Question 1

We are given the individual demand curves for all of the people that consume Good Y. Which statement is TRUE about the market demand curve for Good Y?

Accepted Answer

A) The market demand curve is obtained by horizontally summing the individual demand curves. 
B) The market demand curve is obtained by vertically summing the individual demand curves. 
C) The market demand curve cannot be obtained because information on prices is missing. 
D) The market demand curve cannot be obtained from individual demand curves. 
A) The market demand curve is obtained by horizontally summing the individual demand curves. 
B) The market demand curve is obtained by vertically summing the individual demand curves. 
C) The market demand curve cannot be obtained because information on prices is missing. 
D) The market demand curve cannot be obtained from individual demand curves.

Question 2

If a good is a normal good, an increase in income will

Accepted Answer

A) decrease the quantity demanded of the good. 
B) increase the demand for the good. 
C) cause the demand curve for the good to shift to the left. 
D) cause a movement down along the demand curve. 
A) decrease the quantity demanded of the good. 
B) increase the demand for the good. 
C) cause the demand curve for the good to shift to the left. 
D) cause a movement down along the demand curve.

Question 3

At the market clearing price

Accepted Answer

A) there is neither a shortage nor a surplus. 
B) quantity supplied equals quantity demanded. 
C) the supply and demand curves intersect. 
D) all of the above are correct. 
A) there is neither a shortage nor a surplus. 
B) quantity supplied equals quantity demanded. 
C) the supply and demand curves intersect. 
D) all of the above are correct.

Question 4

A decrease in supply will occur when

Accepted Answer

A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right. 
A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right.

Question 5

The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook

Accepted Answer

A) increased from 3 to 4.5. 
B) decreased from 0.8 to 0.67. 
C) decreased from 3 to 2.5. 
D) remained constant. 
A) increased from 3 to 4.5. 
B) decreased from 0.8 to 0.67. 
C) decreased from 3 to 2.5. 
D) remained constant.

Question 6

-Using the above table, the market clearing price for this product is

Accepted Answer

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

Question 7

A movement along a supply curve is induced by a change in

Accepted Answer

A) input prices. 
B) taxes and subsidies. 
C) price expectations. 
D) the product's own price. 
A) input prices. 
B) taxes and subsidies. 
C) price expectations. 
D) the product's own price.

Question 8

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of butter is ________.

Accepted Answer

A) 0.5; 0.8. 
B) 0.5; 1.25. 
C) 2.0; 1.25. 
D) 2.0; 0.8. 
A) 0.5; 0.8. 
B) 0.5; 1.25. 
C) 2.0; 1.25. 
D) 2.0; 0.8.

Question 9

When there is an excess quantity of a product supplied, there will be

Accepted Answer

A) a tendency for price of the product to increase. 
B) a tendency for price of the product to fall. 
C) incentives for consumers to leave the market. 
D) upward pressure on the price of labor. 
A) a tendency for price of the product to increase. 
B) a tendency for price of the product to fall. 
C) incentives for consumers to leave the market. 
D) upward pressure on the price of labor.

Question 10

Which of the following statements about a supply curve is FALSE?

Accepted Answer

A) It shows a direct (positive)relationship between price and quantity supplied. 
B) It shows the quantity supplied at each specific price. 
C) It typically slopes downward to the right. 
D) It has a positive slope. 
A) It shows a direct (positive)relationship between price and quantity supplied. 
B) It shows the quantity supplied at each specific price. 
C) It typically slopes downward to the right. 
D) It has a positive slope.

Question 11

If a demand curve shifts, we know that

Accepted Answer

A) the price of the good itself is not a factor. 
B) the price of the good itself is a factor. 
C) the price of the good and supply are the major factors. 
D) the price of the good and demand are major factors. 
A) the price of the good itself is not a factor. 
B) the price of the good itself is a factor. 
C) the price of the good and supply are the major factors. 
D) the price of the good and demand are major factors.

Question 12

Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know that

Accepted Answer

A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan. 
A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan.

Question 13

All of the following will affect the position of the demand curve EXCEPT

Accepted Answer

A) income. 
B) taste and preference. 
C) changes in expectations of future relative prices. 
D) prices of resources used to produce the product. 
A) income. 
B) taste and preference. 
C) changes in expectations of future relative prices. 
D) prices of resources used to produce the product.

Question 14

-If the market price rises from P₀ to P₂ in the above figure, then there is a

Accepted Answer

A) surplus equal to the distance Q₀, Q₂. 
B) surplus equal to the distance Q₁, Q₂. 
C) shortage equal to the distance Q₀, Q₂. 
D) shortage equal to the distance Q₁, Q₂. 
A) surplus equal to the distance Q₀, Q₂. 
B) surplus equal to the distance Q₁, Q₂. 
C) shortage equal to the distance Q₀, Q₂. 
D) shortage equal to the distance Q₁, Q₂.

Question 15

If one day a terrible disease were to wipe out over one-half of the world's lime trees, which of the following would likely result?

Accepted Answer

A) The supply curve of lime juice would shift downward and to the right. 
B) The supply curve of lime juice would shift upward and to the left. 
C) The demand curve for lime juice would shift to the right. 
D) The demand curve for lime juice would shift to the left. 
A) The supply curve of lime juice would shift downward and to the right. 
B) The supply curve of lime juice would shift upward and to the left. 
C) The demand curve for lime juice would shift to the right. 
D) The demand curve for lime juice would shift to the left.

Question 16

Consider the following:  
The relative price of hamburgers this year has

Accepted Answer

A) increased. 
B) decreased. 
C) stayed the same. 
D) Not enough information has been given to calculate an answer. 
A) increased. 
B) decreased. 
C) stayed the same. 
D) Not enough information has been given to calculate an answer.

Question 17

The concept of "demand" in economics refers to

Accepted Answer

A) the different quantities of a good or service people will buy at different possible prices. 
B) the different types of goods and services that people of different income levels want to buy. 
C) how changes in the prices of all goods affect people's buying behavior. 
D) changes in people's consumption behavior over time. 
A) the different quantities of a good or service people will buy at different possible prices. 
B) the different types of goods and services that people of different income levels want to buy. 
C) how changes in the prices of all goods affect people's buying behavior. 
D) changes in people's consumption behavior over time.

Question 18

Which of the following is a non-price determinant of demand?

Accepted Answer

A) income 
B) tastes and preferences 
C) prices of related goods and services 
D) All of the above are correct. 
A) income 
B) tastes and preferences 
C) prices of related goods and services 
D) All of the above are correct.

Question 19

If consumers expect that the price of pretzels will decrease next week, what would happen today?

Accepted Answer

A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease. 
A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease.

Question 20

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Accepted Answer

A) the demand for oranges will rise. 
B) the equilibrium quantity of oranges will rise. 
C) the amount of oranges available at various prices will decline. 
D) the price of oranges will fall. 
A) the demand for oranges will rise. 
B) the equilibrium quantity of oranges will rise. 
C) the amount of oranges available at various prices will decline. 
D) the price of oranges will fall.

We are given the individual demand curves for all of the people that consume Good Y. Which statement is TRUE about the market demand curve for Good Y?

If a good is a normal good, an increase in income will

At the market clearing price

A decrease in supply will occur when

The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook

-Using the above table, the market clearing price for this product is

A movement along a supply curve is induced by a change in

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is , while the price of a gallon of milk relative to a pound of butter is .

When there is an excess quantity of a product supplied, there will be

Which of the following statements about a supply curve is FALSE?

If a demand curve shifts, we know that

Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know that

All of the following will affect the position of the demand curve EXCEPT

-If the market price rises from P₀ to P₂ in the above figure, then there is a

If one day a terrible disease were to wipe out over one-half of the world's lime trees, which of the following would likely result?

Consider the following: The relative price of hamburgers this year has

The concept of "demand" in economics refers to

Which of the following is a non-price determinant of demand?

If consumers expect that the price of pretzels will decrease next week, what would happen today?

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

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

We are given the individual demand curves for all of the people that consume Good Y. Which statement is TRUE about the market demand curve for Good Y?

If a good is a normal good, an increase in income will

At the market clearing price

A decrease in supply will occur when

The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook

-Using the above table, the market clearing price for this product is

A movement along a supply curve is induced by a change in

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of butter is ________.

When there is an excess quantity of a product supplied, there will be

Which of the following statements about a supply curve is FALSE?

If a demand curve shifts, we know that

Morgan graduates from college and gets a job paying $50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month. If everything else is held constant, we know that

All of the following will affect the position of the demand curve EXCEPT

-If the market price rises from P₀ to P₂ in the above figure, then there is a

If one day a terrible disease were to wipe out over one-half of the world's lime trees, which of the following would likely result?

Consider the following: The relative price of hamburgers this year has

The concept of "demand" in economics refers to

Which of the following is a non-price determinant of demand?

If consumers expect that the price of pretzels will decrease next week, what would happen today?

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

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

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is , while the price of a gallon of milk relative to a pound of butter is .