Question 1

-Refer to the above figure.The market clearing price is

Accepted Answer

A) $2. 
B) $6. 
C) $8. 
D) $10. 
A) $2. 
B) $6. 
C) $8. 
D) $10.

Question 2

A demand curve is derived from

Accepted Answer

A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium. 
A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium.

Question 3

If the price of Pepsi increases,then there will be ________ of Pepsi.

Accepted Answer

A) a decrease in the supply 
B) an increase in the supply 
C) an increase in the quantity supplied 
D) a decrease in the quantity supplied 
A) a decrease in the supply 
B) an increase in the supply 
C) an increase in the quantity supplied 
D) a decrease in the quantity supplied

Question 4

A change in the price of a good causes

Accepted Answer

A) an increase in supply. 
B) a decrease in supply. 
C) an increase in demand and a decrease in supply. 
D) a change in quantity supplied. 
A) an increase in supply. 
B) a decrease in supply. 
C) an increase in demand and a decrease in supply. 
D) a change in quantity supplied.

Question 5

An increase in supply will occur when

Accepted Answer

A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right. 
A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right.

Question 6

-Refer to the above figure.The equilibrium price and quantity are

Accepted Answer

A) $2 and 12 units. 
B) $6 and 9 units. 
C) $8 and 6 units. 
D) $10 and 1 unit. 
A) $2 and 12 units. 
B) $6 and 9 units. 
C) $8 and 6 units. 
D) $10 and 1 unit.

Question 7

The money price of a good is that price

Accepted Answer

A) expressed in constant 2005 dollars. 
B) expressed in purchasing power against a common item like bread. 
C) expressed in today's dollars. 
D) that would clear the market. 
A) expressed in constant 2005 dollars. 
B) expressed in purchasing power against a common item like bread. 
C) expressed in today's dollars. 
D) that would clear the market.

Question 8

-If the market price rises from P0 to P2 in the above figure,then there is a

Accepted Answer

A) surplus equal to the distance Q0,Q2. 
B) surplus equal to the distance Q1,Q2. 
C) shortage equal to the distance Q0,Q2. 
D) shortage equal to the distance Q1,Q2. 
A) surplus equal to the distance Q0,Q2. 
B) surplus equal to the distance Q1,Q2. 
C) shortage equal to the distance Q0,Q2. 
D) shortage equal to the distance Q1,Q2.

Question 9

What type of relationship does the law of demand demonstrate?

Accepted Answer

A) direct 
B) positive 
C) inverse 
D) static 
A) direct 
B) positive 
C) inverse 
D) static

Question 10

Which of the following pairs of goods is least likely to be a pair of complements?

Accepted Answer

A) Gasoline and motor oil 
B) Hot dog buns and hot dogs 
C) Beer and wine 
D) Razors and razor blades 
A) Gasoline and motor oil 
B) Hot dog buns and hot dogs 
C) Beer and wine 
D) Razors and razor blades

Question 11

$$\begin{array} { c c c c c } 
\text { Price } &  \text { Quantity Demanded } \
\hline  \text { Per DVD } & \text { Buyer 1 } & \text { Buyer 2 } & \text { Buyer 3 } & \text { Buyer 4 } \
\hline \$ 20 & 0 & 0 & 1 & 0 \
18 & 0 & 1 & 3 & 0 \
16 & 1 & 2 & 5 & 1 \
14 & 2 & 4 & 7 & 3 \
12 & 3 & 6 & 9 & 6 \
10 & 4 & 8 & 11 & 10 \
8 & 5 & 11 & 13 & 15\\hline
\end{array}$$
-Refer to the above table.Suppose Buyer 2 leaves the market.What is the new market quantity of DVDs demanded at a price of $10?

Accepted Answer

A) 33 
B) 25 
C) 22 
D) 8 
A) 33 
B) 25 
C) 22 
D) 8

Question 12

Demand is a schedule of

Accepted Answer

A) how much of a good a person wants. 
B) how much of a good people will purchase at each different possible price. 
C) how much of a good people will purchase at each income level. 
D) each possible price and the amount people will buy when their incomes change. 
A) how much of a good a person wants. 
B) how much of a good people will purchase at each different possible price. 
C) how much of a good people will purchase at each income level. 
D) each possible price and the amount people will buy when their incomes change.

Question 13

Briefly discuss the determinants of supply other than price.

Accepted Answer

An increase in the costs of inputs used

Question 14

-Refer to the above figure.At a price of three cents,a(n)________ of bubble gum will exist in the market.

Accepted Answer

A) surplus 
B) shortage 
C) equilibrium quantity 
D) excess quantity supplied 
A) surplus 
B) shortage 
C) equilibrium quantity 
D) excess quantity supplied

Question 15

The data points on a supply curve come from

Accepted Answer

A) survey analysis. 
B) the same place from which we get the data points on a demand curve. 
C) the supply schedule. 
D) companies' annual reports. 
A) survey analysis. 
B) the same place from which we get the data points on a demand curve. 
C) the supply schedule. 
D) companies' annual reports.

Question 16

A fundamental principle in demand analysis is that a change in price leads to

Accepted Answer

A) a movement along the demand curve. 
B) a rightward shift of the demand curve. 
C) a leftward shift of the demand curve. 
D) a complementary movement on the supply curve. 
A) a movement along the demand curve. 
B) a rightward shift of the demand curve. 
C) a leftward shift of the demand curve. 
D) a complementary movement on the supply curve.

Question 17

By summing the quantities demanded by individuals at each price we obtain the

Accepted Answer

A) equilibrium price. 
B) market demand curve. 
C) market supply curve. 
D) individual demand curve. 
A) equilibrium price. 
B) market demand curve. 
C) market supply curve. 
D) individual demand curve.

Question 18

A supply curve

Accepted Answer

A) has an indirect or negative relationship between price and quantity supplied. 
B) has a direct or positive relationship between price and quantity supplied. 
C) shows the relationship between quantity supplied and income. 
D) shows the relationship between complements. 
A) has an indirect or negative relationship between price and quantity supplied. 
B) has a direct or positive relationship between price and quantity supplied. 
C) shows the relationship between quantity supplied and income. 
D) shows the relationship between complements.

Question 19

If a good is a normal good,an increase in income will

Accepted Answer

A) decrease the quantity demanded of the good. 
B) increase the demand for the good. 
C) cause the demand curve for the good to shift to the left. 
D) cause a movement down along the demand curve. 
A) decrease the quantity demanded of the good. 
B) increase the demand for the good. 
C) cause the demand curve for the good to shift to the left. 
D) cause a movement down along the demand curve.

Question 20

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

Accepted Answer

A normal good is one for which demand in

Exam 3: Demand and Supply

-Refer to the above figure.The market clearing price is

A demand curve is derived from

If the price of Pepsi increases,then there will be ________ of Pepsi.

A change in the price of a good causes

An increase in supply will occur when

-Refer to the above figure.The equilibrium price and quantity are

The money price of a good is that price

-If the market price rises from P0 to P2 in the above figure,then there is a

What type of relationship does the law of demand demonstrate?

Which of the following pairs of goods is least likely to be a pair of complements?

Price Quantity Demanded Per DVD Buyer 1 Buyer 2 Buyer 3 Buyer 4 \ 20 0 0 1 0 18 0 1 3 0 16 1 2 5 1 14 2 4 7 3 12 3 6 9 6 10 4 8 11 10 8 5 11 13 15 -Refer to the above table.Suppose Buyer 2 leaves the market.What is the new market quantity of DVDs demanded at a price of $10?

Demand is a schedule of

Briefly discuss the determinants of supply other than price.

-Refer to the above figure.At a price of three cents,a(n)________ of bubble gum will exist in the market.

The data points on a supply curve come from

A fundamental principle in demand analysis is that a change in price leads to

By summing the quantities demanded by individuals at each price we obtain the

A supply curve

If a good is a normal good,an increase in income will

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

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

-If the market price rises from P₀ to P₂ in the above figure,then there is a