ECON EXAM ANSWERS
Which of the following would not shift the demand curveforbeef?
A. a widely publicized study that indicatesbeef consumption increasesone's cholesterol
B. areduction in the price ofcattle feed
an effective advertising campaign by pork producers
a change in the incomesof beef consumers
AACSB: KnowledgeApplication Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
In 2007, the price of oil increased, which in turn caused theprice of natural gas to rise. This can best be explainedby saying that oil and naturalgas are
A. complementary goods,andthe higher price for oil increased thedemand for natural gas.
B. substitute goods,andthe higher price for oil increasedthe demand for naturalgas.
complementary goods,and the higher price for oil decreased the supply of natural gas.
substitute goods, and the higher price for oil decreasedthe supply of natural gas.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
An economist for a bicyclecompany predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction assumes that
there are many goods that aresubstitutes for bicycles.
there are many goods that are complementary to bicycles.
there are few goods that are substitutes for bicycles.
D. bicycles are normal goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If two goods are complements,
they are consumedindependently.
an increasein the price ofone will increase the demandforthe other.
C. adecrease in the price of one will increasethe demand for the other.
D. they are necessarily inferior goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Blu-ray players and Blu-raydiscs are
A. complementary goods.
substitute goods.
independent goods.
inferior goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If the demandcurve for productB shifts to the right as theprice of productA declines, then
both A and B areinferior goods.
A is a superior good and B is an inferior good.
A is an inferior good and B is a superior good.
D. A and B are complementary goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If the price ofproduct L increases, thedemand curve for close-substitute productJ will
shift downward toward the horizontal axis.
shift totheleft.
C. shift to the right.
D. remain unchanged.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Which of the following is most likelyto be an inferior good?
gold watches
ocean cruises
C. used clothing
D. steak
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Which of the following statements is correct?
A. An increase in the price of C will decreasethe demand for complementary product D.
A decrease in income will decrease the demand for an inferiorgood.
An increase in income will reduce the demand for a normal good.
A decline in the price of X will increasethe demand for substitute product Y.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
A shift to the right in the demand curveforproduct A can be most reasonably explained by sayingthat
consumer incomes havedeclined, and consumersnow want to buy less of A at each possible price.
the price of A has increased and, as a result, consumers want to purchase less ofit.
C. consumer preferences have changed in favor of A so that they now want to buy more at each possible price.
D. the price ofA has declined and, as a result,consumers want to purchase more of it.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Which of the followingwill cause the demand curve for product A to shift to the left?
population growth that causes an expansionin the number of personsconsuming A
an increase in money income if A is a normal good
a decrease in the price ofcomplementary product C
D. anincrease in money income if A is an inferior good
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If X is a normal good, a rise in money income will shift the
supply curve for X to the left.
supply curveforX to the right.
demand curve for X to the left.
D. demandcurve for X to the right.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If Z is an inferior good, an increase in money income will shift the
supply curve for Z to the left.
supply curve for Z to the right.
C. demandcurve for Z to the left.
D. demandcurve for Z to the right.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
College students livingoff-campus frequently consumelarge amounts of ramen noodles and boxed macaroni andcheese. When they finish school and start careers, their consumption of both goods frequently declines. This suggeststhat ramen noodles andboxed macaroni and cheese are
A. inferior goods.
normal goods.
complementary goods.
substitute goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Other things equal,which of the following might shift the demand curve for gasolineto the left?
A. the discoveryof vast new oil reserves in Montana
B. the development of a low-cost electric automobile
an increasein the price oftrain and air transportation
a large declinein the price ofautomobiles
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Running shoes and staplers are
substitute goods.
complementary goods.
inferior goods.
D. independent goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
The demandformost products varies directly with changes in consumer incomes. Such products are known as
complementary goods.
competitive goods.
inferior goods.
D. normal goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Assume thedemand curve for product X shifts to the right. This might be caused by
A. adecline in income if X is an inferiorgood.
a decline in the price of Z if X and Z aresubstitute goods.
a change in consumertastes that is unfavorable to X.
an increase in the price ofY if X and Y are complementary goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Digital cameras and memory cards are
A. substitute goods.
B. complementary goods.
independent goods.
inferior goods.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
A decrease in theprice of digitalcameras will
A. cause the demandcurve for memorycards to become vertical.
B. shift thedemand curve for memory cards to the right.
shift thedemand curve for memory cards to the left.
not affect the demand for memory cards.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
A normal good is one
whose amount demanded will increase as its price decreases.
whose amount demanded will increase as its price increases.
whose demandcurve will shift leftwardas incomes rise.
D. for which the consumption varies directlywith income.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If the demandforsteak (a normal good) shifts to the left, the most likelyreason is that
A. consumer incomes have fallen.
cattle production hasdeclined.
the price of steak has risen.
the price ofcattle feed has gone up.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If consumer incomes increase,thedemand for productX
A. will necessarily remain unchanged.
B. may shift either totheright or left.
will necessarily shift totheright.
will necessarily shift to the left.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If products A and B are complements andthe price of B decreases, the
demand curves for both A and B will shift to the left.
amount of B purchased will increase,but the demand curve for A will not shift.
C. demandforA will increase andthequantity of B demanded will increase.
D. demandforA will declineand the demand for B will increase.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
If products C and D are closesubstitutes, an increase in theprice of C will
tend tocause the price of D to fall.
shift the demand curve for C to the left and the demand curve for D to the right.
C. shift the demand curve for D to the right.
D. shift the demand curves of both productsto the right.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
In constructing a demand curve for product X,
A. consumer preferences are allowed to vary.
B. the prices of other goods are assumed constant.
money incomes areallowed to vary.
the supply curve of product X is assumedconstant.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
An inferior good is
one whose demand curve will shift rightward as incomes rise.
one whose price and quantity demanded vary directly.
one that has not been approved by the FederalFood and Drug Administration.
D. not accurately defined by any of these statements.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Suppose an excise tax is imposedon product X. We expect this tax to
A. increase thedemand for complementary good Y and decrease thedemand for substitute product Z.
B. decrease the demand for complementary good Y and increase the demand for substitute product Z.
increase the demands for both complementary good Y and substitute product Z.
decrease the demands for both complementary good Y and substitute product Z.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
An increase in the price ofproduct A will
reduce the demand for resources used in the production of A.
increase the demand for complementary product C.
C. increase thedemand for substitute product B.
D. reduce thedemand for substitute product B.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Which of the followingwould most likely increase the demandforgasoline?
A. the expectation by consumersthat gasoline prices will be higher in the future
the expectation by consumersthat gasoline prices will be lower in the future
a widespread shift in car ownership from SUVs to hybrid sedans
a decrease in theprice of public transportation
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increasein the price ofpizza to
A. reduce thedemand for tacos andincrease the demand for soda.
B. reduce the demandforsoda and increase the demandfortacos.
increase the demand for both soda andtacos.
reduce thedemand for both soda and tacos.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
54.
Refer tothe diagram. A decrease in demandis depicted by a
move from point x to point y.
shift from D1 toD2.
C. shift from D2 to D1.
D. movefrom point y to point x.
AACSB: KnowledgeApplication
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
55.
Refer tothe diagram. A decrease in quantity demanded is depictedby a
move from point x to point y.
shift from D1 toD2.
shift from D2 toD1.
D. movefrom point y to point x.
AACSB: KnowledgeApplication
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
When an economistsays that the demand for a producthas increased, this means that
A. consumers are now willingto purchase more of this product at each possible price.
the producthas become particularly scarce for some reason.
product price has fallen and, as a consequence,consumers are buying a larger quantity of the product.
the demand curve has shifted to the left.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
"In the corn market,demand often exceeds supplyand supply sometimesexceeds demand." "The price of corn risesandfalls in response to changes in supplyand demand." In which of these two statements are theterms demand and supply being used correctly?
A. In neither statement.
B. In the secondstatement.
In the first statement.
In both statements.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
By an "increase in demand," economists mean that
A. product pricehasfallen, so consumersmove down to a new point on thedemand curve.
B. the quantity demanded at each priceina set of prices is greater.
the quantity demanded at each priceina set of prices is smaller.
a leftward shift of thedemand curve has occurred.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
The term "quantity demanded"
refers to the entire series ofprices and quantities that comprise thedemand schedule.
refers to a situation in which theincome and substitution effects do not apply.
C. refers to the amount of a product that will be purchased at some specific price.
D. means the same thing as demand.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
A decrease in thedemand for recreational fishing boats might be causedbyan increase in the
A. income of sports fishers.
B. price of outboard motors.
size and number of fish available.
price of sailingboats.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
Assume that the demand curveforproduct C is downsloping.Ifthe price of C falls from $2.00 to$1.75,
A. a smallerquantity of C will be demanded.
B. alarger quantity of C will be demanded.
the demand for C will increase.
the demand for C will decrease.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
An increase in the quantity demanded means that
A. given supply,theprice of the product can be expected to decline.
B. price has declined and consumers thereforewantto purchase more of theproduct.
the demand curve has shifted totheright.
the demand curve has shifted to the left.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
An increase in product price will cause
A. quantity demanded to decrease.
quantity suppliedtodecrease.
quantity demanded to increase.
the supply curve to shift to the left.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
In moving along a demand curve, whichof the following isnot held constant?
A. the price ofthe product itself.
price expectations
consumer incomes
prices of complementary goods
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
In which of the following statements are the terms "demand" and "quantity demanded" used correctly?
A. When theprice of ice cream rose, the demand for both ice cream andice cream toppings fell.
B. When the price ofice cream rose,the quantity demanded of ice cream fell, and thedemand for ice cream toppings fell.
When the price ofice cream rose,the demand for ice cream fell, and thequantity demanded of ice cream toppings fell.
None of these statementsuse the terms correctly.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-02 Describedemand and explain how it can change.
Test Bank: I Topic: Demand
66.
Refer tothe diagram. A decrease in supply is depicted by a
move from point x to point y.
Shift from S1 toS2.
C. shift from S2 to S1.
D. movefrom point y to point x.
AACSB: KnowledgeApplication
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
67.
Refer tothe diagram. An increase in quantity suppliedis depicted by a
A. movefrom point y to point x.
shift from S1 to S2.
shift from S2 to S1.
move from point x to point y.
AACSB: KnowledgeApplication
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
The law of supply indicates that,other things equal,
A. producers will offer more of a productat high prices than at low prices.
the productsupply curve is downsloping.
consumers will purchase less ofa good at high prices than at low prices.
producers will offer more of a productat low prices than at high prices.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
The upward slope of thesupply curve reflects the
A. principleof specialization in production.
B. law of supply.
fact that price and quantity supplied are inversely related.
law of diminishing marginal utility.
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Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
70.
(Advanced analysis) The equationfor the supplycurve in the below diagram is approximately
A. P = 4 + 0.3Q. B. P = 4 + 2Q. C. P = 4 + 0.5Q. D. P = 4 - 3Q.
AACSB: KnowledgeApplication
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
The supply curve shows the relationship between
A. priceandquantity supplied.
production costs and the amount demanded.
total business revenues and quantity supplied.
physical inputs of resourcesand the resulting units of output.
AACSB: KnowledgeApplication Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
LearningObjective: 03-03 Describesupply and explain how it can change.
Test Bank: I Topic: Supply
A firm's supplycurve is upsloping because
the expansion of production necessitates theuse of qu