Question 1

What is the effect of an improvement in technology?

Accepted Answer

A)  It will cause a increase in the quantity supplied. 
B)  It will cause an increase in demand. 
C)  It will cause a decrease in demand. 
D)  It will cause an increase in supply. 
E)  It will cause a decrease in supply. 
A)  It will cause a increase in the quantity supplied. 
B)  It will cause an increase in demand. 
C)  It will cause a decrease in demand. 
D)  It will cause an increase in supply. 
E)  It will cause a decrease in supply. D

Question 2

An increase in incomes will lead to a decrease in the demand for an inferior product.

Accepted Answer

A) True 
 B)False  True

Question 3

What is the term for the mechanism which brings buyers and sellers together to assist them in negotiation the exchange of products?

Accepted Answer

A)  Production possibilities. 
B)  Laissez-faire. 
C)  Opportunity cost. 
D)  The market. 
E)  Supply and demand. 
A)  Production possibilities. 
B)  Laissez-faire. 
C)  Opportunity cost. 
D)  The market. 
E)  Supply and demand. D

Question 4

What is the term for a table that shows the various quantities demanded per period of time at different prices?

Accepted Answer

A)  Production possibilities table. 
B)  Demand schedule. 
C)  Supply schedule. 
D)  Market schedule. 
E)  Schedule of equilibrium points. 
A)  Production possibilities table. 
B)  Demand schedule. 
C)  Supply schedule. 
D)  Market schedule. 
E)  Schedule of equilibrium points.

Question 5

Demonstrate graphically and explain verbally the concept of a shortage. Is price above or below equilibrium?

Accepted Answer

A shortage refers to situations where th

Question 6

The two graphs below show the markets for orange juice and apple juice, which are initially in equilibrium:   Show what will happen to the prices and quantities traded of both products if a severe frost in Florida were to seriously damage the orange crop.

Accepted Answer

The answer of The two graphs below show the markets...

Question 7

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

Accepted Answer

A)  Change in the quantity supplied. 
B)  Change in the individual supply. 
C)  Change in the market supply. 
D)  Change in the market demand. 
A)  Change in the quantity supplied. 
B)  Change in the individual supply. 
C)  Change in the market supply. 
D)  Change in the market demand.

Question 8

What is the term for the quantities which producers are willing and able to sell per period of time at various prices?

Accepted Answer

A)  Quantity supplied. 
B)  Quantity demanded. 
C)  Surplus. 
D)  Supply. 
E)  Product availability. 
A)  Quantity supplied. 
B)  Quantity demanded. 
C)  Surplus. 
D)  Supply. 
E)  Product availability.

Question 9

-Refer to the information above to answer this question. Assume that the market was at equilibrium and that demand increases by 20 units. What will be the new equilibrium price and quantity?

Accepted Answer

A)  Price will rise by $2 and quantity traded will rise by 20 units. 
B)  Price will fall by $2 and quantity traded will fall by 20 units. 
C)  Price will rise by $1 and quantity traded will rise by 10 units. 
D)  Price will fall by $1 and quantity traded will fall by 10 units. 
A)  Price will rise by $2 and quantity traded will rise by 20 units. 
B)  Price will fall by $2 and quantity traded will fall by 20 units. 
C)  Price will rise by $1 and quantity traded will rise by 10 units. 
D)  Price will fall by $1 and quantity traded will fall by 10 units.

Question 10

What is meant by the term ceteris paribus?

Accepted Answer

A)  A downward-sloping demand curve. 
B)  Other things being equal. 
C)  All things vary. 
D)  Prices remain constant. 
A)  A downward-sloping demand curve. 
B)  Other things being equal. 
C)  All things vary. 
D)  Prices remain constant.

Question 11

What is the slope of the demand curve?

Accepted Answer

A)  It is downward-sloping because when the price of a product falls, consumers are willing and able to buy more. 
B)  It is upward-sloping because when the price of a product falls, consumers are willing and able to buy more. 
C)  It is upward-sloping because when the price of a product increases, consumers are willing and able to buy more. 
D)  It is downward-sloping because higher prices are associated with larger quantities. 
A)  It is downward-sloping because when the price of a product falls, consumers are willing and able to buy more. 
B)  It is upward-sloping because when the price of a product falls, consumers are willing and able to buy more. 
C)  It is upward-sloping because when the price of a product increases, consumers are willing and able to buy more. 
D)  It is downward-sloping because higher prices are associated with larger quantities.

Question 12

What is the effect of an increase in the price of coffee?

Accepted Answer

A)  It will lead to an increase in the demand for tea. 
B)  It will lead to a decrease in the demand for tea. 
C)  It will have no effect on the tea market. 
D)  It will increase the demand for coffee. 
A)  It will lead to an increase in the demand for tea. 
B)  It will lead to a decrease in the demand for tea. 
C)  It will have no effect on the tea market. 
D)  It will increase the demand for coffee.

Question 13

What is the term for income measured by the amount of goods and services which it will buy?

Accepted Answer

A)  Income effect. 
B)  Net income. 
C)  Real income. 
D)  Nominal income. 
E)  Actual income. 
A)  Income effect. 
B)  Net income. 
C)  Real income. 
D)  Nominal income. 
E)  Actual income.

Question 14

What is the income effect?

Accepted Answer

A)  The effect of a change in income on the demand for a product. 
B)  The effect of a change in income on the demand for a substitute product. 
C)  The effect of a price change on real income and therefore on the quantity demanded of a product. 
D)  The effect of a change in income on the demand for an inferior product. 
A)  The effect of a change in income on the demand for a product. 
B)  The effect of a change in income on the demand for a substitute product. 
C)  The effect of a price change on real income and therefore on the quantity demanded of a product. 
D)  The effect of a change in income on the demand for an inferior product.

Question 15

Explain how a surplus will be eliminated.

Accepted Answer

A surplus occurs when the quantity deman

Question 16

Stuff-Crust Pizza is a new pizza introduced by Pizza Hut. What happens to the equilibrium price and equilibrium quantity in each of the following situations?
a. Due to weather conditions, crop yields (including wheat) decreased.
b. The price of beer decreased
c. Dominos Pizza introduced a similar type of pizza that sold for $1 less than the one by Pizza Hut.
d. A recession reduced households' income.
e. A new oven technology reduced the time it takes to bake a pizza.

Accepted Answer

a. A reduction in the supply of wheat ra

Question 17

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

Accepted Answer

A)  Desire. 
B)  Supply. 
C)  Demand. 
D)  Market. 
E)  Human wants. 
A)  Desire. 
B)  Supply. 
C)  Demand. 
D)  Market. 
E)  Human wants.

Question 18

-Refer to the graph above to answer this question. What does the distance Q1 - Q3 represent?

Accepted Answer

A)  The decrease in equilibrium quantity traded resulting from a decrease in demand. 
B)  The decrease in equilibrium quantity traded resulting from a decrease in supply. 
C)  The decrease in equilibrium quantity traded resulting from a decrease in the quantity supplied. 
D)  The decrease in equilibrium quantity traded resulting from an increase in the quantity supplied. 
A)  The decrease in equilibrium quantity traded resulting from a decrease in demand. 
B)  The decrease in equilibrium quantity traded resulting from a decrease in supply. 
C)  The decrease in equilibrium quantity traded resulting from a decrease in the quantity supplied. 
D)  The decrease in equilibrium quantity traded resulting from an increase in the quantity supplied.

Question 19

-Refer to the above graph to answer this question. How could you describe the movement from point A to point B?

Accepted Answer

A)  An increase in demand which leads to a decrease in the equilibrium price and an increase in supply. 
B)  An increase in supply which leads to an increase in the equilibrium price and an increase in demand. 
C)  An increase in demand which leads to an increase in the equilibrium price and an increase in the quantity supplied. 
D)  An increase in supply which leads to an increase in the equilibrium price and an increase in the quantity demanded. 
E)  An increase in demand which leads to an increase in supply and an increase in the equilibrium price. 
A)  An increase in demand which leads to a decrease in the equilibrium price and an increase in supply. 
B)  An increase in supply which leads to an increase in the equilibrium price and an increase in demand. 
C)  An increase in demand which leads to an increase in the equilibrium price and an increase in the quantity supplied. 
D)  An increase in supply which leads to an increase in the equilibrium price and an increase in the quantity demanded. 
E)  An increase in demand which leads to an increase in supply and an increase in the equilibrium price.

Question 20

Why is the demand curve downward sloping? Explain.

Accepted Answer

The demand curve is downward sloping bec

What is the effect of an improvement in technology?

An increase in incomes will lead to a decrease in the demand for an inferior product.

What is the term for the mechanism which brings buyers and sellers together to assist them in negotiation the exchange of products?

What is the term for a table that shows the various quantities demanded per period of time at different prices?

Demonstrate graphically and explain verbally the concept of a shortage. Is price above or below equilibrium?

The two graphs below show the markets for orange juice and apple juice, which are initially in equilibrium: Show what will happen to the prices and quantities traded of both products if a severe frost in Florida were to seriously damage the orange crop.

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

What is the term for the quantities which producers are willing and able to sell per period of time at various prices?

-Refer to the information above to answer this question. Assume that the market was at equilibrium and that demand increases by 20 units. What will be the new equilibrium price and quantity?

What is meant by the term ceteris paribus?

What is the slope of the demand curve?

What is the effect of an increase in the price of coffee?

What is the term for income measured by the amount of goods and services which it will buy?

What is the income effect?

Explain how a surplus will be eliminated.

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

-Refer to the graph above to answer this question. What does the distance Q1 - Q3 represent?

-Refer to the above graph to answer this question. How could you describe the movement from point A to point B?

Why is the demand curve downward sloping? Explain.

The Economic Problem

Demand and Supply: an Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 2: Demand and Supply: an Introduction

What is the effect of an improvement in technology?

An increase in incomes will lead to a decrease in the demand for an inferior product.

What is the term for the mechanism which brings buyers and sellers together to assist them in negotiation the exchange of products?

What is the term for a table that shows the various quantities demanded per period of time at different prices?

Demonstrate graphically and explain verbally the concept of a shortage. Is price above or below equilibrium?

The two graphs below show the markets for orange juice and apple juice, which are initially in equilibrium: Show what will happen to the prices and quantities traded of both products if a severe frost in Florida were to seriously damage the orange crop.

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

What is the term for the quantities which producers are willing and able to sell per period of time at various prices?

-Refer to the information above to answer this question. Assume that the market was at equilibrium and that demand increases by 20 units. What will be the new equilibrium price and quantity?

What is meant by the term ceteris paribus?

What is the slope of the demand curve?

What is the effect of an increase in the price of coffee?

What is the term for income measured by the amount of goods and services which it will buy?

What is the income effect?

Explain how a surplus will be eliminated.

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

-Refer to the graph above to answer this question. What does the distance Q1 - Q3 represent?

-Refer to the above graph to answer this question. How could you describe the movement from point A to point B?

Why is the demand curve downward sloping? Explain.

The Economic Problem

Demand and Supply: an Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters