Question 1

Given a positively sloped supply curve,when market demand increases

Accepted Answer

A) the new equilibrium will have a lower price and a greater quantity. 
B) the new equilibrium will have a lower price and a smaller quantity. 
C) the new equilibrium will have a higher price and a smaller quantity. 
D) the new equilibrium will have a higher price and a larger quantity. 
E) the new equilibrium will have the same price and larger quantity. 
A) the new equilibrium will have a lower price and a greater quantity. 
B) the new equilibrium will have a lower price and a smaller quantity. 
C) the new equilibrium will have a higher price and a smaller quantity. 
D) the new equilibrium will have a higher price and a larger quantity. 
E) the new equilibrium will have the same price and larger quantity. D

Question 2

In which statement is the term ʺdemandʺ used correctly? (1)A decrease in the price of airline tickets led to an increase in quantity demanded for airline tickets.(2)A decrease in the price of airline tickets led to an increase in the demand for airline tickets.

Accepted Answer

A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed 
A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed B

Question 3

To say that the supply curve is positively sloped means that

Accepted Answer

A) as price goes up,quantity supplied will decrease. 
B) households will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will have to increase also. 
E) as price goes up,quantity supplied will remain constant. 
A) as price goes up,quantity supplied will decrease. 
B) households will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will have to increase also. 
E) as price goes up,quantity supplied will remain constant. C

Question 4

Which of the following pairs of goods are likely to be substitutes for a large group of consumers?

Accepted Answer

A) eggs and toast 
B) coffee and cream 
C) green beans and peas 
D) wieners and buns 
E) pancakes and syrup 
A) eggs and toast 
B) coffee and cream 
C) green beans and peas 
D) wieners and buns 
E) pancakes and syrup

Question 5

In which statement is the term ʺdemandʺ used correctly? (1)An increase in the price of eggs will lead to a decrease in the demand for eggs.(2)An increase in the price of eggs will lead to a decrease in the demand for bacon.

Accepted Answer

A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed 
A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed

Question 6

Suppose that the demand and supply curves in the market for apples have the following functional forms: Q D = 250 - 4p and QS = 10 + p.The equilibrium quantity and price would then be

Accepted Answer

A) Q = 48,p = 58. 
B) Q = 58,p = 48. 
C) Q = 68,p = 98. 
D) Q = 68,p = 108. 
E) Q = 92,p = 48. 
A) Q = 48,p = 58. 
B) Q = 58,p = 48. 
C) Q = 68,p = 98. 
D) Q = 68,p = 108. 
E) Q = 92,p = 48.

Question 7

If a demand curve and a supply curve can be stated functionally as Qd = 100 - 5P; and Qs = 90 + 5P,respectively,then the equilibrium quantity and price (Q,P)would be

Accepted Answer

A) 95; 1. 
B) 1; 95. 
C) 190; 1. 
D) 95; 10. 
E) 190; 10. 
A) 95; 1. 
B) 1; 95. 
C) 190; 1. 
D) 95; 10. 
E) 190; 10.

Question 8

Which statement best describes a ʺdemand scheduleʺ?

Accepted Answer

A) a functional statement of the demand relationship 
B) a graph showing the inverse relationship between quantity demanded and price 
C) a numerical tabulation showing the quantities demanded at various prices 
D) a timetable showing the quantity demanded at different time periods 
E) an abstract concept underlying the graph of a demand curve 
A) a functional statement of the demand relationship 
B) a graph showing the inverse relationship between quantity demanded and price 
C) a numerical tabulation showing the quantities demanded at various prices 
D) a timetable showing the quantity demanded at different time periods 
E) an abstract concept underlying the graph of a demand curve

Question 9

To say that the demand curve for movies is negatively sloped means that

Accepted Answer

A) less quantity will be demanded at lower prices. 
B) less quantity will be demanded as preferences change. 
C) less quantity will be demanded at higher prices. 
D) more quantity will be demanded as consumersʹ income increases. 
E) less quantity will be demanded at the same price. 
A) less quantity will be demanded at lower prices. 
B) less quantity will be demanded as preferences change. 
C) less quantity will be demanded at higher prices. 
D) more quantity will be demanded as consumersʹ income increases. 
E) less quantity will be demanded at the same price.

Question 10

If tastes change so that a particular style of boots is now considered more appealing,the likely result is

Accepted Answer

A) a shift in the demand curve to the right. 
B) a shift in the demand curve to the left. 
C) a movement down the demand curve. 
D) a movement up the demand curve. 
E) no change in the demand curve. 
A) a shift in the demand curve to the right. 
B) a shift in the demand curve to the left. 
C) a movement down the demand curve. 
D) a movement up the demand curve. 
E) no change in the demand curve.

Question 11

The ʺlaw of demandʺ describes

Accepted Answer

A) an inverse relationship between the price of a good and the quantity of the good demanded per unit of time,other things being equal. 
B) a positive relationship between the price of a good and the quantity of the good demanded per unit of time,ceteris paribus. 
C) an inverse relationship between the price of a good and the demand for the good,per unit of time. 
D) a direct relationship between the price of a good and the demand for the good. 
E) any relationship between quantity demanded and demand for a good. 
A) an inverse relationship between the price of a good and the quantity of the good demanded per unit of time,other things being equal. 
B) a positive relationship between the price of a good and the quantity of the good demanded per unit of time,ceteris paribus. 
C) an inverse relationship between the price of a good and the demand for the good,per unit of time. 
D) a direct relationship between the price of a good and the demand for the good. 
E) any relationship between quantity demanded and demand for a good.

Question 12

Consider the global market for barley,an agricultural commodity.Suppose that in August,2014,the equilibrium price and quantity were P = $150 per tonne and Q = 350 million tonnes.In August,2015,the equilibrium price and quantity were P = $142 per tonne and Q = 335 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

Accepted Answer

A) There has been an increase in supply of barley. 
B) There has been a decrease in supply of barley. 
C) There has been a simultaneous increase in demand and increase in supply of barley. 
D) There has been a decrease in demand for barley. 
E) There has been an increase in demand for barley. 
A) There has been an increase in supply of barley. 
B) There has been a decrease in supply of barley. 
C) There has been a simultaneous increase in demand and increase in supply of barley. 
D) There has been a decrease in demand for barley. 
E) There has been an increase in demand for barley.

Question 13

In which statement is the term ʺsupplyʺ used correctly? (1)An increase in the price of copper will lead to an increase in the quantity supplied of copper.(2)An increase in the price of copper will lead to an increase in the supply of copper.

Accepted Answer

A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed 
A) neither statement 
B) the first statement only 
C) the second statement only 
D) both statements 
E) more information is needed

Question 14

The relative price of a good

Accepted Answer

A) is always measured in current dollars. 
B) is a measure of the relative share of the consumerʹs income devoted to its purchase. 
C) is its price in terms of money. 
D) is equal to the average price of the good over the last 5 years. 
E) reflects its price in terms of units of other goods. 
A) is always measured in current dollars. 
B) is a measure of the relative share of the consumerʹs income devoted to its purchase. 
C) is its price in terms of money. 
D) is equal to the average price of the good over the last 5 years. 
E) reflects its price in terms of units of other goods.

Question 15

A demand curve is a representation of the relationship,ceteris paribus,between quantity demanded and

Accepted Answer

A) supply. 
B) wealth. 
C) price. 
D) income. 
E) preferences. 
A) supply. 
B) wealth. 
C) price. 
D) income. 
E) preferences.

Question 16

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease.Widespread knowledge of this research,other things being equal,is likely to have what impact on the market for tofu?

Accepted Answer

A) shift the whole demand curve to the right 
B) shift the whole demand curve to the left 
C) movement along the demand curve to the right 
D) movement along the demand curve to the left 
E) there would likely be no effect 
A) shift the whole demand curve to the right 
B) shift the whole demand curve to the left 
C) movement along the demand curve to the right 
D) movement along the demand curve to the left 
E) there would likely be no effect

Question 17

Consider the global market for barley,an agricultural commodity.Suppose that in August,2014,the equilibrium price and quantity were P = $150 per tonne and Q = 350 million tonnes.In August,2015,the equilibrium price and quantity were P = $159 per tonne and Q = 372 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

Accepted Answer

A) There has been an increase in demand for barley. 
B) There has been an increase in supply of barley. 
C) There has been a simultaneous decrease in demand and increase in supply of barley. 
D) There has been a decrease in supply of barley. 
A) There has been an increase in demand for barley. 
B) There has been an increase in supply of barley. 
C) There has been a simultaneous decrease in demand and increase in supply of barley. 
D) There has been a decrease in supply of barley.

Question 18

Quantity demanded is a flow variable,which means that it must be expressed

Accepted Answer

A) as so much at a specific moment in time. 
B) in units of the good per day. 
C) in units of the good per week. 
D) in units of the good per year. 
E) in units of the good per period of time. 
A) as so much at a specific moment in time. 
B) in units of the good per day. 
C) in units of the good per week. 
D) in units of the good per year. 
E) in units of the good per period of time.

Question 19

The positive slope of a supply curve indicates that

Accepted Answer

A) as price goes up,quantity supplied will decrease. 
B) consumers will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will increase. 
E) as price goes up,quantity supplied will remain constant. 
A) as price goes up,quantity supplied will decrease. 
B) consumers will want to buy less at higher prices. 
C) as price goes up,quantity supplied will increase. 
D) if the costs of production increase,the quantity supplied will increase. 
E) as price goes up,quantity supplied will remain constant.

Question 20

Suppose there is a decrease in the quantity supplied of copper at each price.This change would imply

Accepted Answer

A) a shift to the left of the supply curve. 
B) a shift to the right of the supply curve. 
C) a movement up the supply curve. 
D) a movement down the supply curve. 
A) a shift to the left of the supply curve. 
B) a shift to the right of the supply curve. 
C) a movement up the supply curve. 
D) a movement down the supply curve.

Exam 3: Demand, supply, and Price

Given a positively sloped supply curve,when market demand increases

In which statement is the term ʺdemandʺ used correctly? (1)A decrease in the price of airline tickets led to an increase in quantity demanded for airline tickets.(2)A decrease in the price of airline tickets led to an increase in the demand for airline tickets.

To say that the supply curve is positively sloped means that

Which of the following pairs of goods are likely to be substitutes for a large group of consumers?

In which statement is the term ʺdemandʺ used correctly? (1)An increase in the price of eggs will lead to a decrease in the demand for eggs.(2)An increase in the price of eggs will lead to a decrease in the demand for bacon.

Suppose that the demand and supply curves in the market for apples have the following functional forms: Q D = 250 - 4p and QS = 10 + p.The equilibrium quantity and price would then be

If a demand curve and a supply curve can be stated functionally as Qd = 100 - 5P; and Qs = 90 + 5P,respectively,then the equilibrium quantity and price (Q,P)would be

Which statement best describes a ʺdemand scheduleʺ?

To say that the demand curve for movies is negatively sloped means that

If tastes change so that a particular style of boots is now considered more appealing,the likely result is

The ʺlaw of demandʺ describes

In which statement is the term ʺsupplyʺ used correctly? (1)An increase in the price of copper will lead to an increase in the quantity supplied of copper.(2)An increase in the price of copper will lead to an increase in the supply of copper.

The relative price of a good

A demand curve is a representation of the relationship,ceteris paribus,between quantity demanded and

Suppose new medical research suggests that consuming 200 grams of tofu everyday helps to prevent heart disease.Widespread knowledge of this research,other things being equal,is likely to have what impact on the market for tofu?

Quantity demanded is a flow variable,which means that it must be expressed

The positive slope of a supply curve indicates that

Suppose there is a decrease in the quantity supplied of copper at each price.This change would imply

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