Question 1

NAFTA increased the supply curve of lumber in the UnitedStates.

Accepted Answer

A) True 
 B)False

Question 2

(Figure: Demand Curve) Refer to the figure. What is themaximum price per book that buyers are willing to pay for 2,500 books?
Figure: Demand Curve

Accepted Answer

A) $60 
B) $45 
C) $30 
D) $15 
A) $60 
B) $45 
C) $30 
D) $15

Question 3

An increase in income increases the demand for normal goods.

Accepted Answer

A) True 
 B)False

Question 4

(Figure: Supply Shift) According to the figure, the:Figure: Supply Shift

Accepted Answer

A) costs of producing output have decreased. 
B) technology for producing output have improved. 
C) costs of producing output have increased. 
D) price of the product decreased. 
A) costs of producing output have decreased. 
B) technology for producing output have improved. 
C) costs of producing output have increased. 
D) price of the product decreased.

Question 5

Mario buys eight units of good X when his income is $2,000 amonth. When his income increases to $2,700 per month, hebuys only six units of good X. For Mario, good X is:

Accepted Answer

A) a normal good. 
B) an expensive good. 
C) an inferior good. 
D) a useless good. 
A) a normal good. 
B) an expensive good. 
C) an inferior good. 
D) a useless good.

Question 6

Figure: Supply Shifts   (Figure: Supply Shifts) In the figure, the initial supply curve isS1. Producers engage in market speculation with the belief thatthe price of the good will increase in the near future. Thiswould be represented in the figure by shifting the:

Accepted Answer

A) supply curve to S2, resulting in a lower quantity supplied at each price. 
B) supply curve to S2, resulting in a higher quantity supplied at each price. 
C) supply curve to S3, resulting in a lower quantity supplied at each price. 
D) supply curve to S3, resulting in a higher quantity supplied at each price. 
A) supply curve to S2, resulting in a lower quantity supplied at each price. 
B) supply curve to S2, resulting in a higher quantity supplied at each price. 
C) supply curve to S3, resulting in a lower quantity supplied at each price. 
D) supply curve to S3, resulting in a higher quantity supplied at each price.

Question 7

One result of the North American Free Trade Agreement wasa:

Accepted Answer

A) rise in the price of lumber in the United States due to the entry of Canadian lumber companies into U.S.
Markets. 
B) decrease in the price of lumber in the United States due to the entry of Canadian lumber companies into U.S.markets.(True
Answer )Correct 
C) rise in the price of lumber in the United States due to the exit of Canadian lumber companies from U.S.markets. 
D) decrease in the price of lumber in the United States due to the exit of Canadian lumber companies from U.S.
Markets. 
A) rise in the price of lumber in the United States due to the entry of Canadian lumber companies into U.S.
Markets. 
B) decrease in the price of lumber in the United States due to the entry of Canadian lumber companies into U.S.markets.(True
Answer )Correct 
C) rise in the price of lumber in the United States due to the exit of Canadian lumber companies from U.S.markets. 
D) decrease in the price of lumber in the United States due to the exit of Canadian lumber companies from U.S.
Markets.

Question 8

An increase in the use of labor-saving technologies will shift thesupply curve to the right.

Accepted Answer

A) True 
 B)False

Question 9

Accepted Answer

A) the expectation of an outbreak of war in the world's best oil producing regions 
B) the expectation of a reduction in the future supply of oil 
C) the expectation that next week's oil prices will be substantially higher 
D) All of the answers are correct. 
A) the expectation of an outbreak of war in the world's best oil producing regions 
B) the expectation of a reduction in the future supply of oil 
C) the expectation that next week's oil prices will be substantially higher 
D) All of the answers are correct.

Question 10

A change in quantity supplied is reflected by a movement alongthe same supply curve while a change in supply refers to a shiftin the entire supply curve.

Accepted Answer

A) True 
 B)False

Question 11

What does the law of demand state?
I. There is a negative relationship between price and quantitydemanded
II.There is an inverse relationship between price and quantitythat buyers are willing and able to purchase
III. There is an inverse relationship between price and demand.

Accepted Answer

A) I and II only 
B) II and III only 
C) I and III only 
D) I, II, and III 
A) I and II only 
B) II and III only 
C) I and III only 
D) I, II, and III

Question 12

In the market for fertilizer, an:

Accepted Answer

A) increase in the wage rate will increase the demand for fertilizer. 
B) advance in technology will increase the supply of fertilizer. 
C) increase in the wage rate will increase the supply of fertilizer. 
D) increase in the cost of equipment will increase the supply of fertilizer. 
A) increase in the wage rate will increase the demand for fertilizer. 
B) advance in technology will increase the supply of fertilizer. 
C) increase in the wage rate will increase the supply of fertilizer. 
D) increase in the cost of equipment will increase the supply of fertilizer.

Question 13

Joe runs a landscape company and uses one of his home'sbedrooms as a home office. This office could be used to earnrental income from college students. If average rental income inJoe's neighborhood were to rise:

Accepted Answer

A) Joe's opportunity cost of using a bedroom as a home office would decrease. 
B) Joe's landscape company would experience a decrease in demand for services at all prices. 
C) Joe should expand his office space in his home. 
D) Joe's opportunity cost of using a bedroom as a home office would increase. 
A) Joe's opportunity cost of using a bedroom as a home office would decrease. 
B) Joe's landscape company would experience a decrease in demand for services at all prices. 
C) Joe should expand his office space in his home. 
D) Joe's opportunity cost of using a bedroom as a home office would increase.

Question 14

Advertising, fads, and fashion are examples of influences ondemand that are generally referred to as altering expectationsabout products.

Accepted Answer

A) True 
 B)False

Question 15

If the price to play golf decreases, the demand for golf balls willincrease.

Accepted Answer

A) True 
 B)False

Question 16

A government subsidy causes the:

Accepted Answer

A) supply of the product to increase. 
B) supply of the product to decrease. 
C) supply curve to change slope. 
D) supply curve to shift up and to the left. 
A) supply of the product to increase. 
B) supply of the product to decrease. 
C) supply curve to change slope. 
D) supply curve to shift up and to the left.

Question 17

Which of the following are likely to be complements?

Accepted Answer

A) hotdogs and hamburgers 
B) books and book-lights 
C) coffee and tea 
D) cars and vans 
A) hotdogs and hamburgers 
B) books and book-lights 
C) coffee and tea 
D) cars and vans

Question 18

The quantity supplied is the:

Accepted Answer

A) amount of inputs that a firm earns profit on. 
B) change in the sellers' output multiplied by the change in price. 
C) incremental cost of producing one more unit of output, holding all other things constant. 
D) amount of a good that firms are willing and able to sell at a particular price during a given period of time.(True Answer
)Correct 
A) amount of inputs that a firm earns profit on. 
B) change in the sellers' output multiplied by the change in price. 
C) incremental cost of producing one more unit of output, holding all other things constant. 
D) amount of a good that firms are willing and able to sell at a particular price during a given period of time.(True Answer
)Correct

Question 19

Accepted Answer

A) $4.00 
B) $2.50 
C) $2.75 
D) $4.25 
A) $4.00 
B) $2.50 
C) $2.75 
D) $4.25

Question 20

Which of the following statements correctly defines a demandcurve?

Accepted Answer

A) A demand curve is a function that shows the relationship between prices and the quantity available for sale. 
B) A demand curve is a function that shows the relationship between prices and their associated quantities
Supplied. 
C) A demand curve is a function that shows the relationship between prices and their associated quantities
Demanded. 
D) A demand curve is a function that shows the relationship between quantity demanded and quantity supplied. 
A) A demand curve is a function that shows the relationship between prices and the quantity available for sale. 
B) A demand curve is a function that shows the relationship between prices and their associated quantities
Supplied. 
C) A demand curve is a function that shows the relationship between prices and their associated quantities
Demanded. 
D) A demand curve is a function that shows the relationship between quantity demanded and quantity supplied.

NAFTA increased the supply curve of lumber in the UnitedStates.

(Figure: Demand Curve) Refer to the figure. What is themaximum price per book that buyers are willing to pay for 2,500 books? Figure: Demand Curve

An increase in income increases the demand for normal goods.

(Figure: Supply Shift) According to the figure, the:Figure: Supply Shift

Mario buys eight units of good X when his income is $2,000 amonth. When his income increases to $2,700 per month, hebuys only six units of good X. For Mario, good X is:

Figure: Supply Shifts (Figure: Supply Shifts) In the figure, the initial supply curve isS₁. Producers engage in market speculation with the belief thatthe price of the good will increase in the near future. Thiswould be represented in the figure by shifting the:

One result of the North American Free Trade Agreement wasa:

An increase in the use of labor-saving technologies will shift thesupply curve to the right.

A change in quantity supplied is reflected by a movement alongthe same supply curve while a change in supply refers to a shiftin the entire supply curve.

What does the law of demand state? I. There is a negative relationship between price and quantitydemanded II.There is an inverse relationship between price and quantitythat buyers are willing and able to purchase III. There is an inverse relationship between price and demand.

In the market for fertilizer, an:

Joe runs a landscape company and uses one of his home'sbedrooms as a home office. This office could be used to earnrental income from college students. If average rental income inJoe's neighborhood were to rise:

Advertising, fads, and fashion are examples of influences ondemand that are generally referred to as altering expectationsabout products.

If the price to play golf decreases, the demand for golf balls willincrease.

A government subsidy causes the:

Which of the following are likely to be complements?

The quantity supplied is the:

Which of the following statements correctly defines a demandcurve?

Welcome to Economics

Choice in a World of Scarcity

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

Exam 3: Demand and Supply

NAFTA increased the supply curve of lumber in the UnitedStates.

(Figure: Demand Curve) Refer to the figure. What is themaximum price per book that buyers are willing to pay for 2,500 books? Figure: Demand Curve

An increase in income increases the demand for normal goods.

(Figure: Supply Shift) According to the figure, the:Figure: Supply Shift

Mario buys eight units of good X when his income is $2,000 amonth. When his income increases to $2,700 per month, hebuys only six units of good X. For Mario, good X is:

Figure: Supply Shifts (Figure: Supply Shifts) In the figure, the initial supply curve isS1. Producers engage in market speculation with the belief thatthe price of the good will increase in the near future. Thiswould be represented in the figure by shifting the:

One result of the North American Free Trade Agreement wasa:

An increase in the use of labor-saving technologies will shift thesupply curve to the right.

A change in quantity supplied is reflected by a movement alongthe same supply curve while a change in supply refers to a shiftin the entire supply curve.

What does the law of demand state? I. There is a negative relationship between price and quantitydemanded II.There is an inverse relationship between price and quantitythat buyers are willing and able to purchase III. There is an inverse relationship between price and demand.

In the market for fertilizer, an:

Joe runs a landscape company and uses one of his home'sbedrooms as a home office. This office could be used to earnrental income from college students. If average rental income inJoe's neighborhood were to rise:

Advertising, fads, and fashion are examples of influences ondemand that are generally referred to as altering expectationsabout products.

If the price to play golf decreases, the demand for golf balls willincrease.

A government subsidy causes the:

Which of the following are likely to be complements?

The quantity supplied is the:

Which of the following statements correctly defines a demandcurve?

Welcome to Economics

Choice in a World of Scarcity

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

Figure: Supply Shifts (Figure: Supply Shifts) In the figure, the initial supply curve isS₁. Producers engage in market speculation with the belief thatthe price of the good will increase in the near future. Thiswould be represented in the figure by shifting the: