Question 1

There is a technological advance in the production of digital watches.This will cause:

Accepted Answer

A)  demand to increase. 
B)  supply to increase. 
C)  demand to decrease. 
D)  supply to decrease. 
E)  the price to increase. 
A)  demand to increase. 
B)  supply to increase. 
C)  demand to decrease. 
D)  supply to decrease. 
E)  the price to increase.

Question 2

If good X is an inferior good,a decrease in consumer income,other things being equal,will shift the:

Accepted Answer

A)  demand curve for good X to the right. 
B)  demand curve for good X to the left. 
C)  supply curve for good X to the right. 
D)  supply curve for good X to the left. 
A)  demand curve for good X to the right. 
B)  demand curve for good X to the left. 
C)  supply curve for good X to the right. 
D)  supply curve for good X to the left.

Question 3

A market demand curve:

Accepted Answer

A)  is the sum of the demand curves of all the individuals in a particular market. 
B)  is determined by the demand of those who purchase in quantity. 
C)  is always horizontal. 
D)  cannot be estimated. 
E)  never includes demand by the government. 
A)  is the sum of the demand curves of all the individuals in a particular market. 
B)  is determined by the demand of those who purchase in quantity. 
C)  is always horizontal. 
D)  cannot be estimated. 
E)  never includes demand by the government.

Question 4

Which of the following would not cause market demand for a normal good to decline?

Accepted Answer

A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death. 
A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death.

Question 5

Which of the following would cause a shift in the demand curve for a good?

Accepted Answer

A)  An increase in consumers' income. 
B)  A decrease in the number of consumers. 
C)  The expectation that the price of a good will increase in the future. 
D)  All of the above. 
A)  An increase in consumers' income. 
B)  A decrease in the number of consumers. 
C)  The expectation that the price of a good will increase in the future. 
D)  All of the above.

Question 6

The demand schedule for a good shows:

Accepted Answer

A)  the specific quantity of the good that people are willing and able to sell at different prices. 
B)  the positive relationship between the price and the quantity of the good. 
C)  no relationship between the price and the quantity of the good. 
D)  the specific quantity of the good that people are willing and able to buy at different prices. 
E)  the quantity of the good that is sold in the market. 
A)  the specific quantity of the good that people are willing and able to sell at different prices. 
B)  the positive relationship between the price and the quantity of the good. 
C)  no relationship between the price and the quantity of the good. 
D)  the specific quantity of the good that people are willing and able to buy at different prices. 
E)  the quantity of the good that is sold in the market.

Question 7

Which of the following will not cause a movement along the supply curve?

Accepted Answer

A)  Changes in the sellers' expectations. 
B)  Increases in taxes per unit of output. 
C)  Advances in technology. 
D)  All of the above. 
A)  Changes in the sellers' expectations. 
B)  Increases in taxes per unit of output. 
C)  Advances in technology. 
D)  All of the above.

Question 8

A baby boom will have what immediate effect on the disposable diaper market?

Accepted Answer

A)  Supply decreases. 
B)  Supply increases. 
C)  Demand decreases. 
D)  Demand increases. 
E)  Supply and demand remains the same. 
A)  Supply decreases. 
B)  Supply increases. 
C)  Demand decreases. 
D)  Demand increases. 
E)  Supply and demand remains the same.

Question 9

The horizontal summation of all individual demands at different given prices results in the:

Accepted Answer

A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve. 
A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve.

Question 10

Suppose the prices of petroleum products,including gasoline and fuel oil,fell sharply.Which of the following would most likely occur as the result of the lower prices of petroleum products?

Accepted Answer

A)  A reduction in the consumption of gasoline. 
B)  An increase in demand for solar heating systems. 
C)  An increase in demand for smaller, more efficient automobiles. 
D)  A reduction in the demand for home insulation products. 
A)  A reduction in the consumption of gasoline. 
B)  An increase in demand for solar heating systems. 
C)  An increase in demand for smaller, more efficient automobiles. 
D)  A reduction in the demand for home insulation products.

Question 11

A technological improvement in producing good A would be a shift in the:

Accepted Answer

A)  supply curve for A to the right. 
B)  supply curve for A to the left. 
C)  demand curve for A to the right. 
D)  demand curve for A to the left. 
A)  supply curve for A to the right. 
B)  supply curve for A to the left. 
C)  demand curve for A to the right. 
D)  demand curve for A to the left.

Question 12

Assume that the equilibrium price for a good is $5.If the market price is $10,a:

Accepted Answer

A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5. 
A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5.

Question 13

Assuming that generic brands are inferior goods,an increase in consumer income,other things being equal,will cause a(n):

Accepted Answer

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

Question 14

The law of demand indicates that:

Accepted Answer

A)  every physical good has a use. 
B)  when people want a good badly enough, they will find a way to pay for it. 
C)  the desire for a good is unrelated to its price. 
D)  the quantity of a good that people will buy is inversely related to the price of the good. 
A)  every physical good has a use. 
B)  when people want a good badly enough, they will find a way to pay for it. 
C)  the desire for a good is unrelated to its price. 
D)  the quantity of a good that people will buy is inversely related to the price of the good.

Question 15

Exhibit 3-3 Demand curves
  
-Assume that crackers and soup are complementary goods.Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D.

Question 16

Which of the following will not cause a change in demand for crackers?

Accepted Answer

A)  A change in consumers' income. 
B)  A change in the price of crackers. 
C)  A change in the price of cheese. 
D)  A change in the number of cracker-eaters. 
E)  A change in consumers' tastes for crackers. 
A)  A change in consumers' income. 
B)  A change in the price of crackers. 
C)  A change in the price of cheese. 
D)  A change in the number of cracker-eaters. 
E)  A change in consumers' tastes for crackers.

Question 17

Exhibit 3-4 Supply curves
  
-In Exhibit 3-4,which of the following could have caused the shift in the supply curve from S₁ to S₂?

Accepted Answer

A)  Increase in demand. 
B)  Decrease in demand. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates. 
E)  Increase in materials cost. 
A)  Increase in demand. 
B)  Decrease in demand. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates. 
E)  Increase in materials cost.

Question 18

A decrease in quantity demanded is given by a(n):

Accepted Answer

A)  downward shift of the demand curve. 
B)  upward shift of the demand curve. 
C)  downward movement to the right along the demand curve. 
D)  upward movement to the left along the demand curve. 
E)  downward shift of both demand and supply curves. 
A)  downward shift of the demand curve. 
B)  upward shift of the demand curve. 
C)  downward movement to the right along the demand curve. 
D)  upward movement to the left along the demand curve. 
E)  downward shift of both demand and supply curves.

Question 19

If X is a normal good,a rise in consumer income will shift the:

Accepted Answer

A)  demand curve for X to the right. 
B)  demand curve for X to the left. 
C)  supply curve for X to the right. 
D)  supply curve for X to the left. 
A)  demand curve for X to the right. 
B)  demand curve for X to the left. 
C)  supply curve for X to the right. 
D)  supply curve for X to the left.

Question 20

Seller A,has an upward-sloping supply curve,and is willing to supply 400 units of a commodity at a price of $5 per unit.Seller A is now willing to supply 500 units at a price of $5 per unit.Evidently,seller A has experienced a(n):

Accepted Answer

A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in the quantity supplied. 
E)  decrease in demand. 
A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in the quantity supplied. 
E)  decrease in demand.

Exam 3: Part 1: Market Demand and Supply

There is a technological advance in the production of digital watches.This will cause:

If good X is an inferior good,a decrease in consumer income,other things being equal,will shift the:

A market demand curve:

Which of the following would not cause market demand for a normal good to decline?

Which of the following would cause a shift in the demand curve for a good?

The demand schedule for a good shows:

Which of the following will not cause a movement along the supply curve?

A baby boom will have what immediate effect on the disposable diaper market?

The horizontal summation of all individual demands at different given prices results in the:

Suppose the prices of petroleum products,including gasoline and fuel oil,fell sharply.Which of the following would most likely occur as the result of the lower prices of petroleum products?

A technological improvement in producing good A would be a shift in the:

Assume that the equilibrium price for a good is $5.If the market price is $10,a:

Assuming that generic brands are inferior goods,an increase in consumer income,other things being equal,will cause a(n):

The law of demand indicates that:

Exhibit 3-3 Demand curves -Assume that crackers and soup are complementary goods.Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Which of the following will not cause a change in demand for crackers?

Exhibit 3-4 Supply curves -In Exhibit 3-4,which of the following could have caused the shift in the supply curve from S₁ to S₂?

A decrease in quantity demanded is given by a(n):

If X is a normal good,a rise in consumer income will shift the:

Seller A,has an upward-sloping supply curve,and is willing to supply 400 units of a commodity at a price of $5 per unit.Seller A is now willing to supply 500 units at a price of $5 per unit.Evidently,seller A has experienced a(n):

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