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n Salvatore m
1. Amdeclineminmthemsupplymwillmcausemamchangemin
A) themlevelmofmquantitymdemanded.*
B) themdemand.
C) AmandmB
D) Nonemofmthemabovemismcorrect.
2. Amdeclineminmthemdemandmwillmcausemamchangemin
A) themlevelmofmquantitymsupplied.*
B) themsupply.
C) AmandmB
D) Nonemofmthemabovemismcorrect.
3. Assumemthatmcornmandmwheatmaremsubstitutesminmproduction;mthatmis,mthemsameminputsmcan
mbemusedmtomproducemeithermonemofmthesemtwomcommodities.mAlsomassumemthatmthemlawsmo
fmsupplymandmdemandmapplyminmbothmmarkets.mIfmthemdemandmformonemofmthesemcommodit
iesmincreases,mwhatmwillmlikelymhappenminmthemothermmarket?
A) Themdemandmwillmincrease.
B) Themdemandmwillmdecrease.
C) Themsupplymwillmincrease.
D) Themsupplymwillmdecrease.
4. IfmwemnoticemthatmanmincreaseminmthempricemofmproductmXmcausesmreductionsminmthemdem
andmformproductmY,mthenmwemcanmconcludemthatmthesemtwomproductsmare
A) complementsminmconsumption.
B) substitutesminmconsumption.
C) complementsminmproduction.
D) substitutesminmproduction.
E) Nonemofmthemabovemismcorrect.
5. Ifmtwomgoodsmaremcomplementsminmconsumption,mthenmanmincreaseminmthempricemofmone
mofmthesemgoodsmwillmcause
A) themdemandmformthemothermgoodmtomincrease.
B) themsupplymofmthemothermgoodmtomincrease.
C) themdemandmformthemothermgoodmtomdecrease.
D) themsupplymofmthemothermgoodmtomdecrease.
E) Nonemofmthemabovemismcorrect.
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6. Ifmbothmsupplymandmdemandmincreasematmthemsamemtime,mthen
A) thempricemofmthemproductmwillmdefinitelymincrease.
B) thempricemofmthemproductmwillmdefinitelymdecline.
C) themmarket-clearingmquantitymofmthemproductmwillmdefinitelymincrease.
D) themmarket-clearingmquantitymofmthemproductmwillmdefinitelymdecrease.
7. ThemmanagementmofmfirmmAmobservedmthatmeverymtimemtheremismanmincreaseminmthempric
emchargedmbymfirmmB,mthemlevelmofmsalesmofmfirmmAmdeclines.mButmwhenmfirmmCmincreas
esmitsmprice,mthemlevelmofmsalesmofmfirmmAmincreases.mFrommthismwemcanmconcludemthat
A) firmsmAmandmBmproducemsubstitutesminmconsumption.
B) firmsmAmandmCmproducemsubstitutesminmconsumption.
C) firmsmAmandmBmproducemunrelatedminmconsumptionmproducts.
D) firmsmAmandmCmproducemunrelatedminmconsumptionmproducts.
E) Nonemofmthemabovemismcorrect.
8. Themlawmofmdemandmstatesmthat
A) asmthempricemincreasesmthemdemandmincreasesm(shiftsmoutward).
B) asmthempricemincreasesmthemquantitymdemandedmdecreases.
C) asmthemincomemlevelmofmthemconsumermincreasesmthemquantitymdemandedmincreases.
D) Nonemofmthemabovemismcorrect.
9. Amgoodmismnormalmifmamriseminmconsumers'mincomemcauses
A) themquantitymdemandedmtomincrease.
B) themdemandmtomdecrease.
C) themdemandmtomincrease.
D) Nonemofmthemabovemismcorrect.
10. Whichmofmthemfollowingmstatementsmismincorrect?
A) Inmamrecession,mnormalmgoodsmmanufacturersmaremexpectedmtomhavemreductionsminmt
hemdemand.
B) Inmamrecession,minferiormgoodsmmanufacturersmaremnotmexpectedmtomhavemreductions
minm
themdemand.
C) Allmproducersmaremgoingmtombemnegativelymaffectedminmamrecession.
D) Nonemofmthemabovemismcorrect.
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11. Inmwhichmscenariomwillmbothmthemequilibriummpricemandmquantitymincreasematmthemsa
memtime?
A) Whenmsupplymincreases
B) Whenmbothmsupplymandmdemandmincrease
C) Whenmdemandmincreases
D) Whenmbothmsupplymandmdemandmdecrease
E) Nonemofmthemabovemismcorrect.
12. Ifmsupplymincreasesmwhilemdemandmdecreases
A) themequilibriummpricemwillmdefinitelymincrease.
B) themequilibriummquantitymwillmdefinitelymincrease.
C) themequilibriummpricemwillmdefinitelymdecrease.
D) themequilibriummquantitymwillmdefinitelymdecrease.
13. Ifmbothmdemandmandmsupplymdecreasematmthemsamemtime,mthen
A) themequilibriummpricemwillmincrease.
B) themequilibriummpricemwillmdecrease.
C) themequilibriummquantitymwillmincrease.
D) themequilibriummquantitymwillmdecrease.
14. Ifmwemassumemthatmthemcurrentmequilibriummwagemformlow-
skilledmlabormism$8mpermhourmandmthemminimummwagemismincreasedmfromm$5.75mtom$7.25m
permhour,mthen
A) unemploymentmamongmlow-skilledmworkersmwillmincrease.
B) unemploymentmamongmlow-skilledmworkersmwillmremainmunaffected.
C) unemploymentmamongmlow-skilledmworkersmwillmdecrease.
15. Whatmwouldmyourmanswermtomthempreviousmquestionmbemifmthemcurrentmmarket-
clearingmwagemequaledm$7.00?
A) Themunemploymentmwouldmincrease.
B) Themunemploymentmwouldmremainmthemsame.
C) Themunemploymentmwouldmdecrease.
D) Nonemofmthemabovemismcorrect.
16. Whenmrentmcontrolsmaremimposedmbelowmthemcurrentmmarketmpricemtheymcanmdomallmexcept
A) increasemthemquantitymofmrentalmhousingmdemanded.
B) reducemthemqualitymofmrentalmhousing.
C) reducemthemlevelmofmsupplymofmrentalmhousing.
D) createmexcessmsupplymofmrentalmhousing.
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17. Whenmrentmcontrolmismimposedmabovemthemcurrentmmarketmpricemitmwill
A) increasemthemquantitymofmrentalmhousingmdemanded.
B) reducemthemqualitymofmrentalmhousing.
C) createmamshortagemofmrentalmhousing.
D) createmnomimpactmonmthemmarket.
18. AssumemthatmthempricemofmXmdecreasesmandmasmamresultmofmthatmthemdemandmformYmincrea
sesmwhilemthemdemandmformZmdecreases.mFrommthismwemcanmconcludemthat
A) goodsmXmandmYmaremsubstitutesminmconsumption.
B) goodsmXmandmZmaremsubstitutesminmconsumption.
C) goodsmYmandmZmaremcomplementsminmconsumption.
D) Nonemofmthemabovemismcorrect.
19. Whichmofmthemfollowingmbestmdescribesmamnormalmgood?
A) Anmincreaseminmthempricemofmthemproductmleadsmtomanmincreaseminmthemlevelmofmquan
titymdemanded.
B) Amreductionminmthempricemofmthemproductmleadsmtomamdecreaseminmthemlevelmofmquan
titymdemanded.
C) Anmincreaseminmthemconsumer'smincomemcausesmamdecreaseminmthemdemand.
D) Amreductionminmthemconsumer'smincomemcausesmanmincreaseminmthemdemand.
E) Nonemofmthemabovemismcorrect.
20. Ifmwemassumemthemfollowingmscenario:masmthemaveragemincomemofmthemconsumermincrea
sesmthemdemandmform“fast”mfoodmdecreases,mthenmwemcanmassumemthatm“fast”mfoodmis
A) amnormalmgood.
B) anminferiormgood.
C) Nonemofmthemabovemismcorrect.
21. Whichmofmthemfollowingmwillmnotmbemamconsequencemofmanmimportmtariff?
A) Anmincreaseminmthempricemofmthemproductminmthemdomesticmmarket
B) Reducedmcompetitivempressurembymforeignmfirmsmonmthemdomesticmproducers
C) Increasedmlevelmofmsupplyminmthemdomesticmmarket
D) Nonemofmthemabovemismcorrect.
22. Whatmismthemeffectmofmanmincreaseminmthempricemofmfuelmonmthemtransportationmservi
cesmmarketmwheremfuelmismanminput?
A) Themdemandmwillmincrease.
B) Themdemandmwillmdecrease.
C) Themsupplymwillmincrease.
D) Themsupplymwillmdecrease.
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m m m m m m m m m m m
n Salvatore m
1. Amdeclineminmthemsupplymwillmcausemamchangemin
A) themlevelmofmquantitymdemanded.*
B) themdemand.
C) AmandmB
D) Nonemofmthemabovemismcorrect.
2. Amdeclineminmthemdemandmwillmcausemamchangemin
A) themlevelmofmquantitymsupplied.*
B) themsupply.
C) AmandmB
D) Nonemofmthemabovemismcorrect.
3. Assumemthatmcornmandmwheatmaremsubstitutesminmproduction;mthatmis,mthemsameminputsmcan
mbemusedmtomproducemeithermonemofmthesemtwomcommodities.mAlsomassumemthatmthemlawsmo
fmsupplymandmdemandmapplyminmbothmmarkets.mIfmthemdemandmformonemofmthesemcommodit
iesmincreases,mwhatmwillmlikelymhappenminmthemothermmarket?
A) Themdemandmwillmincrease.
B) Themdemandmwillmdecrease.
C) Themsupplymwillmincrease.
D) Themsupplymwillmdecrease.
4. IfmwemnoticemthatmanmincreaseminmthempricemofmproductmXmcausesmreductionsminmthemdem
andmformproductmY,mthenmwemcanmconcludemthatmthesemtwomproductsmare
A) complementsminmconsumption.
B) substitutesminmconsumption.
C) complementsminmproduction.
D) substitutesminmproduction.
E) Nonemofmthemabovemismcorrect.
5. Ifmtwomgoodsmaremcomplementsminmconsumption,mthenmanmincreaseminmthempricemofmone
mofmthesemgoodsmwillmcause
A) themdemandmformthemothermgoodmtomincrease.
B) themsupplymofmthemothermgoodmtomincrease.
C) themdemandmformthemothermgoodmtomdecrease.
D) themsupplymofmthemothermgoodmtomdecrease.
E) Nonemofmthemabovemismcorrect.
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6. Ifmbothmsupplymandmdemandmincreasematmthemsamemtime,mthen
A) thempricemofmthemproductmwillmdefinitelymincrease.
B) thempricemofmthemproductmwillmdefinitelymdecline.
C) themmarket-clearingmquantitymofmthemproductmwillmdefinitelymincrease.
D) themmarket-clearingmquantitymofmthemproductmwillmdefinitelymdecrease.
7. ThemmanagementmofmfirmmAmobservedmthatmeverymtimemtheremismanmincreaseminmthempric
emchargedmbymfirmmB,mthemlevelmofmsalesmofmfirmmAmdeclines.mButmwhenmfirmmCmincreas
esmitsmprice,mthemlevelmofmsalesmofmfirmmAmincreases.mFrommthismwemcanmconcludemthat
A) firmsmAmandmBmproducemsubstitutesminmconsumption.
B) firmsmAmandmCmproducemsubstitutesminmconsumption.
C) firmsmAmandmBmproducemunrelatedminmconsumptionmproducts.
D) firmsmAmandmCmproducemunrelatedminmconsumptionmproducts.
E) Nonemofmthemabovemismcorrect.
8. Themlawmofmdemandmstatesmthat
A) asmthempricemincreasesmthemdemandmincreasesm(shiftsmoutward).
B) asmthempricemincreasesmthemquantitymdemandedmdecreases.
C) asmthemincomemlevelmofmthemconsumermincreasesmthemquantitymdemandedmincreases.
D) Nonemofmthemabovemismcorrect.
9. Amgoodmismnormalmifmamriseminmconsumers'mincomemcauses
A) themquantitymdemandedmtomincrease.
B) themdemandmtomdecrease.
C) themdemandmtomincrease.
D) Nonemofmthemabovemismcorrect.
10. Whichmofmthemfollowingmstatementsmismincorrect?
A) Inmamrecession,mnormalmgoodsmmanufacturersmaremexpectedmtomhavemreductionsminmt
hemdemand.
B) Inmamrecession,minferiormgoodsmmanufacturersmaremnotmexpectedmtomhavemreductions
minm
themdemand.
C) Allmproducersmaremgoingmtombemnegativelymaffectedminmamrecession.
D) Nonemofmthemabovemismcorrect.
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11. Inmwhichmscenariomwillmbothmthemequilibriummpricemandmquantitymincreasematmthemsa
memtime?
A) Whenmsupplymincreases
B) Whenmbothmsupplymandmdemandmincrease
C) Whenmdemandmincreases
D) Whenmbothmsupplymandmdemandmdecrease
E) Nonemofmthemabovemismcorrect.
12. Ifmsupplymincreasesmwhilemdemandmdecreases
A) themequilibriummpricemwillmdefinitelymincrease.
B) themequilibriummquantitymwillmdefinitelymincrease.
C) themequilibriummpricemwillmdefinitelymdecrease.
D) themequilibriummquantitymwillmdefinitelymdecrease.
13. Ifmbothmdemandmandmsupplymdecreasematmthemsamemtime,mthen
A) themequilibriummpricemwillmincrease.
B) themequilibriummpricemwillmdecrease.
C) themequilibriummquantitymwillmincrease.
D) themequilibriummquantitymwillmdecrease.
14. Ifmwemassumemthatmthemcurrentmequilibriummwagemformlow-
skilledmlabormism$8mpermhourmandmthemminimummwagemismincreasedmfromm$5.75mtom$7.25m
permhour,mthen
A) unemploymentmamongmlow-skilledmworkersmwillmincrease.
B) unemploymentmamongmlow-skilledmworkersmwillmremainmunaffected.
C) unemploymentmamongmlow-skilledmworkersmwillmdecrease.
15. Whatmwouldmyourmanswermtomthempreviousmquestionmbemifmthemcurrentmmarket-
clearingmwagemequaledm$7.00?
A) Themunemploymentmwouldmincrease.
B) Themunemploymentmwouldmremainmthemsame.
C) Themunemploymentmwouldmdecrease.
D) Nonemofmthemabovemismcorrect.
16. Whenmrentmcontrolsmaremimposedmbelowmthemcurrentmmarketmpricemtheymcanmdomallmexcept
A) increasemthemquantitymofmrentalmhousingmdemanded.
B) reducemthemqualitymofmrentalmhousing.
C) reducemthemlevelmofmsupplymofmrentalmhousing.
D) createmexcessmsupplymofmrentalmhousing.
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17. Whenmrentmcontrolmismimposedmabovemthemcurrentmmarketmpricemitmwill
A) increasemthemquantitymofmrentalmhousingmdemanded.
B) reducemthemqualitymofmrentalmhousing.
C) createmamshortagemofmrentalmhousing.
D) createmnomimpactmonmthemmarket.
18. AssumemthatmthempricemofmXmdecreasesmandmasmamresultmofmthatmthemdemandmformYmincrea
sesmwhilemthemdemandmformZmdecreases.mFrommthismwemcanmconcludemthat
A) goodsmXmandmYmaremsubstitutesminmconsumption.
B) goodsmXmandmZmaremsubstitutesminmconsumption.
C) goodsmYmandmZmaremcomplementsminmconsumption.
D) Nonemofmthemabovemismcorrect.
19. Whichmofmthemfollowingmbestmdescribesmamnormalmgood?
A) Anmincreaseminmthempricemofmthemproductmleadsmtomanmincreaseminmthemlevelmofmquan
titymdemanded.
B) Amreductionminmthempricemofmthemproductmleadsmtomamdecreaseminmthemlevelmofmquan
titymdemanded.
C) Anmincreaseminmthemconsumer'smincomemcausesmamdecreaseminmthemdemand.
D) Amreductionminmthemconsumer'smincomemcausesmanmincreaseminmthemdemand.
E) Nonemofmthemabovemismcorrect.
20. Ifmwemassumemthemfollowingmscenario:masmthemaveragemincomemofmthemconsumermincrea
sesmthemdemandmform“fast”mfoodmdecreases,mthenmwemcanmassumemthatm“fast”mfoodmis
A) amnormalmgood.
B) anminferiormgood.
C) Nonemofmthemabovemismcorrect.
21. Whichmofmthemfollowingmwillmnotmbemamconsequencemofmanmimportmtariff?
A) Anmincreaseminmthempricemofmthemproductminmthemdomesticmmarket
B) Reducedmcompetitivempressurembymforeignmfirmsmonmthemdomesticmproducers
C) Increasedmlevelmofmsupplyminmthemdomesticmmarket
D) Nonemofmthemabovemismcorrect.
22. Whatmismthemeffectmofmanmincreaseminmthempricemofmfuelmonmthemtransportationmservi
cesmmarketmwheremfuelmismanminput?
A) Themdemandmwillmincrease.
B) Themdemandmwillmdecrease.
C) Themsupplymwillmincrease.
D) Themsupplymwillmdecrease.
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