Question 1

Graphically, a market demand curve is found by

Accepted Answer

A) taking the average of all prices that people are willing to pay. 
B) summing the quantities demanded by all individuals at each price. 
C) summing the prices each consumer would pay for each quantity. 
D) taking the average of the individual demand curves. 
A) taking the average of all prices that people are willing to pay. 
B) summing the quantities demanded by all individuals at each price. 
C) summing the prices each consumer would pay for each quantity. 
D) taking the average of the individual demand curves.

Question 2

Other things being equal, an increase in wages paid to workers in firms making digital devices will cause

Accepted Answer

A) the quantity of digital devices demanded to increase. 
B) the quantity of digital devices supplied to decrease. 
C) the supply of digital devices to decrease. 
D) the demand for digital devices to decrease. 
A) the quantity of digital devices demanded to increase. 
B) the quantity of digital devices supplied to decrease. 
C) the supply of digital devices to decrease. 
D) the demand for digital devices to decrease.

Question 3

Other things being constant, the only way to move along a given supply curve for a product is for

Accepted Answer

A) the product's relative price to change. 
B) the future relative price of related goods to change. 
C) the number of sellers to change. 
D) technological changes to occur. 
A) the product's relative price to change. 
B) the future relative price of related goods to change. 
C) the number of sellers to change. 
D) technological changes to occur.

Question 4

Which of the following is an example of the law of demand?

Accepted Answer

A) A decrease in the price of milk is followed by an increase in milk purchases. 
B) A decrease in the price of milk is followed by a decrease in milk purchases. 
C) An increase in the price of milk has no effect on the amount of milk purchased. 
D) The amount of milk purchased increases when the price is constant. 
A) A decrease in the price of milk is followed by an increase in milk purchases. 
B) A decrease in the price of milk is followed by a decrease in milk purchases. 
C) An increase in the price of milk has no effect on the amount of milk purchased. 
D) The amount of milk purchased increases when the price is constant.

Question 5

The money price of a good is that price

Accepted Answer

A) expressed in constant 2005 dollars. 
B) expressed in purchasing power against a common item like bread. 
C) expressed in today's dollars. 
D) that would clear the market. 
A) expressed in constant 2005 dollars. 
B) expressed in purchasing power against a common item like bread. 
C) expressed in today's dollars. 
D) that would clear the market.

Question 6

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

Accepted Answer

A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. 
A) the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B) the quantity demanded of both to fall. 
C) the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D) the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

Question 7

The direct relationship between changes in price and changes in quantity supplied is

Accepted Answer

A) a change in supply. 
B) shown by a shift in the supply curve. 
C) the law of supply. 
D) the law of relative production. 
A) a change in supply. 
B) shown by a shift in the supply curve. 
C) the law of supply. 
D) the law of relative production.

Question 8

What happens as the result of a surplus?

Accepted Answer

A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because it is too commonplace. 
D) Demand for the good increases. 
A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because it is too commonplace. 
D) Demand for the good increases.

Question 9

-In the above figure, an increase in income is best demonstrated by a

Accepted Answer

A) shift of D₁ to D₂ in Graph A, if good A is a normal good. 
B) shift of D₂ to D₁ in Graph A, if good A is a normal good. 
C) movement along D₀ from P₁ to P₂ in Graph B. 
D) movement along D₀ from P₂ to P₁ in Graph B. 
A) shift of D₁ to D₂ in Graph A, if good A is a normal good. 
B) shift of D₂ to D₁ in Graph A, if good A is a normal good. 
C) movement along D₀ from P₁ to P₂ in Graph B. 
D) movement along D₀ from P₂ to P₁ in Graph B.

Question 10

After the price of milk increases, David buys more eggs and less cereal. For David

Accepted Answer

A) milk, eggs, and cereal are all complements. 
B) milk and eggs are complements, and milk and cereal are substitutes. 
C) milk and eggs are substitutes, and milk and cereal are complements. 
D) milk, eggs, and cereal are all substitutes. 
A) milk, eggs, and cereal are all complements. 
B) milk and eggs are complements, and milk and cereal are substitutes. 
C) milk and eggs are substitutes, and milk and cereal are complements. 
D) milk, eggs, and cereal are all substitutes.

Question 11

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

Accepted Answer

A) reduce demand for chicken, pork, and beef. 
B) leave demand for chicken, pork, and beef unchanged. 
C) increase demand for chicken, pork, and beef. 
D) increase quantity demanded of beef. 
A) reduce demand for chicken, pork, and beef. 
B) leave demand for chicken, pork, and beef unchanged. 
C) increase demand for chicken, pork, and beef. 
D) increase quantity demanded of beef.

Question 12

A shortage will occur whenever

Accepted Answer

A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping. 
A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping.

Question 13

-Refer to the above figure. At a price of four cents, a(n)________ of bubble gum will exist in the market.

Accepted Answer

A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity 
A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity

Question 14

Which of the following statements is correct?

Accepted Answer

A) A shortage and scarcity are the same thing. 
B) A shortage occurs when the quantity demanded is less than the quantity supplied at a price below the market clearing price. 
C) A shortage occurs when the quantity demanded is greater than the quantity supplied at a price below the market clearing price. 
D) A shortage occurs when the quantity demanded is less than the quantity supplied at a price above the market clearing price. 
A) A shortage and scarcity are the same thing. 
B) A shortage occurs when the quantity demanded is less than the quantity supplied at a price below the market clearing price. 
C) A shortage occurs when the quantity demanded is greater than the quantity supplied at a price below the market clearing price. 
D) A shortage occurs when the quantity demanded is less than the quantity supplied at a price above the market clearing price.

Question 15

The law of demand

Accepted Answer

A) is only an assumption that cannot be tested. 
B) only applies to necessities, not to luxuries. 
C) is supported by observations of human behavior in the marketplace. 
D) does not apply to scarce goods. 
A) is only an assumption that cannot be tested. 
B) only applies to necessities, not to luxuries. 
C) is supported by observations of human behavior in the marketplace. 
D) does not apply to scarce goods.

Question 16

-According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be

Accepted Answer

A) a shortage of 30 million gallons. 
B) a surplus of 30 million gallons. 
C) a shortage of 20 million gallons. 
D) a surplus of 50 million gallons. 
A) a shortage of 30 million gallons. 
B) a surplus of 30 million gallons. 
C) a shortage of 20 million gallons. 
D) a surplus of 50 million gallons.

Question 17

Which of the following factors will lead to a shift in the demand curve?

Accepted Answer

A) changes in the costs of inputs 
B) changes in technology 
C) changes in the price of the good 
D) changes in consumers' tastes and preferences 
A) changes in the costs of inputs 
B) changes in technology 
C) changes in the price of the good 
D) changes in consumers' tastes and preferences

Question 18

-In a free market, the market price and quantity in the above figure will adjust to equilibrium values of

Accepted Answer

A) $1 per gallon and 50 million gallons. 
B) $4 per gallon and 10 million gallons. 
C) $2 per gallon and 60 million gallons. 
D) $2 per gallon and 30 million gallons. 
A) $1 per gallon and 50 million gallons. 
B) $4 per gallon and 10 million gallons. 
C) $2 per gallon and 60 million gallons. 
D) $2 per gallon and 30 million gallons.

Question 19

According to the law of demand

Accepted Answer

A) price and quantity demanded move in the same direction. 
B) price and quantity demanded move in opposite directions. 
C) ceteris paribus does not apply. 
D) price and quantity demanded are unrelated. 
A) price and quantity demanded move in the same direction. 
B) price and quantity demanded move in opposite directions. 
C) ceteris paribus does not apply. 
D) price and quantity demanded are unrelated.

Question 20

If the price of an item can freely adjust, a market will

Accepted Answer

A) always move towards equilibrium. 
B) always have an excess quantity demanded. 
C) always have an excess quantity supplied. 
D) never move towards equilibrium because prices are always increasing. 
A) always move towards equilibrium. 
B) always have an excess quantity demanded. 
C) always have an excess quantity supplied. 
D) never move towards equilibrium because prices are always increasing.

Graphically, a market demand curve is found by

Other things being equal, an increase in wages paid to workers in firms making digital devices will cause

Other things being constant, the only way to move along a given supply curve for a product is for

Which of the following is an example of the law of demand?

The money price of a good is that price

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

The direct relationship between changes in price and changes in quantity supplied is

What happens as the result of a surplus?

-In the above figure, an increase in income is best demonstrated by a

After the price of milk increases, David buys more eggs and less cereal. For David

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

A shortage will occur whenever

-Refer to the above figure. At a price of four cents, a(n)________ of bubble gum will exist in the market.

Which of the following statements is correct?

The law of demand

-According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be

Which of the following factors will lead to a shift in the demand curve?

-In a free market, the market price and quantity in the above figure will adjust to equilibrium values of

According to the law of demand

If the price of an item can freely adjust, a market will

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

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Exam 3: Demand and Supply

Graphically, a market demand curve is found by

Other things being equal, an increase in wages paid to workers in firms making digital devices will cause

Other things being constant, the only way to move along a given supply curve for a product is for

Which of the following is an example of the law of demand?

The money price of a good is that price

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

The direct relationship between changes in price and changes in quantity supplied is

What happens as the result of a surplus?

-In the above figure, an increase in income is best demonstrated by a

After the price of milk increases, David buys more eggs and less cereal. For David

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

A shortage will occur whenever

-Refer to the above figure. At a price of four cents, a(n)________ of bubble gum will exist in the market.

Which of the following statements is correct?

The law of demand

-According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be

Which of the following factors will lead to a shift in the demand curve?

-In a free market, the market price and quantity in the above figure will adjust to equilibrium values of

According to the law of demand

If the price of an item can freely adjust, a market will

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