Question 1

A shift in demand occurs when

Accepted Answer

A) the price of that good changes. 
B) the amount demanded of a good changes at each existing price. 
C) there is a change in quantity demanded. 
D) the price changes and the good is a normal good. 
A) the price of that good changes. 
B) the amount demanded of a good changes at each existing price. 
C) there is a change in quantity demanded. 
D) the price changes and the good is a normal good.

Question 2

An increase in the quantity demanded is shown by

Accepted Answer

A) a leftward shift of the demand curve. 
B) a rightward shift of the demand curve. 
C) a movement down along a demand curve. 
D) a movement up along a demand curve. 
A) a leftward shift of the demand curve. 
B) a rightward shift of the demand curve. 
C) a movement down along a demand curve. 
D) a movement up along a demand curve.

Question 3

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

Accepted Answer

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

Question 4

If the price of one good goes up and the demand of a related good goes down, the two goods are

Accepted Answer

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

Question 5

Suppose a shortage for good X exists. Given this information, we know that

Accepted Answer

A) the price of good X will tend to rise toward the equilibrium level. 
B) the price of good X will tend to fall toward the equilibrium level. 
C) a government price floor should be imposed above the current price so that the market can work more effectively. 
D) a government price ceiling should be imposed above the current price so that the market can work more effectively. 
A) the price of good X will tend to rise toward the equilibrium level. 
B) the price of good X will tend to fall toward the equilibrium level. 
C) a government price floor should be imposed above the current price so that the market can work more effectively. 
D) a government price ceiling should be imposed above the current price so that the market can work more effectively.

Question 6

If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises

Accepted Answer

A) demand for bottled juice rises. 
B) demand for bottled juice falls. 
C) quantity of bottled juice demanded falls. 
D) quantity of bottled juice demanded rises. 
A) demand for bottled juice rises. 
B) demand for bottled juice falls. 
C) quantity of bottled juice demanded falls. 
D) quantity of bottled juice demanded rises.

Question 7

Which of the following will cause a movement along the supply curve for oil?

Accepted Answer

A) new technology to drill oil underwater in the Gulf of Mexico 
B) a change in the price of oil 
C) an increase in the number of oil-producing firms 
D) government subsidies to oil producers in Wyoming 
A) new technology to drill oil underwater in the Gulf of Mexico 
B) a change in the price of oil 
C) an increase in the number of oil-producing firms 
D) government subsidies to oil producers in Wyoming

Question 8

-Refer to the above figure. At a price of $10, excess quantity supplied equals

Accepted Answer

A) 0. 
B) 12. 
C) 15. 
D) infinity. 
A) 0. 
B) 12. 
C) 15. 
D) infinity.

Question 9

When a shortage exists

Accepted Answer

A) the price is below the market clearing price. 
B) quantity demanded exceeds quantity supplied. 
C) an excess quantity demanded exists. 
D) all of the above 
A) the price is below the market clearing price. 
B) quantity demanded exceeds quantity supplied. 
C) an excess quantity demanded exists. 
D) all of the above

Question 10

If the government imposes a per-unit tax on sales of an industry's product, then we would expect

Accepted Answer

A) the supply curve in that industry would shift to the left. 
B) the supply curve in that industry would shift to the right. 
C) the demand curve for that industry would shift to the right. 
D) the demand curve for that industry would shift to the left. 
A) the supply curve in that industry would shift to the left. 
B) the supply curve in that industry would shift to the right. 
C) the demand curve for that industry would shift to the right. 
D) the demand curve for that industry would shift to the left.

Question 11

When economists talk about a demand schedule for a product, they mean

Accepted Answer

A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period. 
A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period.

Question 12

Adding the quantities demanded by all consumers at every price will yield

Accepted Answer

A) the market-clearing price. 
B) the number of consumers. 
C) the total substitution effect from a price change. 
D) the market demand curve. 
A) the market-clearing price. 
B) the number of consumers. 
C) the total substitution effect from a price change. 
D) the market demand curve.

Question 13

All of the following will cause the supply curve of good A to shift rightward EXCEPT

Accepted Answer

A) a reduction in the prices of inputs used to produce good A. 
B) an increase in the number of firms in the industry producing good A. 
C) a decrease in the per-unit tax on good A which producers must pay. 
D) an increase in the market price of good A. 
A) a reduction in the prices of inputs used to produce good A. 
B) an increase in the number of firms in the industry producing good A. 
C) a decrease in the per-unit tax on good A which producers must pay. 
D) an increase in the market price of good A.

Question 14

-Refer to the above figure. At a price of $6, excess quantity supplied equals

Accepted Answer

A) 0. 
B) 12. 
C) 15. 
D) infinity. 
A) 0. 
B) 12. 
C) 15. 
D) infinity.

Question 15

Which of the following will shift today's supply curve to the right?

Accepted Answer

A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future. 
A) Input prices rise. 
B) Sales taxes increase. 
C) Prices are expected to be higher in the future. 
D) Prices are expected to be lower in the future.

Question 16

In economics, "demand" refers to

Accepted Answer

A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) how much of a good people will buy at any price during a given time period. 
A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) how much of a good people will buy at any price during a given time period.

Question 17

According to the law of demand, the quantity demanded of a good is related to

Accepted Answer

A) the average price of all goods. 
B) income. 
C) any factor that affects the decision of an individual consumer but not the market. 
D) the relative price of that good. 
A) the average price of all goods. 
B) income. 
C) any factor that affects the decision of an individual consumer but not the market. 
D) the relative price of that good.

Question 18

More cattle are found to have mad cow disease. As a result, consumer confidence in the safety of beef is shaken. What would an economist predict will happen in the beef market?

Accepted Answer

A) As consumer preferences move away from beef, there is an upward movement along the beef demand curve. 
B) The demand curve will shift to the left. 
C) The demand curve does not shift but consumers move to a point lower down the curve. 
D) absolutely no change in either the quantity demand or the demand for beef 
A) As consumer preferences move away from beef, there is an upward movement along the beef demand curve. 
B) The demand curve will shift to the left. 
C) The demand curve does not shift but consumers move to a point lower down the curve. 
D) absolutely no change in either the quantity demand or the demand for beef

Question 19

State the law of supply and explain it.

Accepted Answer

The law of supply indicates the direct o

Question 20

-At a price of P₀ in the above figure, which of the following statements is FALSE?

Accepted Answer

A) Quantity demanded equals quantity supplied. 
B) There is an equilibrium in the market. 
C) P₀ is the market clearing price. 
D) There is a surplus equal to Q₀. 
A) Quantity demanded equals quantity supplied. 
B) There is an equilibrium in the market. 
C) P₀ is the market clearing price. 
D) There is a surplus equal to Q₀.

A shift in demand occurs when

An increase in the quantity demanded is shown by

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

If the price of one good goes up and the demand of a related good goes down, the two goods are

Suppose a shortage for good X exists. Given this information, we know that

If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises

Which of the following will cause a movement along the supply curve for oil?

-Refer to the above figure. At a price of $10, excess quantity supplied equals

When a shortage exists

If the government imposes a per-unit tax on sales of an industry's product, then we would expect

When economists talk about a demand schedule for a product, they mean

Adding the quantities demanded by all consumers at every price will yield

All of the following will cause the supply curve of good A to shift rightward EXCEPT

-Refer to the above figure. At a price of $6, excess quantity supplied equals

Which of the following will shift today's supply curve to the right?

In economics, "demand" refers to

According to the law of demand, the quantity demanded of a good is related to

More cattle are found to have mad cow disease. As a result, consumer confidence in the safety of beef is shaken. What would an economist predict will happen in the beef market?

State the law of supply and explain it.

-At a price of P₀ in the above figure, which of the following statements is FALSE?

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

A shift in demand occurs when

An increase in the quantity demanded is shown by

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

If the price of one good goes up and the demand of a related good goes down, the two goods are

Suppose a shortage for good X exists. Given this information, we know that

If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises

Which of the following will cause a movement along the supply curve for oil?

-Refer to the above figure. At a price of $10, excess quantity supplied equals

When a shortage exists

If the government imposes a per-unit tax on sales of an industry's product, then we would expect

When economists talk about a demand schedule for a product, they mean

Adding the quantities demanded by all consumers at every price will yield

All of the following will cause the supply curve of good A to shift rightward EXCEPT

-Refer to the above figure. At a price of $6, excess quantity supplied equals

Which of the following will shift today's supply curve to the right?

In economics, "demand" refers to

According to the law of demand, the quantity demanded of a good is related to

More cattle are found to have mad cow disease. As a result, consumer confidence in the safety of beef is shaken. What would an economist predict will happen in the beef market?

State the law of supply and explain it.

-At a price of P₀ in the above figure, which of the following statements is FALSE?

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