Survey of Economics International Edition 8th Edition by Irvin B. Tucker – Test Bank

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Survey of Economics International Edition 8th Edition by Irvin B. Tucker – Test Bank

Chapter 4—Markets in Action

MULTIPLE CHOICE

1. An increased equilibrium price and a decreased equilibrium quantity results from a(n):

a.	decrease in demand.
b.	increase in supply.
c.	decrease in supply.
d.	increase in demand.

ANS: C PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

2.A decrease in demand leads to a(n):

a.	increased equilibrium price and an increased equilibrium quantity.
b.	decreased equilibrium price and a decreased equilibrium quantity.
c.	decreased equilibrium price and an increased equilibrium quantity.
d.	increased equilibrium price and a decreased equilibrium quantity.

ANS: B PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

3.If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?

a.	Price would increase, and quantity would decrease.
b.	Price would decrease, and quantity would decrease.
c.	Price would increase, and quantity would increase.
d.	Price would decrease, and quantity would increase.

ANS: B PTS: 1 DIF: M TOP: Change in equilibrium

TYP: CA

4.If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by a(n):

a.	increase in the supply of the good.
b.	increase in the demand for the good.
c.	decrease in the demand for the good.
d.	decrease in the supply of the good.

ANS: C PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

5.Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

a.	An increase in consumer income over this ten year period
b.	A reduction in the price of residential phone service, a substitute for cellular phone service
c.	An increase in the wages of workers in the cellular phone industry
d.	Technological improvements that reduced the cost of supplying cellular phone service

ANS: D PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

6.If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?

a.	Price would increase, and quantity would decrease.
b.	Price would decrease, and quantity would decrease.
c.	Price would increase, and quantity would increase.
d.	Price would decrease, and quantity would increase.

ANS: A PTS: 1 DIF: M TOP: Change in equilibrium

TYP: CA

7.If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by a(n):

a.	increase in the supply of the good.
b.	increase in the demand for the good.
c.	decrease in the demand for the good.
d.	decrease in the supply of the good.

ANS: A PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

8.How would a decrease in consumer income affect the market for new automobiles?

a.	Demand would decrease, leading to an increase in price and a reduction in quantity sold.
b.	Demand would decrease, leading to a reduction in price and a reduction in quantity sold.
c.	Demand would increase, leading to an increase in price and an increase in quantity sold.
d.	Demand would increase, leading to a reduction in price and an increase in quantity sold.

ANS: B PTS: 1 DIF: M TOP: Change in equilibrium

TYP: CA

9.If there is a decrease in demand for lettuce, we would expect:

a.	both the price and quantity sold to increase.
b.	both the price and quantity sold to decrease.
c.	the price to decrease and the quantity sold to increase.
d.	the price to increase and the quantity sold to decrease.

ANS: B PTS: 1 DIF: M TOP: Change in equilibrium

TYP: CA

10. Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice, a substitute product?

a.	The price of orange juice will increase, and the quantity purchased will fall.
b.	The price of orange juice will fall, and the quantity purchased will increase.
c.	The price of orange juice will increase, and the quantity purchased will increase.
d.	The price of orange juice will fall, and the quantity purchased will fall.

ANS: D PTS: 1 DIF: D TOP: Change in equilibrium

TYP: CA

11. Each year around Valentine’s Day, we would expect:

a.	the demand for roses to increase.
b.	the price of roses to increase.
c.	the number of roses sold to increase.
d.	all of the above.

ANS: D PTS: 1 DIF: E TOP: Change in equilibrium

TYP: CA

MAECENAS IACULIS

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ADIPISCING CONVALLIS BULUM

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