Question 1

An increase in price will result in a decrease in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 2

A decrease in supply is caused by:

Accepted Answer

A)  a decrease in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of lower prices in the future. 
D)  an advancement in the technology for producing the good. 
A)  a decrease in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of lower prices in the future. 
D)  an advancement in the technology for producing the good.

Question 3

Use the following to answer questions .
Exhibit: Demand and Supply of Gasoline  
-(Exhibit: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S1 to S2:

Accepted Answer

A)  at the old price of $2.50, there will be pressure for the price to fall. 
B)  the new price will be $2.00. 
C)  the new quantity will be 400. 
D)  all of the above are true. 
A)  at the old price of $2.50, there will be pressure for the price to fall. 
B)  the new price will be $2.00. 
C)  the new quantity will be 400. 
D)  all of the above are true.

Question 4

If the current price is above the equilibrium price, we would expect:

Accepted Answer

A)  quantity demanded to exceed quantity supplied. 
B)  upward pressure on price. 
C)  quantity supplied to exceed quantity demanded. 
D)  no change in the market price. 
A)  quantity demanded to exceed quantity supplied. 
B)  upward pressure on price. 
C)  quantity supplied to exceed quantity demanded. 
D)  no change in the market price.

Question 5

Describe what would happen in a market if the current price were above the equilibrium price (assume no government interference). Using the same assumptions, describe what would happen if the current price were below the equilibrium price. Use a graph to explain your answer.

Accepted Answer

If the current price in a market were ab

Question 6

If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:

Accepted Answer

A)  a decrease in the supply of pizza. 
B)  an increase in the supply of pizza. 
C)  an increase in the quantity of pizza supplied. 
D)  no change in the supply of pizza. 
A)  a decrease in the supply of pizza. 
B)  an increase in the supply of pizza. 
C)  an increase in the quantity of pizza supplied. 
D)  no change in the supply of pizza.

Question 7

If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.

Accepted Answer

A) True 
 B)False

Question 8

When the price of gas goes up and the demand for tires goes down, this means tires and gas are:

Accepted Answer

A)  substitutes. 
B)  complements. 
C)  both expensive. 
D)  both inexpensive. 
A)  substitutes. 
B)  complements. 
C)  both expensive. 
D)  both inexpensive.

Question 9

Use the following to answer questions .
Exhibit: Demand and Supply Curves  
-(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

Accepted Answer

A)  $0. 
B)  $5. 
C)  $10. 
D)  $15. 
A)  $0. 
B)  $5. 
C)  $10. 
D)  $15.

Question 10

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

Accepted Answer

A) True 
 B)False

Question 11

The same factors that lead to a change in quantity demanded also cause a change in demand.

Accepted Answer

A) True 
 B)False

Question 12

If the price of a commodity increases as the result of increased demand, you would expect the:

Accepted Answer

A)  supply to increase. 
B)  quantity supplied to increase. 
C)  quantity supplied to decrease. 
D)  supply curve to shift to the right. 
A)  supply to increase. 
B)  quantity supplied to increase. 
C)  quantity supplied to decrease. 
D)  supply curve to shift to the right.

Question 13

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?

Accepted Answer

A)  income 
B)  consumer expectations 
C)  consumer preferences 
D)  prices of other goods 
A)  income 
B)  consumer expectations 
C)  consumer preferences 
D)  prices of other goods

Question 14

What is the difference between a shortage and scarcity?

Accepted Answer

A)  Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level. 
B)  Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages. 
C)  A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case. 
D)  There is no distinction between the two. They are the same thing. 
A)  Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level. 
B)  Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages. 
C)  A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case. 
D)  There is no distinction between the two. They are the same thing.

Question 15

The law of demand is illustrated by a demand curve that is:

Accepted Answer

A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping. 
A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping.

Question 16

If two goods are complements, a fall in the price of one will lead to an increase in demand for the other.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions .
Exhibit: The Determinants of Demand and Supply  
-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events. Suppose a new machine is developed that allows restaurants and fast-food outlets to produce French fries at a lower cost. Which panel best describes how this will affect the market for French fries?

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 18

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

Accepted Answer

A)  supply. 
B)  demand. 
C)  equilibrium. 
D)  disequilibrium. 
A)  supply. 
B)  demand. 
C)  equilibrium. 
D)  disequilibrium.

Question 19

A decrease in supply is caused by:

Accepted Answer

A)  an increase in returns from other alternative activities. 
B)  suppliers' expectations of lower prices in the future. 
C)  an advancement in the technology for producing the good. 
D)  a decrease in the price of a good using the same resources. 
A)  an increase in returns from other alternative activities. 
B)  suppliers' expectations of lower prices in the future. 
C)  an advancement in the technology for producing the good. 
D)  a decrease in the price of a good using the same resources.

Question 20

The slope and location of the demand curve depend on:

Accepted Answer

A)  the number of buyers. 
B)  production costs. 
C)  the number of producers. 
D)  all of the above. 
A)  the number of buyers. 
B)  production costs. 
C)  the number of producers. 
D)  all of the above.

An increase in price will result in a decrease in the quantity supplied.

A decrease in supply is caused by:

Use the following to answer questions . Exhibit: Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S₁ to S₂:

If the current price is above the equilibrium price, we would expect:

Describe what would happen in a market if the current price were above the equilibrium price (assume no government interference). Using the same assumptions, describe what would happen if the current price were below the equilibrium price. Use a graph to explain your answer.

If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:

If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.

When the price of gas goes up and the demand for tires goes down, this means tires and gas are:

Use the following to answer questions . Exhibit: Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

The same factors that lead to a change in quantity demanded also cause a change in demand.

If the price of a commodity increases as the result of increased demand, you would expect the:

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?

What is the difference between a shortage and scarcity?

The law of demand is illustrated by a demand curve that is:

If two goods are complements, a fall in the price of one will lead to an increase in demand for the other.

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

A decrease in supply is caused by:

The slope and location of the demand curve depend on:

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

An increase in price will result in a decrease in the quantity supplied.

A decrease in supply is caused by:

Use the following to answer questions . Exhibit: Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S1 to S2:

If the current price is above the equilibrium price, we would expect:

Describe what would happen in a market if the current price were above the equilibrium price (assume no government interference). Using the same assumptions, describe what would happen if the current price were below the equilibrium price. Use a graph to explain your answer.

If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:

If two goods are substitutes, a decrease in the price of one will result in an increase in demand for the other.

When the price of gas goes up and the demand for tires goes down, this means tires and gas are:

Use the following to answer questions . Exhibit: Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

The same factors that lead to a change in quantity demanded also cause a change in demand.

If the price of a commodity increases as the result of increased demand, you would expect the:

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to which demand shifter?

What is the difference between a shortage and scarcity?

The law of demand is illustrated by a demand curve that is:

If two goods are complements, a fall in the price of one will lead to an increase in demand for the other.

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

A decrease in supply is caused by:

The slope and location of the demand curve depend on:

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: Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S₁ to S₂: