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AP Macroeconomics Unit 1 - Part 2 (Mods 5-7)

Total questions: 51

Worksheet time: 48mins

Name
Class
Date
1.
Workers agree to a 10% wage increase.  Everything else remaining constant, this will cause the _______ curve to shift _____. 
a)
demand; right
b)
demand; left
c)
supply; right
d)
supply; left
2.
There is an increase in supply.  This will cause the equilibrium price to ______ & the equilibrium quantity to ______.
a)
decrease; increase
b)
decrease; decrease
c)
increase; increase
d)
increase; decrease
3.
If the supply and demand curves intersect at a price of $20 then any price above that would result in a(n):
a)
shortage.
b)
equilibrium.
c)
increase in demand.
d)
surplus.
4.

A pair of shoes that costs $80 last month costs $100 this month. Which of the following BEST describes this economic condition?

a)

inflation

b)

recession

c)

stagflation

d)

competition

5.

What caused this to happen?

a)

Decrease in income (for a normal good)

b)

Increase in Income (for a normal good)

c)

Increase in price of substitute

d)

Decrease in price of complement

6.
What caused this to happen?
a)
Increase in consumer interest
b)
Increase in Income
c)
Increase in price of complement
d)
Decrease in price of complement
7.
What caused this to happen?
a)
Price expected to rise next month
b)
Price expected to fall next month
c)
Increase in number of buyers
d)
Increase in income of buyers
8.
What caused this to happen to the demand for gummy bears?
a)
Price of gummy worms increases
b)
New T.V. ad illustrates 50% of cavities are bear related
c)
Minimum wage is increased 7%
d)
Gummy bears become the official candy of netflix
9.
What caused this to happen to the demand for McDonalds french fries?
a)
Price of hamburgers decreases
b)
McDonalds announces fries will be $.50 more expensive starting next week
c)
Wendys has a sale, buy one burger get two fries free for the whole month
d)
A new tax cut increases household income by 14%
10.

What caused this to happen?

a)

Income increased (for a normal good)

b)

Income decreased (for a normal good)

c)

Price of substitute decreased

d)

Price of complement increased

11.

What caused this to happen?

a)

Population decreased

b)

Income decreased (for a normal good)

c)

Price of complement decreased

d)

Price of substitute decreased

12.
What caused this to happen?
a)
Population decreased
b)
Item becomes trendy
c)
People expect the item to be cheaper later
d)
Price of product decreased
13.

What caused this to happen to the demand for Cinnamon Toast Crunch?

a)

Price of Cinnamon Mini-squares reduces

b)

4/5 Dentists agree that Cinnamon Toast Crunch is the best cereal for your teeth

c)

Consumer report announces cereal prices will fall 20% in the winter

d)

Government makes it illegal for 65+year olds to buy sugary cereal

14.
What caused this to happen to the demand for Cinnamon Toast Crunch?
a)
Price was increased
b)
Price was decreased
c)
Decrease in price of complement
d)
Increase in price of substitute
15.
The phrase "a change in demand" most directly implies a 
a)
movement along the curve
b)
movement along the price curve
c)
change in quantity demanded of a good
d)
shift in the demand curve
16.
A change in the demand for apples could result from any of the following except
a)
a change in the number of buyers
b)
increased preferences for fresh fruit consumption for health reasons
c)
a change in the price of an apple
d)
a change in the price of a banana
17.
Iceberg & romaine are two different types of lettuce. For most consumers, iceberg and romaine are 
a)
complements
b)
substitutes
c)
inferior goods
d)
resources
18.
If the demand for used cars decreases after the price of a new car falls, used cars and new cars are
a)
inferior goods
b)
substitute goods
c)
complementary goods
d)
normal goods
19.
If the demand for a good increases when people's incomes increase, 
a)
the good is an inferior good
b)
the law of demand is violated
c)
the good's demand curve must be upward sloping
d)
the good is a normal good
20.
Ramen noodles are a staple food item for many college students. Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods. After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly. In this case, Ramen noodles are: 
a)
a normal good
b)
an inferior good
c)
a complement for higher income people
d)
none of these are correct
21.
The law of demand states that 
a)
price and quantity demanded are inversely related
b)
the larger the number of buyers in a market, the lower will be product price
c)
price and quantity demanded are directly related
d)
consumers will buy more of a product at high prices than at low prices
22.
When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls, and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?
a)
the substitution effect
b)
the income effect
c)
an increase in the demand for Nike soccer balls
d)
the price effect
23.
What does this graph show?
a)
Shortage
b)
Surplus
c)
Supply Table
d)
Equilibrium
24.
Thousands of people leave a small town due to a factory closing down.  Sales at the local grocery store become slow. What causes this change?
a)
Prices or availability of substitutes
b)
Prices or availability of complementary goods
c)
Change in the weather or season
d)
Change in the number of buyers
25.
What is the Equilibrium Price?
a)
1
b)
2
c)
3
d)
4
26.
When there is a shortage the price will usually? 
a)
rise
b)
fall
c)
remain the same
d)
equilibrium
27.

The diagram represents a(n)

a)

increase in supply

b)

decrease in supply

c)

increase in quantity supplied

d)

decrease in quantity supplied

28.
Graph shows which of the following?
(actually use this graph to answer the question)
a)
a decrease in demand (shift) and a decrease in quantity supplied
b)
a decrease in demand (shift) and a decrease in supply
c)
a decrease in quantity demanded and a decrease in quantity supplied
d)
a decrease in quantity demanded and a decrease in supply (shift)
29.
Assume the image is showing the market for apples.  Which of the headlines could indicate the pictured shift is occurring in the market?
a)
Pesticides on apples linked to mouth cancer.
b)
Storms destroy apple orchards.
c)
An apple a day really does keep the doctor away.
d)
New genetic strain leads to apple trees that produce twice as many apples.
30.
The movement from Point A to Point B represents a(n)
a)
increase in the price.
b)
decrease in the quantity supplied.
c)
shift in the supply curve.
d)
Both Orange and Blue are correct.
31.
Which of the following would not shift the supply curve for iphones?
a)
an increase in the price of iphones
b)
a decrease in the number of sellers of iphone
c)
an increase in the price of plastic, an input into the production of iphones
d)
an improvement in the technology used to produce iphones
32.

As supply decreases and demand increases

a)

Equilibrium price increases but we cannot be sure what happens to equilibrium quantity

b)

Equilibrium price decreases but we cannot be sure what happens to equilibrium quantity

c)

Equilibrium quantity increases but we cannot be sure what happens to equilibrium price

d)

Equilibrium quantity decreases but we cannot be sure what happens to equilibrium price

33.

Which best represents the "law of supply"?

a)

The amount of goods available

b)

Producers offer more of a good at a higher price

c)

Producers offer more of a good at a lower price

d)

Consumers want more of a good when the price is low

34.

This image represents a(n):

a)

supply schedule

b)

demand schedule

c)

demand curve

d)

supply curve

35.

This graph represents a(n):

a)

Increase in quantity supplied

b)

Increase in supply

c)

Decrease in quantity supplied

d)

Increase in quantity demanded

36.

A cause, or determinant, of the change seen in this graph would be:

a)

An increase in the cost of cocoa beans used in making chocolate

b)

Government subsidies that make production cheaper

c)

Using more efficient, automated machinery to reduce production costs

d)

An increase in the number of suppliers (competitors)

37.

The federal minimum wage increases by $1 today. What happens to the supply of hamburgers today?

a)

Increase in Supply

b)

Decrease in Supply

c)

No change in supply

38.

The federal minimum wage increases by $1 today. How is it reflected in a graph that shows the supply of fast food laborers?

a)

Curve shifts to the right

b)

Curve shifts to the left

c)

Movement along the curve to the left

d)

Movement along the curve to the right

39.

If a business believes they will be able to charge more money for the product in the future, the supply curve would

a)

shift left

b)

shift right

c)

not shift

40.

When a lot of sellers exit the market, the supply curve

a)

shifts left

b)

shifts right

c)

does not shift

41.
What happens when a company purposely prices their products very low, in an attempt to get people to try them? 
a)
equilibrium
b)
price floor
c)
surplus
d)
shortage
42.
EP?
a)
$2
b)
$4
c)
$6
d)
$8
43.
EQ?
a)
10
b)
20
c)
30
d)
40
44.

If the equilibrium price of a taxi ride is $30, but a taxi company tried to charge $40 for rides, this would result in a ________________ in taxis because quantity supplied is ___________ than quantity demanded.

a)

shortage.......lower

b)

shortage.....higher

c)

surplus.......lower

d)

surplus......higher

45.

As supply decreases and demand decreases

a)

Equilibrium price increases but we cannot be sure what happens to equilibrium quantity

b)

Equilibrium price decreases but we cannot be sure what happens to equilibrium quantity

c)

Equilibrium quantity increases but we cannot be sure what happens to equilibrium price

d)

Equilibrium quantity decreases but we cannot be sure what happens to equilibrium price

46.

As supply increases and demand decreases (note that the image doesn't actually show this)

a)

Equilibrium price increases but we cannot be sure what happens to equilibrium quantity

b)

Equilibrium price decreases but we cannot be sure what happens to equilibrium quantity

c)

Equilibrium quantity increases but we cannot be sure what happens to equilibrium price

d)

Equilibrium quantity decreases but we cannot be sure what happens to equilibrium price

47.

As supply increases and demand increases (note that the image doesn't actually show this)

a)

Equilibrium price increases but we cannot be sure what happens to equilibrium quantity

b)

Equilibrium price decreases but we cannot be sure what happens to equilibrium quantity

c)

Equilibrium quantity increases but we cannot be sure what happens to equilibrium price

d)

Equilibrium quantity decreases but we cannot be sure what happens to equilibrium price

48.

If the weather in Iowa is particularly hot and dry this summer and researched is published saying corn is really good for you, what will happen to the market for corn?

a)

Eq P increases, but we don't know what happens to Eq Q

b)

Eq P decreases, but we don't know what happens to Eq Q

c)

Eq Q increases, but we don't know what happens to Eq P

d)

Eq Q decreases, but we don't know what happens to Eq P

49.

If a great ad campaign for Nike shoes comes out featuring baby Yoda, while the price of leather decreases, what will happen to the market for Nike shoes?

a)

Eq P increases, but we don't know what happens to Eq Q

b)

Eq P decreases, but we don't know what happens to Eq Q

c)

Eq Q increases, but we don't know what happens to Eq P

d)

Eq Q decreases, but we don't know what happens to Eq P

50.

If a factory used to make Ford cars is shut down at the same time that the price of Toyota cars decreases, what will happen to the market for Ford cars?

a)

Eq P increases, but we don't know what happens to Eq Q

b)

Eq P decreases, but we don't know what happens to Eq Q

c)

Eq Q increases, but we don't know what happens to Eq P

d)

Eq Q decreases, but we don't know what happens to Eq P

51.

If the price of jelly increased at the same time that the price of peanuts decreased, what would happen to the market for peanut butter?

a)

Eq P increases, but we don't know what happens to Eq Q

b)

Eq P decreases, but we don't know what happens to Eq Q

c)

Eq Q increases, but we don't know what happens to Eq P

d)

Eq Q decreases, but we don't know what happens to Eq P

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