Question 1

-According to the above figure for a gasoline market, an increase in the price from $2 to $4 will result in

Accepted Answer

A) a shortage of 30 million gallons. 
B) an increase in quantity demanded of 10 million gallons. 
C) an increase in quantity supplied of 20 million gallons. 
D) an increase in demand of 20 million gallons. 
A) a shortage of 30 million gallons. 
B) an increase in quantity demanded of 10 million gallons. 
C) an increase in quantity supplied of 20 million gallons. 
D) an increase in demand of 20 million gallons.

Question 2

Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result

Accepted Answer

A) the demand for peanut butter will fall. 
B) the demand for peanut butter will rise. 
C) the price of peanut butter will fall. 
D) a smaller amount of peanut butter will be purchased. 
A) the demand for peanut butter will fall. 
B) the demand for peanut butter will rise. 
C) the price of peanut butter will fall. 
D) a smaller amount of peanut butter will be purchased.

Question 3

Suppose that the demand curve for apples is downward sloping and the price per bushel increases from $6.50 to $7.50. We would then expect

Accepted Answer

A) the demand for apples to decrease. 
B) the quantity of apples demanded to fall. 
C) the demand curve to shift toward the origin. 
D) the quantity of apples demanded to increase. 
A) the demand for apples to decrease. 
B) the quantity of apples demanded to fall. 
C) the demand curve to shift toward the origin. 
D) the quantity of apples demanded to increase.

Question 4

A market requires

Accepted Answer

A) sellers only. 
B) buyers and sellers. 
C) government intervention. 
D) buyers only. 
A) sellers only. 
B) buyers and sellers. 
C) government intervention. 
D) buyers only.

Question 5

Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

Accepted Answer

A) The demand curve shifts to the right. 
B) The demand curve shifts to the left. 
C) a leftward movement along the demand curve 
D) a rightward movement along the demand curve 
A) The demand curve shifts to the right. 
B) The demand curve shifts to the left. 
C) a leftward movement along the demand curve 
D) a rightward movement along the demand curve

Question 6

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

Accepted Answer

Market equilibrium occurs at the point a

Question 7

-Using the above table, at a price of $5 there will be a

Accepted Answer

A) shortage of 20 units. 
B) shortage of 10 units. 
C) surplus of 20 units. 
D) surplus of 10 units. 
A) shortage of 20 units. 
B) shortage of 10 units. 
C) surplus of 20 units. 
D) surplus of 10 units.

Question 8

Suppose that milk producers expect that the price of milk is going to drop next week. This would cause

Accepted Answer

A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today. 
A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today.

Question 9

The relationship between quantity supplied and price is usually

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) impossible to determine. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) impossible to determine.

Question 10

Another name for a shortage is

Accepted Answer

A) excess quantity supplied. 
B) excess quantity demanded. 
C) equilibrium. 
D) market clearing. 
A) excess quantity supplied. 
B) excess quantity demanded. 
C) equilibrium. 
D) market clearing.

Question 11

The law of supply states that other things being equal

Accepted Answer

A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases, quantity supplied increases. 
D) supply will increase to meet demand if demand increases. 
A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases, quantity supplied increases. 
D) supply will increase to meet demand if demand increases.

Question 12

-Suppose a change takes place and the new equilibrium is at point A in the above figure. This change could have been caused by

Accepted Answer

A) an increase in the per-unit tax on CDs. 
B) a decrease in the income of consumers. 
C) a reduction in the wages paid to workers in the CD industry. 
D) a reduction in the price of CD players. 
A) an increase in the per-unit tax on CDs. 
B) a decrease in the income of consumers. 
C) a reduction in the wages paid to workers in the CD industry. 
D) a reduction in the price of CD players.

Question 13

-According to the above table, at a price of $8 per unit, other things constant

Accepted Answer

A) consumers will continue to bid prices upward. 
B) there will be no tendency for the market to approach an equilibrium. 
C) a surplus of 100 units will exist. 
D) a shortage of 80 units will exist. 
A) consumers will continue to bid prices upward. 
B) there will be no tendency for the market to approach an equilibrium. 
C) a surplus of 100 units will exist. 
D) a shortage of 80 units will exist.

Question 14

When the price of a complement (cream)decreases, the demand for the related good (coffee)

Accepted Answer

A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward. 
A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward.

Question 15

When a shortage exists in a market

Accepted Answer

A) the market clearing price is above equilibrium and market forces will cause the price to fall. 
B) the quantity demanded is less than the quantity supplied at the existing price. 
C) the current price is below the market clearing price and the price will rise. 
D) the quantity supplied is greater than the quantity demanded at the current price. 
A) the market clearing price is above equilibrium and market forces will cause the price to fall. 
B) the quantity demanded is less than the quantity supplied at the existing price. 
C) the current price is below the market clearing price and the price will rise. 
D) the quantity supplied is greater than the quantity demanded at the current price.

Question 16

The relative price of a textbook is

Accepted Answer

A) the money price of the textbook divided by the money price of some other good. 
B) the price of the textbook compared with what students think it should cost. 
C) the amount it cost to make the textbook. 
D) what the author earned for writing the textbook. 
A) the money price of the textbook divided by the money price of some other good. 
B) the price of the textbook compared with what students think it should cost. 
C) the amount it cost to make the textbook. 
D) what the author earned for writing the textbook.

Question 17

A technological improvement in the production of tablets would

Accepted Answer

A) increase the demand for tablets. 
B) increase the supply of tablets. 
C) decrease the demand for tablets. 
D) decrease the supply of tablets. 
A) increase the demand for tablets. 
B) increase the supply of tablets. 
C) decrease the demand for tablets. 
D) decrease the supply of tablets.

Question 18

Which of the following represents the law of supply?

Accepted Answer

A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above 
A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above

Question 19

What happens as the result of a shortage?

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 they have a hard time finding it. 
D) Supply of the good decreases. 
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 they have a hard time finding it. 
D) Supply of the good decreases.

Question 20

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

Accepted Answer

A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences. 
A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences.

-According to the above figure for a gasoline market, an increase in the price from $2 to $4 will result in

Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result

Suppose that the demand curve for apples is downward sloping and the price per bushel increases from $6.50 to $7.50. We would then expect

A market requires

Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

-Using the above table, at a price of $5 there will be a

Suppose that milk producers expect that the price of milk is going to drop next week. This would cause

The relationship between quantity supplied and price is usually

Another name for a shortage is

The law of supply states that other things being equal

-Suppose a change takes place and the new equilibrium is at point A in the above figure. This change could have been caused by

-According to the above table, at a price of $8 per unit, other things constant

When the price of a complement (cream)decreases, the demand for the related good (coffee)

When a shortage exists in a market

The relative price of a textbook is

A technological improvement in the production of tablets would

Which of the following represents the law of supply?

What happens as the result of a shortage?

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

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

-According to the above figure for a gasoline market, an increase in the price from $2 to $4 will result in

Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result

Suppose that the demand curve for apples is downward sloping and the price per bushel increases from $6.50 to $7.50. We would then expect

A market requires

Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

-Using the above table, at a price of $5 there will be a

Suppose that milk producers expect that the price of milk is going to drop next week. This would cause

The relationship between quantity supplied and price is usually

Another name for a shortage is

The law of supply states that other things being equal

-Suppose a change takes place and the new equilibrium is at point A in the above figure. This change could have been caused by

-According to the above table, at a price of $8 per unit, other things constant

When the price of a complement (cream)decreases, the demand for the related good (coffee)

When a shortage exists in a market

The relative price of a textbook is

A technological improvement in the production of tablets would

Which of the following represents the law of supply?

What happens as the result of a shortage?

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

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