Question 1

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased. As a result, we can expect

Accepted Answer

A)  a decrease in price and no predictable impact on output. 
B)  a definite decrease in price and increase in output. 
C)  an increase in output with no predictable change in price. 
D)  no predictable changes in either price or output. 
A)  a decrease in price and no predictable impact on output. 
B)  a definite decrease in price and increase in output. 
C)  an increase in output with no predictable change in price. 
D)  no predictable changes in either price or output.

Question 2

Computer processors and memory costs have decreased dramatically in the past 25 years. As a result, in the computer market, we have seen

Accepted Answer

A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply. 
A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply.

Question 3

If the demand curve shifts outward and the supply curve remains the same, price will fall.

Accepted Answer

A) True 
 B)False

Question 4

What group tends to benefit from the sugar price supports?

Accepted Answer

A)  Manufacturers of products that use sugar 
B)  Individual consumers of sugar 
C)  Producers of other agricultural products 
D)  Producers of sugar 
E)  All of these responses are correct. 
A)  Manufacturers of products that use sugar 
B)  Individual consumers of sugar 
C)  Producers of other agricultural products 
D)  Producers of sugar 
E)  All of these responses are correct.

Question 5

The invention of new technology that can double the amount of gold extracted from raw ore will lead to a

Accepted Answer

A)  higher world price of gold, since mining companies must pay for the new machinery. 
B)  lower world price of gold, since any amount of gold output is now cheaper to produce. 
C)  higher world price of gold, because miners' wages must double as their productivity doubles. 
D)  lower world price of gold, but only if new mining companies are not allowed to enter the industry. 
A)  higher world price of gold, since mining companies must pay for the new machinery. 
B)  lower world price of gold, since any amount of gold output is now cheaper to produce. 
C)  higher world price of gold, because miners' wages must double as their productivity doubles. 
D)  lower world price of gold, but only if new mining companies are not allowed to enter the industry.

Question 6

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

Accepted Answer

A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product 
A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product

Question 7

If a price floor is removed , which of the following would be a result?

Accepted Answer

A)  The elimination of surpluses 
B)  Problems with the disposal of goods 
C)  Disguised discounts to sell additional goods are offered by sellers 
D)  Overinvestment in the industry 
A)  The elimination of surpluses 
B)  Problems with the disposal of goods 
C)  Disguised discounts to sell additional goods are offered by sellers 
D)  Overinvestment in the industry

Question 8

Changes in the size of an industry may cause supply to shift.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a characteristic of a market where a price floor is in place?

Accepted Answer

A)  The market quantity demanded exceeds the market quantity supplied. 
B)  Fewer regulations are needed since the government sets the price. 
C)  Fewer units are purchased than would be the case without the price floor. 
D)  A smaller number of sellers than in markets without price floors. 
A)  The market quantity demanded exceeds the market quantity supplied. 
B)  Fewer regulations are needed since the government sets the price. 
C)  Fewer units are purchased than would be the case without the price floor. 
D)  A smaller number of sellers than in markets without price floors.

Question 10

Tampering with the price mechanism

Accepted Answer

A)  can be efficient for a while. 
B)  cannot be attempted in a market economy. 
C)  can enhance societal welfare if done properly. 
D)  often produces undesired side effects. 
A)  can be efficient for a while. 
B)  cannot be attempted in a market economy. 
C)  can enhance societal welfare if done properly. 
D)  often produces undesired side effects.

Question 11

The minimum wage is an example of a government price ceiling and results in a reduction in unemployment.

Accepted Answer

A) True 
 B)False

Question 12

Price floors are typically accompanied by a standard series of symptoms. What are they?

Accepted Answer

Following are some of the symptoms assoc

Question 13

Why do airlines tend to lower ticket prices in the winter?

Accepted Answer

A)  Supply is relatively variable, and a drop in demand lowers equilibrium price 
B)  Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C)  A drop in both supply and demand lowers equilibrium price. 
D)  Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E)  Demand is relatively fixed, and a drop in supply lowers equilibrium price. 
A)  Supply is relatively variable, and a drop in demand lowers equilibrium price 
B)  Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C)  A drop in both supply and demand lowers equilibrium price. 
D)  Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E)  Demand is relatively fixed, and a drop in supply lowers equilibrium price.

Question 14

A key assumption made when a supply schedule is constructed is that

Accepted Answer

A)  the only factors that matter in determining supply are price and quantity. 
B)  firms only want to sell a certain amount of a product. 
C)  supply is too important to be left to the marketplace. 
D)  only price and quantity vary, all other determinants of supply are held constant. 
E)  demand has a positive slope. 
A)  the only factors that matter in determining supply are price and quantity. 
B)  firms only want to sell a certain amount of a product. 
C)  supply is too important to be left to the marketplace. 
D)  only price and quantity vary, all other determinants of supply are held constant. 
E)  demand has a positive slope.

Question 15

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Accepted Answer

A) True 
 B)False

Question 16

The supply curve for a good can be thought of as

Accepted Answer

A)  a graphical display of "market potential." 
B)  a graphical representation of the data in a supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
D)  a forecasting tool. 
E)  All of these responses are correct. 
A)  a graphical display of "market potential." 
B)  a graphical representation of the data in a supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
D)  a forecasting tool. 
E)  All of these responses are correct.

Question 17

University studies have shown that that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. This leads to a reduction in feed costs of $60 million a year. In the chicken market, the

Accepted Answer

A)  demand curve shifts to the right. 
B)  supply curve shifts to the right. 
C)  price will rise. 
D)  quantity sold will fall. 
A)  demand curve shifts to the right. 
B)  supply curve shifts to the right. 
C)  price will rise. 
D)  quantity sold will fall.

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased. As a result, we can expect

Computer processors and memory costs have decreased dramatically in the past 25 years. As a result, in the computer market, we have seen

If the demand curve shifts outward and the supply curve remains the same, price will fall.

What group tends to benefit from the sugar price supports?

The invention of new technology that can double the amount of gold extracted from raw ore will lead to a

A demand schedule is a table showing how the of some product during a specified period of time changes as changes, holding all other determinants of quantity demanded constant.

If a price floor is removed , which of the following would be a result?

Changes in the size of an industry may cause supply to shift.

Which of the following is a characteristic of a market where a price floor is in place?

Tampering with the price mechanism

The minimum wage is an example of a government price ceiling and results in a reduction in unemployment.

Price floors are typically accompanied by a standard series of symptoms. What are they?

Why do airlines tend to lower ticket prices in the winter?

A key assumption made when a supply schedule is constructed is that

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

The supply curve for a good can be thought of as

University studies have shown that that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. This leads to a reduction in feed costs of $60 million a year. In the chicken market, the

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

Exam 4: Supply and Demand: an Initial Look

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased. As a result, we can expect

Computer processors and memory costs have decreased dramatically in the past 25 years. As a result, in the computer market, we have seen

If the demand curve shifts outward and the supply curve remains the same, price will fall.

What group tends to benefit from the sugar price supports?

The invention of new technology that can double the amount of gold extracted from raw ore will lead to a

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

If a price floor is removed , which of the following would be a result?

Changes in the size of an industry may cause supply to shift.

Which of the following is a characteristic of a market where a price floor is in place?

Tampering with the price mechanism

The minimum wage is an example of a government price ceiling and results in a reduction in unemployment.

Price floors are typically accompanied by a standard series of symptoms. What are they?

Why do airlines tend to lower ticket prices in the winter?

A key assumption made when a supply schedule is constructed is that

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

The supply curve for a good can be thought of as

University studies have shown that that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop. This leads to a reduction in feed costs of $60 million a year. In the chicken market, the

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

A demand schedule is a table showing how the of some product during a specified period of time changes as changes, holding all other determinants of quantity demanded constant.