Question 1

Which of the following causes a movement along a supply curve?

Accepted Answer

A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above 
A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above

Question 2

-A change in quantity demanded

Accepted Answer

A) is a shift of the demand curve. 
B) is a movement along the demand curve. 
C) can be either a shift or a movement along the demand curve. 
D) is caused when there is a change in a ceteris paribus factor. 
A) is a shift of the demand curve. 
B) is a movement along the demand curve. 
C) can be either a shift or a movement along the demand curve. 
D) is caused when there is a change in a ceteris paribus factor.

Question 3

When there is an excess quantity supplied in the market,

Accepted Answer

A) the price of the product will increase, causing a decrease in demand and an increase in supply. 
B) the price of the product will increase, causing a decrease in quantity demanded and an increase in supply. 
C) the price of the product will decrease, causing an increase in quantity demanded and a decrease in quantity supplied. 
D) the price will increase, causing a decrease in demand and an increase in quantity supplied. 
A) the price of the product will increase, causing a decrease in demand and an increase in supply. 
B) the price of the product will increase, causing a decrease in quantity demanded and an increase in supply. 
C) the price of the product will decrease, causing an increase in quantity demanded and a decrease in quantity supplied. 
D) the price will increase, causing a decrease in demand and an increase in quantity supplied.

Question 4

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is true?

Accepted Answer

A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee. 
A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee.

Question 5

In economics, "demand" refers to

Accepted Answer

A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) the quantities of a good that people will buy at various prices. 
A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) the quantities of a good that people will buy at various prices.

Question 6

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

Accepted Answer

A) 33 
B) 25 
C) 22 
D) 8 
A) 33 
B) 25 
C) 22 
D) 8

Question 7

Which one of the following statements is FALSE?

Accepted Answer

A) Generally, what matters most to consumers is what a good costs in dollars. 
B) The relative price of a good is its price measured relative to the price of other goods. 
C) The nominal price of a good is its price measured in current dollars. 
D) When the price of beer goes up by the same proportion as the prices of all other goods, the relative price of beer does not change. 
A) Generally, what matters most to consumers is what a good costs in dollars. 
B) The relative price of a good is its price measured relative to the price of other goods. 
C) The nominal price of a good is its price measured in current dollars. 
D) When the price of beer goes up by the same proportion as the prices of all other goods, the relative price of beer does not change.

Question 8

Suppose the price of cement goes up in the United States. What happens in the market for new homes?

Accepted Answer

A) Supply shifts upward and to the left. 
B) Demand shifts left. 
C) Supply shifts downward and to the right. 
D) Demand shifts to the right. 
A) Supply shifts upward and to the left. 
B) Demand shifts left. 
C) Supply shifts downward and to the right. 
D) Demand shifts to the right.

Question 9

In deriving the demand schedule for a good, economists assume that

Accepted Answer

A) consumers have equal incomes to allocate among goods. 
B) a consumer will allocate all of her income to one good. 
C) all other influences on demand except the product price are held constant. 
D) reported income changes at each point on the demand schedule. 
A) consumers have equal incomes to allocate among goods. 
B) a consumer will allocate all of her income to one good. 
C) all other influences on demand except the product price are held constant. 
D) reported income changes at each point on the demand schedule.

Question 10

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?

Accepted Answer

A) A 
B) B 
C) neither graph 
D) both graphs 
A) A 
B) B 
C) neither graph 
D) both graphs

Question 11

If there is a decline in the price of milk, an input in the production of ice cream, then there will be a(n)

Accepted Answer

A) decrease in the supply of ice cream and a leftward shift of the supply curve. 
B) decrease in the quantity of ice cream supplied and a movement up along the supply curve. 
C) increase in the supply of ice cream and a rightward shift of the supply curve. 
D) increase in the quantity of ice cream supplied and a movement down along the supply curve. 
A) decrease in the supply of ice cream and a leftward shift of the supply curve. 
B) decrease in the quantity of ice cream supplied and a movement up along the supply curve. 
C) increase in the supply of ice cream and a rightward shift of the supply curve. 
D) increase in the quantity of ice cream supplied and a movement down along the supply curve.

Question 12

-Using the above table, the market clearing price for this product is

Accepted Answer

A) $5. 
B) $4. 
C) $3. 
D) $2. 
A) $5. 
B) $4. 
C) $3. 
D) $2.

Question 13

-Refer to the above figure. At a price of $10, excess quantity supplied equals

Accepted Answer

A) 0. 
B) 12. 
C) 15. 
D) infinity. 
A) 0. 
B) 12. 
C) 15. 
D) infinity.

Question 14

A demand curve is a

Accepted Answer

A) graphical representation of the demand schedule. 
B) graphical representation of alternative demands. 
C) horizontal line connecting amounts demanded at various income levels. 
D) graphical relationship, that includes several things such as tastes, time, and supply. 
A) graphical representation of the demand schedule. 
B) graphical representation of alternative demands. 
C) horizontal line connecting amounts demanded at various income levels. 
D) graphical relationship, that includes several things such as tastes, time, and supply.

Question 15

Which of the following will cause an outward (rightward)shift in the supply curve?

Accepted Answer

A) A reduction in the price of the good 
B) An increase in the price of labor input 
C) An increase in the number of consumers 
D) Technological progress 
A) A reduction in the price of the good 
B) An increase in the price of labor input 
C) An increase in the number of consumers 
D) Technological progress

Question 16

What information is provided by a demand curve? What variables are measured along the axes of the graph?

Accepted Answer

The demand curve is a graphical represen

Question 17

Other things being equal, an increase in the price of a good leads to an increase in the amount produced. This is known as

Accepted Answer

A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium. 
A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium.

Question 18

Demand is defined as

Accepted Answer

A) a schedule of how much of an item people will purchase at any particular price of that item during a specified time period, other things being constant. 
B) a specific quantity of an item that people want at a particular price of that item during a specified time period, other things being constant. 
C) a schedule of how much of a good or service people will purchase at any particular price of a different item during the specified time period, other things being constant. 
D) a specific quantity of a good or service that people will purchase at one particular price of another item during a specified time period, other things being constant. 
A) a schedule of how much of an item people will purchase at any particular price of that item during a specified time period, other things being constant. 
B) a specific quantity of an item that people want at a particular price of that item during a specified time period, other things being constant. 
C) a schedule of how much of a good or service people will purchase at any particular price of a different item during the specified time period, other things being constant. 
D) a specific quantity of a good or service that people will purchase at one particular price of another item during a specified time period, other things being constant.

Question 19

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

Accepted Answer

A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity demanded. 
A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity demanded.

Question 20

A given supply curve illustrates

Accepted Answer

A) the relationship between price and quantity supplied. 
B) the effect of a change in resource costs on quantity supplied. 
C) the effect of a change in technology on quantity supplied. 
D) the relationship between expected future prices and quantity supplied. 
A) the relationship between price and quantity supplied. 
B) the effect of a change in resource costs on quantity supplied. 
C) the effect of a change in technology on quantity supplied. 
D) the relationship between expected future prices and quantity supplied.

Exam 3: Demand and Supply

Which of the following causes a movement along a supply curve?

-A change in quantity demanded

When there is an excess quantity supplied in the market,

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is true?

In economics, "demand" refers to

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

Which one of the following statements is FALSE?

Suppose the price of cement goes up in the United States. What happens in the market for new homes?

In deriving the demand schedule for a good, economists assume that

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has increased?

If there is a decline in the price of milk, an input in the production of ice cream, then there will be a(n)

-Using the above table, the market clearing price for this product is

-Refer to the above figure. At a price of $10, excess quantity supplied equals

A demand curve is a

Which of the following will cause an outward (rightward)shift in the supply curve?

What information is provided by a demand curve? What variables are measured along the axes of the graph?

Other things being equal, an increase in the price of a good leads to an increase in the amount produced. This is known as

Demand is defined as

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

A given supply curve illustrates

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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