Question 1

The equilibrium price and quantity of any good or service are established by

Accepted Answer

A)  only consumers. 
B)  only firms. 
C)  government regulations. 
D)  both consumers and firms. 
E)  custom and tradition. 
A)  only consumers. 
B)  only firms. 
C)  government regulations. 
D)  both consumers and firms. 
E)  custom and tradition.

Question 2

Assume the demand for graphics cards decreases,while the supply increases.Which of the following outcomes is certain to occur?

Accepted Answer

A)  The equilibrium price of graphics cards will rise. 
B)  The equilibrium quantity of graphics cards will rise. 
C)  The equilibrium price of graphics cards will fall. 
D)  The equilibrium quantity of graphics cards will fall. 
E)  Neither the equilibrium price nor the equilibrium quantity of graphics cards can be predicted. 
A)  The equilibrium price of graphics cards will rise. 
B)  The equilibrium quantity of graphics cards will rise. 
C)  The equilibrium price of graphics cards will fall. 
D)  The equilibrium quantity of graphics cards will fall. 
E)  Neither the equilibrium price nor the equilibrium quantity of graphics cards can be predicted.

Question 3

Suppose that the demand curve for a good is given by QD = 100 - 2PD,while the supply curve for the good is given by QS = 60 + 2PS.The equilibrium quantity is ______ and the equilibrium price is _____.

Accepted Answer

A)  10;80 
B)  80;10 
C)  100;60 
D)  60;100 
E)  120;100 
A)  10;80 
B)  80;10 
C)  100;60 
D)  60;100 
E)  120;100

Question 4

For two goods,X and Y,to be classified as substitutes,it must be the case that

Accepted Answer

A)  X and Y are identical. 
B)  consumers tend to purchase both items. 
C)  when the price of X rises,the demand for Y decreases. 
D)  when the price of X rises,the demand for Y increases. 
E)  X and Y look alikE. 
A)  X and Y are identical. 
B)  consumers tend to purchase both items. 
C)  when the price of X rises,the demand for Y decreases. 
D)  when the price of X rises,the demand for Y increases. 
E)  X and Y look alikE.

Question 5

Suppose that both the equilibrium price and the equilibrium quantity of ketchup fall.The most consistent explanation for these observations is

Accepted Answer

A)  a decrease in the demand for ketchup with no change in supply. 
B)  an increase in the demand for ketchup with no change in supply. 
C)  an increase in the demand for ketchup and a decrease in the supply of ketchup. 
D)  an increase in the supply of ketchup with no change in demand. 
E)  a decrease in the supply of ketchup with no change in demand. 
A)  a decrease in the demand for ketchup with no change in supply. 
B)  an increase in the demand for ketchup with no change in supply. 
C)  an increase in the demand for ketchup and a decrease in the supply of ketchup. 
D)  an increase in the supply of ketchup with no change in demand. 
E)  a decrease in the supply of ketchup with no change in demand.

Question 6

If the price of a good is above the equilibrium price,then

Accepted Answer

A)  the government needs to set a higher price. 
B)  firms,dissatisfied with growing inventories,will raise the price. 
C)  consumers,wanting to ensure they acquire the good,will bid the price lower. 
D)  the government needs to set a lower price. 
E)  firms,dissatisfied with growing inventories,will lower the pricE. 
A)  the government needs to set a higher price. 
B)  firms,dissatisfied with growing inventories,will raise the price. 
C)  consumers,wanting to ensure they acquire the good,will bid the price lower. 
D)  the government needs to set a lower price. 
E)  firms,dissatisfied with growing inventories,will lower the pricE.

Question 7

The statement that a market in equilibrium leaves no unexploited opportunities for individuals is the

Accepted Answer

A)  Cost-Benefit Principle. 
B)  Scarcity Problem. 
C)  Efficiency Principle. 
D)  Equilibrium Principle. 
E)  Principle of Comparative AdvantagE. 
A)  Cost-Benefit Principle. 
B)  Scarcity Problem. 
C)  Efficiency Principle. 
D)  Equilibrium Principle. 
E)  Principle of Comparative AdvantagE.

Question 8

A shift to either the left or the right in a demand curve is called

Accepted Answer

A)  a change in quantity demanded. 
B)  a movement along a demand curve. 
C)  a change in demand. 
D)  a change in quantity supplied. 
E)  a change in supply. 
A)  a change in quantity demanded. 
B)  a movement along a demand curve. 
C)  a change in demand. 
D)  a change in quantity supplied. 
E)  a change in supply.

Question 9

Market Equilibrium
  
-Assume that column B and column D are the initial demand and supply curves.At a price of $30,the market would experience

Accepted Answer

A)  an equilibrium. 
B)  excess demand of 95 units. 
C)  excess supply of 45 units. 
D)  excess demand of 45 units. 
E)  excess supply of 50 units. 
A)  an equilibrium. 
B)  excess demand of 95 units. 
C)  excess supply of 45 units. 
D)  excess demand of 45 units. 
E)  excess supply of 50 units.

Question 10

Suppose that the demand curve for a good is given by QD = 100 - 2PD,while the supply curve for the good is given by QS = 60 + 2PS.If the price in this market is currently equal to 20,then there is currently ______ in the amount of _____ units.

Accepted Answer

A)  excess demand;20 
B)  excess demand;40 
C)  excess supply;20 
D)  excess supply;40 
E)  excess supply;100 
A)  excess demand;20 
B)  excess demand;40 
C)  excess supply;20 
D)  excess supply;40 
E)  excess supply;100

Question 11

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that supply will ________ and demand will ________.

Accepted Answer

A)  increase;decrease 
B)  decrease;increase 
C)  increase;increase 
D)  decrease;decrease 
E)  be constant;be constant 
A)  increase;decrease 
B)  decrease;increase 
C)  increase;increase 
D)  decrease;decrease 
E)  be constant;be constant

Question 12

Refer to the graphs below.In the 1990s,corporations began to find new ways to incorporate recycled materials in new products.The effect on the market for recycled materials is best shown by

Accepted Answer

A)  Graph (a). 
B)  Graph (b). 
C)  Graph (c). 
D)  Graph (d). 
E)  none of these graphs. 
A)  Graph (a). 
B)  Graph (b). 
C)  Graph (c). 
D)  Graph (d). 
E)  none of these graphs.

Question 13

If,when the price of X increases,the demand for Y decreases,one can conclude that X and Y are

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  normal. 
D)  inferior. 
E)  superior. 
A)  complements. 
B)  substitutes. 
C)  normal. 
D)  inferior. 
E)  superior.

Question 14

-Which of the following statements is true?

Accepted Answer

A)  If the quantity demanded increases from 4 units to 6 units,the market price will fall. 
B)  If the quantity demanded increases from 4 units to 6 units,the supply will increase. 
C)  If the quantity demanded increases from 4 units to 6 units,the market price will fall and the supply will increase. 
D)  Six units of pizza will be demanded if the market price of pizza is $4 instead of $6. 
E)  Only 4 units of pizza will be demanded even if the price of pizza is $4. 
A)  If the quantity demanded increases from 4 units to 6 units,the market price will fall. 
B)  If the quantity demanded increases from 4 units to 6 units,the supply will increase. 
C)  If the quantity demanded increases from 4 units to 6 units,the market price will fall and the supply will increase. 
D)  Six units of pizza will be demanded if the market price of pizza is $4 instead of $6. 
E)  Only 4 units of pizza will be demanded even if the price of pizza is $4.

Question 15

Market Equilibrium and Shifts in Demand and Supply
  
-Starting with column C,the most reasonable explanation of how to get to column D is

Accepted Answer

A)  an increase in quantity supplied. 
B)  an increase in supply. 
C)  a decrease in quantity supplied. 
D)  a decrease in supply. 
E)  a change in demand. 
A)  an increase in quantity supplied. 
B)  an increase in supply. 
C)  a decrease in quantity supplied. 
D)  a decrease in supply. 
E)  a change in demand.

Question 16

Assume that Joe is willing to produce another hamburger that costs $1 to make.Mary is hungry and is willing to buy a hamburger for $3.According to the equilibrium principle,Joe and Mary

Accepted Answer

A)  will make a trade. 
B)  will only make a trade if Joe can get Mary to spend more than $3 for the hamburger. 
C)  will only make a trade if Mary can get Joe to charge less than $1 for the hamburger. 
D)  may or may not make a trade. 
E)  will never trade;they will look for better deals. 
A)  will make a trade. 
B)  will only make a trade if Joe can get Mary to spend more than $3 for the hamburger. 
C)  will only make a trade if Mary can get Joe to charge less than $1 for the hamburger. 
D)  may or may not make a trade. 
E)  will never trade;they will look for better deals.

Question 17

Which of the following is NOT true of a supply curve?

Accepted Answer

A)  It relates the price of an item to the quantity supplied of that item. 
B)  It shows the amount producers are willing and able to produce at various prices,holding other factors constant. 
C)  It has a positive slope. 
D)  It shows that producers tend to produce more of a good as its price rises. 
E)  It relates the price of an item to the demand for that item. 
A)  It relates the price of an item to the quantity supplied of that item. 
B)  It shows the amount producers are willing and able to produce at various prices,holding other factors constant. 
C)  It has a positive slope. 
D)  It shows that producers tend to produce more of a good as its price rises. 
E)  It relates the price of an item to the demand for that item.

Question 18

One observes that both the equilibrium price and the equilibrium quantity of coffee fall.Which of the following best fits the observed data?

Accepted Answer

A)  An increase in demand with supply constant. 
B)  An increase in demand coupled with a decrease in supply. 
C)  An increase in demand coupled with an increase in supply. 
D)  A decrease in demand with supply constant. 
E)  An increase in supply with demand constant. 
A)  An increase in demand with supply constant. 
B)  An increase in demand coupled with a decrease in supply. 
C)  An increase in demand coupled with an increase in supply. 
D)  A decrease in demand with supply constant. 
E)  An increase in supply with demand constant.

Question 19

An economic model is a representation of economic reality that

Accepted Answer

A)  highlights all possible variables and the relationships among them. 
B)  highlights particular variables and the relationships among them. 
C)  predicts how government actions influence the private sector. 
D)  illustrates the difference between economic and non-economic theories. 
E)  focuses strictly on welfare economics. 
A)  highlights all possible variables and the relationships among them. 
B)  highlights particular variables and the relationships among them. 
C)  predicts how government actions influence the private sector. 
D)  illustrates the difference between economic and non-economic theories. 
E)  focuses strictly on welfare economics.

Question 20

When the price of a good is below its equilibrium value,

Accepted Answer

A)  consumers will bid the price up. 
B)  excess supply will occur. 
C)  it will tend to stay below the equilibrium value. 
D)  suppliers will notice their inventories are growing. 
E)  suppliers will lower the pricE. 
A)  consumers will bid the price up. 
B)  excess supply will occur. 
C)  it will tend to stay below the equilibrium value. 
D)  suppliers will notice their inventories are growing. 
E)  suppliers will lower the pricE.

The equilibrium price and quantity of any good or service are established by

Assume the demand for graphics cards decreases,while the supply increases.Which of the following outcomes is certain to occur?

Suppose that the demand curve for a good is given by Q_D = 100 - 2P_D,while the supply curve for the good is given by Q_S = 60 + 2P_S.The equilibrium quantity is __ and the equilibrium price is _.

For two goods,X and Y,to be classified as substitutes,it must be the case that

Suppose that both the equilibrium price and the equilibrium quantity of ketchup fall.The most consistent explanation for these observations is

If the price of a good is above the equilibrium price,then

The statement that a market in equilibrium leaves no unexploited opportunities for individuals is the

A shift to either the left or the right in a demand curve is called

Market Equilibrium -Assume that column B and column D are the initial demand and supply curves.At a price of $30,the market would experience

Suppose that the demand curve for a good is given by Q_D = 100 - 2P_D,while the supply curve for the good is given by Q_S = 60 + 2P_S.If the price in this market is currently equal to 20,then there is currently __ in the amount of _ units.

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that supply will and demand will .

Refer to the graphs below.In the 1990s,corporations began to find new ways to incorporate recycled materials in new products.The effect on the market for recycled materials is best shown by

If,when the price of X increases,the demand for Y decreases,one can conclude that X and Y are

-Which of the following statements is true?

Market Equilibrium and Shifts in Demand and Supply -Starting with column C,the most reasonable explanation of how to get to column D is

Assume that Joe is willing to produce another hamburger that costs $1 to make.Mary is hungry and is willing to buy a hamburger for $3.According to the equilibrium principle,Joe and Mary

Which of the following is NOT true of a supply curve?

One observes that both the equilibrium price and the equilibrium quantity of coffee fall.Which of the following best fits the observed data?

An economic model is a representation of economic reality that

When the price of a good is below its equilibrium value,

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters

Exam 3: Measuring Macroeconomic Performance: Wages, Employment and the Labour Market

The equilibrium price and quantity of any good or service are established by

Assume the demand for graphics cards decreases,while the supply increases.Which of the following outcomes is certain to occur?

Suppose that the demand curve for a good is given by QD = 100 - 2PD,while the supply curve for the good is given by QS = 60 + 2PS.The equilibrium quantity is ______ and the equilibrium price is _____.

For two goods,X and Y,to be classified as substitutes,it must be the case that

Suppose that both the equilibrium price and the equilibrium quantity of ketchup fall.The most consistent explanation for these observations is

If the price of a good is above the equilibrium price,then

The statement that a market in equilibrium leaves no unexploited opportunities for individuals is the

A shift to either the left or the right in a demand curve is called

Market Equilibrium -Assume that column B and column D are the initial demand and supply curves.At a price of $30,the market would experience

Suppose that the demand curve for a good is given by QD = 100 - 2PD,while the supply curve for the good is given by QS = 60 + 2PS.If the price in this market is currently equal to 20,then there is currently ______ in the amount of _____ units.

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that supply will ________ and demand will ________.

Refer to the graphs below.In the 1990s,corporations began to find new ways to incorporate recycled materials in new products.The effect on the market for recycled materials is best shown by

If,when the price of X increases,the demand for Y decreases,one can conclude that X and Y are

-Which of the following statements is true?

Market Equilibrium and Shifts in Demand and Supply -Starting with column C,the most reasonable explanation of how to get to column D is

Assume that Joe is willing to produce another hamburger that costs $1 to make.Mary is hungry and is willing to buy a hamburger for $3.According to the equilibrium principle,Joe and Mary

Which of the following is NOT true of a supply curve?

One observes that both the equilibrium price and the equilibrium quantity of coffee fall.Which of the following best fits the observed data?

An economic model is a representation of economic reality that

When the price of a good is below its equilibrium value,

Measuring Macroeconomic Performance: Output and Prices

Measuring Macroeconomic Performance: Saving and Wealth

Short-Term Economic Fluctuations

Spending and Output in the Short Run

Fiscal Policy

Money, Prices and the Reserve Bank

The Reserve Bank and the Economy

The Aggregate Demand - Aggregate Supply Model

Macroeconomic Policy

The Economy in the Long Run: an Introduction to Economic Growth

The Production Function Approach to Understanding Growth

Savings, Capital Formation and Comparative Economic Growth

International Trade

Exchange Rates and the Open Economy

The Balance of Payments: Net Exports and International Capital Flows

Filters

Suppose that the demand curve for a good is given by Q_D = 100 - 2P_D,while the supply curve for the good is given by Q_S = 60 + 2P_S.The equilibrium quantity is __ and the equilibrium price is _.

Suppose that the demand curve for a good is given by Q_D = 100 - 2P_D,while the supply curve for the good is given by Q_S = 60 + 2P_S.If the price in this market is currently equal to 20,then there is currently __ in the amount of _ units.

If both buyers and sellers expect the price of a commodity to rise in the future,it is likely that supply will and demand will .