect:A) the supply curve for soft drinks to shift left.

B) the quantity supplied of soft drinks to increase.

C) the demand for soft drinks to increase.

D) the supply curve for soft drinks to shift right.

Figure: Demand and Supply of Gasoline

10. (Figure: Demand and Supply of Gasoline) The initial price and quantity (at intersection of S1 and D) of gasoline in equilibrium are:A) $2.00 and 450 gallons.

B) $1.50 and 400 gallons.

C) $2.00 and 200 gallons.

D) $2.50 and 300 gallons.

11. Researchers find a new strain of genetically modified seeds results in a higher yield for corn producers. Holding all other things constant, this research will:A) shift the supply curve for corn left.

B) increase the quantity supplied of corn.

C) decrease the quantity supplied of corn.

D) shift the supply curve for corn to the right.

Figure: Market for Candies

12. (Figure: Market for Candies) A surplus of the good will exist at a price of:A) P1.

B) P2.

C) P3.

D) There are no surpluses in this market.

13. Which of the following statements is correct?A) A change in demand is a movement along the demand curve and a change in quantity demanded is a shift of

the demand curve.B) Both a change in quantity demanded and a change in demand are movements along the demand curve, only in

different directions.C) Both a change in quantity demanded and a change in demand are shifts of the demand curve, only in different

directions.D) A change in quantity demanded is a movement along the demand curve and a change in demand is a

shift of the demand curve.

14. A decrease in the price of eggs will result in a(n):A) increase in the demand for eggs.

B) increase in the supply of eggs.

C) greater amount of eggs supplied.

D) greater amount of eggs demanded.

15. A technological advance in the production of automobiles will:A) increase the demand for automobiles.

B) increase the supply of automobiles.

C) decrease the demand for automobiles.

D) decrease the supply of automobiles.

16. A decrease in supply is caused by:A) an increase in prices of goods that are substitutes in production.

B) suppliers' expectations of lower prices in the future.

C) an advancement in the technology for producing the good.

D) an increase in the number of producers.


Figure: DVD Market

17. (Figure: DVD Market) At a rental price of $3, there will beA) equilibrium in the rental market for DVDs.

B) an increase in demand.

C) an excess supply of 40 DVD rentals.

D) an excess demand of 40 DVD rentals.


Table: The Market for Chocolate-Covered Peanuts

18. (Table: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is $0.60, the price will:A) remain unchanged.

B) fall to $0.30.

C) fall to $0.50.

D) rise to $0.70.


Table: The Demand for Chocolate-Covered Peanuts

19. (Table: The Demand for Chocolate-Covered Peanuts) If George, Barbara, and Dan are the only three buyers in the market, and the price of a bag of chocolate-covered peanuts is $0.50, the total market demand is ________ bags per month.A) 80

B) 105

C) 210

D) 280


Figure: Demand for DVDs

20. (Figure: Demand for DVDs) A decrease in the price of movie tickets (a substitute) would result in a change illustrated by:A) the move from f to g in panel A.

B) the move from h to i in panel B.

C) the move from j to k in panel C.

D) the move from l to m in panel D.


Figure: Demand and Supply of Wheat

21. (Figure: Demand and Supply of Wheat) A price of ________ will result in a ________.A) $6; shortage

B) $8; surplus

C) $8; shortage

D) $4; surplus

22. The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. They believe that in the market for flights:A) supply increased.

B) supply decreased.

C) demand increased.

D) demand decreased.

23. An increase in demand, with no change in supply, will lead to ________ in equilibrium quantity and ________ in equilibrium price.A) an increase; an increase

B) an increase; a decrease

C) a decrease; an increase

D) a decrease; a decrease


Figure: Market for DVD Rentals

24. (Figure: Market for DVD Rentals) Four possible outcomes in the market for rentals of DVDs are shown in the figure provided. An increase in the price of DVD players would result in a change illustrated by:A) the move from f to g in panel A.

B) the move from h to i in panel B.

C) the move from j to k in panel C.

D) the move from l to m in panel D.

Figure: DVD Market

25. (Figure: DVD Market) If the rental price of DVDs rises from $5 per rental to $7 per rental, then:A) demand will decrease from 50 to 30 rentals per weekend.

B) quantity demanded will decrease from 50 rentals per weekend to 30 rentals per weekend.

C) supply will increase from 50 to 70 rentals per weekend.

D) quantity supplied will increase from 50 to 60 rentals per weekend.

26. French fries and hamburgers are complements. Suppose that the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries ________ and the equilibrium quantity ________.A) rises; increases

B) rises; decreases

C) falls; increases

D) falls; decreases

Figure: Shifts in Demand and Supply

27. (Figure: Shifts in Demand and Supply) The graph shows how supply and demand might shift in response to specific events. Suppose a new machine is developed that allows restaurants and fast-food outlets to produce french fries at a lower cost. Which panel best illustrates how this will affect the market for french fries?A) Panel A

B) Panel B

C) Panel C

D) Panel D

28. In the soft drink market, an increase in the price of sugar, a necessary ingredient for soft drinks, and an increased concern about tooth decay caused by the consumption of soft drinks will result in which of the following?A) There will be an increase in both the equilibrium price and quantity.

B) Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.

C) There will be a decrease in both equilibrium price and quantity.

D) Equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same.

29. Suppose that supply increases and demand decreases. What is the most likely effect on price and quantity?A) The price will increase, but quantity may increase, decrease, or stay the same.

B) The price will decrease, but quantity may increase, decrease, or stay the same.

C) The price will decrease and quantity will decrease.

D) The price will increase and quantity will increase.

30. It is certain that the equilibrium price will fall when:A) the supply curve and the demand curve both shift to the right.

B) the supply curve shifts to the right and the demand curve shifts to the left.

C) supply and demand both increase.

D) supply decreases and demand stays the same.

31. The demand for meals at a local Applebee's will fall if:A) the Olive Garden offers a 10% discount coupon in the local newspaper.

B) the price of a meal at Applebee's rises.

C) local incomes increase and Applebee's is a normal good.

D) the price of gasoline falls in the local area.

32. Market demand for a good is initially made up of 50 buyers. Suppose there is a decrease in the number of buyers by 10. Holding everything else constant, one would expect that:A) the supply curve shifts left.

B) the quantity supplied will increase.

C) the supply curve shifts right.

D) the quantity supplied will decrease.

33. Rice and potatoes are substitute goods. If the price of rice rises, and there is a bumper crop of potatoes, then in the market for potatoes one would expect that the:A) equilibrium price would rise, fall, or stay the same while equilibrium quantity would rise.

B) equilibrium price will rise, while the equilibrium quantity falls.

C) equilibrium price and quantity will both fall.

D) equilibrium price will rise, while the equilibrium quantity could fall, rise, or stay the same.

Figure: Four Markets for DVD Rentals

34. (Figure: Four Markets for DVD Rentals) Which of the graphs shows a decrease in the quantity of DVDs supplied?A) A

B) B

C) C

D) D

35. In a market, which of the following would result in a movement along the demand curve?A) a change in preferences

B) an increase in the number of buyers

C) an increase in the number of suppliers

D) a decrease in income

Figure: Shifts in Demand and Supply II

36. (Figure: Shifts in Demand and Supply II) The graph shows how supply and demand might shift in response to specific events. Suppose a fall frost destroys one-third of the nation's grapefruit crop. Which panel best describes how this will affect the market for vitamin B-12 tablets, which are a substitute for grapefruit?A) Panel A

B) Panel B

C) Panel C

D) Panel D


Figure: Shifts in Demand and Supply III

37. (Figure: Shifts in Demand and Supply III) The figure shows how supply and demand might shift in response to specific events. Suppose the technology for producing snowboards improves. Which panel best describes how this will affect the market for winter parkas, a complement of snowboards?A) Panel A

B) Panel B

C) Panel C

D) Panel D

Answer Key OLQ3 Practice Quiz

1. D

2. B

3. B

4. C

5. D

6. D

7. A

8. A

9. A

10. D

11. D

12. A

13. D

14. D

15. B

16. A

17. D

18. A

19. C

20. A

21. B

22. B

23. A

24. A

25. B

26. D

27. A

28. B

29. B

30. B

31. A

32. D

33. A

34. C

35. C

36. A

37. A

Econ201 Quiz 3

Documents

Transcript of Econ201 Quiz 3