Question 1

Which of the following is true if a market is in equilibrium?

Accepted Answer

A)  price will be rising 
B)  price will be falling 
C)  quantity demanded is greater than quantity supplied 
D)  quantity demanded is equal to quantity supplied 
E)  quantity demanded is less than quantity supplied 
A)  price will be rising 
B)  price will be falling 
C)  quantity demanded is greater than quantity supplied 
D)  quantity demanded is equal to quantity supplied 
E)  quantity demanded is less than quantity supplied

Question 2

The market-day supply curve is

Accepted Answer

A)  horizontal, reflecting the fact that the quantity supplied can increase infinitely 
B)  vertical, reflecting the fact that the quantity supplied cannot change 
C)  increasing, reflecting the positive relationship between price and quantity 
D)  decreasing, reflecting the inverse relationship between price and quantity 
E)  flatter than the market demand curve 
A)  horizontal, reflecting the fact that the quantity supplied can increase infinitely 
B)  vertical, reflecting the fact that the quantity supplied cannot change 
C)  increasing, reflecting the positive relationship between price and quantity 
D)  decreasing, reflecting the inverse relationship between price and quantity 
E)  flatter than the market demand curve

Question 3

Over the past couple of years, prices for personal computers have fallen dramatically, but suppliers have offered more and more of them for sale. Does this refute the law of supply? Explain.

Accepted Answer

No. The price has fallen in re

Question 4

Suppose there is an increase in the price of oranges. Which of the following is a possible cause?

Accepted Answer

A)  increase in income 
B)  increase in the price of sugar, a complement of oranges 
C)  decrease in the price of tangerines, a substitute for oranges 
D)  freeze in Florida 
E)  favorable weather pattern 
A)  increase in income 
B)  increase in the price of sugar, a complement of oranges 
C)  decrease in the price of tangerines, a substitute for oranges 
D)  freeze in Florida 
E)  favorable weather pattern

Question 5

The equilibrium quantity of Smids would be found by

Accepted Answer

A)  choosing a quantity that generated the highest market price 
B)  setting price equal to the revenue target desired by firms 
C)  solving for the price that generates the maximum revenue for sellers 
D)  choosing the quantity desired by consumers and working backward to solve for the price associated with that quantity 
E)  determining the price and quantity where the demand and supply curves intersect 
A)  choosing a quantity that generated the highest market price 
B)  setting price equal to the revenue target desired by firms 
C)  solving for the price that generates the maximum revenue for sellers 
D)  choosing the quantity desired by consumers and working backward to solve for the price associated with that quantity 
E)  determining the price and quantity where the demand and supply curves intersect

Question 6

Population growth will most likely lead to increased bottled water demand, short-term

Accepted Answer

A)  shortages, and a resultant price increase . 
B)  surpluses, and a resultant price increase 
C)  shortages, and a resultant price decrease. 
D)  surpluses, and a resultant price decrease 
E)  surpluses, and a resultant price decrease. 
A)  shortages, and a resultant price increase . 
B)  surpluses, and a resultant price increase 
C)  shortages, and a resultant price decrease. 
D)  surpluses, and a resultant price decrease 
E)  surpluses, and a resultant price decrease.

Question 7

If the price of Chinese food decreases, then the demand for chop sticks decreases because they are complementary goods.

Accepted Answer

A) True 
 B)False

Question 8

-In Exhibit C-19, the shift of the demand curve is best explained by a change in

Accepted Answer

A)  the quantity demanded 
B)  resources prices 
C)  prices 
D)  the prices of other goods 
E)  the number of demanders and suppliers 
A)  the quantity demanded 
B)  resources prices 
C)  prices 
D)  the prices of other goods 
E)  the number of demanders and suppliers

Question 9

Which of the following is not a short-run decision for a fisherman?

Accepted Answer

A)  hire more fishing crew 
B)  produce less fish 
C)  buy a new fishing boat 
D)  buy more bait 
E)  purchase less fuel for the boat 
A)  hire more fishing crew 
B)  produce less fish 
C)  buy a new fishing boat 
D)  buy more bait 
E)  purchase less fuel for the boat

Question 10

Suppose there are 100 people with identical demand curves. When the price of a movie ticket is $8, the quantity demanded by each person is 5 tickets. When the price is $4, the quantity demanded by each person is 9 tickets. Which of the following is the most likely quantity demanded for the market as a whole when the price is $6?

Accepted Answer

A)  700 
B)  1,200 
C)  400 
D)  1,000 
E)  100 
A)  700 
B)  1,200 
C)  400 
D)  1,000 
E)  100

Question 11

A market demand curve is

Accepted Answer

A)  the sum of the demand curves of individuals in a market 
B)  the sum of individuals who make demands 
C)  horizontal at the market price 
D)  vertical at the market price 
E)  upward sloping 
A)  the sum of the demand curves of individuals in a market 
B)  the sum of individuals who make demands 
C)  horizontal at the market price 
D)  vertical at the market price 
E)  upward sloping

Question 12

For complementary goods, an increase in the price of one shifts the demand curve for the other to the right.

Accepted Answer

A) True 
 B)False

Question 13

A decrease in supply means that

Accepted Answer

A)  demand will increase by the same amount 
B)  the quantity supplied increases 
C)  the quantity supplied decreases 
D)  at every price level, the quantity supplied decreases 
E)  the supply curve shifts to the right 
A)  demand will increase by the same amount 
B)  the quantity supplied increases 
C)  the quantity supplied decreases 
D)  at every price level, the quantity supplied decreases 
E)  the supply curve shifts to the right

Question 14

The long run refers to the time interval in which suppliers are able to change the quantityof some, but not all, of the resources in the production of a good.

Accepted Answer

A) True 
 B)False

Question 15

A decrease in demand, accompanied by a simultaneous decrease in supply, will always cause the equilibrium price and quantity of the good to fall.

Accepted Answer

A) True 
 B)False

Question 16

Tasha is undecided about whether to sell her house or not. If the real estate agent comes to her with a $150,000 offer, she will not sell. If the offer is $175,000, she will sell. Think of Tasha as one of hundreds of would-be sellers on the housing market. It illustrates that

Accepted Answer

A)  the demand for real estate is unreliable 
B)  Tasha's decision making reflects a market-day supply 
C)  there must be an excess supply of homes 
D)  the supply curve for homes is upward sloping 
E)  the supply curve for homes is downward sloping 
A)  the demand for real estate is unreliable 
B)  Tasha's decision making reflects a market-day supply 
C)  there must be an excess supply of homes 
D)  the supply curve for homes is upward sloping 
E)  the supply curve for homes is downward sloping

Question 17

Which of the following best explains the fact that computers are cheaper now than 10 years ago?

Accepted Answer

A)  the price of computers has risen 
B)  laptops have become commonplace 
C)  The technology used in the production of computers has improved during this period. 
D)  Resources used in the production of computers have become more scarce during this period. 
E)  The demand for computers has increased substantially during this period. 
A)  the price of computers has risen 
B)  laptops have become commonplace 
C)  The technology used in the production of computers has improved during this period. 
D)  Resources used in the production of computers have become more scarce during this period. 
E)  The demand for computers has increased substantially during this period.

Question 18

Substitute goods are goods that are

Accepted Answer

A)  jointly consumed, like bread and jam 
B)  good replacements for each other, like Coke and Pepsi 
C)  used in sequence, like meals and desserts 
D)  inferior, like black-and-white television 
E)  not dependent on price, like water and air 
A)  jointly consumed, like bread and jam 
B)  good replacements for each other, like Coke and Pepsi 
C)  used in sequence, like meals and desserts 
D)  inferior, like black-and-white television 
E)  not dependent on price, like water and air

Question 19

If the price of pizzas falls, the demand for submarine sandwiches (a substitute good)increases.

Accepted Answer

A) True 
 B)False

Question 20

If a shortage of a good exists in the market,

Accepted Answer

A)  the price is higher than its equilibrium level 
B)  the quantity demanded is less than the quantity supplied 
C)  the quantity demanded exceeds the quantity supplied 
D)  there is an excess supply of the good 
E)  the price will fall 
A)  the price is higher than its equilibrium level 
B)  the quantity demanded is less than the quantity supplied 
C)  the quantity demanded exceeds the quantity supplied 
D)  there is an excess supply of the good 
E)  the price will fall

Which of the following is true if a market is in equilibrium?

The market-day supply curve is

Over the past couple of years, prices for personal computers have fallen dramatically, but suppliers have offered more and more of them for sale. Does this refute the law of supply? Explain.

Suppose there is an increase in the price of oranges. Which of the following is a possible cause?

The equilibrium quantity of Smids would be found by

Population growth will most likely lead to increased bottled water demand, short-term

If the price of Chinese food decreases, then the demand for chop sticks decreases because they are complementary goods.

-In Exhibit C-19, the shift of the demand curve is best explained by a change in

Which of the following is not a short-run decision for a fisherman?

A market demand curve is

For complementary goods, an increase in the price of one shifts the demand curve for the other to the right.

A decrease in supply means that

The long run refers to the time interval in which suppliers are able to change the quantityof some, but not all, of the resources in the production of a good.

A decrease in demand, accompanied by a simultaneous decrease in supply, will always cause the equilibrium price and quantity of the good to fall.

Tasha is undecided about whether to sell her house or not. If the real estate agent comes to her with a $150,000 offer, she will not sell. If the offer is $175,000, she will sell. Think of Tasha as one of hundreds of would-be sellers on the housing market. It illustrates that

Which of the following best explains the fact that computers are cheaper now than 10 years ago?

Substitute goods are goods that are

If the price of pizzas falls, the demand for submarine sandwiches (a substitute good)increases.

If a shortage of a good exists in the market,

Introduction

Production Possibilities and Opportunity Costs

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

Exam 3: Demand and Supply

Which of the following is true if a market is in equilibrium?

The market-day supply curve is

Over the past couple of years, prices for personal computers have fallen dramatically, but suppliers have offered more and more of them for sale. Does this refute the law of supply? Explain.

Suppose there is an increase in the price of oranges. Which of the following is a possible cause?

The equilibrium quantity of Smids would be found by

Population growth will most likely lead to increased bottled water demand, short-term

If the price of Chinese food decreases, then the demand for chop sticks decreases because they are complementary goods.

-In Exhibit C-19, the shift of the demand curve is best explained by a change in

Which of the following is not a short-run decision for a fisherman?

A market demand curve is

For complementary goods, an increase in the price of one shifts the demand curve for the other to the right.

A decrease in supply means that

The long run refers to the time interval in which suppliers are able to change the quantityof some, but not all, of the resources in the production of a good.

A decrease in demand, accompanied by a simultaneous decrease in supply, will always cause the equilibrium price and quantity of the good to fall.

Tasha is undecided about whether to sell her house or not. If the real estate agent comes to her with a $150,000 offer, she will not sell. If the offer is $175,000, she will sell. Think of Tasha as one of hundreds of would-be sellers on the housing market. It illustrates that

Which of the following best explains the fact that computers are cheaper now than 10 years ago?

Substitute goods are goods that are

If the price of pizzas falls, the demand for submarine sandwiches (a substitute good)increases.

If a shortage of a good exists in the market,

Introduction

Production Possibilities and Opportunity Costs

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters