Question 1

Which of the following will cause an outward (rightward)shift in the supply curve?

Accepted Answer

A) A reduction in the price of the good 
B) An increase in the price of labor input 
C) An increase in the number of consumers 
D) Technological progress 
A) A reduction in the price of the good 
B) An increase in the price of labor input 
C) An increase in the number of consumers 
D) Technological progress

Question 2

What happens as the result of a surplus?

Accepted Answer

A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because it is too commonplace. 
D) Demand for the good increases. 
A) There is downward pressure on prices. 
B) There is upward pressure on prices. 
C) Consumers begin to view the good as an inferior good because it is too commonplace. 
D) Demand for the good increases.

Question 3

A shift of the demand curve to the left represents

Accepted Answer

A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity demanded. 
A) an increase in demand. 
B) a decrease in demand. 
C) an increase in quantity demanded. 
D) a decrease in quantity demanded.

Question 4

Assuming coffee and cola are substitutes,if the price of coffee rises,

Accepted Answer

A) there is a movement along the demand curve for cola. 
B) the demand curve for coffee will shift to the right. 
C) the demand curve for cola will shift to the right. 
D) the demand curve for coffee will shift to the left. 
A) there is a movement along the demand curve for cola. 
B) the demand curve for coffee will shift to the right. 
C) the demand curve for cola will shift to the right. 
D) the demand curve for coffee will shift to the left.

Question 5

Which of the following will NOT lead to a decrease in demand for a normal good?

Accepted Answer

A) An increase in income 
B) An increase in the price of an input 
C) A decrease in the price of a complement good 
D) An increase in the number of consumers 
A) An increase in income 
B) An increase in the price of an input 
C) A decrease in the price of a complement good 
D) An increase in the number of consumers

Question 6

The price that we observe in the market is

Accepted Answer

A) the law of demand. 
B) a substitute. 
C) the money price. 
D) the relative price. 
A) the law of demand. 
B) a substitute. 
C) the money price. 
D) the relative price.

Question 7

The law of demand

Accepted Answer

A) is only an assumption that cannot be tested. 
B) only applies to necessities,not to luxuries. 
C) is supported by observations of human behavior in the marketplace. 
D) does not apply to scarce goods. 
A) is only an assumption that cannot be tested. 
B) only applies to necessities,not to luxuries. 
C) is supported by observations of human behavior in the marketplace. 
D) does not apply to scarce goods.

Question 8

A shift in the demand curve will occur when

Accepted Answer

A) supply shifts. 
B) the price of an input used to produce the good changes. 
C) consumers' income changes. 
D) the price of the product changes. 
A) supply shifts. 
B) the price of an input used to produce the good changes. 
C) consumers' income changes. 
D) the price of the product changes.

Question 9

If goods X and Y are substitute goods,then an increase in the price of Y,other things being equal,

Accepted Answer

A) results in a decrease in the amounts of both X and Y consumed. 
B) decreases the quantity demanded of Y,but has no effect on the amount of X consumed. 
C) results in a decrease in the quantity of Y consumed,but increases the demand for X. 
D) has no real effect on the quantity demanded of good Y,but increases the demand for X. 
A) results in a decrease in the amounts of both X and Y consumed. 
B) decreases the quantity demanded of Y,but has no effect on the amount of X consumed. 
C) results in a decrease in the quantity of Y consumed,but increases the demand for X. 
D) has no real effect on the quantity demanded of good Y,but increases the demand for X.

Question 10

Which of the following will cause a movement along the demand curve for shoes?

Accepted Answer

A) An increase in the price of socks 
B) An increase in income 
C) An increase in the price of shoes 
D) All of the above 
A) An increase in the price of socks 
B) An increase in income 
C) An increase in the price of shoes 
D) All of the above

Question 11

Demand applies to which of the following?

Accepted Answer

A) Fast food 
B) Criminal activity 
C) Labor market 
D) All of the above 
A) Fast food 
B) Criminal activity 
C) Labor market 
D) All of the above

Question 12

The demand for orthodontists' services falls as the proportion of the population that obtains braces falls.It may take several years before the new long-run equilibrium for the orthodontic labor market is attained.In the meantime,the orthodontic labor market experiences a

Accepted Answer

A) shortage. 
B) quality decrease. 
C) surplus. 
D) excess demand. 
A) shortage. 
B) quality decrease. 
C) surplus. 
D) excess demand.

Question 13

The market demand curve for a particular good

Accepted Answer

A) is the horizontal sum of all individual demand curves for the good. 
B) may be less than an individual demand curve for the good. 
C) may or may not show a direct relationship between price and quantity demanded. 
D) will not be affected by any of the determinants of individual demand. 
A) is the horizontal sum of all individual demand curves for the good. 
B) may be less than an individual demand curve for the good. 
C) may or may not show a direct relationship between price and quantity demanded. 
D) will not be affected by any of the determinants of individual demand.

Question 14

According to the law of demand,an increase in the price of a good causes

Accepted Answer

A) a rightward shift of the demand curve for that good. 
B) a leftward shift of the demand curve for that good. 
C) an upward movement along the demand curve for that good. 
D) a downward movement along the demand curve for that good. 
A) a rightward shift of the demand curve for that good. 
B) a leftward shift of the demand curve for that good. 
C) an upward movement along the demand curve for that good. 
D) a downward movement along the demand curve for that good.

Question 15

-Refer to the above figure.Which panel demonstrates the law of supply?

Accepted Answer

A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D. 
A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D.

Question 16

Sugar is an input used to produce cereal.Suppose that the price of sugar rises.As a result,

Accepted Answer

A) the supply curve for sugar will shift to the right. 
B) the supply curve for sugar will shift to the left. 
C) the supply curve for cereal will shift to the right. 
D) the supply curve for cereal will shift to the left. 
A) the supply curve for sugar will shift to the right. 
B) the supply curve for sugar will shift to the left. 
C) the supply curve for cereal will shift to the right. 
D) the supply curve for cereal will shift to the left.

Question 17

$$\begin{array} { l c c } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\$ \$ 50 & 300 & 0 \
\$ 55 & 220 & 80 \
\$ 60 & 150 & 150 \
\$ 65 & 90 & 230 \
\$ 70 & 30 & 300 \
\hline
\end{array}$$
-Using the above table,the market clearing price is ________ and equilibrium quantity is ________.

Accepted Answer

A) $55; 80 
B) $60; 150 
C) $70; 150 
D) $150; 150 
A) $55; 80 
B) $60; 150 
C) $70; 150 
D) $150; 150

Question 18

If more buyers came into the market for a good,we would expect to see the market demand curve

Accepted Answer

A) shift inward and to the left. 
B) remain unchanged since none of the determinants of individual demand changed. 
C) shift outward and to the right. 
D) reflect a positive relationship between price and quantity demanded. 
A) shift inward and to the left. 
B) remain unchanged since none of the determinants of individual demand changed. 
C) shift outward and to the right. 
D) reflect a positive relationship between price and quantity demanded.

Question 19

Which of the following causes an increase in demand for a normal good?

Accepted Answer

A) Increase in the price of a substitute 
B) Increase in the price of a complement 
C) Decrease in price 
D) Decrease in income 
A) Increase in the price of a substitute 
B) Increase in the price of a complement 
C) Decrease in price 
D) Decrease in income

Question 20

Which one of the following statements is FALSE?

Accepted Answer

A) There is an inverse (negative)relationship between product price and quantity supplied. 
B) There is some price at which quantity supplied of a product is zero. 
C) As product price increases,producers are willing to put more of the good on the market for sale. 
D) In order to entice producers to offer more of a product on the market for sale,product price must rise. 
A) There is an inverse (negative)relationship between product price and quantity supplied. 
B) There is some price at which quantity supplied of a product is zero. 
C) As product price increases,producers are willing to put more of the good on the market for sale. 
D) In order to entice producers to offer more of a product on the market for sale,product price must rise.

Exam 3: Demand and Supply

Which of the following will cause an outward (rightward)shift in the supply curve?

What happens as the result of a surplus?

A shift of the demand curve to the left represents

Assuming coffee and cola are substitutes,if the price of coffee rises,

Which of the following will NOT lead to a decrease in demand for a normal good?

The price that we observe in the market is

The law of demand

A shift in the demand curve will occur when

If goods X and Y are substitute goods,then an increase in the price of Y,other things being equal,

Which of the following will cause a movement along the demand curve for shoes?

Demand applies to which of the following?

The demand for orthodontists' services falls as the proportion of the population that obtains braces falls.It may take several years before the new long-run equilibrium for the orthodontic labor market is attained.In the meantime,the orthodontic labor market experiences a

The market demand curve for a particular good

According to the law of demand,an increase in the price of a good causes

-Refer to the above figure.Which panel demonstrates the law of supply?

Sugar is an input used to produce cereal.Suppose that the price of sugar rises.As a result,

Price Quantity Demanded Quantity Supplied \ \ 50 300 0 \ 55 220 80 \ 60 150 150 \ 65 90 230 \ 70 30 300 -Using the above table,the market clearing price is ________ and equilibrium quantity is ________.

If more buyers came into the market for a good,we would expect to see the market demand curve

Which of the following causes an increase in demand for a normal good?

Which one of the following statements is FALSE?

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

Price Quantity Demanded Quantity Supplied \ \ 50 300 0 \ 55 220 80 \ 60 150 150 \ 65 90 230 \ 70 30 300 -Using the above table,the market clearing price is and equilibrium quantity is .