Question 1

-Refer to the above figure.Other things being equal,if price is at P2 ,then we would expect

Accepted Answer

A) price to decline until an equilibrium is achieved at P0. 
B) consumers to reduce their offering price for the good. 
C) an excess quantity demanded to occur. 
D) consumers to bid against each other for goods and force the price still higher. 
A) price to decline until an equilibrium is achieved at P0. 
B) consumers to reduce their offering price for the good. 
C) an excess quantity demanded to occur. 
D) consumers to bid against each other for goods and force the price still higher.

Question 2

The price of a new textbook is $60 in one year and $75 two years later,while the price of a used copy of the textbook increased from $25 to $37.50.The relative price of a new textbook

Accepted Answer

A) increased by 25 percent. 
B) increased from 2.4 to 3. 
C) decreased from 2.4 to 2.0. 
D) decreased from 1.4 to 1.25 
A) increased by 25 percent. 
B) increased from 2.4 to 3. 
C) decreased from 2.4 to 2.0. 
D) decreased from 1.4 to 1.25

Question 3

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price per } \
\text { Constant } \
\text { Quality of X }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { X Demanded } \
\text { per Time Period }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { X Supplied } \
\text { per Time Period }
\end{array} \
\hline \$ 10 & 0 & 150 \
8 & 20 & 120 \
6 & 40 & 90 \
4 & 60 & 60 \
2 & 80 & 30 \
0 & 100 & 0\\hline 
\end{array}$$
-Given the market data for good X in the above table,an equilibrium quantity is established at

Accepted Answer

A) 90 units. 
B) 60 units. 
C) 30 units. 
D) 120 units. 
A) 90 units. 
B) 60 units. 
C) 30 units. 
D) 120 units.

Question 4

Which of the following will NOT cause a rightward shift in the supply curve?

Accepted Answer

A) an improvement in technology 
B) a reduction in resource costs 
C) a reduction in the expected future price 
D) none of the above 
A) an improvement in technology 
B) a reduction in resource costs 
C) a reduction in the expected future price 
D) none of the above

Question 5

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price per } \
\text { Constant- } \
\text { Quality Unit }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { of Constant-Quality } \
\text { Units per Year }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { of Constant-Quality } \
\text { Units per Year }
\end{array} \
\hline \$ 1.00 & 1,000 & 200 \
2.00 & 800 & 400 \
3.00 & 600 & 600 \
4.00 & 400 & 800 \
5.00 & 200 & 1,000 \
\hline
\end{array}$$
-In a free market economy,the market clearing (equilibrium)price in the above table would adjust to

Accepted Answer

A) $1. 
B) $3. 
C) $4. 
D) $5. 
A) $1. 
B) $3. 
C) $4. 
D) $5.

Question 6

-Refer to the above figure.For a normal good,the rightward shift of the curve could have been caused by

Accepted Answer

A) a technological improvement. 
B) an increase in the cost of inputs. 
C) an increase in income. 
D) a decrease in income. 
A) a technological improvement. 
B) an increase in the cost of inputs. 
C) an increase in income. 
D) a decrease in income.

Question 7

In general,any ceteris paribus determinant of supply that is favorable to production will

Accepted Answer

A) cause a movement along the supply curve. 
B) shift the supply curve to the right. 
C) shift the demand curve to the left. 
D) shift the supply curve to the left. 
A) cause a movement along the supply curve. 
B) shift the supply curve to the right. 
C) shift the demand curve to the left. 
D) shift the supply curve to the left.

Question 8

If we are comparing the price of regular gasoline with the price of super gasoline,then an increase in the relative price of regular gasoline implies that

Accepted Answer

A) the nominal price of regular gasoline increased. 
B) the nominal price of super gasoline decreased. 
C) the relative price of super gasoline decreased. 
D) the relative price of regular gasoline increased. 
A) the nominal price of regular gasoline increased. 
B) the nominal price of super gasoline decreased. 
C) the relative price of super gasoline decreased. 
D) the relative price of regular gasoline increased.

Question 9

How does a change in quantity supplied differ from a change in supply?

Accepted Answer

A) A change in quantity supplied shifts the supply curve; a change in supply is a movement along the curve. 
B) A change in one of the ceteris paribus conditions affects quantity supplied,not supply. 
C) A change in the price affects quantity supplied,not supply. 
D) There is no difference. 
A) A change in quantity supplied shifts the supply curve; a change in supply is a movement along the curve. 
B) A change in one of the ceteris paribus conditions affects quantity supplied,not supply. 
C) A change in the price affects quantity supplied,not supply. 
D) There is no difference.

Question 10

When there is a shortage,
I.there is a tendency for price to increase.
II.there is an excess quantity demanded.

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 11

The "real" price of a good is known as

Accepted Answer

A) the absolute price of the good. 
B) the dollar price of the good since we use dollars in the United States. 
C) relative price of the good. 
D) the price actually paid for a good instead of the sticker price. 
A) the absolute price of the good. 
B) the dollar price of the good since we use dollars in the United States. 
C) relative price of the good. 
D) the price actually paid for a good instead of the sticker price.

Question 12

The law of demand states that

Accepted Answer

A) people demand less at lower prices. 
B) the quantity demanded is directly related to price. 
C) the quantity demanded is inversely related to price. 
D) changes in price and changes in quantity demanded move in the same direction. 
A) people demand less at lower prices. 
B) the quantity demanded is directly related to price. 
C) the quantity demanded is inversely related to price. 
D) changes in price and changes in quantity demanded move in the same direction.

Question 13

-According to the above figure for a gasoline market,an increase in the price from $2 to $4 will result in

Accepted Answer

A) a shortage of 30 million gallons. 
B) an increase in quantity demanded of 10 million gallons. 
C) an increase in quantity supplied of 20 million gallons. 
D) an increase in demand of 20 million gallons. 
A) a shortage of 30 million gallons. 
B) an increase in quantity demanded of 10 million gallons. 
C) an increase in quantity supplied of 20 million gallons. 
D) an increase in demand of 20 million gallons.

Question 14

A shortage exists

Accepted Answer

A) in equilibrium. 
B) when quantity supplied is greater than quantity demanded. 
C) when quantity supplied is less than quantity demanded. 
D) at the market clearing price. 
A) in equilibrium. 
B) when quantity supplied is greater than quantity demanded. 
C) when quantity supplied is less than quantity demanded. 
D) at the market clearing price.

Question 15

-In the above figure,the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B.We can conclude that

Accepted Answer

A) Good A and Good B are substitutes. 
B) Good A and Good B are complements. 
C) Good A is a normal good but Good B is an inferior good. 
D) Good A and Good B are unrelated. 
A) Good A and Good B are substitutes. 
B) Good A and Good B are complements. 
C) Good A is a normal good but Good B is an inferior good. 
D) Good A and Good B are unrelated.

Question 16

A normal good is one for which

Accepted Answer

A) demand increases as income increases. 
B) demand increases as income decreases. 
C) the demand curve is horizontal. 
D) demand increases as the price of a substitute increases. 
A) demand increases as income increases. 
B) demand increases as income decreases. 
C) the demand curve is horizontal. 
D) demand increases as the price of a substitute increases.

Question 17

The law of supply states that there is

Accepted Answer

A) an inverse relationship between price and technology,ceteris paribus. 
B) a direct relationship between profit and quantity supplied,ceteris paribus. 
C) no relationship between price of resources and number of suppliers,ceteris paribus. 
D) a direct relationship between price and quantity supplied,ceteris paribus. 
A) an inverse relationship between price and technology,ceteris paribus. 
B) a direct relationship between profit and quantity supplied,ceteris paribus. 
C) no relationship between price of resources and number of suppliers,ceteris paribus. 
D) a direct relationship between price and quantity supplied,ceteris paribus.

Question 18

A shortage will occur when

Accepted Answer

A) the price equals the market clearing level. 
B) the price is above the market clearing level. 
C) there is an excess quantity supplied. 
D) the price is below the market clearing level. 
A) the price equals the market clearing level. 
B) the price is above the market clearing level. 
C) there is an excess quantity supplied. 
D) the price is below the market clearing level.

Question 19

Given a market equilibrium point,explain,using the concepts of demand and supply,how it is achieved.

Accepted Answer

Market equilibrium occurs at the point a

Question 20

The price of a first-class stamp in 1957 was 3 cents,and it is 45 cents in 2012.From this we know that

Accepted Answer

A) both the relative and the absolute price of first-class stamps increased from 1957 to 2012. 
B) the money price of first-class stamps increased from 1957 to 2012 but the absolute price of first-class stamps stayed constant. 
C) the money price of first-class stamps increased from 1957 to 2012 and the relative price of first-class stamps decreased. 
D) the money price of first-class stamps increased from 1957 to 2012,but we can't tell if the relative price of first-class stamps increased or decreased without more information. 
A) both the relative and the absolute price of first-class stamps increased from 1957 to 2012. 
B) the money price of first-class stamps increased from 1957 to 2012 but the absolute price of first-class stamps stayed constant. 
C) the money price of first-class stamps increased from 1957 to 2012 and the relative price of first-class stamps decreased. 
D) the money price of first-class stamps increased from 1957 to 2012,but we can't tell if the relative price of first-class stamps increased or decreased without more information.

-Refer to the above figure.Other things being equal,if price is at P₂ ,then we would expect

The price of a new textbook is $60 in one year and $75 two years later,while the price of a used copy of the textbook increased from $25 to $37.50.The relative price of a new textbook

Price per Constant Quality of X Quantity of X Demanded per Time Period Quantity of X Supplied per Time Period \ 10 0 150 8 20 120 6 40 90 4 60 60 2 80 30 0 100 0 -Given the market data for good X in the above table,an equilibrium quantity is established at

Which of the following will NOT cause a rightward shift in the supply curve?

-Refer to the above figure.For a normal good,the rightward shift of the curve could have been caused by

In general,any ceteris paribus determinant of supply that is favorable to production will

If we are comparing the price of regular gasoline with the price of super gasoline,then an increase in the relative price of regular gasoline implies that

How does a change in quantity supplied differ from a change in supply?

When there is a shortage, I.there is a tendency for price to increase. II.there is an excess quantity demanded.

The "real" price of a good is known as

The law of demand states that

-According to the above figure for a gasoline market,an increase in the price from $2 to $4 will result in

A shortage exists

-In the above figure,the demand curve for Good A shifts from D₁ to D₂ in Graph A when the price of Good B changes from P₁ to P₂ in Graph B.We can conclude that

A normal good is one for which

The law of supply states that there is

A shortage will occur when

Given a market equilibrium point,explain,using the concepts of demand and supply,how it is achieved.

The price of a first-class stamp in 1957 was 3 cents,and it is 45 cents in 2012.From this we know that

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

Exam 3: Demand and Supply

-Refer to the above figure.Other things being equal,if price is at P2 ,then we would expect

The price of a new textbook is $60 in one year and $75 two years later,while the price of a used copy of the textbook increased from $25 to $37.50.The relative price of a new textbook

Price per Constant Quality of X Quantity of X Demanded per Time Period Quantity of X Supplied per Time Period \ 10 0 150 8 20 120 6 40 90 4 60 60 2 80 30 0 100 0 -Given the market data for good X in the above table,an equilibrium quantity is established at

Which of the following will NOT cause a rightward shift in the supply curve?

-Refer to the above figure.For a normal good,the rightward shift of the curve could have been caused by

In general,any ceteris paribus determinant of supply that is favorable to production will

If we are comparing the price of regular gasoline with the price of super gasoline,then an increase in the relative price of regular gasoline implies that

How does a change in quantity supplied differ from a change in supply?

When there is a shortage, I.there is a tendency for price to increase. II.there is an excess quantity demanded.

The "real" price of a good is known as

The law of demand states that

-According to the above figure for a gasoline market,an increase in the price from $2 to $4 will result in

A shortage exists

-In the above figure,the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B.We can conclude that

A normal good is one for which

The law of supply states that there is

A shortage will occur when

Given a market equilibrium point,explain,using the concepts of demand and supply,how it is achieved.

The price of a first-class stamp in 1957 was 3 cents,and it is 45 cents in 2012.From this we know that

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

-Refer to the above figure.Other things being equal,if price is at P₂ ,then we would expect

-In the above figure,the demand curve for Good A shifts from D₁ to D₂ in Graph A when the price of Good B changes from P₁ to P₂ in Graph B.We can conclude that