Question 1

When there is an excess quantity supplied

Accepted Answer

A) the market is in equilibrium. 
B) quantity demanded is greater than quantity supplied. 
C) quantity demanded is less than quantity supplied. 
D) prices will remain stable. 
A) the market is in equilibrium. 
B) quantity demanded is greater than quantity supplied. 
C) quantity demanded is less than quantity supplied. 
D) prices will remain stable. C

Question 2

Suppose Good A is a normal good. Which of the following will increase the demand for Good A?

Accepted Answer

A) an increase in the price of its substitutes 
B) a lower expected future relative price of A 
C) an increase in the price of its complements 
D) a decrease in income 
A) an increase in the price of its substitutes 
B) a lower expected future relative price of A 
C) an increase in the price of its complements 
D) a decrease in income A

Question 3

Which of the following would cause an increase in the market supply of mountain bikes?

Accepted Answer

A) a decrease in the demand for mountain bikes 
B) an increase in taxes levied on mountain bike manufacturers 
C) an increase in the cost of components used to assemble mountain bikes 
D) an increase in the number of firms making mountain bikes 
A) a decrease in the demand for mountain bikes 
B) an increase in taxes levied on mountain bike manufacturers 
C) an increase in the cost of components used to assemble mountain bikes 
D) an increase in the number of firms making mountain bikes D

Question 4

In any given market, prices are determined by

Accepted Answer

A) specialization of labor. 
B) transactions costs. 
C) supply and demand. 
D) comparative advantage. 
A) specialization of labor. 
B) transactions costs. 
C) supply and demand. 
D) comparative advantage.

Question 5

The law of supply includes the statement "other things being equal." These other things include all of the following EXCEPT

Accepted Answer

A) resource prices. 
B) technology. 
C) producers' expectations. 
D) consumer's income. 
A) resource prices. 
B) technology. 
C) producers' expectations. 
D) consumer's income.

Question 6

Suppose we observe that the demand for eggs increases when people buy more potatoes. We can conclude that eggs and potatoes are

Accepted Answer

A) inferior goods. 
B) normal goods. 
C) complements. 
D) substitutes. 
A) inferior goods. 
B) normal goods. 
C) complements. 
D) substitutes.

Question 7

The price of one product in terms of another commodity is called its

Accepted Answer

A) relative price. 
B) money price. 
C) financial price. 
D) converse price. 
A) relative price. 
B) money price. 
C) financial price. 
D) converse price.

Question 8

Fashion trends are a nonprice determinant for demand because

Accepted Answer

A) they cause a movement along the demand curve. 
B) they influence people's tastes and preferences in clothing. 
C) they change the supply of accessories. 
D) they do not affect demand. 
A) they cause a movement along the demand curve. 
B) they influence people's tastes and preferences in clothing. 
C) they change the supply of accessories. 
D) they do not affect demand.

Question 9

-Refer to the above figure. At a price of four cents, the quantity of bubble gum supplied will be

Accepted Answer

A) 3. 
B) 2. 
C) 4. 
D) 5. 
A) 3. 
B) 2. 
C) 4. 
D) 5.

Question 10

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

Accepted Answer

A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good. 
A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good.

Question 11

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

Accepted Answer

A) $55; 80 
B) $60; 150 
C) $70; 150 
D) $150; 150 
A) $55; 80 
B) $60; 150 
C) $70; 150 
D) $150; 150

Question 12

Which of the following causes an increase in demand for a normal good?

Accepted Answer

A) increase in the price of a substitute 
B) increase in the price of a complement 
C) decrease in price 
D) decrease in income 
A) increase in the price of a substitute 
B) increase in the price of a complement 
C) decrease in price 
D) decrease in income

Question 13

-According to the above table, at a price of $16 per DVD, there is

Accepted Answer

A) an equilibrium. 
B) a surplus of 3000 DVDs. 
C) a shortage of 3000 DVDs. 
D) a shortage of 1500 DVDs. 
A) an equilibrium. 
B) a surplus of 3000 DVDs. 
C) a shortage of 3000 DVDs. 
D) a shortage of 1500 DVDs.

Question 14

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2014, the pay phone costs 50 cents for a call and a first-class stamp costs 49 cents. We know that

Accepted Answer

A) both the nominal and the relative price of phone calls increased from 1950 to 2014. 
B) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2014. 
C) all prices increased from 1950 to 2014: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. 
D) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but we can't tell if the relative prices increased or decreased without more information. 
A) both the nominal and the relative price of phone calls increased from 1950 to 2014. 
B) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2014. 
C) all prices increased from 1950 to 2014: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. 
D) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2014, but we can't tell if the relative prices increased or decreased without more information.

Question 15

Which of the following causes a movement along a supply curve?

Accepted Answer

A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above 
A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above

Question 16

If more buyers came into the market for a good, we would expect to see the market demand curve

Accepted Answer

A) shift inward and to the left. 
B) remain unchanged since none of the determinants of individual demand changed. 
C) shift outward and to the right. 
D) reflect a positive relationship between price and quantity demanded. 
A) shift inward and to the left. 
B) remain unchanged since none of the determinants of individual demand changed. 
C) shift outward and to the right. 
D) reflect a positive relationship between price and quantity demanded.

Question 17

Which of the following will cause the demand curve for cable TV services to shift to the left?

Accepted Answer

A) a rise in the price of cable TV services 
B) a decrease in average incomes of cable TV subscribers 
C) an increase in population 
D) the creation of several hit TV series 
A) a rise in the price of cable TV services 
B) a decrease in average incomes of cable TV subscribers 
C) an increase in population 
D) the creation of several hit TV series

Question 18

Which of the following will cause a rightward shift of the demand curve?

Accepted Answer

A) a decrease in the cost of production 
B) a decrease in the price of the good 
C) an increase in the expected future price of the good 
D) all of the above 
A) a decrease in the cost of production 
B) a decrease in the price of the good 
C) an increase in the expected future price of the good 
D) all of the above

Question 19

Which of the following would most likely be considered complements?

Accepted Answer

A) butter and margarine 
B) rental cars and taxis 
C) plastic wrap and aluminum foil 
D) tennis rackets and tennis balls 
A) butter and margarine 
B) rental cars and taxis 
C) plastic wrap and aluminum foil 
D) tennis rackets and tennis balls

Question 20

The law of supply implies that the supply curve is

Accepted Answer

A) flat. 
B) upward sloping. 
C) downward sloping. 
D) vertical. 
A) flat. 
B) upward sloping. 
C) downward sloping. 
D) vertical.

When there is an excess quantity supplied

Suppose Good A is a normal good. Which of the following will increase the demand for Good A?

Which of the following would cause an increase in the market supply of mountain bikes?

In any given market, prices are determined by

The law of supply includes the statement "other things being equal." These other things include all of the following EXCEPT

Suppose we observe that the demand for eggs increases when people buy more potatoes. We can conclude that eggs and potatoes are

The price of one product in terms of another commodity is called its

Fashion trends are a nonprice determinant for demand because

-Refer to the above figure. At a price of four cents, the quantity of bubble gum supplied will be

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

-Using the above table, the market clearing price is and equilibrium quantity is .

Which of the following causes an increase in demand for a normal good?

-According to the above table, at a price of $16 per DVD, there is

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2014, the pay phone costs 50 cents for a call and a first-class stamp costs 49 cents. We know that

Which of the following causes a movement along a supply curve?

If more buyers came into the market for a good, we would expect to see the market demand curve

Which of the following will cause the demand curve for cable TV services to shift to the left?

Which of the following will cause a rightward shift of the demand curve?

Which of the following would most likely be considered complements?

The law of supply implies that the supply curve is

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 3: Demand and Supply

When there is an excess quantity supplied

Suppose Good A is a normal good. Which of the following will increase the demand for Good A?

Which of the following would cause an increase in the market supply of mountain bikes?

In any given market, prices are determined by

The law of supply includes the statement "other things being equal." These other things include all of the following EXCEPT

Suppose we observe that the demand for eggs increases when people buy more potatoes. We can conclude that eggs and potatoes are

The price of one product in terms of another commodity is called its

Fashion trends are a nonprice determinant for demand because

-Refer to the above figure. At a price of four cents, the quantity of bubble gum supplied will be

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

Which of the following causes an increase in demand for a normal good?

-According to the above table, at a price of $16 per DVD, there is

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2014, the pay phone costs 50 cents for a call and a first-class stamp costs 49 cents. We know that

Which of the following causes a movement along a supply curve?

If more buyers came into the market for a good, we would expect to see the market demand curve

Which of the following will cause the demand curve for cable TV services to shift to the left?

Which of the following will cause a rightward shift of the demand curve?

Which of the following would most likely be considered complements?

The law of supply implies that the supply curve is

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

-Using the above table, the market clearing price is and equilibrium quantity is .