Question 1

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

Accepted Answer

A) substitute goods. 
B) complementary goods. 
C) inferior goods. 
D) satisfying the law of supply. 
A) substitute goods. 
B) complementary goods. 
C) inferior goods. 
D) satisfying the law of supply.

Question 2

-Refer to the above figure. The rightward shift of the curve indicates

Accepted Answer

A) an increase in demand. 
B) an increase in supply. 
C) a change in quantity demanded. 
D) a change in quantity supplied. 
A) an increase in demand. 
B) an increase in supply. 
C) a change in quantity demanded. 
D) a change in quantity supplied.

Question 3

According to the law of supply,

Accepted Answer

A) people buy more of a good when the price increases. 
B) people buy less of a good when the price decreases. 
C) producers provide more of a good when the price decreases. 
D) producers provide less of a good when the price decreases. 
A) people buy more of a good when the price increases. 
B) people buy less of a good when the price decreases. 
C) producers provide more of a good when the price decreases. 
D) producers provide less of a good when the price decreases.

Question 4

-Refer to the above figure. At a price of three cents, a(n)________ of bubble gum will exist in the market.

Accepted Answer

A) surplus 
B) shortage 
C) equilibrium quantity 
D) excess quantity supplied 
A) surplus 
B) shortage 
C) equilibrium quantity 
D) excess quantity supplied

Question 5

-Refer to the above figure. The equilibrium price and quantity are

Accepted Answer

A) $2 and 12 units. 
B) $6 and 9 units. 
C) $8 and 6 units. 
D) $10 and 1 unit. 
A) $2 and 12 units. 
B) $6 and 9 units. 
C) $8 and 6 units. 
D) $10 and 1 unit.

Question 6

A demand curve is derived from

Accepted Answer

A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium. 
A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium.

Question 7

An increase in demand occurs when

Accepted Answer

A) we measure price in money price rather than real price. 
B) we move up the demand curve. 
C) the demand curve shifts to the right. 
D) the demand curve shifts to the left. 
A) we measure price in money price rather than real price. 
B) we move up the demand curve. 
C) the demand curve shifts to the right. 
D) the demand curve shifts to the left.

Question 8

When the amount supplied is greater at each price, there is a(n)

Accepted Answer

A) rightward shift in the supply curve. 
B) leftward shift in the supply curve. 
C) upward movement along the supply curve. 
D) downward movement along the supply curve. 
A) rightward shift in the supply curve. 
B) leftward shift in the supply curve. 
C) upward movement along the supply curve. 
D) downward movement along the supply curve.

Question 9

"A shortage is the same thing as scarcity." Do you agree or disagree with this statement? Why? What can cause a shortage to disappear in a market? What can cause scarcity to disappear?

Accepted Answer

Disagree with the statement. Scarcity is

Question 10

Which of the following represents the law of supply?

Accepted Answer

A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above 
A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above

Question 11

The demand curve is downward sloping because

Accepted Answer

A) the price must rise to induce firms to increase quantity supplied. 
B) a reduction in the price of a good causes individuals to increase their purchase of that good. 
C) an increase in the price will cause a leftward shift in the demand curve. 
D) all of the above. 
A) the price must rise to induce firms to increase quantity supplied. 
B) a reduction in the price of a good causes individuals to increase their purchase of that good. 
C) an increase in the price will cause a leftward shift in the demand curve. 
D) all of the above.

Question 12

A decrease in demand would be represented by

Accepted Answer

A) the price of a good going from $3 to $4. 
B) an increase in the cost of resources used to produce the good. 
C) a movement along the demand curve. 
D) a shift of the demand curve to the left. 
A) the price of a good going from $3 to $4. 
B) an increase in the cost of resources used to produce the good. 
C) a movement along the demand curve. 
D) a shift of the demand curve to the left.

Question 13

An increase in price will lead to an increase in quantity supplied. This statement is

Accepted Answer

A) the law of supply. 
B) the law of demand. 
C) untrue always. 
D) a normative statement. 
A) the law of supply. 
B) the law of demand. 
C) untrue always. 
D) a normative statement.

Question 14

Which of the following statements is consistent with a decrease in supply?

Accepted Answer

A) Prices of raw material inputs have increased. 
B) There has been an advance in technology. 
C) Consumers' incomes have increased. 
D) The market price has decreased. 
A) Prices of raw material inputs have increased. 
B) There has been an advance in technology. 
C) Consumers' incomes have increased. 
D) The market price has decreased.

Question 15

A shift in the demand curve will occur when

Accepted Answer

A) supply shifts. 
B) the price of an input used to produce the good changes. 
C) consumers' income changes. 
D) the price of the product changes. 
A) supply shifts. 
B) the price of an input used to produce the good changes. 
C) consumers' income changes. 
D) the price of the product changes.

Question 16

By summing the quantities demanded by individuals at each price we obtain the

Accepted Answer

A) equilibrium price. 
B) market demand curve. 
C) market supply curve. 
D) individual demand curve. 
A) equilibrium price. 
B) market demand curve. 
C) market supply curve. 
D) individual demand curve.

Question 17

Which of the following will shift today's supply curve to the right?

Accepted Answer

A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future. 
A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future.

Question 18

The law of demand states that

Accepted Answer

A) people demand less at lower prices. 
B) the quantity demanded is directly related to price. 
C) the quantity demanded is inversely related to price. 
D) changes in price and changes in quantity demanded move in the same direction. 
A) people demand less at lower prices. 
B) the quantity demanded is directly related to price. 
C) the quantity demanded is inversely related to price. 
D) changes in price and changes in quantity demanded move in the same direction.

Question 19

Which of the following will shift the supply curve for laptop computers to the left?

Accepted Answer

A) development of a cheaper microchip used in laptop computer production 
B) a subsidy to the laptop computer industry 
C) expectations of a future decline in laptop computer prices 
D) a reduction of the number of firms that make laptop computers 
A) development of a cheaper microchip used in laptop computer production 
B) a subsidy to the laptop computer industry 
C) expectations of a future decline in laptop computer prices 
D) a reduction of the number of firms that make laptop computers

Question 20

As John's income has increased, he has purchased fewer hamburgers. Hamburgers are

Accepted Answer

A) a normal good for John. 
B) an inferior good for John. 
C) not following the law of demand. 
D) leading to a rightward shift in John's demand curve for hamburgers. 
A) a normal good for John. 
B) an inferior good for John. 
C) not following the law of demand. 
D) leading to a rightward shift in John's demand curve for hamburgers.

Exam 3: Demand and Supply

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

-Refer to the above figure. The rightward shift of the curve indicates

According to the law of supply,

-Refer to the above figure. At a price of three cents, a(n)________ of bubble gum will exist in the market.

-Refer to the above figure. The equilibrium price and quantity are

A demand curve is derived from

An increase in demand occurs when

When the amount supplied is greater at each price, there is a(n)

"A shortage is the same thing as scarcity." Do you agree or disagree with this statement? Why? What can cause a shortage to disappear in a market? What can cause scarcity to disappear?

Which of the following represents the law of supply?

The demand curve is downward sloping because

A decrease in demand would be represented by

An increase in price will lead to an increase in quantity supplied. This statement is

Which of the following statements is consistent with a decrease in supply?

A shift in the demand curve will occur when

By summing the quantities demanded by individuals at each price we obtain the

Which of the following will shift today's supply curve to the right?

The law of demand states that

Which of the following will shift the supply curve for laptop computers to the left?

As John's income has increased, he has purchased fewer hamburgers. Hamburgers are

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

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