Question 1

There is a 15 percent increase in the price of lumber used by a firm that builds new homes. This causes

Accepted Answer

A) a decrease in the quantity of new homes supplied. 
B) an increase in the supply of new homes. 
C) an increase of the quantity supplied of new homes. 
D) a decrease in the supply of new homes. 
A) a decrease in the quantity of new homes supplied. 
B) an increase in the supply of new homes. 
C) an increase of the quantity supplied of new homes. 
D) a decrease in the supply of new homes.

Question 2

We know that products G and H are related goods, because when the price of G increases,

Accepted Answer

A) the demand curve for H will shift to the right, because G and H are complementary goods. 
B) the quantity of H demanded will shift along its demand curve, because G and H are complementary goods. 
C) the demand curve for H will shift to the left, because G and H are complementary goods. 
D) the demand curve for H will remain unchanged because G and H are substitute goods. 
A) the demand curve for H will shift to the right, because G and H are complementary goods. 
B) the quantity of H demanded will shift along its demand curve, because G and H are complementary goods. 
C) the demand curve for H will shift to the left, because G and H are complementary goods. 
D) the demand curve for H will remain unchanged because G and H are substitute goods.

Question 3

Mary decreases 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 4

-In the above figure, an increase in income is best demonstrated by a

Accepted Answer

A) shift of D1 to D2 in Graph A, if good A is a normal good. 
B) shift of D2 to D1 in Graph A, if good A is a normal good. 
C) movement along D0 from P1 to P2 in Graph B. 
D) movement along D0 from P2 to P1 in Graph B. 
A) shift of D1 to D2 in Graph A, if good A is a normal good. 
B) shift of D2 to D1 in Graph A, if good A is a normal good. 
C) movement along D0 from P1 to P2 in Graph B. 
D) movement along D0 from P2 to P1 in Graph B.

Question 5

Other things being constant, the only way to move along a given supply curve for a product is for

Accepted Answer

A) the product's relative price to change. 
B) the future relative price of related goods to change. 
C) the number of sellers to change. 
D) technological changes to occur. 
A) the product's relative price to change. 
B) the future relative price of related goods to change. 
C) the number of sellers to change. 
D) technological changes to occur.

Question 6

The alternative quantities demanded for a given time period at different possible prices is known as

Accepted Answer

A) absolute demand. 
B) a demand schedule. 
C) real demand. 
D) constant demand. 
A) absolute demand. 
B) a demand schedule. 
C) real demand. 
D) constant demand.

Question 7

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that

Accepted Answer

A) at the regular price, there is a surplus of Super Bowl tickets. 
B) at the regular price, there is a shortage of Super Bowl tickets. 
C) at the regular price, the quantity of Super Bowl tickets demanded equals the quantity supplied. 
D) the scalper is making the football fan worse off. 
A) at the regular price, there is a surplus of Super Bowl tickets. 
B) at the regular price, there is a shortage of Super Bowl tickets. 
C) at the regular price, the quantity of Super Bowl tickets demanded equals the quantity supplied. 
D) the scalper is making the football fan worse off.

Question 8

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

Accepted Answer

A) the quantity demanded of the used textbook to increase and the quantity demanded of the new textbook to decrease. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase and the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. 
A) the quantity demanded of the used textbook to increase and the quantity demanded of the new textbook to decrease. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase and the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

Question 9

-According to the above table, there is an excess quantity demanded of 1500 DVDs at the price

Accepted Answer

A) $14. 
B) $12. 
C) $10. 
D) $8. 
A) $14. 
B) $12. 
C) $10. 
D) $8.

Question 10

Which of the following will NOT affect the position of the market supply curve for a good?

Accepted Answer

A) The government grants a subsidy to the producers for each unit of a good that they produce. 
B) The price of the good increases. 
C) The number of sellers in the market increases. 
D) There is an increase in the prices of the inputs used in production. 
A) The government grants a subsidy to the producers for each unit of a good that they produce. 
B) The price of the good increases. 
C) The number of sellers in the market increases. 
D) There is an increase in the prices of the inputs used in production.

Question 11

-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

Accepted Answer

A) Good A and Good B are substitutes. 
B) Good A and Good B are complements. 
C) Good A is a normal good but Good B is an inferior good. 
D) Good A and Good B are unrelated. 
A) Good A and Good B are substitutes. 
B) Good A and Good B are complements. 
C) Good A is a normal good but Good B is an inferior good. 
D) Good A and Good B are unrelated.

Question 12

Demand applies to which of the following?

Accepted Answer

A) Fast food 
B) Criminal activity 
C) Labor market 
D) All of the above 
A) Fast food 
B) Criminal activity 
C) Labor market 
D) All of the above

Question 13

If the price of oil rises, producers of oil will

Accepted Answer

A) increase the quantity of oil supplied. 
B) supply less oil. 
C) leave the amount of oil supplied unchanged. 
D) cut the price. 
A) increase the quantity of oil supplied. 
B) supply less oil. 
C) leave the amount of oil supplied unchanged. 
D) cut the price.

Question 14

-Suppose that, at an official ticket price of $480, there are 6,000 Justin Timberlake fans wanting to attend his concert, but only 4,000 ticketed seats are available. Which one of the following statements is then true?

Accepted Answer

A) There will be scalpers outside the arena selling tickets for $480. 
B) There will be a surplus of tickets. 
C) The market clearing price of the tickets is less than $480. 
D) The market clearing price of the tickets is more than $480. 
A) There will be scalpers outside the arena selling tickets for $480. 
B) There will be a surplus of tickets. 
C) The market clearing price of the tickets is less than $480. 
D) The market clearing price of the tickets is more than $480.

Question 15

-In the above figure, when the price of Good B increases, the result can be shown by

Accepted Answer

A) the movement from D1 to D2 in Graph A. 
B) the movement from D2 to D1 in Graph A. 
C) the movement along D0 from P1 to P2. 
D) the movement along D0 from P2 to P1. 
A) the movement from D1 to D2 in Graph A. 
B) the movement from D2 to D1 in Graph A. 
C) the movement along D0 from P1 to P2. 
D) the movement along D0 from P2 to P1.

Question 16

-Using the above table, at a price of $70, there is

Accepted Answer

A) a surplus of 150 units. 
B) a shortage of 120 units. 
C) a surplus of 270 units. 
D) a shortage of 150 units. 
A) a surplus of 150 units. 
B) a shortage of 120 units. 
C) a surplus of 270 units. 
D) a shortage of 150 units.

Question 17

-Refer to the above figure. Corn is an input for producing Corn Flakes. Which diagram shows the effect on the supply of Corn Flakes when the price of corn has increased?

Accepted Answer

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

Question 18

According to the law of demand

Accepted Answer

A) price and quantity demanded move in the same direction. 
B) price and quantity demanded move in opposite directions. 
C) ceteris paribus does not apply. 
D) price and quantity demanded are unrelated. 
A) price and quantity demanded move in the same direction. 
B) price and quantity demanded move in opposite directions. 
C) ceteris paribus does not apply. 
D) price and quantity demanded are unrelated.

Question 19

-According to the market data for good X in the above table, a stable equilibrium price is established at

Accepted Answer

A) $2. 
B) $4. 
C) $6. 
D) $8. 
A) $2. 
B) $4. 
C) $6. 
D) $8.

Question 20

Which of the following will NOT cause market supply to increase?

Accepted Answer

A) an increase in the number of firms supplying the product in the market 
B) a change in technology which allows a larger level of production at every price 
C) an increase in the costs of resources used to produce the product 
D) a decrease in labor costs 
A) an increase in the number of firms supplying the product in the market 
B) a change in technology which allows a larger level of production at every price 
C) an increase in the costs of resources used to produce the product 
D) a decrease in labor costs

Exam 3: Demand and Supply

There is a 15 percent increase in the price of lumber used by a firm that builds new homes. This causes

We know that products G and H are related goods, because when the price of G increases,

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

-In the above figure, an increase in income is best demonstrated by a

Other things being constant, the only way to move along a given supply curve for a product is for

The alternative quantities demanded for a given time period at different possible prices is known as

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

-According to the above table, there is an excess quantity demanded of 1500 DVDs at the price

Which of the following will NOT affect the position of the market supply curve for a good?

-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

Demand applies to which of the following?

If the price of oil rises, producers of oil will

-Suppose that, at an official ticket price of $480, there are 6,000 Justin Timberlake fans wanting to attend his concert, but only 4,000 ticketed seats are available. Which one of the following statements is then true?

-In the above figure, when the price of Good B increases, the result can be shown by

-Using the above table, at a price of $70, there is

-Refer to the above figure. Corn is an input for producing Corn Flakes. Which diagram shows the effect on the supply of Corn Flakes when the price of corn has increased?

According to the law of demand

-According to the market data for good X in the above table, a stable equilibrium price is established at

Which of the following will NOT cause market supply to increase?

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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