Elc.it.lhu.edu.tw

Topic: Price and Opportunity Cost
„ Markets and Prices
Skill: Analytical
Author: KC

Topic: Price and Opportunity Cost
Twenty years ago a stove cost $300 and a refrig- Skill: Recognition
erator cost $1,500. Today a stove costs $600, Author: JBH
1)
while a refrigerator costs $1,800. Which of the The relative price of stoves and refrigerators has equal to the price of that good divided by the The relative price of a refrigerator has increased what you get paid for babysitting your cousin.
The relative price of a stove has increased Answer: A
The money price of a refrigerator has fallen Answer: C
Topic: Price and Opportunity Cost
Skill: Analytical

Topic: Price and Opportunity Cost
Author: JBH
Skill: Analytical
The price of a bag of corn chips is $3, and the Author: TO
price of a bottle of soda is $1. What is the relative The ABC Music club charges a price of $8 for a cassette and $16 for a CD. For an ABC Music Club member, the opportunity cost of a CD is Answer: A
None of the above answers are correct.
Answer: A
Topic: Price and Opportunity Cost
Skill: Analytical

„ Demand
Author: JBH
3)
The price of a bag of corn chips is $3, and the Topic: Law of Demand
price of a bottle of soda is $1. What is the relative Skill: Conceptual
Author: MR
The “law of demand” is illustrated by a rightward shift of the demand curve.
Answer: B
Answer: C
Topic: Law of Demand
Topic: Demand; Income Effect
Skill: Recognition
Skill: Recognition
Author: MN
Author: PZ
The “law of demand” states that changes in 10) The “income effect” in the market for aspirin demand are related directly to changes in supply.
the quantity demanded of a good are not related aspirin are generally taken by people with higher to changes in the quantity supplied.
the quantity demanded of a good are inversely a decrease in the price of a substitute good like acetaminophen will make aspirin takers feel a demand are inversely related to changes in sup- little poorer than they were before.
an increase in the price of aspirin will reduce the Answer: C
total purchasing power of aspirin takers, makingthem able to afford fewer aspirin.
Topic: Demand; Substitution Effect
an increase in the price of aspirin will cause Skill: Conceptual*
headache sufferers to look for a lower priced Author: CD
When the price of a pizza decreases from $12 to Answer: C
the income effect means people buy less pizza.
Topic: Demand; Income Effect
the substitution effect means people buy more Skill: Conceptual*
Author: CD
the quantity demanded of pizza will not change.
11) When the price of a pizza decreases from $12 to None of the above answers is correct.
Answer: B
the income effect means people buy less pizza.
the income effect points out that the total pur- Topic: Demand; Substitution Effect
chasing power of people who buy pizza in- Skill: Conceptual
Author: DD
the quantity demanded of pizza will not change.
Suppose that the price of cereal rises. As a result, None of the above answers is correct.
people have cereal for breakfast on fewer days and Answer: B
eat eggs instead. This behavior is an example of a decrease in the quantity demanded of cereal Topic: Demand; Income Effect
Skill: Conceptual*
an increase in quantity demanded of eggs be- Author: CD
12) Pizza is a normal god. When the price of a pizza a decrease in quantity supplied of cereal because the income effect means people buy less pizza.
an increase in quantity supplied of eggs because the income effect means people buy more pizza.
the quantity demanded of pizza will not change.
Answer: A
None of the above answers is correct.
Answer: B
Topic: Demand; Income and Substitution Effects
Topic: Demand Curve and Demand Schedule
Skill: Conceptual
Skill: Recognition
Author: JBH
Author: JBH
13) Which of the following explains why demand the quantity of one good on the vertical axis and the quantity of another good on the horizontal the quantity of one good on the vertical axis and the price of another good on the horizontal axis.
Answer: D
the quantity of a good on the vertical axis and itsprice on the horizontal axis.
Topic: Demand; Income and Substitution Effects
the quantity of a good on the horizontal axis and Skill: Analytical
Author: TO
Answer: D
14) The ABC Music club charges a price of $16 for a CD and $8 for a cassette. Both CDs and cassettes Topic: Demand Curve and Demand Schedule
are normal goods. If the ABC Music club in- Skill: Conceptual
creases the price of a CD to $18, everything else Author: JBH
17) The negative slope of the demand curve indicates the substitution effect induces club members to direct relationship between price and quantity the income effect induces club members to buy inverse relationship between price and quantity the substitution effect induces club members to positive relationship between price and quantity Answer: D
no relationship between price and quantity de-manded.
Topic: Demand; Income and Substitution Effects
Answer: B
Skill: Analytical*
Author: DS

Topic: Change in the Quantity Demanded
15) When the price of an inferior good falls, ceteris Skill: Recognition*
paribus, the substitution effect leads to ____ in Author: DS
the quantity purchased and the income effect 18) If the price of chocolate chip cookies rises, then leads to ____ in the quantity purchased.
the demand curve would shift rightward.
the demand curve would shift leftward.
there would be a movement upward along the Answer: B
Answer: D
Topic: Change in Demand
Topic: Change in Demand, Price of a Related Good
Skill: Recognition.
Skill: Conceptual
Author: LC
Author: PZ
19) Which of the following lists of variables will all 22) Which of the following shifts the demand curve price of the good, preferences, prices of substi- Disastrous weather that destroys about half of income, preferences, number of buyers, price of A decrease in the price of a pound of bananas, a substitute in consumption for oranges.
expectation of future price, price of the good, An increase in the price of the fuel used to Great weather that produces a bumper orange Answer: B
Answer: B
Topic: Change in Demand
Skill: Analytical

Topic: Change in Demand, Price of a Related Good
Author: SB
Skill: Conceptual
20) The price of the steel used to produce engines Author: RR
increases. How does this price hike affect the de- 23) Oatmeal is an inferior good and cold cereal is a substitute for oatmeal. Raisins are a complement It decreases the demand, that is, the demand for oatmeal. Which of the following increases the It increases the demand, that is, the demand An increase in the price of raisins.
It does not change the demand, that is, the de- An increase in the price of cold cereal.
There is not enough information to tell how the Answer: D
Answer: C
Topic: Change in Demand, Price of a Related Good
Skill: Conceptual

Topic: Change in Demand
Author: NU
Skill: Analytical
24) Which of the following will result in a leftward Author: VK
21) Which of the following results in an increase in An increase in the price of a hot dog bun.
A decrease in the price of a hot dog bun.
An increase in the price of a hot dog.
A smaller number of consumers wanting to buy An increase in the price of a hamburger.
Answer: A
An increase in the price of the product.
An increase in the price of a substitute product.
Topic: Change in Demand, Price of a Related Good
Skill: Conceptual

Answer: D
Author: NU
25) If the price of product X falls and this change in-
creases the demand for product Y, then X and Y are complements.
X and Y are substitutes.
Answer: B
Topic: Change in Demand, Price of a Related Good
Topic: Change in Demand, Price of a Related Good
Skill: Conceptual
Skill: Analytical
Author: NU
Author: MN
26) Suppose you observe that an increase in the price 29) Which of the following can shift the demand of salsa causes a decrease in the demand for tortilla curve for digital video disk (DVD) rentals right- chips and an increase in the demand for potato A decrease in the price of renting video cassette salsa and tortilla chips are substitutes.
salsa and potato chips are complements.
A decrease in the price of DVD players.
tortilla chips and potato chips are complements.
A decrease in the price of cable TV service.
salsa and tortilla chips are complements.
An decrease in the price of DVD rentals.
Answer: D
Answer: B
Topic: Change in Demand, Price of a Related Good
Topic: Change in Demand, Expected Future Prices
Skill: Conceptual
Skill: Recognition
Author: VS
Author: PVA
27) Cupcakes and granola bars are substitutes in con- 30) An increase the expected future price of a good sumption. The price of a granola bar increases. As granola bars will increase, that is, the demand D) has no effect on either its demand or its supply.
cupcakes will increase, that is, the demand curve Answer: A
granola bars will decrease, that is, the demand Topic: Change in Demand, Expected Future Prices
Skill: Recognition

Author: AF
cupcakes will decrease, that is, the demand curve 31) Which of the following will increase the demand Answer: B
Topic: Change in Demand, Price of a Related Good
An decrease in the price of a substitute.
Skill: Conceptual
An increase in the price of a complement.
Author: VS
The price of the good is expected to increase in 28) Sweatshirts and tee-shirts are complements in consumption and the price of a sweatshirt in- Answer: D
sweatshirts will increase that is, the demand Topic: Change in Demand, Expected Future Prices
Skill: Conceptual

Author: DD
tee-shirts will increase that is, the demand curve 32) A decrease in the expected future price of cars sweatshirts will decrease that is, the demand increase in the current quantity demanded of cars, that is, a movement downward along the tee-shirts will decrease that is, the demand curve increase in the current demand for cars, that is, a Answer: D
rightward shift of the demand curve for cars.
decrease in the current quantity demanded ofcars, that is, a movement upward along the de-mand curve for cars.
decrease in the current demand for cars, that is aleftward shift of the demand curve for cars.
Answer: D
Topic: Change in Demand, Income
Topic: Change in Demand, Income
Skill: Conceptual
Skill: Recognition
Author: VS
Author: SB
33) If the demand for digital cameras increases when consumers’ income rise, then digital cameras are For an inferior good, when income increases, the If the price of a substitute rises, the demand a substitute good for video cameras.
If people expect the price of a good will rise in Answer: A
the future, the demand curve shifts leftward.
An increase in population will cause the demand Topic: Change in Demand, Income
Skill: Conceptual
Answer: A
Author: JBH
34) If macaroni and cheese is an inferior good, then a
Topic: Change in Demand, Income
Skill: Conceptual
an increase in the demand for macaroni and Author: NU
38) When income increases, the demand curve for a decrease in the demand for macaroni and product X shifts rightward and the demand curve for product Y shifts leftward. These shifts mean an increase in the supply of macaroni and X and Y are complements.
a decrease in the supply of macaroni and cheese.
X and Y both normal goods.
Answer: A
X is an inferior good and Y is a normal good.
X is a normal good and Y is an inferior good.
Topic: Change in Demand, Income
Answer: D
Skill: Recognition
Author: AF

Topic: Change in Demand, Income
35) Which of the following would decrease the de- Skill: Recognition
Author: RR
39) Georgine buys more sweaters when her income A decrease in the price of a complement.
increases. For Georgine, sweaters are a(n) An increase in the price of a substitute.
Answer: A
Topic: Change in Demand, Income
Answer: D
Skill: Recognition
Author: PVA
36) If consumer income increases and the demand for
A) Bus rides must be a normal good.
B) Consumers are behaving irrationally.
C) Bus rides are an inferior good.
D) None of the above.
Answer: C
Topic: A Change in the Quantity Demanded
Versus a Change in Demand
Skill: Recognition
Author: LC
40) Which of the following statement is correct?
A change in the quantity demanded means a A change in demand means a movement along A change in demand and change in quantity A change in demand means a shift in the de-mand curve while change in the quantity de-manded means a movement along the demand Answer: D
Topic: A Change in the Quantity Demanded
Topic: A Change in the Quantity Demanded
Versus a Change in Demand
Versus a Change in Demand
Skill: Analytical
Skill: Recognition
Author: VK
Author: AF
41) Which of the following best reflects an increase in 42) In the above figure, an increase in the quantity quantity demanded and not an increase in de- demanded is represented by a movement from A college expects enrollment to increase, despite Skiing becomes a fashionable winter sports ac- After holiday mark downs produce higher sales.
Answer: C
Consumers expect lower prices next month forcomputers.
Answer: C
„ Supply
Topic: What Determines Selling Plans?
Skill: Recognition
Author: AF
43) Which of the following is NOT one of the factors
Answer: B
Topic: The Law of Supply
Skill: Conceptual
Author: PZ

44) The “law of supply” is illustrated when the demand curve shifts along a stationary sup- the supply curve and demand curve both shift in the supply curve shifts along a stationary de- the demand curve and supply curve are both Answer: A
Topic: The Law of Supply
Skill: Conceptual
Quantity (gallons of ice cream per month) Author: JBH
45) Which of the following explains why supply
Topic: Minimum Supply Price
Skill: Conceptual
Author: AF

48) In the above figure, what is the minimum supply price for the fourth gallon of ice-cream? Substitutes in production and complements in Answer: B
Topic: The Law of Supply
Answer: D
Skill: Recognition
Author: DD

Topic: Change in Supply
46) The supply curve slopes upward when graphed Skill: Recognition
Author: PVA

49) A shift of the supply curve for pick-up trucks the price of the good; increasing marginal cost might be the result of all of the following EX- the price of the good; decreasing marginal cost B) an increase in the price of a resource used to Answer: A
Topic: Supply Curve and Supply Schedule
C) a change in the number of suppliers of pick-up Skill: Recognition
Author: JBH
D) a change in the price of pick-up trucks.
Answer: D
the quantity of one good on the vertical axis andthe quantity of another good on the horizontalaxis.
the quantity of one good on the vertical axis andthe price of another good on the horizontal axis.
the quantity of a good on the vertical axis and itsprice on the horizontal axis.
the quantity of a good on the horizontal axis andits price on the vertical axis.
Answer: D
Topic: Change in Supply
Topic: Change in Supply, Prices of Productive
Skill: Conceptual
Resources
Author: DD
Skill: Recognition
50) A change in which of the following would NOT Author: NU
53) Which of the following shifts the supply curve An increase in technology for making sneakers.
An increase in the price of rubber, used to make A positive change in preferences for the good.
An increase in the price of sneakers.
A decrease in the price of the good.
None of the above, that is, each change shifts A decrease in the price of the resources used to Answer: C
Answer: D
Topic: Change In Supply
Topic: Change in Supply, Prices of Productive
Skill: Conceptual
Resources
Author: PZ
Skill: Analytical
51) Which of the following shifts the supply curve for Author: SB
54) Autoworkers negotiate a wage increase; how does Disastrous weather that destroys about half of A newly discovered increase in the nutritional An increase in the price of bananas, a substitute There is not enough information to tell if the change increases, decreases, or has no effect on An increase in income for all orange consumers.
Answer: A
Answer: A
Topic: Change in Supply, Prices of Productive
Topic: Change in Supply, Expected Future Price
Resources
Skill: Conceptual
Skill: Conceptual
Author: VS
Author: JBH
55) It is expected that the price of a bushel of wheat 52) Which of the following shifts the supply curve for will increase in one month. This belief will result A situation where the quantity demanded ex- an increase in current supply of wheat.
a decrease in current supply of wheat.
An increase in the price of gasoline.
a decrease in future supply of wheat.
A decrease in the price of a resource used to pro- no change in current or future supply of wheat.
Answer: B
An increase in the demand for gas-guzzling, Topic: Change in Supply, Technology
Skill: Recognition
Answer: C
Author: DD
56) An increase in technology for producing personal
an increase in the demand for personal comput-ers.
a decrease in the demand for personal comput-ers.
an increase in the supply of personal computers.
a decrease in the supply of personal computers.
Answer: C
Topic: Change in Supply, Number of Suppliers
Topic: A Change in the Quantity Supplied Versus a
Skill: Analytical
Change in Supply
Author: VK
Skill: Conceptual
57) Which of the following increases the supply of a Author: VS
60) Which of the following will increase the quantity supplied of compact discs but NOT increase the A smaller number of sellers producing the prod- A decrease in the price of a compact disc.
An increase in foreign imports of the product.
An increase in the price of a compact disc.
Higher taxes imposed upon producers of the A decrease in the number of suppliers of com- Answer: C
An increase in the price of the resources used toproduce compact discs.
Topic: Change in Supply, Number of Suppliers
Answer: B
Skill: Conceptual
Author: VS

Topic: A Change in the Quantity Supplied Versus a
58) Which of the following will decreases the supply Change in Supply
Skill: Conceptual
Author: JBH
An increase in the price of popcorn.
61) Which of the following statements is TRUE? A technological development in the production An increase in the price of gasoline will decrease A decrease in the number of popcorn suppliers.
An increase in the price of gasoline will increase Answer: D
An increase in the price of gasoline will increase Topic: A Change in the Quantity Supplied Versus a
Change in Supply
An increase in the price of gasoline will increase Skill: Conceptual
Author: RR
Answer: D
59) Consider the market for broccoli. If the price of a pound of broccoli increases, what will happen to Topic: A Change in the Quantity Supplied Versus a
Change in Supply
The supply of broccoli will decrease.
Skill: Analytical
The supply of broccoli will increase.
Author: VK
There will be no change in the supply of broc- 62) Which of the following best reflects an increase in coli, but instead will be an increase in the quan- quantity supplied rather than an increase in sup- There will be no change in the supply of broc- The producer of cellular phones experiences coli, but instead will be a decrease in the quan- The government stops controlling the price of a Answer: C
product, allowing the price to increase.
More sellers enter the computer market.
Answer: B
„ Market Equilibrium
Topic: Market Equilibrium
Skill: Recognition
Author: JBH
63) The equilibrium price and quantity are found at point where quantity supplied equals quantity Topic: Willingness-To-Pay
horizontal intercept of the demand curve.
Skill: Recognition
vertical intercept of the supply curve.
Author: KC
horizontal intercept of the supply and the de- 66) Using the data in the table above, at the equilib- rium, the willingness to pay of buyers for the last Answer: A
Topic: Price Adjustments
Skill: Conceptual*

Author: DS
64) If a market is NOT in equilibrium, then which of Answer: B
The demand curve will shift to bring the market Topic: Minimum Supply Price
Skill: Recognition
The supply curve will shift to bring the market Author: KC
67) Using the data in the table above, at the equilib- The price will adjust to bring the market to rium, the minimum price at which sellers were Answer: C
Topic: Price Adjustments, Surplus
Skill: Recognition*

Author: DS
Answer: D
65) If the price is above the equilibrium price, then surplus, and market forces will operate to lowerprice.
surplus, and market forces will operate to raiseprice.
shortage, and market forces will operate to lowerprice.
shortage, and market forces will operate to raiseprice.
Answer: A
Topic: Market Equilibrium
Skill: Analytical
Author: VS
70) Using the data in the above table, the equilibrium quantity and equilibrium price for a cellular tele-phone is Topic: Price Adjustment; Surplus
Skill: Conceptual

Author: JBH
68) The above table gives the demand and supply schedules for compact discs. If the price of a com- pact disc is $28, there is a ____ and the price of a Answer: C
Topic: Price Adjustments, Surplus
Skill: Analytical
Author: VS
71) Using the data in the above table, at the price of Answer: D
shortage of 25 thousand cellular telephones oc- Topic: Market Equilibrium
Skill: Recognition
surplus of 80 thousand cellular telephones oc- Author: JBH
69) The above table gives the demand and supply surplus of 25 thousand cellular telephones oc- schedules for compact discs. Based on the table, the equilibrium quantity and price of a compact shortage of 55 thousand cellular telephones oc- Answer: C
Answer: B
Topic: Price Adjustment
Skill: Analytical
Topic: Price Adjustments
Author: PVA
Skill: Conceptual
72) In the above figure, a price of $15 per dozen for Author: NU
75) In the above figure, if the price is $8 then Answer: B
Answer: B
Topic: Price Adjustment
Topic: Price Adjustments
Skill: Analytical
Skill: Conceptual
Author: CD
Author: NU
73) In the above figure, a price of $15 per dozen roses 76) Based on the above figure, which of the following would result in a ____ so that the price of roses At a price of $6, quantity demanded is equal to At a price of $4, quantity demanded is greater At a price of $8, quantity demanded is less than Answer: C
Topic: Price Adjustment
All of the above answers are correct.
Skill: Analytical
Answer: D
Author: PVA
74) In the above figure, a price of $35 per dozen
Answer: C
Topic: Price Adjustment; Surplus
Topic: Price Adjustment; Shortage
Skill: Analytical
Skill: Conceptual
Author: SB
Author: SB
77) Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price means resources are being allocated efficiently is less than the quantity supplied and a surplus is less than the quantity supplied and a shortage Answer: C
exceeds the quantity supplied and a surplus re- exceeds the quantity supplied and a shortage re- Answer: A
Topic: Price Adjustment; Surplus
Skill: Conceptual

Author: AF
below the equilibrium price, quantity supplied exceeds quantity demanded and price rises.
below the equilibrium price, quantity demanded exceeds quantity supplied and price falls.
Topic: Price Adjustment; Shortage
above the equilibrium price, quantity supplied Skill: Conceptual
exceeds quantity demanded and price falls.
Author: JBH
above the equilibrium price, quantity demanded 82) The above table gives the demand and supply exceeds quantity supplied and price rises.
schedules for compact discs. If the price of a com- Answer: C
pact disc is $8, there is a ____ and the price of acompact disc will ____.
Topic: Price Adjustment; Shortage
Skill: Recognition
Author: TO
79) When the price is less than the equilibrium price, Answer: A
some consumers will be willing to pay a pricehigher than the prevailing price.
All of the above answers are correct.
Answer: D
Topic: Price Adjustments, Shortage
Skill: Conceptual
Author: VS
80) If there exists a shortage in the market for snow-
mobiles, then the price of a snowmobile will Answer: A
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Demand Changes
Demand Changes
Skill: Analytical
Skill: Analytical
Author: JBH
Author: MN
83) The above table gives the demand and supply 86) If the U.S. Surgeon General announced that in- schedules for compact discs. Suppose that the creased grapefruit juice consumption could cause price of a compact disc player increases, resulting lower cholesterol levels, what would happen to the in the demand for compact discs decreasing by equilibrium price and quantity of grapefruit juice? 8,000 units at all prices. What are the new equi- librium quantity and equilibrium price of com- Price increases but quantity decreases.
Price decreases but quantity increases.
Answer: A
Topic: Predicting Changes in Price and Quantity;
Demand Changes

Answer: B
Skill: Analytical
Author: VS

„ Predicting Changes in Price and
87) What will happen to the equilibrium price and Quantity
equilibrium quantity for ice cream cones whenconsumers’ incomes decrease? Topic: Predicting Changes in Price and Quantity;
If ice cream cones are a normal good, then the Demand Changes
equilibrium price and quantity of ice cream Skill: Recognition
Author: MN
84) Which of the following would result in a move-
If ice cream cones are a normal good, then the ment along, but no shift in, the supply curve of equilibrium price and equilibrium quantity of A report by the U.S. Surgeon General that in- If ice cream cones are an inferior good, then the creased citrus consumption increases the likeli- equilibrium price for an ice cream cone will in- crease and the equilibrium quantity of ice cream An increase in wages for workers in all citrus or- If ice cream cones are an inferior good, then the A decrease in the price of grapefruits due to a equilibrium price and quantity of ice cream Answer: A
All of the above cause movements along but noshift in the supply curve of grapefruit juice.
Topic: Predicting Changes in Price and Quantity;
Answer: A
Demand Changes
Skill: Analytical

Topic: Predicting Changes in Price and Quantity;
Author: PZ
Demand Changes
88) Which of the following could increase the price of Skill: Conceptual
a used car in the United States and also increase Author: AF
85) When demand increases, the equilibrium price
____ and the equilibrium quantity ____.
A new 8 percent federal excise tax placed on all An increase in wages for used car salespeople.
A special rebate program on all new cars.
Answer: A
Answer: C
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Demand Changes
Demand Changes
Skill: Analytical
Skill: Analytical
Author: PZ
Author: MR
89) Suppose that coffee and sugar are complements. If 92) Throughout the 1990’s, the price of sport utility the supply curve of coffee shifts leftward because vehicles (SUVs) rose and each year more were there must have been technological advances in a rightward shift of the demand curve for coffee.
the law of demand does not hold true in this a leftward shift of the supply curve for sugar.
Answer: B
there must have movement leftward along thesupply curve for SUVs.
Topic: Predicting Changes in Price and Quantity;
there must have been a rightward shift of the Demand Changes
Skill: Conceptual
Answer: D
Author: DD
90) Suppose that people find out that eating more fish
Topic: Predicting Changes in Price and Quantity;
improves their health, leading them to increase Demand Changes
their demand for fish. As a result, the equilibrium Skill: Conceptual
price of fish ____ and the equilibrium quantity Author: NU
93) In March, the quantity of orange juice sold in the town of Jackson was 3000 cartons and the price $3. In May, the quantity of orange juice sold in the town of Jackson was 3500 cartons and the price was $3.20. This change in the price and Answer: B
quantity sold could have been the result of the release of a medical study suggesting that Topic: Predicting Changes in Price and Quantity;
consuming orange juice helps prevent cancer.
Demand Changes
a reduction in the number of orange juice cou- Skill: Analytical
Author: VK
91) Doctors find that one aspirin per day reduces the
the after effects of a cold winter in Florida that risk of heart attacks. Demand for aspirin will the after effects of a warm winter in Florida that increase, so that equilibrium price and equilib- increased the orange crop yield by 50 percent.
Answer: A
decrease, so that equilibrium price and equilib-rium quantity will increase.
increase, so that equilibrium price will decreaseand equilibrium quantity will increase.
increase, but the new equilibrium price andquantity are indeterminate.
Answer: A
Topic: Predicting Changes in Price and Quantity;
Demand Changes

Skill: Recognition
Author: MN
96) The above figure shows the market for pizza.
Which figure shows the effect of an increase in the price of a substitute such as sandwiches? Answer: A
Topic: Predicting Changes in Price and Quantity;
Supply Changes
Skill: Recognition
Author: MN
97) The above figure shows the market for pizza.
Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza? Topic: Predicting Changes in Price and Quantity;
Answer: C
Demand Changes
Skill: Recognition

Topic: Predicting Changes in Price and Quantity;
Author: MN
Demand Changes
94) The above figure shows the market for pizza.
Skill: Recognition
Which figure shows the effect of a decrease in the Author: MN
price of a pizza substitute such as hamburgers? 98) The above figure shows the market for pizza.
Which figure shows the effect of a new report by the U.S. Surgeon General that pizza, as a part of the Mediterranean diet, contributes to lower cho- Answer: B
Topic: Predicting Changes in Price and Quantity;
Demand Changes
Skill: Recognition

Author: MN
Answer: A
95) The above figure shows the market for pizza.
Which figure shows the effect of an increase in theprice of a complement such as soda? Answer: B
Topic: Predicting Changes in Price and Quantity;
Supply Changes

Skill: Recognition
Author: PZ
101) The above figure shows the market for ham-
burger. Which panel shows the effect of a new ex- Answer: C
Topic: Predicting Changes in Price and Quantity;
Supply Changes
Skill: Recognition
Author: RR
102) As a result of an increase in the supply for a good,
the equilibrium quantity ____ and the equilib- Topic: Predicting Changes in Price and Quantity;
Demand Changes
Answer: A
Skill: Recognition
Author: PZ

Topic: Predicting Changes in Price and Quantity;
99) The above figure shows the market for ham- Supply Changes
burger. Which figure shows the effect of an an- Skill: Conceptual
nouncement by the U.S. Food and Drug Admini- Author: VS
103) If the equilibrium price and equilibrium quantity
stration (FDA) that eating hamburger causes early of wheat per month is respectively $20 per ton and 1 million tons, then a decrease in the price of increase the equilibrium price and equilibrium increase the equilibrium price of wheat and de- Answer: B
crease the equilibrium quantity of wheat.
Topic: Predicting Changes in Price and Quantity;
decrease the equilibrium price of wheat and in- Supply Changes
crease the equilibrium quantity of wheat.
Skill: Recognition
decrease the equilibrium price and equilibrium Author: PZ
100) The above figure shows the market for ham- Answer: C
burger. Which panel shows the effect of a droughtin “cattle country”? Answer: C
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Supply Changes
Supply Changes
Skill: Conceptual
Skill: Analytical
Author: AF
Author: LC
104) When supply decreases, the equilibrium price 107) Assume that there is an improvement in produc- ____ and the equilibrium quantity ____.
tion technologies and also an increase in the ex- pected future price. Which of the following will The equilibrium price will rise because the sup- Answer: A
The equilibrium price falls because the supplycurve shifts leftward.
Topic: Predicting Changes in Price and Quantity;
The technological improvement causes the sup- Supply Changes
ply curve to shift rightward while the increase in Skill: Analytical
the expected future price causes the supply curve Author: LC
105) Suppose that there is an improvement in produc-
to shift leftward. The net effect is not known.
tion technologies. Which of the following will The demand curve shifts rightward and the sup- Answer: C
A leftward shift of the supply curve and both theequilibrium price and equilibrium quantity fall.
Topic: Predicting Changes in Price and Quantity;
A rightward shift of the supply curve and both Supply Changes
the equilibrium price and equilibrium quantity Skill: Conceptual
Author: NU
A rightward shift of the supply curve and the 108) If a technological improvement takes place in the equilibrium price falls while the equilibrium computer industry, then the equilibrium price of a computer will ____ and the equilibrium quantity A rightward shift of the supply curve and both the equilibrium price and equilibrium quantity Answer: C
Topic: Predicting Changes in Price and Quantity;
Answer: A
Supply Changes
Skill: Analytical

Topic: Predicting Changes in Price and Quantity;
Author: PZ
Supply Changes
106) If the price of aluminum used to make bicycles Skill: Conceptual
increases, the price of a bicycle rises because of a Author: RR
rightward shift of the demand curve for bicycles.
109) What is the effect on the price of wooden desks rightward shift of the supply curve for bicycles.
and quantity of wooden desks sold if the price of leftward shift of the demand curve for bicycles.
wood, a resource used to produce wooden desks, leftward shift of the supply curve for bicycles.
Answer: D
The equilibrium quantity of wooden desks in-creases and the equilibrium price falls.
The equilibrium quantity of wooden desks in-creases and the equilibrium price rises.
The equilibrium quantity of wooden desks de-creases and the equilibrium price falls.
The equilibrium quantity of wooden desks de-creases and the equilibrium price rises.
Answer: D
Topic: Predicting Changes in Price and Quantity;
Both Demand and Supply Increase
Skill: Analytical

Author: LC
110) When the demand and supply curves both shift
rightward, which of the following happens? The equilibrium price rises and the equilibrium The equilibrium price falls and the equilibrium The equilibrium price falls and any change in the equilibrium quantity cannot be determined.
The equilibrium quantity increases and any change in the equilibrium price cannot be de- Topic: Predicting Changes in Price and Quantity;
Answer: D
Demand Increases
Topic: Predicting Changes in Price and Quantity;
Skill: Analytical*
Both Demand and Supply Increase
Author: CD
Skill: Conceptual
113) Using the above figure, suppose that roses are a Author: NU
normal good. If there is an increase in income, 111) Suppose a medical study reveals new benefits to the equilibrium price will rise above $25 per consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The the equilibrium quantity will decrease below 10 we cannot predict what will happen to the equi- perhaps rise, fall, or stay the same, but more in- formation is needed to determine which it does.
we cannot predict what will happen to the equi- Answer: A
Answer: B
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Supply Decreases
Both Demand and Supply Increase
Skill: Analytical*
Skill: Conceptual
Author: CD
Author: NU
114) Using the above figure, suppose there is a decrease 112) The price of chicken falls, causing the demand curve for beef to shift leftward, while at the same the equilibrium price will decrease below $25 time a bumper corn crop reduces the cost of feeding steers. These changes result in ____ we cannot predict what will happen to equilib- an increase in the equilibrium quantity of beef.
an increase in the equilibrium quantity of beef if the equilibrium quantity will decrease below 10 the shift in the demand curve is smaller than the D) both the equilibrium price and quantity will an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the Answer: C
no change in the equilibrium quantity of beef.
Answer: B
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Both Demand and Supply Increase
Demand Increases, Supply Decreases
Skill: Analytical
Skill: Conceptual
Author: PVA
Author: AF
115) In the above figure, in order for the equilibrium 118) When demand increases and supply decreases, the price to remain constant while the equilibrium equilibrium price falls, and the equilibrium quantity might increase, decrease, or remain supply and demand curves both would have to equilibrium quantity decreases, and the equilib- supply curve would have to shift leftward and rium price might rise, fall, or remain constant.
the demand curve would have to shift rightward.
equilibrium quantity increases, and the equilib- supply curve would have to shift rightward and rium price might rise, fall, or remain constant.
the demand curve would have to shift leftward.
equilibrium price rises, and the equilibrium supply and demand curves both would have to quantity might increase, decrease, or remain Answer: D
Answer: D
Topic: Predicting Changes in Price and Quantity;
Topic: Predicting Changes in Price and Quantity;
Both Demand and Supply Decrease
Demand Increases, Supply Decreases
Skill: Analytical*
Skill: Analytical
Author: CD
Author: LC
116) Using the above figure, suppose that roses are a 119) When the demand curve shifts rightward and the normal good. If incomes decrease while simulta- supply curve shifts leftward, then the equilibrium neously there is an increase in the price of the re- price ____ and the equilibrium quantity ____.
the price will definitely increase above $25 per rises; probably changes but the direction of the the quantity will definitely decrease below 10 probably changes but the direction of the change the price will definitely decrease below $25 per Answer: C
we cannot tell what will happen to equilibrium Topic: Predicting Changes in Price and Quantity;
Demand Increases, Supply Decreases
Answer: B
Skill: Analytical
Author: PVA

Topic: Predicting Changes in Price and Quantity;
120) If the demand curve shifts rightward, and the Both Demand and Supply Decrease
Skill: Conceptual
Author: VS

price must rise and the quantity might increase, 117) If the demand for and supply of bathing suits both decrease, then definitely the equilibrium price must fall and the quantity might increase, quantity must increase and the price might rise, quantity must decrease and the price might rise, Answer: D
Answer: A
Topic: Predicting Changes in Price and Quantity;
Mathematical Note Questions
Demand Increases, Supply Decreases
Skill: Analytical

Topic: Mathematical Note
Author: VK
Skill: Analytical
121) The production costs of aspirin increase simulta- Author: TO
neously as doctors find that one aspirin per day reduces the risk of heart attacks. Supply and de- QD = 8000 – 7000P, where QD is the quantity demanded and P is the price in dollars. The sup- both increase, so that the equilibrium price and ply for hot dogs is given by QS = 4000 + 1000P, where QS is the quantity supplied and P is the decrease and increase, respectively, so that the price in dollars. Given these supply and demand equilibrium price will increase, but the equilib- rium quantity can decrease, increase, or remain At the equilibrium, the price = $0.50 and the increase and decrease, respectively, so that the At a price of $1, there is a shortage of 4000 hot equilibrium price will decrease, increase, or re- main constant, but the equilibrium quantity will At a price of $1, there is a surplus of 4000 hot both decrease so that the equilibrium price falls and the equilibrium quantity will decrease, in- Answer: D
Answer: B
Topic: Predicting Changes in Price and Quantity;
Demand Increases, Supply Decreases
Skill: Recognition
Author: MN
122) All grapefruit juice producers have decided to
blend tangerine juice with the grapefruit juice.
This blend results in a higher cost of production,but studies show that consumers prefer the taste ofthe blend to straight grapefruit juice. What willhappen to the equilibrium price and quantity ofthe new “blended” grapefruit juice now that itcosts more to produce but consumers like it bet-ter? Price and quantity will both increase.
Price will decrease but quantity will increase.
The effect on price is uncertain, but quantitywill increase.
Price will increase, but the effect on quantity isuncertain.
Answer: D

Source: http://elc.it.lhu.edu.tw/LHUIT/LHUITCourse/%20IT21122-3/offline/3tb600.pdf

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