Chapter 3 Quiz

20 October 2022
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question
Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?
answer
An increase in the quantity demanded for orange juice.
question
An increase in the demand for a product means that the:
answer
demand curve shifts to the right.
question
If there is an increase in income, which of the following is true?
answer
The demand for normal goods increases.
question
There is a technological advance in the production of digital watches. This will cause:
answer
supply to increase.
question
Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):
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rightward shift in the supply curve for soybeans.
question
A fall in the price of a good causes an increase in its:
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quantity demanded.
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If the demand for a good increases because consumer income increases, the good is a(n):
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normal good.
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A leftward shift of a supply curve is called a(n):
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decrease in supply.
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If the price of coffee decreases, the demand curve for tea (a substitute good) will:
answer
shift to the left.
question
Which of the following could cause the supply of carrots to decrease?
answer
Fertilizer costs increase.
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If an individual's income increases, then the demand for a normal good will:
answer
increase.
question
A decrease in the price of coffee, other things being equal, causes a(n):
answer
downward movement along the demand curve for coffee.
question
When economists say the supply of a product has decreased, they mean that:
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the supply curve has shifted to the left.
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When economists say the quantity demanded of a product has increased, they mean the:
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price of the product has fallen, and consequently, consumers are buying more of it.
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If the price of tea is below its equilibrium level, then:
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there is a shortage of tea.
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An increase in the cost of chicken feed will reduce the supply of eggs.
answer
True
question
According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease.
answer
True
question
If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.
answer
True
question
Which of the following will cause a movement upward along a supply curve?
answer
Increases in the market price of a good, other things being equal.
question
A surplus of wheat:
answer
is impossible if the price of wheat is below equilibrium.
question
If a surplus of a product currently exists in the market,
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the quantity supplied exceeds the quantity demanded at the current price.
question
To finance medical care, the federal government raises the tax per pack paid by sellers of cigarettes. Other things being equal, the price of cigarettes rises because of a(n):
answer
leftward shift of the supply curve for cigarettes.
question
Assuming compact discs and cassettes are substitute goods, a decrease in the price of cassettes will cause the demand curve for compact discs to:
answer
shift to the left as consumers switch from buying discs to cassettes.
question
A rightward shift of a demand curve is called a(n):
answer
increase in demand.
question
Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a(n):
answer
decrease in the demand for soup.
question
According to the law of supply, there is a direct relationship between quantity supplied and:
answer
the price of the good.
question
Which of the following would cause a shift in the demand curve for a good? A) An increase in consumers' income. B) A decrease in the number of consumers. C) The expectation that the price of a good will increase in the future. D) All of these.
answer
D) All of these.
question
Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:
answer
increase the demand for dry cleaning.
question
A shift occurs in the supply curve for salt when:
answer
improvements are made in the production process.
question
Which of the following will not shift the demand curve for televisions?
answer
An increase in the price of televisions.
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An increase in the quantity demanded of a good is most often due to:
answer
lower prices.
question
The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.
answer
False
question
If movies are an inferior good, movie attendance will rise when consumer incomes fall.
answer
True
question
Surpluses cause prices to fall while shortages cause prices to rise.
answer
True