# Econ Practice 3LE

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question
Which of the following statements is correct?
D. Buyers determine demand, and sellers determine supply.
question The movement from point A to point B on the graph shows a(n)
A. increase in quantity demanded.
question
"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as
B. the law of demand.
question
Kari downloads 7 songs per month when the price is \$1.29 per song and 10 songs per month when the price is \$0.99 per song. Kari's behavior demonstrates the law of
D. demand.
question
A leftward shift of a demand curve is called a(n)
D. decrease in demand.
question
Each of the following is a determinant of demand except
B. production technology.
question
If Max experiences a decrease in his income, then we would expect Max's demand for
C. normal goods to decrease.
question
Pizza is a normal good if the demand
D. for pizza rises when income rises.
question
If a increase in income decreases the demand for a good, then the good is a(n)
D. inferior good.
question
When quantity demanded has increased at every price, it might be because
A. the price of a complementary good has decreased.
question
If toast and butter are complements, then which of the following would increase the demand for toast?
A. a decrease in the price of butter
question
You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter
C. increases today.
question Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?
C. a change in consumer preferences toward watching movies in movie theaters rather than at home
question The movement from Da to Db could be caused by
A. a decrease in income, assuming the good is inferior.
question The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?
C. The price of cigarettes increased.
question
When the price of a good or service changes,
B. there is a movement along a given supply curve.
question
Which of the following would cause a movement along the supply curve for cupcakes?
B. a decrease in the price of cupcakes
question
The line that relates the price of a good and the quantity supplied of that good is called the supply
C. curve, and it usually slopes upward.
question
Today's supply curve for gasoline could shift in response to a change in
C. the expected future price of gasoline.
question The shift from S' to S in the market for chocolate cake could be caused by a(n)
D. decrease in the number of commercial bakers.
question
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows: If only members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?
B. \$20
question At a price of \$16, there is a
D. surplus of 3 units.
question
You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to
A. decide whether the fires affected demand or supply.
question
Which of the following would increase in response to a increase in the price of ironing boards? A. the equilibrium price of irons B. the equilibrium quantity of irons C. the quantity of irons demanded at each possible price of irons D. None of the above is correct.
D. None of the above is correct.
question
Which of the following events would cause the price of oranges to fall?
C. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.
question
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?
B. Both the equilibrium price and quantity would increase.
question
Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?
B. Quantity will rise, and the effect on price is ambiguous.
question
What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?
B. Price will fall, and the effect on quantity is ambiguous.
question
Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would
D. could rise, fall, or remain unchanged.
question
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?
D. The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
question All else equal, the approach of Thanksgiving would cause a move from
A. DB to DA.
question Which of the following movements would illustrate the effect in the market for convertible automobiles of an increase in the price of steel?
B. Point C to Point D
question Which of the following movements would illustrate the effect in the market for fences of a decrease in the price of wood?
C. Point A to Point B
question Which of the four panels illustrates an increase in quantity supplied?
A. Panel (a)
question
A market is a group of buyers and sellers of a particular good or service. a. TRUE b. FALSE
a. TRUE
question
The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls. a. TRUE b. FALSE
b. FALSE
question
If something happens to alter the quantity demanded at any given price, then the demand curve shifts. a. TRUE b. FALSE
a. TRUE
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A movement upward and to the left along a given demand curve is called a decrease in demand. a. TRUE b. FALSE
b. FALSE
question
An increase in demand shifts the demand curve to the left. a. TRUE b. FALSE
b. FALSE
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Price cannot fall so low that some sellers choose to supply a quantity of zero. a. TRUE b. FALSE
b. FALSE
question
A decrease in the price of pizza will shift the supply curve for pizza to the left. a. TRUE b. FALSE
b. FALSE
question
A decrease in the price of sugar will shift the supply curve for cookies to the right. a. TRUE b. FALSE
a. TRUE
question
When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now. a. TRUE b. FALSE
b. FALSE
question
When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied. a. TRUE b. FALSE
b. FALSE
question
Price will rise to eliminate a shortage. a. TRUE b. FALSE
a. TRUE
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A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price. a. TRUE b. FALSE