Question 1

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

Accepted Answer

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

Question 2

According to the law of demand,an increase in the price of a good causes

Accepted Answer

A) a rightward shift of the demand curve for that good. 
B) a leftward shift of the demand curve for that good. 
C) an upward movement along the demand curve for that good. 
D) a downward movement along the demand curve for that good. 
A) a rightward shift of the demand curve for that good. 
B) a leftward shift of the demand curve for that good. 
C) an upward movement along the demand curve for that good. 
D) a downward movement along the demand curve for that good.

Question 3

-According to the market data for good X in the above table,a stable equilibrium price is established at

Accepted Answer

A) $2. 
B) $4. 
C) $6. 
D) $8. 
A) $2. 
B) $4. 
C) $6. 
D) $8.

Question 4

When there is an excess quantity supplied,

Accepted Answer

A) the market is in equilibrium. 
B) quantity demanded is greater than quantity supplied. 
C) quantity demanded is less than quantity supplied. 
D) prices will remain stable. 
A) the market is in equilibrium. 
B) quantity demanded is greater than quantity supplied. 
C) quantity demanded is less than quantity supplied. 
D) prices will remain stable.

Question 5

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 6

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Accepted Answer

A) decrease;increase 
B) decrease;decrease 
C) increase;decrease 
D) increase;increase 
A) decrease;increase 
B) decrease;decrease 
C) increase;decrease 
D) increase;increase

Question 7

Demand is defined as

Accepted Answer

A) a schedule of how much of an item people will purchase at any particular price of that item during a specified time period,other things being constant. 
B) a specific quantity of an item that people want at a particular price of that item during a specified time period,other things being constant. 
C) a schedule of how much of a good or service people will purchase at any particular price of a different item during the specified time period,other things being constant. 
D) a specific quantity of a good or service that people will purchase at one particular price of another item during a specified time period,other things being constant. 
A) a schedule of how much of an item people will purchase at any particular price of that item during a specified time period,other things being constant. 
B) a specific quantity of an item that people want at a particular price of that item during a specified time period,other things being constant. 
C) a schedule of how much of a good or service people will purchase at any particular price of a different item during the specified time period,other things being constant. 
D) a specific quantity of a good or service that people will purchase at one particular price of another item during a specified time period,other things being constant.

Question 8

Fashion trends are a nonprice determinant for demand because

Accepted Answer

A) they cause a movement along the demand curve. 
B) they influence people's tastes and preferences in clothing. 
C) they change the supply of accessories. 
D) they do not affect demand. 
A) they cause a movement along the demand curve. 
B) they influence people's tastes and preferences in clothing. 
C) they change the supply of accessories. 
D) they do not affect demand.

Question 9

The price that we observe in the market is

Accepted Answer

A) the law of demand. 
B) a substitute. 
C) the money price. 
D) the relative price. 
A) the law of demand. 
B) a substitute. 
C) the money price. 
D) the relative price.

Question 10

The market supply curve is found by

Accepted Answer

A) surveys of consumer groups. 
B) vertically summing up the equilibrium prices of individual firms. 
C) horizontally summing up the supply curves of individual firms. 
D) estimating what the supply curve would be of one huge firm large enough to serve the entire market. 
A) surveys of consumer groups. 
B) vertically summing up the equilibrium prices of individual firms. 
C) horizontally summing up the supply curves of individual firms. 
D) estimating what the supply curve would be of one huge firm large enough to serve the entire market.

Question 11

A demand curve represents a(n)

Accepted Answer

A) direct relationship between price and quantity demanded. 
B) direct relationship between price and demand. 
C) indirect or inverse relationship between price and quantity demanded. 
D) indirect relationship between price and supply. 
A) direct relationship between price and quantity demanded. 
B) direct relationship between price and demand. 
C) indirect or inverse relationship between price and quantity demanded. 
D) indirect relationship between price and supply.

Question 12

Suppose the price of cement goes up in the United States.What happens in the market for new homes?

Accepted Answer

A) Supply shifts upward and to the left. 
B) Demand shifts left. 
C) Supply shifts downward and to the right. 
D) Demand shifts to the right. 
A) Supply shifts upward and to the left. 
B) Demand shifts left. 
C) Supply shifts downward and to the right. 
D) Demand shifts to the right.

Question 13

If the price of butter increases,the demand for margarine

Accepted Answer

A) will be unchanged. 
B) will shift outward. 
C) will shift inward. 
D) will kink into an S-curve. 
A) will be unchanged. 
B) will shift outward. 
C) will shift inward. 
D) will kink into an S-curve.

Question 14

A change in any of the ceteris paribus conditions for demand leads to a

Accepted Answer

A) a good going from an inferior good to a normal good. 
B) movement along the demand curve. 
C) shift of the demand curve. 
D) change in supply. 
A) a good going from an inferior good to a normal good. 
B) movement along the demand curve. 
C) shift of the demand curve. 
D) change in supply.

Question 15

The concept of "demand" in economics refers to

Accepted Answer

A) the different quantities of a good or service people will buy at different possible prices. 
B) the different types of goods and services that people of different income levels want to buy. 
C) how changes in the prices of all goods affect people's buying behavior. 
D) changes in people's consumption behavior over time. 
A) the different quantities of a good or service people will buy at different possible prices. 
B) the different types of goods and services that people of different income levels want to buy. 
C) how changes in the prices of all goods affect people's buying behavior. 
D) changes in people's consumption behavior over time.

Question 16

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 17

Suppose that milk producers expect that the price of milk is going to drop next week.This would cause

Accepted Answer

A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today. 
A) a decrease in the supply of milk today. 
B) an increase in the supply of milk today. 
C) an increase in the demand for milk today. 
D) the selling price of milk to rise today.

Question 18

The supply curve shows the relationship between the

Accepted Answer

A) cost of production and the price of the product. 
B) cost of resources and cost of production. 
C) price of the product and quantity supplied. 
D) quantity demanded and the quantity supplied. 
A) cost of production and the price of the product. 
B) cost of resources and cost of production. 
C) price of the product and quantity supplied. 
D) quantity demanded and the quantity supplied.

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

If the price of personal computers were to rise,then the demand for printers would decrease because personal computers and printers are

Accepted Answer

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

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

According to the law of demand,an increase in the price of a good causes

-According to the market data for good X in the above table,a stable equilibrium price is established at

When there is an excess quantity supplied,

A shortage will occur when

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .

Demand is defined as

Fashion trends are a nonprice determinant for demand because

The price that we observe in the market is

The market supply curve is found by

A demand curve represents a(n)

Suppose the price of cement goes up in the United States.What happens in the market for new homes?

If the price of butter increases,the demand for margarine

A change in any of the ceteris paribus conditions for demand leads to a

The concept of "demand" in economics refers to

The law of demand states that

Suppose that milk producers expect that the price of milk is going to drop next week.This would cause

The supply curve shows the relationship between the

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

If the price of personal computers were to rise,then the demand for printers would decrease because personal computers and printers are

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

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 3: Demand and Supply

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

According to the law of demand,an increase in the price of a good causes

-According to the market data for good X in the above table,a stable equilibrium price is established at

When there is an excess quantity supplied,

A shortage will occur when

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Demand is defined as

Fashion trends are a nonprice determinant for demand because

The price that we observe in the market is

The market supply curve is found by

A demand curve represents a(n)

Suppose the price of cement goes up in the United States.What happens in the market for new homes?

If the price of butter increases,the demand for margarine

A change in any of the ceteris paribus conditions for demand leads to a

The concept of "demand" in economics refers to

The law of demand states that

Suppose that milk producers expect that the price of milk is going to drop next week.This would cause

The supply curve shows the relationship between the

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

If the price of personal computers were to rise,then the demand for printers would decrease because personal computers and printers are

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

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .