Name:___________ HMW 3

K.Koleyni

Please submit only your final answers on a piece of paper. There is no need to print the questions.

1) At a product's equilibrium price

A) the product's demand curve is the same as the product's supply curve.
B) the quantity of the product demanded is greater than the quantity of the product supplied.
C) the quantity of the product demanded is less than the quantity of the product supplied.
D) the product's demand curve crosses the product's supply curve.

2) If the United States placed an embargo on Swedish products, what would happen in the U.S.
market for Swedish furniture?
A) The supply curve would shift to the left.
B) The supply curve would shift to the right.
C) The demand curve would shift to the right.
D) The demand curve would shift to the left.

3) An increase in the price of off-road vehicles will result in

A) a smaller quantity of off-road vehicles supplied.
B) a larger quantity of off-road vehicles supplied.
C) an increase in the demand for off-road vehicles.
D) a decrease in the supply of off-road vehicles.

4) One would speak of a change in the quantity of a good supplied, rather than a change in
supply, if
A) supplier expectations about future prices change.
B) the price of the good changes.
C) the cost of producing the good changes.
D) prices of substitutes in production change.

5) A supply schedule
A) is a table that shows the relationship between the price of a product and the quantity of the
product supplied.
B) is a curve that shows the relationship between the price of a product and the quantity of the
product supplied.
C) is the relationship between the supply of a product and the cost of producing the product.
D) is a table that shows the relationship between the price of a product and the quantity of the
product that producers and consumers are willing to exchange.

6) A demand curve shows the relationship between

A) the price of a product and the quantity of the product demanded.
B) the amount of a product sellers are willing to sell at a particular price and the amount
consumers are willing to buy at that price.
C) the quantity that consumers are willing and able to buy and the quantity that sellers are
willing and able to offer.
D) the price of a produce and the demand for the product.

7) By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis,

1
Name:___________ HMW 3
K.Koleyni

economists assume that the most important determinant of the demand for a good is
A) consumer income.
B) consumer tastes and preferences.
C) the price of the good.
D) the quality of the good.

8) The phrase "demand has increased" means that

A) a demand curve has shifted to the left.
B) there has been an upward movement along a demand curve.
C) there has been a downward movement along a demand curve.
D) a demand curve has shifted to the right.

9) The ________ effect of a price change refers to the impact of a change in the price of a good
on a consumer's purchasing power.
A) income
B) substitution
C) demographics
D) ceteris paribus

10) The substitution effect of a price change refers to

A) the change in quantity demanded that results from a change in price making a good more or
less expensive relative to other goods that are substitutes.
B) the shift of a demand curve when the price of a substitute good changes.
C) the movement along the demand curve due to a change in purchasing power brought about by
the price change.
D) the shift in the demand curve due to a change in purchasing power brought about by the price
change.

11) If an increase in income leads to an increase in the demand for sushi, then sushi is
A) a normal good.
B) a neutral good.
C) a complement.
D) a necessity.

12) If an increase in income leads to a decrease in the demand for salami, then salami is
A) an inferior good.
B) a neutral good.
C) a necessity.
D) a normal good.

13) How has the growing popularity of factory outlet stores affected the market for clothing at
retail department stores?
A) The demand curve for clothing at retail department stores shifts to the right.
B) The demand curve for clothing at retail department stores shifts to the left.
C) The supply curve for clothing at retail department stores shifts to the right.
D) The supply curve for clothing at retail department stores shifts to the left.

2
Name:___________ HMW 3
K.Koleyni

14) Suppose that when the price of ice cream increases, Liza decreases her purchase of hot
fudge. To Liza,
A) ice cream and hot fudge are complements.
B) ice cream and hot fudge and substitutes.
C) ice cream and hot fudge are normal goods.
D) ice cream is a normal good and hot fudge is an inferior good.

15) How does the increasing use of digital cameras affect the market for traditional camera film?
A) The demand curve for traditional camera film shifts to the right.
B) The quantity of traditional camera film demanded decreases.
C) The quantity of traditional camera film demanded increases.
D) The demand curve for traditional camera film shifts to the left.

16) Technological advancements have led to lower prices and an increase in the sale of color
laser printers. How does this affect the market for laser printer ink cartridges?
A) The demand curve for laser printer ink cartridges shifts to the right.
B) The demand curve for laser printer ink cartridges shifts to the left.
C) The quantity of laser printer ink cartridges demanded increases.
D) The quantity of laser printer ink cartridges demanded decreases.

17) If you are considering buying either an Apple Watch or a Samsung Gear S2, and you choose
the Samsung only because the price is lower, then you consider
A) the Apple Watch to be a normal good and the Samsung Gear S2 to be an inferior good.
B) the Apple Watch to be an inferior good and Samsung Gear S2 to be a normal good.
C) the Apple Watch and the Samsung Gear S2 to be complements.
D) the Apple Watch and the Samsung Gear S2 to be substitutes.

Figure 3-1

3
Name:___________ HMW 3
K.Koleyni

18) Refer to Figure 3-1. An increase in the price of a complement would be represented by a
movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.

19) Plastic and steel are substitutes in the production of body panels for certain automobiles. If
the price of plastic increases, with other things remaining the same, we would expect:
A) the price of steel to fall.
B) the demand curve for steel to shift to the right.
C) the demand curve for plastic to shift to the left.
D) nothing to happen to steel because it is only a substitute for plastic.
E) the demand curve for steel to shift to the left.
20) When an industry's raw material costs increase, other things remaining the same,
A) the supply curve shifts to the left.
B) the supply curve shifts to the right.
C) output increases regardless of the market price and the supply curve shifts upward.
D) output decreases and the market price also decreases.

21) You are analyzing the demand for good X. Which of the following will result in a shift to
the right of the demand curve for X?
A) A decrease in the price of X
B) An increase in the price of a good that is a complement to good X
C) An increase in the price of a good that is a substitute for X
D) all of the above

22) Which of the following would cause a rightward shift in the demand curve for gasoline?
I. A large increase in the price of public transportation.
II. A large decrease in the price of automobiles.
III. A large reduction in the costs of producing gasoline.
A) I only
B) II only
C) I and II only
D) II and III only
E) I, II, and III

23) Which of the following would cause an unambiguous decrease in the real price of DVD
players?
A) A shift to the right in the supply curve for DVD players and a shift to the right in the demand
curve for DVD players.
B) A shift to the right in the supply curve for DVD players and a shift to the left in the demand
curve for DVD players.
C) A shift to the left in the supply curve for DVD players and a shift to the right in the demand
curve for DVD players.

4
Name:___________ HMW 3
K.Koleyni

D) A shift to the left in the supply curve for DVD players and a shift to the left in the demand
curve for DVD players.

24) Over the next few years, several newly constructed office blocks will become available at the
World Trade Center site. As well, economists expect the New York economy will continue to
exhibit modest growth. What is the expected outcome for the office space market in downtown
Manhattan?
A) Unambiguously higher equilibrium rental rates and quantity
B) Unambiguously lower equilibrium rental rates and quantity
C) Unambiguously higher rental rates, and equilibrium quantity could be higher or lower
D) Unambiguously higher equilibrium quantity, and equilibrium rental rates could be higher or
lower

25) Assume that in recent years the cost of producing microbrew beer in the U.S. has decreased
largely due to technological improvements. At the same time, more and more Americans prefer
microbrew beer over wine. Which of the following best explains the effect of these events in the
microbrew beer market?
A) The supply curve has shifted to the right and the demand curve has shifted to the left. As a
result, there has been a decrease in the equilibrium quantity and an uncertain effect on the
equilibrium price.
B) Both the supply and demand curves have shifted to the right. As a result, there has been an
increase in the equilibrium quantity and an uncertain effect on the equilibrium price.
C) Both the supply and demand curves have shifted to the right. As a result, there has been an
increase in both the equilibrium price and the equilibrium quantity.
D) The supply curve has shifted to the left and the demand curve has shifted to the right. As a
result, there has been an increase in the equilibrium price and an uncertain effect on the
equilibrium quantity

26) In January, buyers of gold expect that the price of gold will fall in February. What happens in
the gold market in January, holding everything else constant?
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases.
D) The demand curve shifts to the left.

27) Which of the following describes a characteristic of a perfectly competitive market?

A) There are many buyers but few sellers.
B) There are many sellers but few buyers.
C) There are many buyers and sellers.
D) Equilibrium is achieved when demand for the product sold in the market equals the supply.

28) Which of the following would cause both the equilibrium price and equilibrium quantity of
oysters (assume that oysters are a normal good) to decrease?
A) an increase in consumer income
B) an oil spill that sharply reduces oyster output

5
Name:___________ HMW 3
K.Koleyni

C) a decrease in consumer income

D) a technological advancement in the production of oysters

29) In 2017, hurricanes damaged a large portion of Florida's orange crop. As a result of this,
many orange growers were not able to supply fruit to the market. After the hurricane, what
would we expect to see happen in the market at the pre-hurricane (initial) equilibrium price?
A) An increase in the demand for oranges.
B) A surplus of oranges.
C) The quantity demanded equal to the quantity supplied.
D) A shortage of oranges.

30) An increase in the price of pineapples will result in

A) a decrease in the demand for pineapples.
B) an increase in the supply of pineapples.
C) a larger quantity of pineapples supplied.
D) a smaller quantity of pineapples supplied.