Question 1

The law of demand states that there is

Accepted Answer

A) an inverse relationship between income and quantity demanded,ceteris paribus. 
B) a direct relationship between income and quantity demanded,ceteris paribus. 
C) no relationship between taste and quantity demanded,ceteris paribus. 
D) an inverse relationship between price and quantity demanded,ceteris paribus. 
A) an inverse relationship between income and quantity demanded,ceteris paribus. 
B) a direct relationship between income and quantity demanded,ceteris paribus. 
C) no relationship between taste and quantity demanded,ceteris paribus. 
D) an inverse relationship between price and quantity demanded,ceteris paribus.

Question 2

$\begin{array}{cccc}
&\text { Supplier 1 } & \text { Supplier 2 } & \text { Supplier } 3 \
&\text {Quantity Supplied}& \text {Quantity Supplied} &\text {Quantity Supplied}\
\text { Price } & \text { (thousands) } & \text { (thousands) } & \text { (thousands) } \
\hline 8 & 11 & 7 & 20 \
7 & 8 & 6 & 15 \
6 & 5 & 5 & 10 \
5 & 2 & 4 & 5
\end{array}$
-Refer to the above table.The market quantity supplied when the price is $7 is

Accepted Answer

A) 0 
B) 20 
C) 29 
D) 38 
A) 0 
B) 20 
C) 29 
D) 38

Question 3

Suppose that the price of wheat is above its equilibrium price.You would expect to see

Accepted Answer

A) a shortage on the market that causes prices to increase further. 
B) an increase in quantity demanded because of the high price. 
C) a leftward shift of the demand curve because of the high price. 
D) sellers begin to lower their prices because of the surplus of wheat. 
A) a shortage on the market that causes prices to increase further. 
B) an increase in quantity demanded because of the high price. 
C) a leftward shift of the demand curve because of the high price. 
D) sellers begin to lower their prices because of the surplus of wheat.

Question 4

If there is a surplus,

Accepted Answer

A) fewer producers want to sell the product because it is too scarce. 
B) consumers will drive up the price further. 
C) firms will drive up the price to enhance profits. 
D) the price will decline to the equilibrium level. 
A) fewer producers want to sell the product because it is too scarce. 
B) consumers will drive up the price further. 
C) firms will drive up the price to enhance profits. 
D) the price will decline to the equilibrium level.

Question 5

The arrangements that individuals have with each other to exchange goods is known as

Accepted Answer

A) demand. 
B) supply. 
C) a market. 
D) complements. 
A) demand. 
B) supply. 
C) a market. 
D) complements.

Question 6

If a decrease in the price of good A causes a decrease in demand for good B,the two goods are

Accepted Answer

A) substitutes. 
B) complements. 
C) normal. 
D) inferior. 
A) substitutes. 
B) complements. 
C) normal. 
D) inferior.

Question 7

-Refer to the above figure.The rightward shift of the curve indicates

Accepted Answer

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

Question 8

For a normal good,an increase in consumer income will lead to
I.a movement down the demand curve
II.a rightward shift in the demand curve
III.a reduction in supply

Accepted Answer

A) I only 
B) II only 
C) III only 
D) Both II and III 
A) I only 
B) II only 
C) III only 
D) Both II and III

Question 9

The law of demand shows that there is

Accepted Answer

A) an inverse relationship between price and profit. 
B) an inverse relationship between price and resource cost. 
C) an inverse relationship between price and quantity demanded. 
D) a direct relationship between price and quantity demanded. 
A) an inverse relationship between price and profit. 
B) an inverse relationship between price and resource cost. 
C) an inverse relationship between price and quantity demanded. 
D) a direct relationship between price and quantity demanded.

Question 10

The price of a loaf of bread is $1.50,the price of a gallon of milk is $3.00,and the price of a pound of butter is $2.40.The price of a loaf of bread relative to a gallon of milk is ________,while the price of a gallon of milk relative to a pound of butter is ________.

Accepted Answer

A) 0.5; 0.8. 
B) 0.5; 1.25. 
C) 2.0; 1.25. 
D) 2.0; 0.8. 
A) 0.5; 0.8. 
B) 0.5; 1.25. 
C) 2.0; 1.25. 
D) 2.0; 0.8.

Question 11

According to the law of supply,

Accepted Answer

A) people buy more of a good when the price increases. 
B) people buy less of a good when the price decreases. 
C) producers provide more of a good when the price decreases. 
D) producers provide less of a good when the price decreases. 
A) people buy more of a good when the price increases. 
B) people buy less of a good when the price decreases. 
C) producers provide more of a good when the price decreases. 
D) producers provide less of a good when the price decreases.

Question 12

Briefly discuss the determinants of demand other than price.

Accepted Answer

An increase in income causes demand of a

Question 13

When the price of a complement (cream)decreases,the demand for the related good (coffee)

Accepted Answer

A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward. 
A) will fall. 
B) remains constant. 
C) will shift outward. 
D) will shift inward.

Question 14

Ceteris paribus,as the price of a good or service increases,

Accepted Answer

A) people will buy more of it. 
B) people will buy less of it. 
C) people will want less of it. 
D) people will want more of it. 
A) people will buy more of it. 
B) people will buy less of it. 
C) people will want less of it. 
D) people will want more of it.

Question 15

If the price of apples goes down,then the demand for pears will

Accepted Answer

A) increase,assuming apples and pears are substitutes. 
B) decrease,assuming apples and pears are substitutes. 
C) decrease,assuming apples and pears are complements. 
D) remain constant,assuming apples and pears are related goods. 
A) increase,assuming apples and pears are substitutes. 
B) decrease,assuming apples and pears are substitutes. 
C) decrease,assuming apples and pears are complements. 
D) remain constant,assuming apples and pears are related goods.

Question 16

Which of the following causes a movement along a supply curve?

Accepted Answer

A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above 
A) a change in resource costs 
B) a change in technology 
C) a change in the price 
D) all of the above

Question 17

According to the law of demand,other things being equal,

Accepted Answer

A) when the price a good goes up,then people buy more of that good. 
B) when the price a good goes up,then people buy less of that good. 
C) when people's income goes up,then they buy more of a good. 
D) when people's income goes up,then they buy less of a good. 
A) when the price a good goes up,then people buy more of that good. 
B) when the price a good goes up,then people buy less of that good. 
C) when people's income goes up,then they buy more of a good. 
D) when people's income goes up,then they buy less of a good.

Question 18

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box.Both boxes contain the same number of ounces of cereal.The relative price of cornflakes in terms of oatmeal is

Accepted Answer

A) 0.67. 
B) 1.0. 
C) 0.75. 
D) 1.50. 
A) 0.67. 
B) 1.0. 
C) 0.75. 
D) 1.50.

Question 19

A movement along a demand curve is

Accepted Answer

A) a change in demand and can be caused by a change in consumers' income. 
B) a change in the quantity demanded and is caused by a change in the price of the good. 
C) a change in the quantity demanded and can be caused by a change in consumers' income. 
D) a change in demand and is caused by a change in the price of the good. 
A) a change in demand and can be caused by a change in consumers' income. 
B) a change in the quantity demanded and is caused by a change in the price of the good. 
C) a change in the quantity demanded and can be caused by a change in consumers' income. 
D) a change in demand and is caused by a change in the price of the good.

Question 20

Which of the following will NOT cause a shift in the demand for rewriteable DVDs?

Accepted Answer

A) A change in taste 
B) A change in income 
C) A change in the price of rewriteable DVDs 
D) A change in the price of rewriteable CDs 
A) A change in taste 
B) A change in income 
C) A change in the price of rewriteable DVDs 
D) A change in the price of rewriteable CDs

Exam 3: Demand and Supply

The law of demand states that there is

Supplier 1 Supplier 2 Supplier 3 Quantity Supplied Quantity Supplied Quantity Supplied Price (thousands) (thousands) (thousands) 8 11 7 20 7 8 6 15 6 5 5 10 5 2 4 5 -Refer to the above table.The market quantity supplied when the price is $7 is

Suppose that the price of wheat is above its equilibrium price.You would expect to see

If there is a surplus,

The arrangements that individuals have with each other to exchange goods is known as

If a decrease in the price of good A causes a decrease in demand for good B,the two goods are

-Refer to the above figure.The rightward shift of the curve indicates

For a normal good,an increase in consumer income will lead to I.a movement down the demand curve II.a rightward shift in the demand curve III.a reduction in supply

The law of demand shows that there is

The price of a loaf of bread is $1.50,the price of a gallon of milk is $3.00,and the price of a pound of butter is $2.40.The price of a loaf of bread relative to a gallon of milk is ________,while the price of a gallon of milk relative to a pound of butter is ________.

According to the law of supply,

Briefly discuss the determinants of demand other than price.

When the price of a complement (cream)decreases,the demand for the related good (coffee)

Ceteris paribus,as the price of a good or service increases,

If the price of apples goes down,then the demand for pears will

Which of the following causes a movement along a supply curve?

According to the law of demand,other things being equal,

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box.Both boxes contain the same number of ounces of cereal.The relative price of cornflakes in terms of oatmeal is

A movement along a demand curve is

Which of the following will NOT cause a shift in the demand for rewriteable DVDs?

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

The price of a loaf of bread is $1.50,the price of a gallon of milk is $3.00,and the price of a pound of butter is $2.40.The price of a loaf of bread relative to a gallon of milk is ,while the price of a gallon of milk relative to a pound of butter is .