Question 1

If people demand more of product A when the price of B falls, then A and B are:

Accepted Answer

A)  not related. 
B)  substitutes. 
C)  complements. 
D)  inferior. 
A)  not related. 
B)  substitutes. 
C)  complements. 
D)  inferior.

Question 2

Supply is best defined as the:

Accepted Answer

A)  relationship between the quantity of a good or service buyers are able to purchase, all other things unchanged. 
B)  relationship between the quantity of a good or service buyers are willing to purchase, all other things unchanged. 
C)  relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged. 
D)  quantity of a good or service sellers are willing to offer for sale at a specific price, all other things unchanged. 
A)  relationship between the quantity of a good or service buyers are able to purchase, all other things unchanged. 
B)  relationship between the quantity of a good or service buyers are willing to purchase, all other things unchanged. 
C)  relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged. 
D)  quantity of a good or service sellers are willing to offer for sale at a specific price, all other things unchanged.

Question 3

The price of cotton rises. What happens in the market for cotton shirts?

Accepted Answer

A)  The equilibrium price falls and the equilibrium quantity rises. 
B)  The equilibrium price rises and the equilibrium quantity falls. 
C)  The equilibrium price and quantity rise. 
D)  The equilibrium price and quantity fall. 
A)  The equilibrium price falls and the equilibrium quantity rises. 
B)  The equilibrium price rises and the equilibrium quantity falls. 
C)  The equilibrium price and quantity rise. 
D)  The equilibrium price and quantity fall.

Question 4

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:

Accepted Answer

A)  price curve. 
B)  supply curve. 
C)  quantity function. 
D)  production possibilities curve. 
A)  price curve. 
B)  supply curve. 
C)  quantity function. 
D)  production possibilities curve.

Question 5

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

Accepted Answer

A)  fall. 
B)  stay the same. 
C)  rise. 
D)  change only if demand and/or supply change. 
A)  fall. 
B)  stay the same. 
C)  rise. 
D)  change only if demand and/or supply change.

Question 6

A shortage will exert pressures for the price to decrease.

Accepted Answer

A) True 
 B)False

Question 7

Given the events listed below that take place in the bread market, decide if demand changes or quantity demanded changes and determine the direction of change. 
a. The economy prospers and incomes increase dramatically. 
b. The price of bread falls. 
c. The price of flour, an ingredient of bread, falls. 
d. The price of bread increases. 
e. A severe weather problem occurs and most grain crops are destroyed. 
f. The price of potatoes, a substitute for bread, rises.

Accepted Answer

In economics, the terms "demand" and "qu

Question 8

List and explain the supply shifters.

Accepted Answer

Supply shifters, also known as determina

Question 9

Use the following to answer questions 
Exhibit: The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)
  
-(Exhibit: The Demand for Chocolate-Covered Peanuts) If Barbara is only able to purchase 20 bags of chocolate-covered peanuts, the maximum price she is willing and able to pay for each bag is ________ cents.

Accepted Answer

A)  90 
B)  80 
C)  70 
D)  60 
A)  90 
B)  80 
C)  70 
D)  60

Question 10

If a market reflects a shortage and prices are allowed to move:

Accepted Answer

A)  supply will increase. 
B)  demand will decrease. 
C)  price will decrease. 
D)  price will increase. 
A)  supply will increase. 
B)  demand will decrease. 
C)  price will decrease. 
D)  price will increase.

Question 11

Use the following to answer questions .
Exhibit: Demand and Supply  
-(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  6 
A)  3 
B)  4 
C)  5 
D)  6

Question 12

A market surplus occurs if the:

Accepted Answer

A)  price is below the equilibrium price. 
B)  price is equal to the equilibrium price. 
C)  equilibrium price is above the actual price. 
D)  equilibrium price is below the actual price. 
A)  price is below the equilibrium price. 
B)  price is equal to the equilibrium price. 
C)  equilibrium price is above the actual price. 
D)  equilibrium price is below the actual price.

Question 13

Use the following to answer questions .
Exhibit: Simultaneous Shifts in Demand and Supply  
-(Exhibit: Simultaneous Shifts in Demand and Supply) D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market for a normal good:

Accepted Answer

A)  supply has increased and price has increased. 
B)  demand has increased and price has increased. 
C)  demand has decreased and price has fallen. 
D)  demand has increased and price has fallen. 
A)  supply has increased and price has increased. 
B)  demand has increased and price has increased. 
C)  demand has decreased and price has fallen. 
D)  demand has increased and price has fallen.

Question 14

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 15

Use the following to answer questions .
Exhibit: Demand and Supply Shifters  
-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose half the people in San Diego pack up and move to Colorado Springs. Which panel best describes how this will affect the supply of houses in San Diego?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 16

Every day for the past two years you've had ham and cheese on a whole wheat bagel for lunch at Bungalow Bob's Bagel Boutique. However, the price of whole wheat bagels has risen by 10 cents so today you decide to have ham and cheese on a rye bagel. In this case, whole wheat and rye bagels are best considered:

Accepted Answer

A)  superior goods. 
B)  normal goods. 
C)  substitute goods. 
D)  complementary goods. 
A)  superior goods. 
B)  normal goods. 
C)  substitute goods. 
D)  complementary goods.

Question 17

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

Accepted Answer

A)  supply shifter 
B)  demand shifter 
C)  false prophet 
D)  spoiler 
A)  supply shifter 
B)  demand shifter 
C)  false prophet 
D)  spoiler

Question 18

Use the following to answer questions.
Exhibit: Demand and Supply Schedules for a Good
  
-(Exhibit: Demand and Supply Schedules for a Good) The equilibrium price is ________ and the equilibrium quantity is ________.

Accepted Answer

A)  $2.00; 230 units 
B)  $3.00; 240 units 
C)  $4.00; 210 units 
D)  impossible to determine; impossible to determine 
A)  $2.00; 230 units 
B)  $3.00; 240 units 
C)  $4.00; 210 units 
D)  impossible to determine; impossible to determine

Question 19

A decrease in the price of milk (and ingredient of ice cream) will result in a(n):

Accepted Answer

A)  shift of the supply curve of ice cream to the left. 
B)  shift of the supply curve of ice cream to the right. 
C)  lower price of ice cream, and thus an increase in the demand for ice cream. 
D)  increase in the demand for ice cream and a decrease in the supply of milk. 
A)  shift of the supply curve of ice cream to the left. 
B)  shift of the supply curve of ice cream to the right. 
C)  lower price of ice cream, and thus an increase in the demand for ice cream. 
D)  increase in the demand for ice cream and a decrease in the supply of milk.

Question 20

An increase in the price of a good will lead to an increase in the quantity supplied.

Accepted Answer

A) True 
 B)False

If people demand more of product A when the price of B falls, then A and B are:

Supply is best defined as the:

The price of cotton rises. What happens in the market for cotton shirts?

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

A shortage will exert pressures for the price to decrease.

List and explain the supply shifters.

If a market reflects a shortage and prices are allowed to move:

Use the following to answer questions . Exhibit: Demand and Supply -(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

A market surplus occurs if the:

Use the following to answer questions . Exhibit: Simultaneous Shifts in Demand and Supply -(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good:

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Demand and Supply Schedules for a Good) The equilibrium price is and the equilibrium quantity is .

A decrease in the price of milk (and ingredient of ice cream) will result in a(n):

An increase in the price of a good will lead to an increase in the quantity supplied.

Economics: the Study of Choice

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Exam 3: Demand and Supply

If people demand more of product A when the price of B falls, then A and B are:

Supply is best defined as the:

The price of cotton rises. What happens in the market for cotton shirts?

A curve that shows the relationship between the price and quantity supplied during a particular period, all other things unchanged, is the:

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

A shortage will exert pressures for the price to decrease.

List and explain the supply shifters.

If a market reflects a shortage and prices are allowed to move:

Use the following to answer questions . Exhibit: Demand and Supply -(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

A market surplus occurs if the:

Use the following to answer questions . Exhibit: Simultaneous Shifts in Demand and Supply -(Exhibit: Simultaneous Shifts in Demand and Supply) D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market for a normal good:

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Demand and Supply Schedules for a Good) The equilibrium price is ________ and the equilibrium quantity is ________.

A decrease in the price of milk (and ingredient of ice cream) will result in a(n):

An increase in the price of a good will lead to an increase in the quantity supplied.

Economics: the Study of Choice

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Use the following to answer questions . Exhibit: Simultaneous Shifts in Demand and Supply -(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good:

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Demand and Supply Schedules for a Good) The equilibrium price is and the equilibrium quantity is .