Question 1

When households and businesses interact in product markets money

Accepted Answer

A)  is not exchanged 
B)  is flowing toward businesses 
C)  is flowing toward households 
D)  is not used at all 
E)  is flowing to both businesses and households 
A)  is not exchanged 
B)  is flowing toward businesses 
C)  is flowing toward households 
D)  is not used at all 
E)  is flowing to both businesses and households B

Question 2

The rapid rise in oil prices during 2007-2008 can be explained by noting the fact that

Accepted Answer

A)  the supply of oil increased more rapidly than the demand for oil increased 
B)  the demand for oil increased more rapidly than the supply for oil increased 
C)  the demand for oil decreased at the same time that the supply of oil increased 
D)  the quantity demanded of oil increased more rapidly than the quantity supplied of oil increased 
E)  the quantity supplied of oil increased more rapidly than the quantity demanded of oil increased 
A)  the supply of oil increased more rapidly than the demand for oil increased 
B)  the demand for oil increased more rapidly than the supply for oil increased 
C)  the demand for oil decreased at the same time that the supply of oil increased 
D)  the quantity demanded of oil increased more rapidly than the quantity supplied of oil increased 
E)  the quantity supplied of oil increased more rapidly than the quantity demanded of oil increased B

Question 3

Characterizing a market involves

Accepted Answer

A)  counting the number of demanders and measuring their quantity demanded 
B)  counting the number of suppliers and measuring their costs 
C)  equating the number of suppliers and the number of demanders 
D)  deciding which market best suits the problem being analyzed 
E)  deciding how to increase the degree of competition 
A)  counting the number of demanders and measuring their quantity demanded 
B)  counting the number of suppliers and measuring their costs 
C)  equating the number of suppliers and the number of demanders 
D)  deciding which market best suits the problem being analyzed 
E)  deciding how to increase the degree of competition D

Question 4

Which of the following would shift the demand curve for new college textbooks to the right?

Accepted Answer

A)  an increase in the price of new college textbooks 
B)  a decrease in the price of new college textbooks 
C)  an increase in the price of used college textbooks 
D)  a decrease in the population of college students 
E)  a decrease in the wealth of college students 
A)  an increase in the price of new college textbooks 
B)  a decrease in the price of new college textbooks 
C)  an increase in the price of used college textbooks 
D)  a decrease in the population of college students 
E)  a decrease in the wealth of college students

Question 5

Which of the following is assumed constant along the demand curve for gasoline?

Accepted Answer

A)  the price of gasoline and the prices of related goods 
B)  the price of gasoline,buyers' incomes,and tastes 
C)  all variables affecting demand other than the price of gasoline 
D)  all variables affecting demand other than the supply of gasoline 
E)  buyers' incomes and tastes,but not the prices of related goods 
A)  the price of gasoline and the prices of related goods 
B)  the price of gasoline,buyers' incomes,and tastes 
C)  all variables affecting demand other than the price of gasoline 
D)  all variables affecting demand other than the supply of gasoline 
E)  buyers' incomes and tastes,but not the prices of related goods

Question 6

The demand curve for apples slopes downward

Accepted Answer

A)  because supply and demand are equal in equilibrium 
B)  since producers supply more when consumers demand more 
C)  because people are assumed to be basically greedy 
D)  because the law of demand holds in the market for apples 
E)  because apples are preferred to all other goods 
A)  because supply and demand are equal in equilibrium 
B)  since producers supply more when consumers demand more 
C)  because people are assumed to be basically greedy 
D)  because the law of demand holds in the market for apples 
E)  because apples are preferred to all other goods

Question 7

A decrease in demand coupled with a decrease in supply results in a(n)

Accepted Answer

A)  increase in equilibrium price and a decrease in equilibrium quantity 
B)  decrease in equilibrium price and a decrease in equilibrium quantity 
C)  increase in equilibrium price and a increase in equilibrium quantity 
D)  ambiguous effect of equilibrium price and a decrease in equilibrium quantity 
E)  ambiguous effect on equilibrium price and a increase in equilibrium quantity 
A)  increase in equilibrium price and a decrease in equilibrium quantity 
B)  decrease in equilibrium price and a decrease in equilibrium quantity 
C)  increase in equilibrium price and a increase in equilibrium quantity 
D)  ambiguous effect of equilibrium price and a decrease in equilibrium quantity 
E)  ambiguous effect on equilibrium price and a increase in equilibrium quantity

Question 8

Orange juice and cranberry juice are substitute goods.An increase in the price of orange juice results in a(n)

Accepted Answer

A)  increase in the demand for orange juice 
B)  increase in the supply of cranberry juice 
C)  increase in the quantity demanded of orange juice 
D)  increase in the demand for cranberry juice 
E)  decrease in the quantity demanded of cranberry juice 
A)  increase in the demand for orange juice 
B)  increase in the supply of cranberry juice 
C)  increase in the quantity demanded of orange juice 
D)  increase in the demand for cranberry juice 
E)  decrease in the quantity demanded of cranberry juice

Question 9

The amount of a commodity that buyers in the market would like to purchase at a particular price is

Accepted Answer

A)  equilibrium 
B)  quantity supplied 
C)  quantity produced 
D)  infinite 
E)  quantity demanded 
A)  equilibrium 
B)  quantity supplied 
C)  quantity produced 
D)  infinite 
E)  quantity demanded

Question 10

When there is a change in demand,

Accepted Answer

A)  there is a rightward movement along the demand curve 
B)  there is a leftward movement along the demand curve 
C)  there is a shift of the supply curve 
D)  changes in price lead to different changes in quantity demanded 
E)  there is a shift of the demand curve 
A)  there is a rightward movement along the demand curve 
B)  there is a leftward movement along the demand curve 
C)  there is a shift of the supply curve 
D)  changes in price lead to different changes in quantity demanded 
E)  there is a shift of the demand curve

Question 11

-In supply and demand schedules in Figure 3-10,the equilibrium price of a pair of socks is

Accepted Answer

A)  $4 
B)  $8 
C)  $6 
D)  $2 
E)  $10 
A)  $4 
B)  $8 
C)  $6 
D)  $2 
E)  $10

Question 12

A decrease in demand and an increase in supply results in a(n)

Accepted Answer

A)  decrease in equilibrium price and an ambiguous effect on equilibrium quantity 
B)  increase in equilibrium price and an ambiguous effect on equilibrium quantity 
C)  ambiguous effect on equilibrium price and an increase in equilibrium quantity 
D)  ambiguous effect on equilibrium price and an decrease in equilibrium quantity 
E)  increase in equilibrium price and a decrease in equilibrium quantity 
A)  decrease in equilibrium price and an ambiguous effect on equilibrium quantity 
B)  increase in equilibrium price and an ambiguous effect on equilibrium quantity 
C)  ambiguous effect on equilibrium price and an increase in equilibrium quantity 
D)  ambiguous effect on equilibrium price and an decrease in equilibrium quantity 
E)  increase in equilibrium price and a decrease in equilibrium quantity

Question 13

The demand curve for a particular good indicates the various quantities

Accepted Answer

A)  demanded at various prices,other things equal 
B)  demanded at different income levels,other things equal 
C)  actually purchased at various prices,other things equal 
D)  actually purchased at different income levels,other things equal 
E)  demanded at various prices and income levels,other things equal 
A)  demanded at various prices,other things equal 
B)  demanded at different income levels,other things equal 
C)  actually purchased at various prices,other things equal 
D)  actually purchased at different income levels,other things equal 
E)  demanded at various prices and income levels,other things equal

Question 14

If the price of jelly (a complement with peanut butter)decreases,both the demand and supply curves of peanut butter will shift rightward.

Accepted Answer

A) True 
 B)False

Question 15

A good is said to be a normal good when

Accepted Answer

A)  decreases in income lead to an increase in demand for the good 
B)  decreases in income lead to a decrease in demand for the good 
C)  increases in income lead to a decrease in demand for the good 
D)  increases in price lead to a decrease in the quantity demanded of the good 
E)  increases in price lead to a decrease in demand for the good 
A)  decreases in income lead to an increase in demand for the good 
B)  decreases in income lead to a decrease in demand for the good 
C)  increases in income lead to a decrease in demand for the good 
D)  increases in price lead to a decrease in the quantity demanded of the good 
E)  increases in price lead to a decrease in demand for the good

Question 16

In a market system,prices are determined by

Accepted Answer

A)  corporate executives 
B)  government bureaucrats 
C)  supply and demand 
D)  total market demand 
E)  production costs 
A)  corporate executives 
B)  government bureaucrats 
C)  supply and demand 
D)  total market demand 
E)  production costs

Question 17

The three-step procedure for economic analysis

Accepted Answer

A)  works better in macroeconomics than in microeconomics 
B)  begins with characterizing the market 
C)  helps governments decide how to change the market equilibrium 
D)  focuses on goals and constraints 
E)  is used only in microeconomics 
A)  works better in macroeconomics than in microeconomics 
B)  begins with characterizing the market 
C)  helps governments decide how to change the market equilibrium 
D)  focuses on goals and constraints 
E)  is used only in microeconomics

Question 18

Which of the following statements about markets is false?

Accepted Answer

A)  markets are used to allocate resources in market systems 
B)  markets can vary in geographical size 
C)  prices are used to allocate goods in markets 
D)  markets are used to allocate resources in centrally-planned socialist economic systems 
E)  supply and demand explains how prices are set in competitive markets 
A)  markets are used to allocate resources in market systems 
B)  markets can vary in geographical size 
C)  prices are used to allocate goods in markets 
D)  markets are used to allocate resources in centrally-planned socialist economic systems 
E)  supply and demand explains how prices are set in competitive markets

Question 19

A substitute good is one that

Accepted Answer

A)  appeals to a wide spectrum of consumers 
B)  is used together with another good 
C)  is exchanged on the black market 
D)  is produced by the same firm as another good 
E)  can be used in place of another good,fulfilling the same basic purpose 
A)  appeals to a wide spectrum of consumers 
B)  is used together with another good 
C)  is exchanged on the black market 
D)  is produced by the same firm as another good 
E)  can be used in place of another good,fulfilling the same basic purpose

Question 20

Which of the following items is most likely to be an inferior good?

Accepted Answer

A)  bus tickets 
B)  airline tickets 
C)  housing 
D)  stereo equipment 
E)  home computers 
A)  bus tickets 
B)  airline tickets 
C)  housing 
D)  stereo equipment 
E)  home computers

Exam 2: Scarcity, choice, and Economic Systems: Part A

When households and businesses interact in product markets money

The rapid rise in oil prices during 2007-2008 can be explained by noting the fact that

Characterizing a market involves

Which of the following would shift the demand curve for new college textbooks to the right?

Which of the following is assumed constant along the demand curve for gasoline?

The demand curve for apples slopes downward

A decrease in demand coupled with a decrease in supply results in a(n)

Orange juice and cranberry juice are substitute goods.An increase in the price of orange juice results in a(n)

The amount of a commodity that buyers in the market would like to purchase at a particular price is

When there is a change in demand,

-In supply and demand schedules in Figure 3-10,the equilibrium price of a pair of socks is

A decrease in demand and an increase in supply results in a(n)

The demand curve for a particular good indicates the various quantities

If the price of jelly (a complement with peanut butter)decreases,both the demand and supply curves of peanut butter will shift rightward.

A good is said to be a normal good when

In a market system,prices are determined by

The three-step procedure for economic analysis

Which of the following statements about markets is false?

A substitute good is one that

Which of the following items is most likely to be an inferior good?

What Is Economics

Scarcity,choice,and Economic Systems

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

Perfect Competition: Part A

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

labor Markets: Part A

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

What Macroeconomics Tries to Explain

Production, income, and Employment

The Price Level and Inflation

The Classical Long-Run Model

Part A: The Classical Model in an Open Economy

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-Run Macro Model

Fiscal Policy

Money,banks,and the Federal Reserve

The Money Market and Monetary Policy

Feedback Effects From GDP to the Money Market

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Appendix-finding Equilibrium GDP Algebraically

Appendix: Capital and Leverage

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