Question 1

-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.

Question 2

The market clearing price is

Accepted Answer

A) the price which eliminates excess quantity supplied or excess quantity demanded. 
B) the price which leaves an excess quantity demanded. 
C) the price which leaves an excess quantity supplied. 
D) the lowest price at which a positive quantity supplied exists. 
A) the price which eliminates excess quantity supplied or excess quantity demanded. 
B) the price which leaves an excess quantity demanded. 
C) the price which leaves an excess quantity supplied. 
D) the lowest price at which a positive quantity supplied exists.

Question 3

All of the following cause a shift in the demand curve EXCEPT a change in the

Accepted Answer

A) price of related goods. 
B) price of the good or service. 
C) consumer income. 
D) number of consumers. 
A) price of related goods. 
B) price of the good or service. 
C) consumer income. 
D) number of consumers.

Question 4

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team,then these season tickets are

Accepted Answer

A) a normal good. 
B) an inferior good. 
C) an income complement. 
D) an income substitute. 
A) a normal good. 
B) an inferior good. 
C) an income complement. 
D) an income substitute.

Question 5

Suppose that milk producers expect that the price of milk is going to drop next week.This would cause

Accepted Answer

A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today. 
A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today.

Question 6

When the amount supplied is greater at each price,there is a(n)

Accepted Answer

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

Question 7

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 8

If consumers expect that the price of pretzels will decrease next week,what would happen today?

Accepted Answer

A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease. 
A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease.

Question 9

-If the market price falls from P0 to P1 in the above figure,then

Accepted Answer

A) a new equilibrium quantity is established. 
B) there is a shortage equal to the distance EF. 
C) there will be a further tendency for price to fall. 
D) there is a surplus of goods on the market equal to the distance Q1,Q2. 
A) a new equilibrium quantity is established. 
B) there is a shortage equal to the distance EF. 
C) there will be a further tendency for price to fall. 
D) there is a surplus of goods on the market equal to the distance Q1,Q2.

Question 10

$\begin{array}{cccc}
&\text { Supplier 1 } & \text { Supplier 2 } & \text { Supplier } 3 \
&\text {Quantity Supplied}& \text {Quantity Supplied} &\text {Quantity Supplied}\
\text { Price } & \text { (thousands) } & \text { (thousands) } & \text { (thousands) } \
\hline 8 & 11 & 7 & 20 \
7 & 8 & 6 & 15 \
6 & 5 & 5 & 10 \
5 & 2 & 4 & 5
\end{array}$
-Refer to the above table.The market quantity supplied when the price is $6 is

Accepted Answer

A) 0 
B) 5 
C) 10 
D) 20 
A) 0 
B) 5 
C) 10 
D) 20

Question 11

If a demand curve shifts,we know that

Accepted Answer

A) the price of the good itself is not a factor. 
B) the price of the good itself is a factor. 
C) the price of the good and supply are the major factors. 
D) the price of the good and demand are major factors. 
A) the price of the good itself is not a factor. 
B) the price of the good itself is a factor. 
C) the price of the good and supply are the major factors. 
D) the price of the good and demand are major factors.

Question 12

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents.In 2010,the pay phone costs 50 cents for a call and a first-class stamp costs 44 cents.We know that

Accepted Answer

A) both the nominal and the relative price of phone calls increased from 1950 to 2010. 
B) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2010,but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2010. 
C) all prices increased from 1950 to 2010: Nominal prices of phone calls,first-class stamps,and the relative prices of phone calls and first-class stamps. 
D) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2010,but we can't tell if the relative prices increased or decreased without more information. 
A) both the nominal and the relative price of phone calls increased from 1950 to 2010. 
B) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2010,but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2010. 
C) all prices increased from 1950 to 2010: Nominal prices of phone calls,first-class stamps,and the relative prices of phone calls and first-class stamps. 
D) both the nominal prices of phone calls and first-class stamps increased from 1950 to 2010,but we can't tell if the relative prices increased or decreased without more information.

Question 13

Last year there were 6 pizza shops in town.This year there are only 4.Other things being equal,the decrease in the number of suppliers will

Accepted Answer

A) cause the market supply curve to shift to the right. 
B) increase the market demand for pizza. 
C) cause a decrease in the quantity supplied at each price. 
D) have no impact on market supply as long as the demand for pizza remains strong. 
A) cause the market supply curve to shift to the right. 
B) increase the market demand for pizza. 
C) cause a decrease in the quantity supplied at each price. 
D) have no impact on market supply as long as the demand for pizza remains strong.

Question 14

-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 15

Morgan graduates from college and gets a job paying $50,000 a year.While in school,she consumed 4 pounds of chicken and 1 pound of shrimp a month.After she starts work,she consumes 2 pounds of chicken and 3 pounds of shrimp a month.If everything else is held constant,we know that

Accepted Answer

A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan. 
A) chicken and shrimp are normal goods for Morgan. 
B) chicken is an inferior good and shrimp is a normal good for Morgan. 
C) chicken is an inferior good for Morgan. 
D) shrimp is a normal good for Morgan.

Question 16

If two goods,J and K,are complements,then which of the following statements is FALSE?

Accepted Answer

A) They are consumed together. 
B) An increase in the price of J causes the demand for K to rise. 
C) When the quantity demanded of J increases,the demand for K increases. 
D) A decrease in the price of K causes an increase in the demand for J. 
A) They are consumed together. 
B) An increase in the price of J causes the demand for K to rise. 
C) When the quantity demanded of J increases,the demand for K increases. 
D) A decrease in the price of K causes an increase in the demand for J.

Question 17

When income rises,

Accepted Answer

A) demand for a normal good rises. 
B) demand for a normal good falls. 
C) demand for an inferior good rises. 
D) quantity of a normal good demanded rises. 
A) demand for a normal good rises. 
B) demand for a normal good falls. 
C) demand for an inferior good rises. 
D) quantity of a normal good demanded rises.

Question 18

Suppose that the demand curve for apples is downward sloping and the price per bushel increases from $6.50 to $7.50.We would then expect

Accepted Answer

A) the demand for apples to decrease. 
B) the quantity of apples demanded to fall. 
C) the demand curve to shift toward the origin. 
D) the quantity of apples demanded to increase. 
A) the demand for apples to decrease. 
B) the quantity of apples demanded to fall. 
C) the demand curve to shift toward the origin. 
D) the quantity of apples demanded to increase.

Question 19

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

Accepted Answer

A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences. 
A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences.

Question 20

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) the quantities of a good that people will buy at various prices. 
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) the quantities of a good that people will buy at various prices.

Exam 3: Demand and Supply

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

The market clearing price is

All of the following cause a shift in the demand curve EXCEPT a change in the

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team,then these season tickets are

Suppose that milk producers expect that the price of milk is going to drop next week.This would cause

When the amount supplied is greater at each price,there is a(n)

A shift in demand occurs when

If consumers expect that the price of pretzels will decrease next week,what would happen today?

-If the market price falls from P0 to P1 in the above figure,then

Supplier 1 Supplier 2 Supplier 3 Quantity Supplied Quantity Supplied Quantity Supplied Price (thousands) (thousands) (thousands) 8 11 7 20 7 8 6 15 6 5 5 10 5 2 4 5 -Refer to the above table.The market quantity supplied when the price is $6 is

If a demand curve shifts,we know that

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents.In 2010,the pay phone costs 50 cents for a call and a first-class stamp costs 44 cents.We know that

Last year there were 6 pizza shops in town.This year there are only 4.Other things being equal,the decrease in the number of suppliers will

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

Morgan graduates from college and gets a job paying $50,000 a year.While in school,she consumed 4 pounds of chicken and 1 pound of shrimp a month.After she starts work,she consumes 2 pounds of chicken and 3 pounds of shrimp a month.If everything else is held constant,we know that

If two goods,J and K,are complements,then which of the following statements is FALSE?

When income rises,

Suppose that the demand curve for apples is downward sloping and the price per bushel increases from $6.50 to $7.50.We would then expect

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

In economics,"demand" refers to

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

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

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

-If the market price falls from P₀ to P₁ in the above figure,then