Question 1

All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,

Accepted Answer

A) there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Quarter Pounder and Chalupas are substitutes. 
B) there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
C) there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
D) there is likely to be an increase in demand for McDonald's Quarter Pounder, assuming the Quarter Pounder and Chalupas are substitutes. 
A) there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Quarter Pounder and Chalupas are substitutes. 
B) there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
C) there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
D) there is likely to be an increase in demand for McDonald's Quarter Pounder, assuming the Quarter Pounder and Chalupas are substitutes.

Question 2

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

Accepted Answer

A) A 
B) B 
C) neither graph 
D) both graphs 
A) A 
B) B 
C) neither graph 
D) both graphs

Question 3

If there is a shortage in a free market, then

Accepted Answer

A) consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level. 
B) consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level. 
C) suppliers will decrease their output to match demand. 
D) suppliers will accept any price below equilibrium. 
A) consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level. 
B) consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level. 
C) suppliers will decrease their output to match demand. 
D) suppliers will accept any price below equilibrium.

Question 4

-In the above figure, what are the equilibrium price and quantity?

Accepted Answer

A) $40 and 200 units 
B) $50 and 100 units 
C) $10 and 200 units 
D) $30 and 100 units 
A) $40 and 200 units 
B) $50 and 100 units 
C) $10 and 200 units 
D) $30 and 100 units

Question 5

In economic terminology, a normal good is a good

Accepted Answer

A) on which a monetary value cannot be placed. 
B) that is liked only by normal people. 
C) for which demand increases when price increases. 
D) for which demand increases when income increases. 
A) on which a monetary value cannot be placed. 
B) that is liked only by normal people. 
C) for which demand increases when price increases. 
D) for which demand increases when income increases.

Question 6

The quantity supplied of a particular good is the amount of the good that

Accepted Answer

A) households are willing to consume at each particular price. 
B) firms will actually end up buying at a particular price during a given time period. 
C) firms are willing to sell at each price during a particular time period. 
D) households want firms to sell at each price during a particular time period. 
A) households are willing to consume at each particular price. 
B) firms will actually end up buying at a particular price during a given time period. 
C) firms are willing to sell at each price during a particular time period. 
D) households want firms to sell at each price during a particular time period.

Question 7

-According to the above figure, a shortage will occur at a price at which

Accepted Answer

A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium. 
A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium.

Question 8

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A) increased from 0.25 to 0.6. 
B) decreased from 4.0 to 3.0. 
C) stayed constant at 0.25. 
D) stayed constant at 4.0. 
A) increased from 0.25 to 0.6. 
B) decreased from 4.0 to 3.0. 
C) stayed constant at 0.25. 
D) stayed constant at 4.0.

Question 9

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?

Accepted Answer

A) If a good's price goes down, then demand for the good will decrease. 
B) If a good's price goes down, then quantity demanded will increase. 
C) If demand increases, then the demand curve will shift to the left. 
D) If price rises and quantity demanded decreases, then the demand curve will shift to the left. 
A) If a good's price goes down, then demand for the good will decrease. 
B) If a good's price goes down, then quantity demanded will increase. 
C) If demand increases, then the demand curve will shift to the left. 
D) If price rises and quantity demanded decreases, then the demand curve will shift to the left.

Question 10

When the amount supplied is greater at each price, there is a(n)

Accepted Answer

A) rightward shift in the supply curve. 
B) leftward shift in the supply curve. 
C) upward movement along the supply curve. 
D) downward movement along the supply curve. 
A) rightward shift in the supply curve. 
B) leftward shift in the supply curve. 
C) upward movement along the supply curve. 
D) downward movement along the supply curve.

Question 11

Which of the following situations could generate a shortage?

Accepted Answer

A) Demand for a good increases, resulting in a new higher market clearing price. 
B) Demand for a good decreases, resulting in a new lower market clearing price. 
C) Demand for a good increases, but the price is not permitted to rise. 
D) Demand for a good decreases, but the price is not permitted to fall. 
A) Demand for a good increases, resulting in a new higher market clearing price. 
B) Demand for a good decreases, resulting in a new lower market clearing price. 
C) Demand for a good increases, but the price is not permitted to rise. 
D) Demand for a good decreases, but the price is not permitted to fall.

Question 12

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Accepted Answer

A) an increase in the demand for computers 
B) a decrease in the supply of diskettes 
C) an increase in the supply of computers 
D) an increase in the quantity supplied of computers 
A) an increase in the demand for computers 
B) a decrease in the supply of diskettes 
C) an increase in the supply of computers 
D) an increase in the quantity supplied of computers

Question 13

Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?

Accepted Answer

A) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will fall. 
B) If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded will increase. 
C) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will remain unchanged. 
D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert. 
A) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will fall. 
B) If the price of a ticket to a Lakers game decreases, the quantity of Lakers tickets demanded will increase. 
C) If the price of a ticket to a Lakers game increases, then the demand for Lady Gaga tickets will remain unchanged. 
D) The price of a ticket to a Lakers game will always equal the price of a ticket to a Lady Gaga concert.

Question 14

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?

Accepted Answer

A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee. 
A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee.

Question 15

An excess quantity supplied can be corrected by

Accepted Answer

A) a fall in price. 
B) legally fixing the price at its present level. 
C) a decrease in demand. 
D) an increase in supply. 
A) a fall in price. 
B) legally fixing the price at its present level. 
C) a decrease in demand. 
D) an increase in supply.

Question 16

-Refer to the above figure. For a normal good, the rightward shift of the curve could have been caused by

Accepted Answer

A) a technological improvement. 
B) an increase in the cost of inputs. 
C) an increase in income. 
D) a decrease in income. 
A) a technological improvement. 
B) an increase in the cost of inputs. 
C) an increase in income. 
D) a decrease in income.

Question 17

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

Accepted Answer

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

Question 18

Which of the following statements is FALSE?

Accepted Answer

A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right. 
A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right.

Question 19

Which of the following would cause a change in the quantity demanded of a product?

Accepted Answer

A) a higher price 
B) a higher income 
C) expectations of future price increases 
D) All of the above are correct. 
A) a higher price 
B) a higher income 
C) expectations of future price increases 
D) All of the above are correct.

Question 20

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

Accepted Answer

A) substitute goods. 
B) capital goods. 
C) inferior goods. 
D) complementary goods. 
A) substitute goods. 
B) capital goods. 
C) inferior goods. 
D) complementary goods.

All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

If there is a shortage in a free market, then

-In the above figure, what are the equilibrium price and quantity?

In economic terminology, a normal good is a good

The quantity supplied of a particular good is the amount of the good that

-According to the above figure, a shortage will occur at a price at which

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?

When the amount supplied is greater at each price, there is a(n)

Which of the following situations could generate a shortage?

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?

An excess quantity supplied can be corrected by

-Refer to the above figure. For a normal good, the rightward shift of the curve could have been caused by

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

Which of the following statements is FALSE?

Which of the following would cause a change in the quantity demanded of a product?

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

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

All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,

-Refer to the above figure. Suppose that Cheerios and Apple Jacks are substitutes. Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

If there is a shortage in a free market, then

-In the above figure, what are the equilibrium price and quantity?

In economic terminology, a normal good is a good

The quantity supplied of a particular good is the amount of the good that

-According to the above figure, a shortage will occur at a price at which

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?

When the amount supplied is greater at each price, there is a(n)

Which of the following situations could generate a shortage?

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Suppose a concert by Lady Gaga and a basketball game played by the L.A. Lakers are substitutes, then which of the following is TRUE?

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?

An excess quantity supplied can be corrected by

-Refer to the above figure. For a normal good, the rightward shift of the curve could have been caused by

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

Which of the following statements is FALSE?

Which of the following would cause a change in the quantity demanded of a product?

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

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