Question 1

If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price?

Accepted Answer

A) 14 
B) 42 
C) 12.67 
D) 38 
A) 14 
B) 42 
C) 12.67 
D) 38 A

Question 2

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) be indeterminable. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) be indeterminable. B

Question 3

It is appropriate to use the supply-and-demand model in which of the following markets?

Accepted Answer

A) beer market 
B) car market 
C) wheat market 
D) market for breakfast cereal 
A) beer market 
B) car market 
C) wheat market 
D) market for breakfast cereal C

Question 4

Government prohibition of advertising cigarettes on television would most likely result in

Accepted Answer

A) a rightward shift in the demand curve for cigarettes. 
B) a leftward shift in the demand curve for cigarettes. 
C) a rightward shift in the demand curve for television advertising time. 
D) no change in the market for either cigarette or television advertising. 
A) a rightward shift in the demand curve for cigarettes. 
B) a leftward shift in the demand curve for cigarettes. 
C) a rightward shift in the demand curve for television advertising time. 
D) no change in the market for either cigarette or television advertising.

Question 5

Costs that pertain to finding a trading partner and making a trade are called

Accepted Answer

A) transaction costs. 
B) transgression costs. 
C) consumption costs. 
D) transaction taxes. 
A) transaction costs. 
B) transgression costs. 
C) consumption costs. 
D) transaction taxes.

Question 6

Producer groups tend to lobby for

Accepted Answer

A) price floors. 
B) price ceilings. 
C) quantity quotas. 
D) taxes. 
A) price floors. 
B) price ceilings. 
C) quantity quotas. 
D) taxes.

Question 7

A price floor that is set below the equilibrium price

Accepted Answer

A) causes suppliers to lower their prices. 
B) is binding. 
C) is non-binding. 
D) creates a shortage. 
A) causes suppliers to lower their prices. 
B) is binding. 
C) is non-binding. 
D) creates a shortage.

Question 8

Equilibrium is defined as a situation in which

Accepted Answer

A) neither buyers nor sellers want to change their behavior. 
B) no government regulations exist. 
C) demand curves are perfectly horizontal. 
D) suppliers will supply any amount that buyers wish to buy. 
A) neither buyers nor sellers want to change their behavior. 
B) no government regulations exist. 
C) demand curves are perfectly horizontal. 
D) suppliers will supply any amount that buyers wish to buy.

Question 9

If the price of a good is initially below the equilibrium level

Accepted Answer

A) the supply curve will shift leftward. 
B) the supply curve will shift rightward. 
C) firms supply none of the good. 
D) excess demand exists. 
A) the supply curve will shift leftward. 
B) the supply curve will shift rightward. 
C) firms supply none of the good. 
D) excess demand exists.

Question 10

In the labor market, if the government imposes a minimum wage that is below the equilibrium wage, then

Accepted Answer

A) workers who wish to work at the minimum wage will have a difficult time finding jobs. 
B) firms will hire fewer workers than without the minimum wage law. 
C) some workers may lose their jobs as a result. 
D) nothing will happen to the wage rate or employment. 
A) workers who wish to work at the minimum wage will have a difficult time finding jobs. 
B) firms will hire fewer workers than without the minimum wage law. 
C) some workers may lose their jobs as a result. 
D) nothing will happen to the wage rate or employment.

Question 11

Once an equilibrium is achieved, it can persist indefinitely because

Accepted Answer

A) shocks that shift the demand curve or the supply curve cannot occur. 
B) shocks to the demand curve are always exactly offset by shocks to the supply curve. 
C) the government never intervenes in markets at equilibrium. 
D) in the absence of supply/demand shocks no one applies pressure to change the price. 
A) shocks that shift the demand curve or the supply curve cannot occur. 
B) shocks to the demand curve are always exactly offset by shocks to the supply curve. 
C) the government never intervenes in markets at equilibrium. 
D) in the absence of supply/demand shocks no one applies pressure to change the price.

Question 12

-The above figure shows a graph of a market for pizzas in a large town. At a price of $10, the market

Accepted Answer

A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above. 
A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above.

Question 13

In some markets, ________ act to adjust the price to bring the market into equilibrium.

Accepted Answer

A) bulls 
B) regulators 
C) market makers 
D) web sites 
A) bulls 
B) regulators 
C) market makers 
D) web sites

Question 14

Which of the following cultural events likely increased the demand for the product highlighted in the event?

Accepted Answer

A) the banning of cigarette advertising on television 
B) the inclusion of Reese's Pieces in the movie E.T. 
C) increased environmental awareness about the impacts of sport utility vehicles (SUVs) 
D) concerns over "Mad Cow" disease in beef 
A) the banning of cigarette advertising on television 
B) the inclusion of Reese's Pieces in the movie E.T. 
C) increased environmental awareness about the impacts of sport utility vehicles (SUVs) 
D) concerns over "Mad Cow" disease in beef

Question 15

-The above figure shows a graph of the market for pizzas in a large town. If the price falls from $10 to $7 per pizza, the quantity of pizzas demanded will

Accepted Answer

A) increase by 20. 
B) decrease by 30. 
C) increase by 30. 
D) decrease by 10. 
A) increase by 20. 
B) decrease by 30. 
C) increase by 30. 
D) decrease by 10.

Question 16

If the government places a $1.20 tax on each pizza sold

Accepted Answer

A) consumers will have to pay $1.20 more for each pizza they buy. 
B) the supply curve will shift left by $1.20. 
C) the demand curve will shift right by $1.20. 
D) both the demand curve and the supply curve will shift by 60 cents each. 
A) consumers will have to pay $1.20 more for each pizza they buy. 
B) the supply curve will shift left by $1.20. 
C) the demand curve will shift right by $1.20. 
D) both the demand curve and the supply curve will shift by 60 cents each.

Question 17

Technological innovation in the production of computers has led to

Accepted Answer

A) a decrease in the quantity demanded for computers. 
B) a rightward shift of the supply curve for computers. 
C) a decrease in the quantity supplied of computers. 
D) None of the above. 
A) a decrease in the quantity demanded for computers. 
B) a rightward shift of the supply curve for computers. 
C) a decrease in the quantity supplied of computers. 
D) None of the above.

Question 18

Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the total amount spent on this good when p = 10, 20, and 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Accepted Answer

In all cases, total expenditure equals 1

Question 19

If the demand for eBook readers increases and the supply of eBook readers increases, then

Accepted Answer

A) it is clear that prices will increase, the change in the quantity of eBook readers sold is ambiguous. 
B) it is clear that prices will decrease, the change in the quantity of eBook readers sold is ambiguous. 
C) it is clear that quantity sold will increase, the change in the price of eBook readers is ambiguous. 
D) it is clear that quantity sold will decrease, the change in the price of eBook readers is ambiguous. 
A) it is clear that prices will increase, the change in the quantity of eBook readers sold is ambiguous. 
B) it is clear that prices will decrease, the change in the quantity of eBook readers sold is ambiguous. 
C) it is clear that quantity sold will increase, the change in the price of eBook readers is ambiguous. 
D) it is clear that quantity sold will decrease, the change in the price of eBook readers is ambiguous.

Question 20

Which of the following is NOT possible according to the law of demand?

Accepted Answer

A) a horizontal demand curve 
B) a vertical demand curve 
C) a downward-sloping supply curve 
D) an upward-sloping demand curve 
A) a horizontal demand curve 
B) a vertical demand curve 
C) a downward-sloping supply curve 
D) an upward-sloping demand curve

If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price?

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

It is appropriate to use the supply-and-demand model in which of the following markets?

Government prohibition of advertising cigarettes on television would most likely result in

Costs that pertain to finding a trading partner and making a trade are called

Producer groups tend to lobby for

A price floor that is set below the equilibrium price

Equilibrium is defined as a situation in which

If the price of a good is initially below the equilibrium level

In the labor market, if the government imposes a minimum wage that is below the equilibrium wage, then

Once an equilibrium is achieved, it can persist indefinitely because

-The above figure shows a graph of a market for pizzas in a large town. At a price of $10, the market

In some markets, ________ act to adjust the price to bring the market into equilibrium.

Which of the following cultural events likely increased the demand for the product highlighted in the event?

-The above figure shows a graph of the market for pizzas in a large town. If the price falls from $10 to $7 per pizza, the quantity of pizzas demanded will

If the government places a $1.20 tax on each pizza sold

Technological innovation in the production of computers has led to

Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the total amount spent on this good when p = 10, 20, and 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

If the demand for eBook readers increases and the supply of eBook readers increases, then

Which of the following is NOT possible according to the law of demand?

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 2: Supply and Demand

If Qs = -20 + 10p, and Qd = 400 - 20p, what is the equilibrium price?

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

It is appropriate to use the supply-and-demand model in which of the following markets?

Government prohibition of advertising cigarettes on television would most likely result in

Costs that pertain to finding a trading partner and making a trade are called

Producer groups tend to lobby for

A price floor that is set below the equilibrium price

Equilibrium is defined as a situation in which

If the price of a good is initially below the equilibrium level

In the labor market, if the government imposes a minimum wage that is below the equilibrium wage, then

Once an equilibrium is achieved, it can persist indefinitely because

-The above figure shows a graph of a market for pizzas in a large town. At a price of $10, the market

In some markets, ________ act to adjust the price to bring the market into equilibrium.

Which of the following cultural events likely increased the demand for the product highlighted in the event?

-The above figure shows a graph of the market for pizzas in a large town. If the price falls from $10 to $7 per pizza, the quantity of pizzas demanded will

If the government places a $1.20 tax on each pizza sold

Technological innovation in the production of computers has led to

Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the total amount spent on this good when p = 10, 20, and 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

If the demand for eBook readers increases and the supply of eBook readers increases, then

Which of the following is NOT possible according to the law of demand?

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters