Question 1

Complementary goods are goods:

Accepted Answer

A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related. 
A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related.

Question 2

An improvement in a firm's technology that improves productivity results in a(n):

Accepted Answer

A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve. 
A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve.

Question 3

Which of the following corresponds to the definition of the supply curve?

Accepted Answer

A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied. 
E)  It depicts a proportional relationship between prices and quantity supplied. 
A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied. 
E)  It depicts a proportional relationship between prices and quantity supplied.

Question 4

With an upward-sloping supply curve,which of the following is true?

Accepted Answer

A)  An increase in price results in a decrease in quantity supplied. 
B)  An increase in price results in an increase in supply. 
C)  A decrease in price results in a decrease in quantity supplied. 
D)  A decrease in price results in an increase in supply. 
A)  An increase in price results in a decrease in quantity supplied. 
B)  An increase in price results in an increase in supply. 
C)  A decrease in price results in a decrease in quantity supplied. 
D)  A decrease in price results in an increase in supply.

Question 5

Exhibit 3-2 Demand curves
  
-In Exhibit 3-2,the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

Accepted Answer

A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good. 
A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good.

Question 6

If two goods are substitutes in consumption,a(n):

Accepted Answer

A)  decrease in the price of one product will cause an increase in the demand for the other product. 
B)  decrease in the price of one product will cause a decrease in the demand for the other product. 
C)  increase in the price of one product will cause an increase in the supply of the other product. 
D)  increase in the price of one product will cause a decrease in the supply of the other product. 
E)  increase in the price of one product will cause a decrease in the demand for the other product. 
A)  decrease in the price of one product will cause an increase in the demand for the other product. 
B)  decrease in the price of one product will cause a decrease in the demand for the other product. 
C)  increase in the price of one product will cause an increase in the supply of the other product. 
D)  increase in the price of one product will cause a decrease in the supply of the other product. 
E)  increase in the price of one product will cause a decrease in the demand for the other product.

Question 7

An increase in the demand for peanut butter,a normal good,can be caused by a(n):

Accepted Answer

A)  decrease in consumer income. 
B)  increase in the price of jams, jellies, and preserves. 
C)  decrease in the price of bread. 
D)  drought in Georgia that destroyed 30 percent of the peanut crop. 
E)  decrease in the price of bologna. 
A)  decrease in consumer income. 
B)  increase in the price of jams, jellies, and preserves. 
C)  decrease in the price of bread. 
D)  drought in Georgia that destroyed 30 percent of the peanut crop. 
E)  decrease in the price of bologna.

Question 8

Assuming that professional and college football are substitutes,an increase in the ticket price for professional football,other things being equal,will:

Accepted Answer

A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games. 
A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games.

Question 9

Which of the following is most likely to shift the demand curve for electricity to the left?

Accepted Answer

A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy. 
A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy.

Question 10

A decrease in the price of coffee,other things being equal,causes a(n):

Accepted Answer

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

Question 11

According to the law of supply:

Accepted Answer

A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises. 
A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises.

Question 12

When economists say the quantity demanded of a product has increased,they mean the:

Accepted Answer

A)  demand curve has shifted to the left. 
B)  demand curve has shifted to the right. 
C)  price of the product has fallen, and consequently, consumers are buying more of it. 
D)  price of the product has risen, and consequently, consumers are buying less of it. 
A)  demand curve has shifted to the left. 
B)  demand curve has shifted to the right. 
C)  price of the product has fallen, and consequently, consumers are buying more of it. 
D)  price of the product has risen, and consequently, consumers are buying less of it.

Question 13

Suppose there are 100 consumers with identical individual demand curves.When the price of a movie ticket is $8,the quantity demanded for each person is 5.When the price is $4,the quantity demanded for each person is 9.Assuming the law of demand holds,which of the following choices is the most likely quantity demanded in the market when the price is $6?

Accepted Answer

A)  700 
B)  1,200 
C)  400 
D)  1,000 
E)  100 
A)  700 
B)  1,200 
C)  400 
D)  1,000 
E)  100

Question 14

A surplus occurs when the:

Accepted Answer

A)  quantity demanded exceeds the quantity supplied. 
B)  price is below the equilibrium price. 
C)  price is at the equilibrium. 
D)  price is above the equilibrium. 
A)  quantity demanded exceeds the quantity supplied. 
B)  price is below the equilibrium price. 
C)  price is at the equilibrium. 
D)  price is above the equilibrium.

Question 15

Farmers can choose to produce eggs or milk.If there is an increase in the price of milk then what will be the effect in the egg market?

Accepted Answer

A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease. 
A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease.

Question 16

Ceteris paribus,a change in the price of a good always results in a change in:

Accepted Answer

A)  income. 
B)  tastes. 
C)  quantity demanded. 
D)  both income and tastes. 
E)  the price of other goods. 
A)  income. 
B)  tastes. 
C)  quantity demanded. 
D)  both income and tastes. 
E)  the price of other goods.

Question 17

A change in demand cannot be caused by a change in:

Accepted Answer

A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself. 
A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself.

Question 18

Substitute goods are goods that are:

Accepted Answer

A)  jointly consumed. 
B)  competing for consumer spending. 
C)  used late in the game. 
D)  inferior. 
E)  normal. 
A)  jointly consumed. 
B)  competing for consumer spending. 
C)  used late in the game. 
D)  inferior. 
E)  normal.

Question 19

Which of the following will reduce the supply of motorcycles?

Accepted Answer

A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles. 
A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles.

Question 20

If people expect the price of packaged coffee to rise next week,coffee demand will:

Accepted Answer

A)  decrease now. 
B)  increase now. 
C)  stay the same now and increase next week. 
D)  stay the same now and decrease next week. 
E)  stay the same now and next week. 
A)  decrease now. 
B)  increase now. 
C)  stay the same now and increase next week. 
D)  stay the same now and decrease next week. 
E)  stay the same now and next week.

Exam 3: Part 1: Market Demand and Supply

Complementary goods are goods:

An improvement in a firm's technology that improves productivity results in a(n):

Which of the following corresponds to the definition of the supply curve?

With an upward-sloping supply curve,which of the following is true?

Exhibit 3-2 Demand curves -In Exhibit 3-2,the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

If two goods are substitutes in consumption,a(n):

An increase in the demand for peanut butter,a normal good,can be caused by a(n):

Assuming that professional and college football are substitutes,an increase in the ticket price for professional football,other things being equal,will:

Which of the following is most likely to shift the demand curve for electricity to the left?

A decrease in the price of coffee,other things being equal,causes a(n):

According to the law of supply:

When economists say the quantity demanded of a product has increased,they mean the:

A surplus occurs when the:

Farmers can choose to produce eggs or milk.If there is an increase in the price of milk then what will be the effect in the egg market?

Ceteris paribus,a change in the price of a good always results in a change in:

A change in demand cannot be caused by a change in:

Substitute goods are goods that are:

Which of the following will reduce the supply of motorcycles?

If people expect the price of packaged coffee to rise next week,coffee demand will:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters