Question 1

If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:

Accepted Answer

A) will remain unchanged. 
B) will fall to clear the market. 
C) will either fall or remain unchanged. 
D) is below the market equilibrium price. 
A) will remain unchanged. 
B) will fall to clear the market. 
C) will either fall or remain unchanged. 
D) is below the market equilibrium price.

Question 2

If the current price is less than the market clearing or equilibrium price, we would expect:

Accepted Answer

A) a surplus. 
B) downward pressure on price. 
C) upward pressure on price. 
D) no change in the market price. 
A) a surplus. 
B) downward pressure on price. 
C) upward pressure on price. 
D) no change in the market price.

Question 3

Use the following to answer questions 
Exhibit: The Supply of Music Downloads  
-(Exhibit: The Supply of Music Downloads)
A decrease in the price of music licenses sold by music companies to online sites would result in a change illustrated by:

Accepted Answer

A) the move from n to o in Figure (a). 
B) the move from p to q in Figure (b). 
C) the move from s to t in Figure (c). 
D) the move from u to v in Figure (d). 
A) the move from n to o in Figure (a). 
B) the move from p to q in Figure (b). 
C) the move from s to t in Figure (c). 
D) the move from u to v in Figure (d).

Question 4

Which of the following will result in an increased price of milk?

Accepted Answer

A) A shift to the right of the supply curve for milk. 
B) A shift to the right of the demand curve for milk. 
C) An increase in the number of milk suppliers. 
D) A decrease in the number of milk buyers. 
A) A shift to the right of the supply curve for milk. 
B) A shift to the right of the demand curve for milk. 
C) An increase in the number of milk suppliers. 
D) A decrease in the number of milk buyers.

Question 5

An increase in consumer income will lead to an increase in supply.

Accepted Answer

A) True 
 B)False

Question 6

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:

Accepted Answer

A) supply. 
B) demand. 
C) scarcity. 
D) increasing opportunity costs. 
A) supply. 
B) demand. 
C) scarcity. 
D) increasing opportunity costs.

Question 7

Demand is best defined as the:

Accepted Answer

A) amount of a commodity that buyers would be willing and able to purchase at a specific price. 
B) price that buyers would be willing and able to pay for a specific quantity of a good. 
C) relationship between the price of a good and the quantity people are able to purchase, all other things unchanged. 
D) relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged. 
A) amount of a commodity that buyers would be willing and able to purchase at a specific price. 
B) price that buyers would be willing and able to pay for a specific quantity of a good. 
C) relationship between the price of a good and the quantity people are able to purchase, all other things unchanged. 
D) relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged.

Question 8

If people demand more of product A when the price of B falls, then A and B are:

Accepted Answer

A) not related. 
B) substitutes. 
C) complements. 
D) inferior. 
A) not related. 
B) substitutes. 
C) complements. 
D) inferior.

Question 9

Use the following to answer questions 
Exhibit: Demand and Supply Shifters  
-(Exhibit: Demand and Supply Shifters)
The exhibit shows how supply and demand might shift in response to specific events.Suppose half the people in San Diego pack up and move to Colorado Springs.Which panel best describes how this will affect the supply of houses in San Diego?

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

An increase in price will result in a decrease in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 11

All other things unchanged, a tax on a product that leads to an increase in the cost of production would:

Accepted Answer

A) lead to an increase in supply. 
B) lead to a decrease in demand. 
C) result in an increased price. 
D) lead to a decrease in supply. 
A) lead to an increase in supply. 
B) lead to a decrease in demand. 
C) result in an increased price. 
D) lead to a decrease in supply.

Question 12

Use the following to answer questions 
Exhibit: The Demand for Chocolate-Covered Peanuts
Quantity Demanded
(bags per month)
  
-(Exhibit: The Demand for Chocolate-Covered Peanuts)
If George is only able to purchase 30 bags of chocolate-covered peanuts, the maximum price he is willing and able to pay for each bag is ________ cents.

Accepted Answer

A) 80 
B) 70 
C) 60 
D) 50 
A) 80 
B) 70 
C) 60 
D) 50

Question 13

A market shortage occurs if the:

Accepted Answer

A) price is above the equilibrium price. 
B) price is equal to the equilibrium price. 
C) equilibrium price is above the current price. 
D) equilibrium price is below the current price. 
A) price is above the equilibrium price. 
B) price is equal to the equilibrium price. 
C) equilibrium price is above the current price. 
D) equilibrium price is below the current price.

Question 14

The primary difference between a change in supply and a change in the quantity supplied is:

Accepted Answer

A) a change in quantity supplied is a shift in the supply curve, and a change in supply is a movement along the supply curve. 
B) both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions. 
C) a change in quantity supplied is a movement along the supply curve, and a change in supply is a shift of the supply curve. 
D) a change in supply is a movement to the left along the supply curve and a change in quantity supplied is a movement to the right along the supply curve. 
A) a change in quantity supplied is a shift in the supply curve, and a change in supply is a movement along the supply curve. 
B) both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions. 
C) a change in quantity supplied is a movement along the supply curve, and a change in supply is a shift of the supply curve. 
D) a change in supply is a movement to the left along the supply curve and a change in quantity supplied is a movement to the right along the supply curve.

Question 15

A shift to the left of a supply curve is caused by:

Accepted Answer

A) an increase in the number of sellers. 
B) a technological improvement. 
C) an increase in the returns from other supply possibilities. 
D) an increase in the number of buyers. 
A) an increase in the number of sellers. 
B) a technological improvement. 
C) an increase in the returns from other supply possibilities. 
D) an increase in the number of buyers.

Question 16

Use the following to answer questions 
Exhibit: Demand and Supply Shifters  
-(Exhibit: Demand and Supply Shifters)
The exhibit shows how supply and demand might shift in response to specific events.Suppose half the people in San Diego move to Colorado Springs.Which panel best describes how this will affect the market for houses in Colorado Springs?

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 17

If both the demand for a product and the supply of it increase, then the equilibrium quantity will ________ and the equilibrium price will ________.

Accepted Answer

A) decrease; increase 
B) decrease; decrease 
C) decrease; remain constant 
D) increase; either increase, decrease, or remain constant 
A) decrease; increase 
B) decrease; decrease 
C) decrease; remain constant 
D) increase; either increase, decrease, or remain constant

Question 18

Use the following to answer questions 
Exhibit: Demand and Supply-Determinants  
-(Exhibit: Demand and Supply-Determinants)
The exhibit shows how supply and demand might shift in response to specific events.Suppose the birth rate (the number of babies per female in the childbearing age bracket)
Decreases.Which panel best describes how this will affect the market for diapers?

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 19

How a supply curve is sloped and located is affected by:

Accepted Answer

A) consumer preferences. 
B) resource prices. 
C) the number of consumers. 
D) all of the above. 
A) consumer preferences. 
B) resource prices. 
C) the number of consumers. 
D) all of the above.

Question 20

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

Accepted Answer

A) is above the market equilibrium price. 
B) will rise to clear the market. 
C) will either rise or remain unchanged. 
D) is below the market equilibrium price. 
A) is above the market equilibrium price. 
B) will rise to clear the market. 
C) will either rise or remain unchanged. 
D) is below the market equilibrium price.

If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:

If the current price is less than the market clearing or equilibrium price, we would expect:

Use the following to answer questions Exhibit: The Supply of Music Downloads -(Exhibit: The Supply of Music Downloads) A decrease in the price of music licenses sold by music companies to online sites would result in a change illustrated by:

Which of the following will result in an increased price of milk?

An increase in consumer income will lead to an increase in supply.

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:

Demand is best defined as the:

If people demand more of product A when the price of B falls, then A and B are:

An increase in price will result in a decrease in the quantity supplied.

All other things unchanged, a tax on a product that leads to an increase in the cost of production would:

A market shortage occurs if the:

The primary difference between a change in supply and a change in the quantity supplied is:

A shift to the left of a supply curve is caused by:

If both the demand for a product and the supply of it increase, then the equilibrium quantity will and the equilibrium price will .

How a supply curve is sloped and located is affected by:

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Exam 3: Demand and Supply

If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:

If the current price is less than the market clearing or equilibrium price, we would expect:

Use the following to answer questions Exhibit: The Supply of Music Downloads -(Exhibit: The Supply of Music Downloads) A decrease in the price of music licenses sold by music companies to online sites would result in a change illustrated by:

Which of the following will result in an increased price of milk?

An increase in consumer income will lead to an increase in supply.

The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of:

Demand is best defined as the:

If people demand more of product A when the price of B falls, then A and B are:

An increase in price will result in a decrease in the quantity supplied.

All other things unchanged, a tax on a product that leads to an increase in the cost of production would:

A market shortage occurs if the:

The primary difference between a change in supply and a change in the quantity supplied is:

A shift to the left of a supply curve is caused by:

If both the demand for a product and the supply of it increase, then the equilibrium quantity will ________ and the equilibrium price will ________.

How a supply curve is sloped and located is affected by:

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

If both the demand for a product and the supply of it increase, then the equilibrium quantity will and the equilibrium price will .