Question 1

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Accepted Answer

A) decrease; increase 
B) decrease; decrease 
C) increase; decrease 
D) increase; increase 
A) decrease; increase 
B) decrease; decrease 
C) increase; decrease 
D) increase; increase

Question 2

-In the above figure, if the price is equal to $50, there is

Accepted Answer

A) a surplus of 200 units. 
B) a shortage of 100 units. 
C) an excess quantity demanded of 50 units. 
D) an inadequate supply of 100 units. 
A) a surplus of 200 units. 
B) a shortage of 100 units. 
C) an excess quantity demanded of 50 units. 
D) an inadequate supply of 100 units.

Question 3

A subsidy to carrot farmers will

Accepted Answer

A) increase the quantity of carrots demanded. 
B) decrease the quantity of carrots supplied. 
C) increase the supply of carrots. 
D) leave both the supply and demand of carrots unchanged. 
A) increase the quantity of carrots demanded. 
B) decrease the quantity of carrots supplied. 
C) increase the supply of carrots. 
D) leave both the supply and demand of carrots unchanged.

Question 4

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

Accepted Answer

A) substitutes. 
B) complements. 
C) normal. 
D) inferior. 
A) substitutes. 
B) complements. 
C) normal. 
D) inferior.

Question 5

A shortage will occur when

Accepted Answer

A) the price equals the market clearing level. 
B) the price is above the market clearing level. 
C) there is an excess quantity supplied. 
D) the price is below the market clearing level. 
A) the price equals the market clearing level. 
B) the price is above the market clearing level. 
C) there is an excess quantity supplied. 
D) the price is below the market clearing level.

Question 6

A shortage will occur whenever

Accepted Answer

A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping. 
A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping.

Question 7

Which of the following does NOT cause a shift in demand?

Accepted Answer

A) Change in income 
B) Change in tastes 
C) Change in the price of the good 
D) Change in the price of a related good 
A) Change in income 
B) Change in tastes 
C) Change in the price of the good 
D) Change in the price of a related good

Question 8

-In the above figure, what would result if the price was $40?

Accepted Answer

A) a surplus 
B) a shortage 
C) equilibrium 
D) excess demand 
A) a surplus 
B) a shortage 
C) equilibrium 
D) excess demand

Question 9

-Refer to the above figure. Which panel best demonstrates the demand curve?

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 10

-According to the above table, the equilibrium price of DVDs is

Accepted Answer

A) $16. 
B) $14. 
C) $12. 
D) $10. 
A) $16. 
B) $14. 
C) $12. 
D) $10.

Question 11

A direct or positive relationship between price and quantity supplied is

Accepted Answer

A) the market clearing price. 
B) a change in demand. 
C) a supply curve. 
D) a demand curve. 
A) the market clearing price. 
B) a change in demand. 
C) a supply curve. 
D) a demand curve.

Question 12

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A) increased from 0.25 to 0.6. 
B) decreased from 4.0 to 3.0. 
C) stayed constant at 0.25. 
D) stayed constant at 4.0. 
A) increased from 0.25 to 0.6. 
B) decreased from 4.0 to 3.0. 
C) stayed constant at 0.25. 
D) stayed constant at 4.0.

Question 13

There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are

Accepted Answer

A) substitute goods. 
B) inferior goods. 
C) independent goods. 
D) complementary goods. 
A) substitute goods. 
B) inferior goods. 
C) independent goods. 
D) complementary goods.

Question 14

If the price of apples goes down, then the demand for pears will

Accepted Answer

A) increase, assuming apples and pears are substitutes. 
B) decrease, assuming apples and pears are substitutes. 
C) decrease, assuming apples and pears are complements. 
D) remain constant, assuming apples and pears are related goods. 
A) increase, assuming apples and pears are substitutes. 
B) decrease, assuming apples and pears are substitutes. 
C) decrease, assuming apples and pears are complements. 
D) remain constant, assuming apples and pears are related goods.

Question 15

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

Accepted Answer

A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good. 
A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good.

Question 16

-According to the above table, at a price of $2 per unit, which of the following would exist?

Accepted Answer

A) A shortage of 800 units 
B) A surplus of 800 units 
C) A shortage of 200 units 
D) A shortage of 400 units 
A) A shortage of 800 units 
B) A surplus of 800 units 
C) A shortage of 200 units 
D) A shortage of 400 units

Question 17

Which of the following are substitute goods?

Accepted Answer

A) margarine and butter 
B) peanut butter and jelly 
C) pizza and beer 
D) sports utility vehicles and gasoline 
A) margarine and butter 
B) peanut butter and jelly 
C) pizza and beer 
D) sports utility vehicles and gasoline

Question 18

The "real" price of a good is known as

Accepted Answer

A) the absolute price of the good. 
B) the dollar price of the good since we use dollars in the United States. 
C) relative price of the good. 
D) the price actually paid for a good instead of the sticker price. 
A) the absolute price of the good. 
B) the dollar price of the good since we use dollars in the United States. 
C) relative price of the good. 
D) the price actually paid for a good instead of the sticker price.

Question 19

According to the above figure, a shortage will occur at a price at which

Accepted Answer

A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium. 
A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium.

Question 20

A market demand schedule for a product indicates that

Accepted Answer

A) as the product's price falls, consumers buy less of the good. 
B) there is a positive relationship between price and quantity demanded. 
C) as a product's price rises, consumers buy more of the good. 
D) there is a negative relationship between price and quantity demanded. 
A) as the product's price falls, consumers buy less of the good. 
B) there is a positive relationship between price and quantity demanded. 
C) as a product's price rises, consumers buy more of the good. 
D) there is a negative relationship between price and quantity demanded.

Exam 3: Demand and Supply

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

-In the above figure, if the price is equal to $50, there is

A subsidy to carrot farmers will

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

A shortage will occur when

A shortage will occur whenever

Which of the following does NOT cause a shift in demand?

-In the above figure, what would result if the price was $40?

-Refer to the above figure. Which panel best demonstrates the demand curve?

-According to the above table, the equilibrium price of DVDs is

A direct or positive relationship between price and quantity supplied is

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are

If the price of apples goes down, then the demand for pears will

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

-According to the above table, at a price of $2 per unit, which of the following would exist?

Which of the following are substitute goods?

The "real" price of a good is known as

According to the above figure, a shortage will occur at a price at which

A market demand schedule for a product indicates that

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .