Question 1

If the demand for a good is high,then there will be a shortage of that good.

Accepted Answer

A) True 
 B)False  False

Question 2

Techniques for estimating demand curves using direct observations from the marketplace are part of a family of statistical techniques referred to as:

Accepted Answer

A)  legal studies. 
B)  Econometrics. 
C)  policy analysis. 
D)  Economic expansion. 
A)  legal studies. 
B)  Econometrics. 
C)  policy analysis. 
D)  Economic expansion. B

Question 3

Suppose a sales tax of $1 is imposed on DVDs.Suppose the tax causes the price received by suppliers of the DVDs to fall by 60 cents.In this situation,the economic incidence of the sales tax

Accepted Answer

A)  falls more heavily on the demanders of DVDs. 
B)  falls more heavily on the suppliers of DVDs. 
C)  is evenly split between the demanders and suppliers of the DVDs. 
D)  is the same as the legal incidence of the tax. 
A)  falls more heavily on the demanders of DVDs. 
B)  falls more heavily on the suppliers of DVDs. 
C)  is evenly split between the demanders and suppliers of the DVDs. 
D)  is the same as the legal incidence of the tax. B

Question 4

If the wages of loggers went up,the supply of logs would:

Accepted Answer

A)  fall,thereby shifting to the right. 
B)  fall,thereby shifting to the left. 
C)  rise,thereby shifting to the right. 
D)  rise,thereby shifting to the left. 
A)  fall,thereby shifting to the right. 
B)  fall,thereby shifting to the left. 
C)  rise,thereby shifting to the right. 
D)  rise,thereby shifting to the left.

Question 5

If the demand curve for gasoline is relatively steep,then

Accepted Answer

A)  higher gasoline prices would cause a large number of people to stop driving. 
B)  the law of demand does not hold for gasoline. 
C)  shifts in the supply curve for gasoline will have relatively little effect on the price of gasoline. 
D)  the price of gasoline has relatively little effect on drivers' decision to buy gasoline. 
A)  higher gasoline prices would cause a large number of people to stop driving. 
B)  the law of demand does not hold for gasoline. 
C)  shifts in the supply curve for gasoline will have relatively little effect on the price of gasoline. 
D)  the price of gasoline has relatively little effect on drivers' decision to buy gasoline.

Question 6

When the price of a barrel of crude oil rises,what will be the immediate effect on the market for home heating fuel produced from crude oil?

Accepted Answer

A)  The demand for the fuel will fall. 
B)  The quantity demanded of fuel will rise. 
C)  The supply of fuel will fall. 
D)  The quantity supplied of fuel will fall. 
A)  The demand for the fuel will fall. 
B)  The quantity demanded of fuel will rise. 
C)  The supply of fuel will fall. 
D)  The quantity supplied of fuel will fall.

Question 7

A person argues that if the prison sentences for all crimes were doubled,this would worsen the problem of overcrowded prisons,all other things being equal.Use the concept of demand to explain why this argument is incorrect.

Accepted Answer

When the prison sentences for all crimes

Question 8

The accompanying supply-demand diagram shows the market for calculators.The initial price of calculators is P0,and the initial quantity exchanged is Q0.   Which of the following situations could be correctly illustrated by the diagram?

Accepted Answer

A)  Graphing capabilities and other new features lead people to buy more calculators. 
B)  The cost of memory chips used in calculators falls,lowering the price of calculators. 
C)  Personal computerized notepads with substantial computing power are introduced,reducing people's need for calculators. 
D)  A heavy tariff is placed on calculators imported from overseas. 
A)  Graphing capabilities and other new features lead people to buy more calculators. 
B)  The cost of memory chips used in calculators falls,lowering the price of calculators. 
C)  Personal computerized notepads with substantial computing power are introduced,reducing people's need for calculators. 
D)  A heavy tariff is placed on calculators imported from overseas.

Question 9

As defined by economists,the supply of corn refers to the number of bushels of corn that farmers bring to the market.

Accepted Answer

A) True 
 B)False

Question 10

A fear that consumption of ice cream may be related to a life threatening disease spreads rapidly through France.The market result will be:

Accepted Answer

A)  the demand falls,price decreases and therefore French consumers buy more ice cream. 
B)  the demand falls,price decreases and the quantity supplied therefore falls. 
C)  a fall in demand followed by a fall in supply. 
D)  the equilibrium quantity falls,but the price does not change. 
A)  the demand falls,price decreases and therefore French consumers buy more ice cream. 
B)  the demand falls,price decreases and the quantity supplied therefore falls. 
C)  a fall in demand followed by a fall in supply. 
D)  the equilibrium quantity falls,but the price does not change.

Question 11

Suppose we observe that the price of gasoline has been rising,even though the quantity of gasoline sold has been falling.We can conclude that

Accepted Answer

A)  the law of supply does not hold for gasoline. 
B)  the law of demand does not hold for gasoline. 
C)  the demand for gasoline must have fallen. 
D)  the supply of gasoline must have fallen. 
A)  the law of supply does not hold for gasoline. 
B)  the law of demand does not hold for gasoline. 
C)  the demand for gasoline must have fallen. 
D)  the supply of gasoline must have fallen.

Question 12

A sales tax causes the demand curve to shift upwards by the amount of the tax.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would shift the supply curve for coffee to the right?

Accepted Answer

A)  An innovation in agricultural techniques that allows growers to produce coffee less expensively. 
B)  A late frost in Brazil that destroys 75% of its coffee bean crop. 
C)  An increase in the wages paid to coffee bean pickers. 
D)  A rise in the popularity of espresso,cappuccino,and other exotic coffee drinks. 
A)  An innovation in agricultural techniques that allows growers to produce coffee less expensively. 
B)  A late frost in Brazil that destroys 75% of its coffee bean crop. 
C)  An increase in the wages paid to coffee bean pickers. 
D)  A rise in the popularity of espresso,cappuccino,and other exotic coffee drinks.

Question 14

Which of the following would lead to a rise in demand for recordable DVDs by students?

Accepted Answer

A)  An increase in the number of DVD manufacturers. 
B)  A decrease in the price of DVD recording devices. 
C)  A decrease in the price of the DVD making machinery. 
D)  A cut in the number of student workers hired by the university,lowering student incomes. 
A)  An increase in the number of DVD manufacturers. 
B)  A decrease in the price of DVD recording devices. 
C)  A decrease in the price of the DVD making machinery. 
D)  A cut in the number of student workers hired by the university,lowering student incomes.

Question 15

Assume that the demand curve for oranges is downward-sloping and the supply curve for oranges is upward-sloping.If the government imposes an excise tax of 10¢ per orange,then the total price (including the tax)that demanders must pay for an orange

Accepted Answer

A)  remains unchanged. 
B)  rises by less than 10¢ per orange. 
C)  rises by exactly 10¢ per orange. 
D)  rises by more than 10¢ per orange. 
A)  remains unchanged. 
B)  rises by less than 10¢ per orange. 
C)  rises by exactly 10¢ per orange. 
D)  rises by more than 10¢ per orange.

Question 16

A demand curve is drawn downward sloping to show that price and quantity demanded will move in opposite directions as long as other relevant factors remain unchanged.

Accepted Answer

A) True 
 B)False

Question 17

When the law of supply holds,an increase in the price of a product will cause producers to increase the quantity they wish to sell.

Accepted Answer

A) True 
 B)False

Question 18

What can be said about the market price when a good is in surplus (i.e.,when the quantity supplied exceeds the quantity demanded)? How will demanders and suppliers respond to a surplus,and what will happen to the market price?

Accepted Answer

When there is a surplus,the market price

Question 19

The supply curve for a commodity will shift downward when an excise tax is imposed.

Accepted Answer

A) True 
 B)False

Question 20

Demand for a product is given by Q = 200 - P and supply is given by Q = 0.5P - 10.If the quantity demanded rises by 10 units at every possible price,then the equilibrium quantity will be

Accepted Answer

A)  40 units 
B)  50 units 
C)  60 units 
D)  100 units 
A)  40 units 
B)  50 units 
C)  60 units 
D)  100 units

If the demand for a good is high,then there will be a shortage of that good.

Techniques for estimating demand curves using direct observations from the marketplace are part of a family of statistical techniques referred to as:

Suppose a sales tax of $1 is imposed on DVDs.Suppose the tax causes the price received by suppliers of the DVDs to fall by 60 cents.In this situation,the economic incidence of the sales tax

If the wages of loggers went up,the supply of logs would:

If the demand curve for gasoline is relatively steep,then

When the price of a barrel of crude oil rises,what will be the immediate effect on the market for home heating fuel produced from crude oil?

A person argues that if the prison sentences for all crimes were doubled,this would worsen the problem of overcrowded prisons,all other things being equal.Use the concept of demand to explain why this argument is incorrect.

The accompanying supply-demand diagram shows the market for calculators.The initial price of calculators is P₀,and the initial quantity exchanged is Q₀. Which of the following situations could be correctly illustrated by the diagram?

As defined by economists,the supply of corn refers to the number of bushels of corn that farmers bring to the market.

A fear that consumption of ice cream may be related to a life threatening disease spreads rapidly through France.The market result will be:

Suppose we observe that the price of gasoline has been rising,even though the quantity of gasoline sold has been falling.We can conclude that

A sales tax causes the demand curve to shift upwards by the amount of the tax.

Which of the following would shift the supply curve for coffee to the right?

Which of the following would lead to a rise in demand for recordable DVDs by students?

Assume that the demand curve for oranges is downward-sloping and the supply curve for oranges is upward-sloping.If the government imposes an excise tax of 10¢ per orange,then the total price (including the tax)that demanders must pay for an orange

A demand curve is drawn downward sloping to show that price and quantity demanded will move in opposite directions as long as other relevant factors remain unchanged.

When the law of supply holds,an increase in the price of a product will cause producers to increase the quantity they wish to sell.

What can be said about the market price when a good is in surplus (i.e.,when the quantity supplied exceeds the quantity demanded)? How will demanders and suppliers respond to a surplus,and what will happen to the market price?

The supply curve for a commodity will shift downward when an excise tax is imposed.

Demand for a product is given by Q = 200 - P and supply is given by Q = 0.5P - 10.If the quantity demanded rises by 10 units at every possible price,then the equilibrium quantity will be

Prices,costs and Gains From Trade

The Behavior of Consumers

Consumers in the Marketplace

The Behavior of Firms

Production and Costs

Competition

Welfare Economics and the Gains From Trade

Knowledge and Information

Monopoly

Market Power,collusion,and Oligopoly

The Theory of Games

External Costs and Benefits

Common Property and Public Goods

The Demand for Factors of Production

The Market for Labor

Allocating Goods Over Time

Risk and Uncertainty

What Is Economics

Filters

Exam 1: Supply,demand,and Equilibrium

If the demand for a good is high,then there will be a shortage of that good.

Techniques for estimating demand curves using direct observations from the marketplace are part of a family of statistical techniques referred to as:

Suppose a sales tax of $1 is imposed on DVDs.Suppose the tax causes the price received by suppliers of the DVDs to fall by 60 cents.In this situation,the economic incidence of the sales tax

If the wages of loggers went up,the supply of logs would:

If the demand curve for gasoline is relatively steep,then

When the price of a barrel of crude oil rises,what will be the immediate effect on the market for home heating fuel produced from crude oil?

A person argues that if the prison sentences for all crimes were doubled,this would worsen the problem of overcrowded prisons,all other things being equal.Use the concept of demand to explain why this argument is incorrect.

The accompanying supply-demand diagram shows the market for calculators.The initial price of calculators is P0,and the initial quantity exchanged is Q0. Which of the following situations could be correctly illustrated by the diagram?

As defined by economists,the supply of corn refers to the number of bushels of corn that farmers bring to the market.

A fear that consumption of ice cream may be related to a life threatening disease spreads rapidly through France.The market result will be:

Suppose we observe that the price of gasoline has been rising,even though the quantity of gasoline sold has been falling.We can conclude that

A sales tax causes the demand curve to shift upwards by the amount of the tax.

Which of the following would shift the supply curve for coffee to the right?

Which of the following would lead to a rise in demand for recordable DVDs by students?

Assume that the demand curve for oranges is downward-sloping and the supply curve for oranges is upward-sloping.If the government imposes an excise tax of 10¢ per orange,then the total price (including the tax)that demanders must pay for an orange

A demand curve is drawn downward sloping to show that price and quantity demanded will move in opposite directions as long as other relevant factors remain unchanged.

When the law of supply holds,an increase in the price of a product will cause producers to increase the quantity they wish to sell.

What can be said about the market price when a good is in surplus (i.e.,when the quantity supplied exceeds the quantity demanded)? How will demanders and suppliers respond to a surplus,and what will happen to the market price?

The supply curve for a commodity will shift downward when an excise tax is imposed.

Demand for a product is given by Q = 200 - P and supply is given by Q = 0.5P - 10.If the quantity demanded rises by 10 units at every possible price,then the equilibrium quantity will be

Prices,costs and Gains From Trade

The Behavior of Consumers

Consumers in the Marketplace

The Behavior of Firms

Production and Costs

Competition

Welfare Economics and the Gains From Trade

Knowledge and Information

Monopoly

Market Power,collusion,and Oligopoly

The Theory of Games

External Costs and Benefits

Common Property and Public Goods

The Demand for Factors of Production

The Market for Labor

Allocating Goods Over Time

Risk and Uncertainty

What Is Economics

Filters

The accompanying supply-demand diagram shows the market for calculators.The initial price of calculators is P₀,and the initial quantity exchanged is Q₀. Which of the following situations could be correctly illustrated by the diagram?