4-1 If the price of Rare Gordon™ shoes falls, what will happen to the demand for Rare Gordon™ shoes?

A. Demand for Rare Gordon™ shoes will rise.
B. Demand for Rare Gordon™ shoes will fall.
C. Nothing.
D. Demand will fall, then rise again.
E. Demand will rise, then fall again.

4-2 The Bump® shoes and Rare Gordon™ shoes are substitutes. The supply of Rare Gordon™ shoes rises, causing the price of Rare Gordon™ to fall. What will happen to the market for The Bump® shoes?

A. Demand for The Bump® shoes will rise.
B. Demand for The Bump® shoes will fall.
C. Supply for The Bump® shoes will rise.
D. Supply for The Bump® shoes will fall.
E. Nothing.

4-3 Bic disposable razors and shaving cream are complements. Higher costs of manufacturing cause the price of shaving cream to rise. What do you think will happen to Bic razors in equilibrium?

A. Both the price and quantity sold of Bic razors will rise.
B. Both the price and quantity sold of Bic razors will fall.
C. The price of Bic razors will rise and quantity sold will fall.
D. The price of Bic razors will fall and quantity sold will rise.
E. We can't even guess without more information.

4-4 Demand for X will fall...

A. if the price of X rises.
B. if the supply of X increases.
C. if the price of a complement for X falls.
D. if the price of a substitute for X falls.
E. if any (or all) of the above occur.

4-5. The price of video recorders has fallen. From this observation, we might expect ...

A. the price of video tapes will fall.
B. the quantity of video tapes sold will rise.
C. the price of video tapes will rise.
D. both A and B.
E. both B and C.

4-6 Between 1960 and 1966, the price of physicians' services increased by 35% (after accounting for inflation). Quantity of services delivered did not change during this time. The best explanation for this is

A. an increase in supply only.
B. an increase in both demand and supply.
C. an increase in demand only.
D. an increase in demand and a reduction in supply.
E. an increase in supply and a reduction in demand.

4-7 Which of the following is most likely to lower the demand for Bart's Root Beer in Springfield?

A. Advertising for Bart's Root Beer is increased in Springfield.
B. Lisa's Root Beer, a competitor, reduces its price.
C. Krusty Kola (another soft drink) increases its price in Springfield stores.
D. The weather gets hotter in Springfield.
E. The price of Bart's Root Beer rises in Springfield.

4-8 Which of the following is most likely to lower the demand for Bart's Root Beer in Springfield?

A. Incomes of people in Springfield increase.
B. The price of water in Springfield rises.
C. The price of Homer chips, a crispity-crunchity snack food that tastes good with root beer, rises.
D. Springfield schools start their spring break, so kids snack more.
E. The price of Bart's Root Beer rises in Springfield.

4-9 Quotas restricting the importation of Japanese automobiles will have what effects on the supply and demand for domestically produced automobiles?

A. No one wants to buy an American car, so there will be no effect on the domestic car market.
B. The supply and demand for domestic cars will both increase.
C. Demand and quantity supplied of domestic cars will increase.
D. Supply and quantity demanded of domestic cars will increase.
E. Demand will increase, but supply will decrease.

4-10 "Hurricanes in Florida are bringing financial gains to California citrus growers. Because of damage to the Florida citrus crop, California citrus products are commanding the highest prices ever." This statement is best explained in which way?

A. The supply of Florida oranges has decreased, causing their prices to rise and the demand for the substitute California oranges to rise.
B.The supply of Florida oranges has decreased, causing the supply of the substitute California oranges and their prices to rise.
C. The demand for Florida oranges has been reduced by the hurricanes, causing a greater demand for California oranges and an increase in their price.
D. The demand for Florida oranges has been reduced, causing prices to fall, thereby increasing the demand for substitute California oranges.
E. The supply of Florida oranges has fallen, reducing their price, and thus raising the demand for Florida oranges. This then raises the demand for California oranges.

4-11. If the price of Smucker's jam rises due to higher manufacturing costs, what result do you foresee?

A. The prices of other jams will fall.
B. The price of bread will rise.
C. The price of peanut butter will fall.
D. People will buy less of other jams.
E. People will buy more bread.

4-12 If the cost of making Reverse Athletic Shoes falls, what result do you foresee?

A. The price of Reverse shoes will fall.
B. The quantity of Reverse shoes sold will rise.
C. The price of Conbok shoes, a competing product, will fall.
D. The quantity sold of Conbok shoes, a competing product, will fall.
E. All of the above.

4-13 If the cost of making Reverse Athletic Shoes falls, what result do you foresee?

A. The price of Reverse shoes will fall.
B. The quantity of Reverse shoes sold will fall.
C. The price of Conbok shoes, a competing product, will rise.
D. The quantity sold of Conbok shoes, a competing product, will rise.
E. Nothing will change.

4-14 The price of cigarettes has risen while the quantity of cigarettes smoked has fallen. What explanation can you suggest?

A. Both supply and demand must have risen.
B. Both supply and demand fell.
C. Supply fell.
D. Demand fell.
E. Demand rose.

4-15 The supply of haxmatrivs has risen. Other things remaining the same, what will happen?

A. Only price will fall.
B. Only the quantity sold will rise.
C. The quantity sold will rise, as will the price.
D. The quantity sold will rise, but the price will fall.
E. The quantity sold will fall, but the price will rise

4-16 Changes in the demand for Purple Glop can occur because of all of the following except:

A. Changes in the price of complements.
B. Changes in the price of Purple Glop.
C. Changes in population.
D. Changes in people's income.
E. Changes in the price of substitutes.

4-17 A good suddenly becomes fashionable. As a result, there will be

A. movement down this good's demand curve, thus an increase in quantity demanded.
B. . movement up this demand curve, because a good must be reasonably rare to become fashionable.
C. . rightward shift in the demand curve for the good.
D. . leftward shift in the demand curve coupled with a movement down the curve.
E. . leftward shift in the demand curve.

4-18 The price of Purple Blop rises at the same time as the number of stores selling Purple Blop (and thus the quantity of Purple Blop sold) falls. Which is the best explanation?

A. Demand for Purple Blop has fallen.
B. The price of a substitute has risen.
C. The price of a complement has fallen.
D. The cost of producing Blop has risen.
E. The cost of producing Blop has fallen.

4-19 Milk and Soft Dark Brown Snack Stuff are complements . If a change in supply causes the price of Soft Dark Brown Snack Stuff to rise, what will happen to the market for milk?

A. Demand for milk will rise.
B. Demand for milk will fall.
C. Supply for milk will rise.
D. Supply for milk will fall.
E. Nothing.

4-20 Which of the following pairs is likely to be a pair of complements?

A. Aluminum foil and "Handi-Wrap"
B. Coca-Cola and Pepsi-Cola
C. Dryer's Ice Cream and Chevrolets
D. Twinkies and Snickers bars
E. Chips Ahoy Cookies and Milk

4-21 Demand for SnootDrainers rises. As a result, in equilibrium,...

A. price will rise. Then, since price has gone up, demand will fall. Everything ends up back where it started.
B. price will fall. Then, supply will fall, reducing demand.
C. price and quantity will both rise (and that's the end of the story).
D. price will rise, so demand will fall as supply rises.
E. sellers will become confused and yell, "BINGO!!!"

4-22 .The supply of zixitols has fallen. Other things remaining the same, what will happen?

A. Only price will rise.
B. Only the quantity sold will rise.
C. The quantity sold will fall, as will the price.
D. The quantity sold will rise, but the price will fall.
E. The quantity sold will fall, but the price will rise.

4-23 In light of the factors you know to be determinants of a product's price, which would you expect to observe?

A. The rental rate on a U-Haul truck being taken from Phoenix to Los Angeles will be the same as the rate on a truck being taken from Los Angeles to Phoenix, even though there is a net migration of people from L.A. to Phoenix.
B. The ticket price of a movie which costs $100 million to make will always be higher than the ticket price of a movie that costs $10 million to make.
C. Round-trip airline fares will always be exactly twice as expensive as one-way fares.
D. Airplane tickets from Phoenix to Los Angeles will be the same price as tickets from Phoenix to Burbank (which is about as far away as Los Angeles).
E. None of the above is certain, for demand and supply, not just production costs, determine price.

4-24 Which result (ceteris paribus, and in equilibrium) is most likely in the wine market if the cost of growing grapes falls while the incomes of consumers fall (assume wine is a normal good)?

A. Wine prices will certainly rise.
B. Wine prices will certainly fall.
C. The quantity of wine consumed will certainly rise.
D. The quantity of wine consumed will certainly fall.
E. Certainly, price will fall, and thus quantity consumed will rise.

4-25 If the price of BMW's rises, what will happen to the demand for BMW's?

A. Demand for BMW's will rise.
B. Demand for BMW's will fall.
C. Nothing.
D. Demand will fall, then rise again.
E. Demand will rise, then fall again.

4-26 If the supply of poit were to increase, we predict:

A. an increase in both price and quantity purchased of poit.
B. a decrease in price but increase in quantity purchased of poit.
C. an increase in price but decrease in quantity purchased of poit.
D. a decrease in both price and quantity purchased of poit.
E. we cannot tell without more information.

4-27 The demand of dernsquirters has fallen. Other things remaining the same, what will happen?

A. Only price will fall.
B. Only the quantity sold will fall.
C. The quantity sold will fall, as will the price.
D. The quantity sold will rise, but the price will fall.
E. The quantity sold will fall, but the price will rise

4-28 The price of yertsquealers has remained about the same over time, yet the quantity sold each year has fallen dramatically. What is the best explanation for this?

A. A fall in demand.
B. A fall in supply.
C. A rise in demand together with a fall in supply.
D. A fall in demand together with an increase in supply.
E. A fall in demand together with an decrease in supply.

4-29 The price of creeplons has remained about the same over time, yet the quantity sold each year has risen dramatically. What is the best explanation for this?

A. A rise in demand.
B. A rise in supply.
C. A rise in demand together with a fall in supply.
D. A rise in demand together with an increase in supply.
E. A fall in demand together with an decrease in supply.

4-30 The price of glipsticks has fallen dramatically over time, yet the quantity sold each year has remained about the same. What is the best explanation for this?

A. A fall in demand.
B. A fall in supply.
C. An increase in supply.
D. A fall in demand together with an increase in supply.
E. A fall in demand together with an decrease in supply.

For Questions 31-60 click here.