Question 1

The demand for a product is the quantity of it that people buy.

Accepted Answer

A) True 
 B)False

Question 2

Use the following to answer questions 
Exhibit: Shifts in Demand and Supply
  
-(Exhibit: Shifts in Demand and Supply)
Assume that the market in Panel (a)
Is in equilibrium at point M.Compared to the initial equilibrium at point N, what changes could explain what happened in this market?

Accepted Answer

A) supply decreased 
B) demand decreased 
C) both demand and supply decreased 
D) both demand and supply increased 
A) supply decreased 
B) demand decreased 
C) both demand and supply decreased 
D) both demand and supply increased

Question 3

A shortage will exert pressures for the price to decrease.

Accepted Answer

A) True 
 B)False

Question 4

Use the following to answer questions 
Exhibit: Demand and Supply of Wheat  
-(Exhibit: Demand and Supply of Wheat)
A temporary price of $2 in this market would result in:

Accepted Answer

A) a surplus of 8,000 bushels. 
B) a shortage of 8,000 bushels. 
C) a shortage of 10,000 bushels. 
D) a surplus of 10,000 bushels. 
A) a surplus of 8,000 bushels. 
B) a shortage of 8,000 bushels. 
C) a shortage of 10,000 bushels. 
D) a surplus of 10,000 bushels.

Question 5

Two goods are substitutes if:

Accepted Answer

A) an increase in the price of one leads to a shift to the left in the demand curve for the other. 
B) an increase in the price of one leads to an increase in demand for the other. 
C) an increase in the price of one will increase the supply of the other. 
D) a fall in the price of one leads to a reduction in supply for the other. 
A) an increase in the price of one leads to a shift to the left in the demand curve for the other. 
B) an increase in the price of one leads to an increase in demand for the other. 
C) an increase in the price of one will increase the supply of the other. 
D) a fall in the price of one leads to a reduction in supply for the other.

Question 6

Use the following to answer questions 
Exhibit: Demand Shifters and Supply Shifters  
-(Exhibit: Demand Shifters and Supply Shifters)
The exhibit shows how supply and demand might shift in response to specific events.Suppose a wet and sunny year increases the nation's sweet corn crop by 20 percent.Which panel best describes how this will affect the market for frozen peas, a substitute for sweet corn?

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 7

If the price of a commodity increases, all other things unchanged, you would expect the:

Accepted Answer

A) demand to decrease. 
B) quantity demanded to increase. 
C) quantity demanded to decrease. 
D) demand curve to shift to the left. 
A) demand to decrease. 
B) quantity demanded to increase. 
C) quantity demanded to decrease. 
D) demand curve to shift to the left.

Question 8

For most consumers, blu-ray players and blu-ray discs are likely to be:

Accepted Answer

A) substitute goods. 
B) complementary goods. 
C) inferior goods. 
D) independent goods. 
A) substitute goods. 
B) complementary goods. 
C) inferior goods. 
D) independent goods.

Question 9

When economists study the behavior of sellers, they are studying:

Accepted Answer

A) supply. 
B) the role of government. 
C) demand. 
D) accounting. 
A) supply. 
B) the role of government. 
C) demand. 
D) accounting.

Question 10

Use the following to answer questions 
Exhibit: Demand and Supply  
-(Exhibit: Demand and Supply)
If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

Accepted Answer

A) 3 
B) 4 
C) 5 
D) 6 
A) 3 
B) 4 
C) 5 
D) 6

Question 11

Use the following to answer questions 
Exhibit: Demand Shifters and Supply Shifters  
-(Exhibit: Demand Shifters and Supply Shifters)
The exhibit shows how supply and demand might shift in response to specific events.Suppose the technology for producing snowboards improves.Which panel best describes how this will affect the market for winter parkas, a complement of snowboards?

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 12

Use the following to answer questions 
Exhibit: Demand Shifters and Supply Shifters  
-(Exhibit: Demand Shifters and Supply Shifters)
The exhibit shows how supply and demand might shift in response to specific events.Suppose a spring frost destroys one-third of the nation's artichoke crop.Which panel best describes how this will affect the market for mayonnaise, which is a complement to artichokes?

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 13

Use the following to answer questions 
Exhibit: The Determinants of Demand and Supply  
-(Exhibit: The Determinants of Demand and Supply)
The exhibit shows how supply and demand might shift in response to specific events.Suppose a new machine is developed that allows restaurants and fast-food outlets to produce French fries at a lower cost.Which panel best describes how this will affect the market for French fries?

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 14

The law of demand is illustrated by a demand curve that is:

Accepted Answer

A) horizontal. 
B) downward-sloping. 
C) vertical. 
D) upward-sloping. 
A) horizontal. 
B) downward-sloping. 
C) vertical. 
D) upward-sloping.

Question 15

An announcement that smoking will harm your ability to think clearly will most likely result in:

Accepted Answer

A) an increase in the quantity of cigarettes demanded. 
B) a decrease in the demand for cigarettes. 
C) no change in smoking habits. 
D) an increase in the equilibrium price of cigarettes. 
A) an increase in the quantity of cigarettes demanded. 
B) a decrease in the demand for cigarettes. 
C) no change in smoking habits. 
D) an increase in the equilibrium price of cigarettes.

Question 16

Price changes for complements and substitutes have the same effect on demand.

Accepted Answer

A) True 
 B)False

Question 17

Use the following to answer questions 
Exhibit: Demand and Supply Curves  
-(Exhibit: Demand and Supply Curves)
The highest price per unit that buyers would be willing to pay for 250 units is:

Accepted Answer

A) $0. 
B) $5. 
C) $10. 
D) $15. 
A) $0. 
B) $5. 
C) $10. 
D) $15.

Question 18

The law of demand is illustrated when:

Accepted Answer

A) an increase in tuition encourages more students to enroll in college because the quality of education has risen. 
B) an increase in the purchases of personal computers results from lower prices. 
C) higher oil prices cause oil companies to drill for new sources of oil. 
D) higher fees for the use of public golf courses force golfers to purchase fewer golf balls. 
A) an increase in tuition encourages more students to enroll in college because the quality of education has risen. 
B) an increase in the purchases of personal computers results from lower prices. 
C) higher oil prices cause oil companies to drill for new sources of oil. 
D) higher fees for the use of public golf courses force golfers to purchase fewer golf balls.

Question 19

An increase in both supply and demand must increase both equilibrium price and quantity.

Accepted Answer

A) True 
 B)False

Question 20

The price of oranges falls.What happens in the market for apples, which are a substitute for oranges?

Accepted Answer

A) The equilibrium price falls and the equilibrium quantity rises. 
B) The equilibrium price rises and the equilibrium quantity falls. 
C) The equilibrium price and quantity rise. 
D) The equilibrium price and quantity fall. 
A) The equilibrium price falls and the equilibrium quantity rises. 
B) The equilibrium price rises and the equilibrium quantity falls. 
C) The equilibrium price and quantity rise. 
D) The equilibrium price and quantity fall.

The demand for a product is the quantity of it that people buy.

Use the following to answer questions Exhibit: Shifts in Demand and Supply -(Exhibit: Shifts in Demand and Supply) Assume that the market in Panel (a) Is in equilibrium at point M.Compared to the initial equilibrium at point N, what changes could explain what happened in this market?

A shortage will exert pressures for the price to decrease.

Use the following to answer questions Exhibit: Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) A temporary price of $2 in this market would result in:

Two goods are substitutes if:

If the price of a commodity increases, all other things unchanged, you would expect the:

For most consumers, blu-ray players and blu-ray discs are likely to be:

When economists study the behavior of sellers, they are studying:

Use the following to answer questions Exhibit: Demand and Supply -(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

The law of demand is illustrated by a demand curve that is:

An announcement that smoking will harm your ability to think clearly will most likely result in:

Price changes for complements and substitutes have the same effect on demand.

Use the following to answer questions Exhibit: Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

The law of demand is illustrated when:

An increase in both supply and demand must increase both equilibrium price and quantity.

The price of oranges falls.What happens in the market for apples, which are a substitute for oranges?

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

The demand for a product is the quantity of it that people buy.

Use the following to answer questions Exhibit: Shifts in Demand and Supply -(Exhibit: Shifts in Demand and Supply) Assume that the market in Panel (a) Is in equilibrium at point M.Compared to the initial equilibrium at point N, what changes could explain what happened in this market?

A shortage will exert pressures for the price to decrease.

Use the following to answer questions Exhibit: Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) A temporary price of $2 in this market would result in:

Two goods are substitutes if:

If the price of a commodity increases, all other things unchanged, you would expect the:

For most consumers, blu-ray players and blu-ray discs are likely to be:

When economists study the behavior of sellers, they are studying:

Use the following to answer questions Exhibit: Demand and Supply -(Exhibit: Demand and Supply) If the equilibrium price fell to $2 because of a shift to the left of the demand curve, the quantity supplied would be:

The law of demand is illustrated by a demand curve that is:

An announcement that smoking will harm your ability to think clearly will most likely result in:

Price changes for complements and substitutes have the same effect on demand.

Use the following to answer questions Exhibit: Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

The law of demand is illustrated when:

An increase in both supply and demand must increase both equilibrium price and quantity.

The price of oranges falls.What happens in the market for apples, which are a substitute for oranges?

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