Question 1

When the price of tablets goes up and fewer tablets are purchased,this is representative of the

Accepted Answer

A) law of demand. 
B) law of supply. 
C) law of market operations. 
D) law of increasing costs. 
A) law of demand. 
B) law of supply. 
C) law of market operations. 
D) law of increasing costs.

Question 2

-Refer to the above figure.At a price of $2,excess quantity demanded equals

Accepted Answer

A) 0. 
B) 3. 
C) 12. 
D) 15. 
A) 0. 
B) 3. 
C) 12. 
D) 15.

Question 3

An increase in demand is represented by a

Accepted Answer

A) shift of the demand curve to the left. 
B) shift of the demand curve to the right. 
C) movement down the demand curve. 
D) movement up the demand curve. 
A) shift of the demand curve to the left. 
B) shift of the demand curve to the right. 
C) movement down the demand curve. 
D) movement up the demand curve.

Question 4

The price of a new textbook increased from $60 to $75 in one year,while the price of a used textbook increased by 25 percent.What happened to the relative price of a used textbook?

Accepted Answer

A) It increased by 25 percent. 
B) It increased by 10 percent. 
C) It remained constant. 
D) It can't be determined without knowing the nominal price of the used textbook in at least one of the years. 
A) It increased by 25 percent. 
B) It increased by 10 percent. 
C) It remained constant. 
D) It can't be determined without knowing the nominal price of the used textbook in at least one of the years.

Question 5

Suppose an individual experiences a permanent increase in income.As a result of this increased income,further assume that the individual eats dinner at restaurants more frequently each month.This information suggests that dinners at restaurants for this individual are

Accepted Answer

A) an inferior good. 
B) a substitute good. 
C) a normal good. 
D) both complimentary and inferior. 
A) an inferior good. 
B) a substitute good. 
C) a normal good. 
D) both complimentary and inferior.

Question 6

There is an increase in the demand for cream when the price of coffee falls.Other things constant,we can conclude that coffee and cream are

Accepted Answer

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

Question 7

Other things being equal,an increase in the price of a good leads to a decrease in the amount people purchase.This is known as

Accepted Answer

A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium. 
A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium.

Question 8

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

Accepted Answer

A) an increase in airfares to Hawaii 
B) a decrease in airfares to Hawaii 
C) an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D) a downward movement along the demand curve for stays in Hawaiian hotel rooms. 
A) an increase in airfares to Hawaii 
B) a decrease in airfares to Hawaii 
C) an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D) a downward movement along the demand curve for stays in Hawaiian hotel rooms.

Question 9

The effects of a per-unit tax imposed on sales of an industry's product would likely include

Accepted Answer

A) a lower product price at any amount of the product supplied. 
B) a leftward shift of the market supply curve for the product. 
C) a leftward movement along the market supply curve for the product. 
D) none of the above. 
A) a lower product price at any amount of the product supplied. 
B) a leftward shift of the market supply curve for the product. 
C) a leftward movement along the market supply curve for the product. 
D) none of the above.

Question 10

The Chunnel auto tunnel allows motorists to travel between England and France.As an alternative,there is ferry service across the English Channel.What would happen in the market for ferry service if fees for using the Chunnel were increased?

Accepted Answer

A) The demand for ferry service would increase. 
B) The demand for ferry service would decrease. 
C) There would be an upward movement along the demand curve for transits through the Chunnel. 
D) There would be a downward movement along the demand curve for transits through the Chunnel. 
A) The demand for ferry service would increase. 
B) The demand for ferry service would decrease. 
C) There would be an upward movement along the demand curve for transits through the Chunnel. 
D) There would be a downward movement along the demand curve for transits through the Chunnel.

Question 11

-Using the above figure,at which price is there neither excess quantity demanded nor excess quantity supplied?

Accepted Answer

A) P1 
B) P2 
C) P3 
D) none of these 
A) P1 
B) P2 
C) P3 
D) none of these

Question 12

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Accepted Answer

A) demand curve will shift to the right. 
B) demand curve will shift to the left. 
C) supply curve will shift to the right. 
D) supply curve will shift to the left. 
A) demand curve will shift to the right. 
B) demand curve will shift to the left. 
C) supply curve will shift to the right. 
D) supply curve will shift to the left.

Question 13

An increase in the price of steel to producers of refrigerators will cause

Accepted Answer

A) the quantity demanded for steel to increase. 
B) the demand for refrigerators to decrease. 
C) the quantity supplied of refrigerators to increase. 
D) the supply curve for refrigerators to shift left. 
A) the quantity demanded for steel to increase. 
B) the demand for refrigerators to decrease. 
C) the quantity supplied of refrigerators to increase. 
D) the supply curve for refrigerators to shift left.

Question 14

Which of the following is a determinant of consumer demand?

Accepted Answer

A) Expectation of the future relative price of a product 
B) Taxes imposed on firms that sell the product 
C) Cost of inputs used to produce the product 
D) Number of firms that produce the product 
A) Expectation of the future relative price of a product 
B) Taxes imposed on firms that sell the product 
C) Cost of inputs used to produce the product 
D) Number of firms that produce the product

Question 15

Which of the following will occur as the price of a good decreases?

Accepted Answer

A) The demand curve for that good will shift to the left. 
B) The demand curve for that good will shift to the right. 
C) The quantity demanded for that good will increase. 
D) Demand for that good will increase. 
A) The demand curve for that good will shift to the left. 
B) The demand curve for that good will shift to the right. 
C) The quantity demanded for that good will increase. 
D) Demand for that good will increase.

Question 16

The law of demand is based on the observation that

Accepted Answer

A) people buy less of a product when the product becomes less fashionable. 
B) people buy more of a product when the price falls. 
C) people are indifferent to price changes. 
D) stores go out of business if they lower prices. 
A) people buy less of a product when the product becomes less fashionable. 
B) people buy more of a product when the price falls. 
C) people are indifferent to price changes. 
D) stores go out of business if they lower prices.

Question 17

In the long run,the number of firms in an industry may change.If the number of firms increases,then

Accepted Answer

A) the supply curve will shift outward to the right. 
B) the demand curve will shift outward to the right. 
C) the supply curve will shift inward to the left. 
D) the demand curve will shift inward to the left. 
A) the supply curve will shift outward to the right. 
B) the demand curve will shift outward to the right. 
C) the supply curve will shift inward to the left. 
D) the demand curve will shift inward to the left.

Question 18

Four points on a demand schedule are given: $12,2 units; $10,1 unit; $15,1.5 units; and $2,4 units.Which combination is inconsistent with the law of demand?

Accepted Answer

A) $12 and 2 units 
B) $10 and 1 unit 
C) $15 and 1.5 units 
D) $2 and 4 units 
A) $12 and 2 units 
B) $10 and 1 unit 
C) $15 and 1.5 units 
D) $2 and 4 units

Question 19

Suppose it is discovered that consumption of butter leads to a longer life.This information would lead to

Accepted Answer

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

Question 20

A change in the ceteris paribus conditions for supply will lead to a

Accepted Answer

A) change in quantity supplied. 
B) change in supply. 
C) change in quantity supplied and a change in supply. 
D) change in how consumers view the quality of the good. 
A) change in quantity supplied. 
B) change in supply. 
C) change in quantity supplied and a change in supply. 
D) change in how consumers view the quality of the good.

Exam 3: Demand and Supply

When the price of tablets goes up and fewer tablets are purchased,this is representative of the

-Refer to the above figure.At a price of $2,excess quantity demanded equals

An increase in demand is represented by a

The price of a new textbook increased from $60 to $75 in one year,while the price of a used textbook increased by 25 percent.What happened to the relative price of a used textbook?

Suppose an individual experiences a permanent increase in income.As a result of this increased income,further assume that the individual eats dinner at restaurants more frequently each month.This information suggests that dinners at restaurants for this individual are

There is an increase in the demand for cream when the price of coffee falls.Other things constant,we can conclude that coffee and cream are

Other things being equal,an increase in the price of a good leads to a decrease in the amount people purchase.This is known as

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

The effects of a per-unit tax imposed on sales of an industry's product would likely include

The Chunnel auto tunnel allows motorists to travel between England and France.As an alternative,there is ferry service across the English Channel.What would happen in the market for ferry service if fees for using the Chunnel were increased?

-Using the above figure,at which price is there neither excess quantity demanded nor excess quantity supplied?

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

An increase in the price of steel to producers of refrigerators will cause

Which of the following is a determinant of consumer demand?

Which of the following will occur as the price of a good decreases?

The law of demand is based on the observation that

In the long run,the number of firms in an industry may change.If the number of firms increases,then

Four points on a demand schedule are given: $12,2 units; $10,1 unit; $15,1.5 units; and $2,4 units.Which combination is inconsistent with the law of demand?

Suppose it is discovered that consumption of butter leads to a longer life.This information would lead to

A change in the ceteris paribus conditions for supply will lead to a

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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