Question 1

The relationship between quantity supplied and price is usually

Accepted Answer

A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) impossible to determine. 
A) an inverse relationship. 
B) a direct relationship. 
C) a negative relationship. 
D) impossible to determine.

Question 2

An increase in demand occurs when

Accepted Answer

A) we measure price in money price rather than real price. 
B) we move up the demand curve. 
C) the demand curve shifts to the right. 
D) the demand curve shifts to the left. 
A) we measure price in money price rather than real price. 
B) we move up the demand curve. 
C) the demand curve shifts to the right. 
D) the demand curve shifts to the left.

Question 3

Which of the following is an example of the law of supply?

Accepted Answer

A) The price of gum has increased so producers are making more gum. 
B) The price of labor has increased and producers decrease supply. 
C) The amount of a good purchased increases when the price decreases. 
D) Producers provide less of a good when the price increases. 
A) The price of gum has increased so producers are making more gum. 
B) The price of labor has increased and producers decrease supply. 
C) The amount of a good purchased increases when the price decreases. 
D) Producers provide less of a good when the price increases.

Question 4

Which of the following occurs when a market is in equilibrium?

Accepted Answer

A) quantity supplied is equal to quantity demanded 
B) supply is equal to demand. 
C) the price of the good will tend to rise,all else held constant. 
D) the price of the good will tend to fall,all else held constant. 
A) quantity supplied is equal to quantity demanded 
B) supply is equal to demand. 
C) the price of the good will tend to rise,all else held constant. 
D) the price of the good will tend to fall,all else held constant.

Question 5

-Refer to the above figure.Excess quantity supplied 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 6

Of the following,which is the least likely to be an example of substitute goods?

Accepted Answer

A) Beer and pretzels 
B) Margarine and butter 
C) Beef and chicken 
D) Tea and coffee 
A) Beer and pretzels 
B) Margarine and butter 
C) Beef and chicken 
D) Tea and coffee

Question 7

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

Accepted Answer

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

Question 8

Which of the following statements is FALSE about the demand curve?

Accepted Answer

A) An increase in demand shifts the demand curve to the left,closer to the price axis. 
B) When only the price of a good changes,there is movement along the demand curve but no change in demand. 
C) A change in demand is graphically shown by shifting the entire demand curve. 
D) When demand decreases,there is a drop in the quantity demanded at each price. 
A) An increase in demand shifts the demand curve to the left,closer to the price axis. 
B) When only the price of a good changes,there is movement along the demand curve but no change in demand. 
C) A change in demand is graphically shown by shifting the entire demand curve. 
D) When demand decreases,there is a drop in the quantity demanded at each price.

Question 9

A schedule of how much of a good people will purchase for a range of possible prices during a specified time period,other things constant,is the definition of

Accepted Answer

A) supply. 
B) demand. 
C) a purchasing contract. 
D) an economic market. 
A) supply. 
B) demand. 
C) a purchasing contract. 
D) an economic market.

Question 10

All of the following will affect the position of the demand curve EXCEPT

Accepted Answer

A) income. 
B) taste and preference. 
C) changes in expectations of future relative prices. 
D) prices of resources used to produce the product. 
A) income. 
B) taste and preference. 
C) changes in expectations of future relative prices. 
D) prices of resources used to produce the product.

Question 11

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Accepted Answer

A) An increase in the demand for computers. 
B) A decrease in the supply of diskettes. 
C) An increase in the supply of computers. 
D) An increase in the quantity supplied of computers. 
A) An increase in the demand for computers. 
B) A decrease in the supply of diskettes. 
C) An increase in the supply of computers. 
D) An increase in the quantity supplied of computers.

Question 12

A shortage will occur whenever

Accepted Answer

A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping. 
A) price is below the equilibrium price. 
B) price is above the equilibrium price. 
C) price is equal to the equilibrium price. 
D) the supply curve is upward sloping.

Question 13

Assuming that turkey,chicken,pork,and beef are substitutes,suppose that the price of turkey has fallen.This will,other things being equal

Accepted Answer

A) reduce demand for chicken,pork,and beef. 
B) leave demand for chicken,pork,and beef unchanged. 
C) increase demand for chicken,pork,and beef. 
D) increase quantity demanded of beef. 
A) reduce demand for chicken,pork,and beef. 
B) leave demand for chicken,pork,and beef unchanged. 
C) increase demand for chicken,pork,and beef. 
D) increase quantity demanded of beef.

Question 14

Which of the following statements about a supply curve is FALSE?

Accepted Answer

A) It shows a direct (positive)relationship between price and quantity supplied. 
B) It shows the quantity supplied at each specific price. 
C) It typically slopes downward to the right. 
D) It has a positive slope. 
A) It shows a direct (positive)relationship between price and quantity supplied. 
B) It shows the quantity supplied at each specific price. 
C) It typically slopes downward to the right. 
D) It has a positive slope.

Question 15

An increase in price will lead to an increase in quantity supplied.This statement is

Accepted Answer

A) the law of supply. 
B) the law of demand. 
C) untrue always. 
D) a normative statement. 
A) the law of supply. 
B) the law of demand. 
C) untrue always. 
D) a normative statement.

Question 16

An expected future increase in the price of gasoline may

Accepted Answer

A) increase the demand for gasoline now. 
B) decrease the demand for gasoline now. 
C) increase the supply of gasoline now. 
D) make gasoline an inferior good. 
A) increase the demand for gasoline now. 
B) decrease the demand for gasoline now. 
C) increase the supply of gasoline now. 
D) make gasoline an inferior good.

Question 17

An increase in the relative price of a good cannot be caused by

Accepted Answer

A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good. 
B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good. 
C) a decrease in the nominal price of the other good while the price of the good itself remains constant. 
D) an increase in the nominal price of the other good while the price of the good itself remains constant. 
A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good. 
B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good. 
C) a decrease in the nominal price of the other good while the price of the good itself remains constant. 
D) an increase in the nominal price of the other good while the price of the good itself remains constant.

Question 18

All of the following will cause a shift in the supply of jeans EXCEPT

Accepted Answer

A) a decrease in the prices of jeans. 
B) an increase in the cost of producing jeans. 
C) a per-unit government subsidy on the production of jeans. 
D) a decrease in the number of jean manufacturers. 
A) a decrease in the prices of jeans. 
B) an increase in the cost of producing jeans. 
C) a per-unit government subsidy on the production of jeans. 
D) a decrease in the number of jean manufacturers.

Question 19

The only variable that can affect a movement along the demand curve is

Accepted Answer

A) income levels. 
B) the price of the good itself. 
C) the number of buyers. 
D) the number of substitutes. 
A) income levels. 
B) the price of the good itself. 
C) the number of buyers. 
D) the number of substitutes.

Question 20

-Refer to the above figure.A movement from point A to point B indicates

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.

Exam 3: Demand and Supply

The relationship between quantity supplied and price is usually

An increase in demand occurs when

Which of the following is an example of the law of supply?

Which of the following occurs when a market is in equilibrium?

-Refer to the above figure.Excess quantity supplied will exist when

Of the following,which is the least likely to be an example of substitute goods?

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

Which of the following statements is FALSE about the demand curve?

A schedule of how much of a good people will purchase for a range of possible prices during a specified time period,other things constant,is the definition of

All of the following will affect the position of the demand curve EXCEPT

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

A shortage will occur whenever

Assuming that turkey,chicken,pork,and beef are substitutes,suppose that the price of turkey has fallen.This will,other things being equal

Which of the following statements about a supply curve is FALSE?

An increase in price will lead to an increase in quantity supplied.This statement is

An expected future increase in the price of gasoline may

An increase in the relative price of a good cannot be caused by

All of the following will cause a shift in the supply of jeans EXCEPT

The only variable that can affect a movement along the demand curve is

-Refer to the above figure.A movement from point A to point B indicates

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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