Extra Practice Questions

If the price of tangerines increases, the price of oranges also rises because A) consumers consider the two goods complements and so sellers decreased the supply of oranges. B) consumers consider the two goods substitutes and demand for oranges increases. C) if the supply of tangerines decreased, then the supply of oranges also must decrease. D) buyers must have expected a higher price for oranges and thus increased their demand for oranges. E) buyers' incomes must have decreased and oranges are an inferior good.

Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________, and the equilibrium quantity ________. A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases E) does not change; decreases

If the demand for used cars decreases after the price of a new car falls, used cars and new cars are A) inferior goods. B) substitute goods. C) complementary goods. D) normal goods. E) The questions errs because it is the quantity of used cars, NOT the demand for used cars, that will change when the price of a new car falls.

Which of the following increases the demand for a good or service? A) a fall in the price of the good or service B) a smaller number of consumers wanting to buy the good or service C) a rise in the price of the good or service D) a rise in the price of a substitute good or service E) a rise in the price of a complement

A country exports the goods A) for which its domestic prices are very high compared to the world prices. B) that the economy can produce the most of. C) that the economy can produce at relatively lowest opportunity cost. D) that it cannot sell domestically. E) in which it has a comparative disadvantage.

What happens to the demand for a good if a complement's price increases? A) The demand decreases and the demand curve shifts rightward. B) The demand increases and the demand curve shifts rightward. C) The demand decreases and the demand curve shifts leftward. D) The demand increases and the demand curve shifts leftward. E) There is no impact on demand for the good and the demand curve does not shift.

If the United States starts to import purses, then the quantity of purses produced in the United States will ________ and the quantity of purses purchased by consumers in the United States will ________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) not change; increase

Soda and hot dogs are complements for one another. If a shortage of carbonated water leads to an increase in the price of soda, then the A) demand for hot dogs increases. B) demand for hot dogs decreases. C) quantity of hot dogs demanded increases. D) quantity of hot dogs demanded decreases. E) More information is needed to determine if the demand increases or decreases.

Oil refiners can refine a barrel of petroleum so that it yields either more home heating oil or more diesel fuel. If the price of diesel fuel falls, there is A) an increase in the supply of home heating oil. B) a decrease in the supply of home heating oil. C) an increase in the quantity of home heating oil supplied. D) a decrease in the quantity of home heating oil supplied. E) an increase in the demand for home heating oil.