Question 1

A supply schedule

Accepted Answer

A) can be used to generate a supply curve. 
B) is a table reflecting the inverse relationship between price and quantity supplied. 
C) shows what happens to quantity supplied when price is held constant. 
D) all of the above. 
A) can be used to generate a supply curve. 
B) is a table reflecting the inverse relationship between price and quantity supplied. 
C) shows what happens to quantity supplied when price is held constant. 
D) all of the above.

Question 2

Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?

Accepted Answer

A) P1 
B) P2 
C) P3 
D) none of these 
A) P1 
B) P2 
C) P3 
D) none of these

Question 3

Which of the following pairs of goods is least likely to be a pair of complements?

Accepted Answer

A) Gasoline and motor oil 
B) Hot dog buns and hot dogs 
C) Beer and wine 
D) Razors and razor blades 
A) Gasoline and motor oil 
B) Hot dog buns and hot dogs 
C) Beer and wine 
D) Razors and razor blades

Question 4

Which of the following will cause the demand curve for cable TV services to shift to the left?

Accepted Answer

A) a rise in the price of cable TV services 
B) a decrease in average incomes of cable TV subscribers 
C) an increase in population 
D) the creation of several hit TV series 
A) a rise in the price of cable TV services 
B) a decrease in average incomes of cable TV subscribers 
C) an increase in population 
D) the creation of several hit TV series

Question 5

The supply curve shows the relationship between the

Accepted Answer

A) cost of production and the price of the product. 
B) cost of resources and cost of production. 
C) price of the product and quantity supplied. 
D) quantity demanded and the quantity supplied. 
A) cost of production and the price of the product. 
B) cost of resources and cost of production. 
C) price of the product and quantity supplied. 
D) quantity demanded and the quantity supplied.

Question 6

The market clearing price is

Accepted Answer

A) the price which eliminates excess quantity supplied or excess quantity demanded. 
B) the price which leaves an excess quantity demanded. 
C) the price which leaves an excess quantity supplied. 
D) the lowest price at which a positive quantity supplied exists. 
A) the price which eliminates excess quantity supplied or excess quantity demanded. 
B) the price which leaves an excess quantity demanded. 
C) the price which leaves an excess quantity supplied. 
D) the lowest price at which a positive quantity supplied exists.

Question 7

Which of the following statements is FALSE?

Accepted Answer

A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right. 
A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right.

Question 8

When economists talk about a demand schedule for a product, they mean

Accepted Answer

A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period. 
A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period.

Question 9

Another name for a shortage is

Accepted Answer

A) excess quantity supplied. 
B) excess quantity demanded. 
C) equilibrium. 
D) market clearing. 
A) excess quantity supplied. 
B) excess quantity demanded. 
C) equilibrium. 
D) market clearing.

Question 10

Which of the following causes a decrease in demand for a normal good?

Accepted Answer

A) Increase in price of a substitute 
B) Increase in price of a complement 
C) Increase in price 
D) Increase in income 
A) Increase in price of a substitute 
B) Increase in price of a complement 
C) Increase in price 
D) Increase in income

Question 11

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

Accepted Answer

The equilibrium price is determined by t

Question 12

In order to increase the supply of a good, producers must

Accepted Answer

A) convince consumers to reduce the quantity demanded. 
B) see an increase in quantity supplied by competitors. 
C) reduce their per-unit costs of producing the good. 
D) cut back on labor to reduce production costs. 
A) convince consumers to reduce the quantity demanded. 
B) see an increase in quantity supplied by competitors. 
C) reduce their per-unit costs of producing the good. 
D) cut back on labor to reduce production costs.

Question 13

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

Accepted Answer

A) an increase in airfares to Hawaii 
B) a decrease in airfares to Hawaii 
C) an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D) a downward movement along the demand curve for stays in Hawaiian hotel rooms. 
A) an increase in airfares to Hawaii 
B) a decrease in airfares to Hawaii 
C) an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D) a downward movement along the demand curve for stays in Hawaiian hotel rooms.

Question 14

If more foreign auto plants relocate to the United States, we would expect

Accepted Answer

A) the U.S. supply curve for automobiles to shift to the right. 
B) the U.S. supply curve for automobiles would shift to the left. 
C) that the U.S. auto market would not respond. 
D) that U.S. auto demand might change, but U.S. auto supply would remain static. 
A) the U.S. supply curve for automobiles to shift to the right. 
B) the U.S. supply curve for automobiles would shift to the left. 
C) that the U.S. auto market would not respond. 
D) that U.S. auto demand might change, but U.S. auto supply would remain static.

Question 15

When the price of a complement (cream)decreases, the demand for the related good (coffee)

Accepted Answer

A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward. 
A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward.

Question 16

If the price of a product increases, we would expect

Accepted Answer

A) the level of demand to decrease. 
B) quantity supplied to increase. 
C) the level of supply to increase. 
D) an increase in quantity demanded. 
A) the level of demand to decrease. 
B) quantity supplied to increase. 
C) the level of supply to increase. 
D) an increase in quantity demanded.

Question 17

A demand schedule

Accepted Answer

A) holds all prices constant. 
B) is only for a given time period. 
C) holds quantity constant. 
D) is for a given variety of goods. 
A) holds all prices constant. 
B) is only for a given time period. 
C) holds quantity constant. 
D) is for a given variety of goods.

Question 18

In economic terminology, an inferior good is a good

Accepted Answer

A) that no one will purchase. 
B) that doesn't work properly. 
C) that has no monetary value. 
D) for which demand increases as income decreases. 
A) that no one will purchase. 
B) that doesn't work properly. 
C) that has no monetary value. 
D) for which demand increases as income decreases.

Question 19

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

Accepted Answer

Market equilibrium occurs at the point a

Question 20

-Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know that

Accepted Answer

A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan. 
A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan.

Exam 3: Demand and Supply

A supply schedule

Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?

Which of the following pairs of goods is least likely to be a pair of complements?

Which of the following will cause the demand curve for cable TV services to shift to the left?

The supply curve shows the relationship between the

The market clearing price is

Which of the following statements is FALSE?

When economists talk about a demand schedule for a product, they mean

Another name for a shortage is

Which of the following causes a decrease in demand for a normal good?

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

In order to increase the supply of a good, producers must

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

If more foreign auto plants relocate to the United States, we would expect

When the price of a complement (cream)decreases, the demand for the related good (coffee)

If the price of a product increases, we would expect

A demand schedule

In economic terminology, an inferior good is a good

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

-Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know 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

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