Question 1

A market is in equilibrium when

Accepted Answer

A) the quantity demanded equals the quantity supplied at the market clearing price. 
B) the horizontal axis crosses the vertical axis. 
C) buyers do not desire for the price to be any lower. 
D) the equilibrium price is below the market price. 
A) the quantity demanded equals the quantity supplied at the market clearing price. 
B) the horizontal axis crosses the vertical axis. 
C) buyers do not desire for the price to be any lower. 
D) the equilibrium price is below the market price.

Question 2

Which of the following statements is FALSE?

Accepted Answer

A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right. 
A) An increase in income causes an increase in the demand for a normal good. 
B) An increase in income causes a decrease in the demand for an inferior good. 
C) A decrease in income causes the demand curve for a normal good to shift to the left. 
D) An increase in income causes the demand curve for an inferior good to shift to the right.

Question 3

The relative price of a textbook is

Accepted Answer

A) the money price of the textbook divided by the money price of some other good. 
B) the price of the textbook compared with what students think it should cost. 
C) the amount it cost to make the textbook. 
D) what the author earned for writing the textbook. 
A) the money price of the textbook divided by the money price of some other good. 
B) the price of the textbook compared with what students think it should cost. 
C) the amount it cost to make the textbook. 
D) what the author earned for writing the textbook.

Question 4

Which of the following is a non-price determinant of supply?

Accepted Answer

A) the price of related goods consumers may buy 
B) technological advances in production 
C) consumers' incomes 
D) the number of consumers 
A) the price of related goods consumers may buy 
B) technological advances in production 
C) consumers' incomes 
D) the number of consumers

Question 5

Suppose Good A is a normal good.Which of the following will increase the demand for Good A?

Accepted Answer

A) An increase in the price of its substitutes 
B) A lower expected future relative price of A 
C) An increase in the price of its complements 
D) A decrease in income 
A) An increase in the price of its substitutes 
B) A lower expected future relative price of A 
C) An increase in the price of its complements 
D) A decrease in income

Question 6

Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3,Qd = 100; at P = $5,Qd = 75; and when P = $7,Qd = 50.This year the village population has increased by 25%.What impact is this most likely to have?

Accepted Answer

A) Each individual's demand for DVD rentals will increase. 
B) Each individual's demand curve for DVD rentals will shift to the left. 
C) The market demand curve for DVD rentals shifts left. 
D) The market demand for DVD rentals increases. 
A) Each individual's demand for DVD rentals will increase. 
B) Each individual's demand curve for DVD rentals will shift to the left. 
C) The market demand curve for DVD rentals shifts left. 
D) The market demand for DVD rentals increases.

Question 7

Which one of the following is NOT a determinant of demand?

Accepted Answer

A) Prices of related goods 
B) Cost of inputs in production 
C) Income 
D) Future price expectations 
A) Prices of related goods 
B) Cost of inputs in production 
C) Income 
D) Future price expectations

Question 8

The law of demand tells us that people will buy more of a good if

Accepted Answer

A) the price of that good decreases. 
B) the prices of other goods decrease. 
C) people's income increases. 
D) every factor that can affect people's buying decisions changes. 
A) the price of that good decreases. 
B) the prices of other goods decrease. 
C) people's income increases. 
D) every factor that can affect people's buying decisions changes.

Question 9

Explain why there is a direct relationship between price and quantity supplied.

Accepted Answer

For firms to produce more of a good per

Question 10

-Refer to the above figure.A surplus will exist when

Accepted Answer

A) the price is between $0 and $6. 
B) the price equals $6. 
C) the price equals $10. 
D) quantity demanded equals 15. 
A) the price is between $0 and $6. 
B) the price equals $6. 
C) the price equals $10. 
D) quantity demanded equals 15.

Question 11

-Refer to the above figure.At a price of two cents,the quantity of bubble gum demanded will be

Accepted Answer

A) 3. 
B) 2. 
C) 4. 
D) 5. 
A) 3. 
B) 2. 
C) 4. 
D) 5.

Question 12

When the price of tablet devices decreased in the 2010s,there was an increase in the demand for computing apps because tablet devices and computing apps are

Accepted Answer

A) substitute goods. 
B) capital goods. 
C) inferior goods. 
D) complementary goods. 
A) substitute goods. 
B) capital goods. 
C) inferior goods. 
D) complementary goods.

Question 13

The law of supply states that other things being equal,

Accepted Answer

A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases,quantity supplied increases. 
D) supply will increase to meet demand if demand increases. 
A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases,quantity supplied increases. 
D) supply will increase to meet demand if demand increases.

Question 14

In economic terminology,a normal good is a good

Accepted Answer

A) on which a monetary value cannot be placed. 
B) that is liked only by normal people. 
C) for which demand increases when price increases. 
D) for which demand increases when income increases. 
A) on which a monetary value cannot be placed. 
B) that is liked only by normal people. 
C) for which demand increases when price increases. 
D) for which demand increases when income increases.

Question 15

According to the law of demand,

Accepted Answer

A) people buy more of a good when the price rises. 
B) people buy more of a good when their income rises. 
C) people buy more of a good when the relative price rises. 
D) people buy more of a good when the price falls. 
A) people buy more of a good when the price rises. 
B) people buy more of a good when their income rises. 
C) people buy more of a good when the relative price rises. 
D) people buy more of a good when the price falls.

Question 16

An inferior good is one for which

Accepted Answer

A) demand increases as income increases. 
B) demand decreases as income increases. 
C) the demand curve is vertical. 
D) the demand curve slopes up. 
A) demand increases as income increases. 
B) demand decreases as income increases. 
C) the demand curve is vertical. 
D) the demand curve slopes up.

Question 17

Which of the following will NOT affect the supply of cars?

Accepted Answer

A) an increase in the price of steel 
B) an improvement in automobile production technology 
C) an increase in the productivity of auto workers 
D) a decrease in the price of cars 
A) an increase in the price of steel 
B) an improvement in automobile production technology 
C) an increase in the productivity of auto workers 
D) a decrease in the price of cars

Question 18

Which of the following will cause the demand curve for beer to shift right?

Accepted Answer

A) a fall in the price of beer 
B) a fall in average incomes of beer consumers 
C) a decline in population 
D) a successful advertising campaign linking beer consumption to lower cholesterol 
A) a fall in the price of beer 
B) a fall in average incomes of beer consumers 
C) a decline in population 
D) a successful advertising campaign linking beer consumption to lower cholesterol

Question 19

When producers anticipate that the price of their product will increase in the future,

Accepted Answer

A) the supply curve will shift to the right. 
B) the supply curve will shift to the left. 
C) the current production will move along on the supply curve. 
D) they will immediately lobby Congress to adjust prices now. 
A) the supply curve will shift to the right. 
B) the supply curve will shift to the left. 
C) the current production will move along on the supply curve. 
D) they will immediately lobby Congress to adjust prices now.

Question 20

If there is a decline in the price of milk,an input in the production of ice cream,then there will be a(n)

Accepted Answer

A) decrease in the supply of ice cream and a leftward shift of the supply curve. 
B) decrease in the quantity of ice cream supplied and a movement up along the supply curve. 
C) increase in the supply of ice cream and a rightward shift of the supply curve. 
D) increase in the quantity of ice cream supplied and a movement down along the supply curve. 
A) decrease in the supply of ice cream and a leftward shift of the supply curve. 
B) decrease in the quantity of ice cream supplied and a movement up along the supply curve. 
C) increase in the supply of ice cream and a rightward shift of the supply curve. 
D) increase in the quantity of ice cream supplied and a movement down along the supply curve.

Exam 3: Demand and Supply

A market is in equilibrium when

Which of the following statements is FALSE?

The relative price of a textbook is

Which of the following is a non-price determinant of supply?

Suppose Good A is a normal good.Which of the following will increase the demand for Good A?

Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3,Qd = 100; at P = $5,Qd = 75; and when P = $7,Qd = 50.This year the village population has increased by 25%.What impact is this most likely to have?

Which one of the following is NOT a determinant of demand?

The law of demand tells us that people will buy more of a good if

Explain why there is a direct relationship between price and quantity supplied.

-Refer to the above figure.A surplus will exist when

-Refer to the above figure.At a price of two cents,the quantity of bubble gum demanded will be

When the price of tablet devices decreased in the 2010s,there was an increase in the demand for computing apps because tablet devices and computing apps are

The law of supply states that other things being equal,

In economic terminology,a normal good is a good

According to the law of demand,

An inferior good is one for which

Which of the following will NOT affect the supply of cars?

Which of the following will cause the demand curve for beer to shift right?

When producers anticipate that the price of their product will increase in the future,

If there is a decline in the price of milk,an input in the production of ice cream,then there will be a(n)

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

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