Question 1

Which one of the following is TRUE?

Accepted Answer

A)  An increase in demand causes a decrease in supply. 
B)  An increase in price causes a decrease in supply. 
C)  An increase in taxes on production of a good causes a decrease in supply. 
D)  An increase in consumer incomes causes a decrease in supply. 
A)  An increase in demand causes a decrease in supply. 
B)  An increase in price causes a decrease in supply. 
C)  An increase in taxes on production of a good causes a decrease in supply. 
D)  An increase in consumer incomes causes a decrease in supply.

Question 2

The equilibrium price of a good is established by the interaction of _________ and _________.

Accepted Answer

The answer of The equilibrium price of a good is...

Question 3

A demand curve slopes downward to reflect the _________ relationship between quantity demanded and price.

Accepted Answer

The answer of A demand curve slopes downward to reflect...

Question 4

After a decrease in the price of CDs, Samia buys fewer cassette tapes and purchases a new CD player. For Samia,

Accepted Answer

A)  CD players and cassette tapes are complements. 
B)  CDs, CD players, and cassette tapes are all complements. 
C)  CDs, cassette tapes, and CD players are all substitutes. 
D)  CDs and cassette tapes are substitutes, and CDs and CD players are complements. 
A)  CD players and cassette tapes are complements. 
B)  CDs, CD players, and cassette tapes are all complements. 
C)  CDs, cassette tapes, and CD players are all substitutes. 
D)  CDs and cassette tapes are substitutes, and CDs and CD players are complements.

Question 5

According to the law of supply, what must happen in order for firms to increase the quantity supplied of a good?

Accepted Answer

The price

Question 6

Which of the following is NOT a determinant of consumer demand?

Accepted Answer

A)  Income 
B)  Tastes and preferences 
C)  Prices of related goods 
D)  The number of producers in the market 
A)  Income 
B)  Tastes and preferences 
C)  Prices of related goods 
D)  The number of producers in the market

Question 7

An increase in demand for a good can be caused by

Accepted Answer

A)  an increase in the price of a substitute good. 
B)  an increase in the price of the good itself. 
C)  an increase in the price of a complement good. 
D)  a decrease in supply of the good. 
A)  an increase in the price of a substitute good. 
B)  an increase in the price of the good itself. 
C)  an increase in the price of a complement good. 
D)  a decrease in supply of the good.

Question 8

We observe that people buy less seafood and more steak when the relative price of steak decreases. This indicates that steak and seafood are

Accepted Answer

A)  substitutes. 
B)  complements. 
C)  not scarce. 
D)  in surplus. 
A)  substitutes. 
B)  complements. 
C)  not scarce. 
D)  in surplus.

Question 9

What is on the vertical axis when we plot a supply curve?

Accepted Answer

The answer of What is on the vertical axis when...

Question 10

What would have to happen to apartment rents in a locality in order for the demand for rental houses in that same locality to increase?

Accepted Answer

They would

Question 11

A demand schedule holds

Accepted Answer

A)  price constant. 
B)  quality constant. 
C)  quantity constant. 
D)  equilibrium constant. 
A)  price constant. 
B)  quality constant. 
C)  quantity constant. 
D)  equilibrium constant.

Question 12

At prices above the equilibrium price, shortages occur.

Accepted Answer

A) True 
 B)False

Question 13

A surplus can be eliminated by lowering the price of a good.

Accepted Answer

A) True 
 B)False

Question 14

What condition defines a surplus?

Accepted Answer

Quantity s

Question 15

Two goods are substitutes when

Accepted Answer

A)  the more you have of one, the more you want the other. 
B)  the more you buy of one, the less you buy of the other. 
C)  the two goods are used together. 
D)  the two goods have the same price. 
A)  the more you have of one, the more you want the other. 
B)  the more you buy of one, the less you buy of the other. 
C)  the two goods are used together. 
D)  the two goods have the same price.

Question 16

Table 3.2
  
-What is the equilibrium price for the market described in Table 3.2?

Accepted Answer

A)  $2 
B)  $4 
C)  $6 
D)  $8 
A)  $2 
B)  $4 
C)  $6 
D)  $8

Question 17

The substitution effect does not apply to wealthy consumers.

Accepted Answer

A) True 
 B)False

Question 18

The demand curve is downward sloping because

Accepted Answer

A)  price and quantity have a direct relationship. 
B)  price and quantity have an inverse relationship. 
C)  price is always constant. 
D)  demand is based on supply. 
A)  price and quantity have a direct relationship. 
B)  price and quantity have an inverse relationship. 
C)  price is always constant. 
D)  demand is based on supply.

Question 19

An increase in the number of firms producing a good will shift the supply curve for that good to the _________.

Accepted Answer

The answer of An increase in the number of firms...

Question 20

The upward slope of the supply curve reflects the _________ relationship between price and quantity supplied.

Accepted Answer

The answer of The upward slope of the supply curve...

Which one of the following is TRUE?

The equilibrium price of a good is established by the interaction of _ and _.

A demand curve slopes downward to reflect the _________ relationship between quantity demanded and price.

After a decrease in the price of CDs, Samia buys fewer cassette tapes and purchases a new CD player. For Samia,

According to the law of supply, what must happen in order for firms to increase the quantity supplied of a good?

Which of the following is NOT a determinant of consumer demand?

An increase in demand for a good can be caused by

We observe that people buy less seafood and more steak when the relative price of steak decreases. This indicates that steak and seafood are

What is on the vertical axis when we plot a supply curve?

What would have to happen to apartment rents in a locality in order for the demand for rental houses in that same locality to increase?

A demand schedule holds

At prices above the equilibrium price, shortages occur.

A surplus can be eliminated by lowering the price of a good.

What condition defines a surplus?

Two goods are substitutes when

Table 3.2 -What is the equilibrium price for the market described in Table 3.2?

The substitution effect does not apply to wealthy consumers.

The demand curve is downward sloping because

An increase in the number of firms producing a good will shift the supply curve for that good to the _________.

The upward slope of the supply curve reflects the _________ relationship between price and quantity supplied.

Economics and the World of Scarcity

The United States Within the World Economy

Consumer Decision Making and Consumer Reaction to Price Changes

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

Aggregate Demand and Supply

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters

Exam 3: Demand and Supply

Which one of the following is TRUE?

The equilibrium price of a good is established by the interaction of _________ and _________.

A demand curve slopes downward to reflect the _________ relationship between quantity demanded and price.

After a decrease in the price of CDs, Samia buys fewer cassette tapes and purchases a new CD player. For Samia,

According to the law of supply, what must happen in order for firms to increase the quantity supplied of a good?

Which of the following is NOT a determinant of consumer demand?

An increase in demand for a good can be caused by

We observe that people buy less seafood and more steak when the relative price of steak decreases. This indicates that steak and seafood are

What is on the vertical axis when we plot a supply curve?

What would have to happen to apartment rents in a locality in order for the demand for rental houses in that same locality to increase?

A demand schedule holds

At prices above the equilibrium price, shortages occur.

A surplus can be eliminated by lowering the price of a good.

What condition defines a surplus?

Two goods are substitutes when

Table 3.2 -What is the equilibrium price for the market described in Table 3.2?

The substitution effect does not apply to wealthy consumers.

The demand curve is downward sloping because

An increase in the number of firms producing a good will shift the supply curve for that good to the _________.

The upward slope of the supply curve reflects the _________ relationship between price and quantity supplied.

Economics and the World of Scarcity

The United States Within the World Economy

Consumer Decision Making and Consumer Reaction to Price Changes

The Firm: Production and Cost

The Two Extremes: Perfect Competition and Pure Monopoly

In Between the Extremes: Imperfect Competition

Market and Government Failures

Labor Economics

Unemployment, Inflation, and the Business Cycle

Aggregate Demand and Supply

The Fiscal Policy Approach to Stabilization

Money and Our Banking System

The Monetary Policy Approach to Stabilization

How Economies Grow

Trading With Other Nations

Financing World Trade

Filters

The equilibrium price of a good is established by the interaction of _ and _.