Question 1

A demand curve for a normal good

Accepted Answer

A) slopes upward and to the right. 
B) is constructed based on the assumption that income is rising. 
C) is constructed based on the assumption that an inverse relationship exists between price and income. 
D) shows the inverse relationship between price and quantity demanded. 
A) slopes upward and to the right. 
B) is constructed based on the assumption that income is rising. 
C) is constructed based on the assumption that an inverse relationship exists between price and income. 
D) shows the inverse relationship between price and quantity demanded.

Question 2

Other things being equal,an increase in the price of a good leads to a decrease in the amount people purchase.This is known as

Accepted Answer

A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium. 
A) the law of demand. 
B) the law of supply. 
C) ceteris paribus. 
D) equilibrium.

Question 3

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 4

Equilibrium in a market occurs when

Accepted Answer

A) demand and supply indicate a small surplus of a good. 
B) price is at its minimum. 
C) quantity supplied and quantity demanded are equal at the market clearing price. 
D) the market price leads to a decrease in quantity demanded. 
A) demand and supply indicate a small surplus of a good. 
B) price is at its minimum. 
C) quantity supplied and quantity demanded are equal at the market clearing price. 
D) the market price leads to a decrease in quantity demanded.

Question 5

Which of the following are complementary goods?

Accepted Answer

A) sport utility vehicles and gasoline 
B) butter and margarine 
C) beer and wine 
D) DVDs and videocassettes 
A) sport utility vehicles and gasoline 
B) butter and margarine 
C) beer and wine 
D) DVDs and videocassettes

Question 6

-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 7

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 8

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 9

According to the above figure,a shortage will occur at a price at which

Accepted Answer

A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium. 
A) quantity demanded equals quantity supplied. 
B) quantity demanded exceeds quantity supplied. 
C) quantity supplied exceeds quantity demanded. 
D) government sets a price above equilibrium.

Question 10

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 11

When economists talk about a demand schedule for a product,they mean

Accepted Answer

A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period. 
A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period. 
B) the amount of a good that consumers are able to purchase (though they might not be willing to)at different prices in a given period of time. 
C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time. 
D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period.

Question 12

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 13

Market demand is

Accepted Answer

A) the total quantities demanded of all consumers of a particular item at given prices. 
B) a movement along the demand curve in response to the market. 
C) total equilibrium demand for the market. 
D) the demand for and supply of a good or service. 
A) the total quantities demanded of all consumers of a particular item at given prices. 
B) a movement along the demand curve in response to the market. 
C) total equilibrium demand for the market. 
D) the demand for and supply of a good or service.

Question 14

If consumers expect that the price of pretzels will decrease next week,what would happen today?

Accepted Answer

A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease. 
A) Demand today for pretzels would decrease. 
B) Demand today for pretzels would increase. 
C) Demand today for pretzels would be unaffected. 
D) Supply today of pretzels would decrease.

Question 15

Suppose a shortage for good X exists.Given this information,we know that

Accepted Answer

A) the price of good X will tend to rise toward the equilibrium level. 
B) the price of good X will tend to fall toward the equilibrium level. 
C) a government price floor should be imposed above the current price so that the market can work more effectively. 
D) a government price ceiling should be imposed above the current price so that the market can work more effectively. 
A) the price of good X will tend to rise toward the equilibrium level. 
B) the price of good X will tend to fall toward the equilibrium level. 
C) a government price floor should be imposed above the current price so that the market can work more effectively. 
D) a government price ceiling should be imposed above the current price so that the market can work more effectively.

Question 16

For a demand schedule,which of the following is held constant?

Accepted Answer

A) relative prices 
B) quantity demanded 
C) quality of the good 
D) nominal prices 
A) relative prices 
B) quantity demanded 
C) quality of the good 
D) nominal prices

Question 17

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 18

-According to the above figure for a gasoline market,at a price of $1 per gallon of gasoline,there would be

Accepted Answer

A) a shortage of 30 million gallons. 
B) a surplus of 30 million gallons. 
C) a shortage of 20 million gallons. 
D) a surplus of 50 million gallons. 
A) a shortage of 30 million gallons. 
B) a surplus of 30 million gallons. 
C) a shortage of 20 million gallons. 
D) a surplus of 50 million gallons.

Question 19

-If the market price falls from P0 to P1 in the above figure,then

Accepted Answer

A) a new equilibrium quantity is established. 
B) there is a shortage equal to the distance EF. 
C) there will be a further tendency for price to fall. 
D) there is a surplus of goods on the market equal to the distance Q1,Q2. 
A) a new equilibrium quantity is established. 
B) there is a shortage equal to the distance EF. 
C) there will be a further tendency for price to fall. 
D) there is a surplus of goods on the market equal to the distance Q1,Q2.

Question 20

-According to the above figure,a shortage is shown between which two points?

Accepted Answer

A) A and E 
B) C and B 
C) A and B 
D) E and F 
A) A and E 
B) C and B 
C) A and B 
D) E and F

A demand curve for a normal good

Other things being equal,an increase in the price of a good leads to a decrease in the amount people purchase.This is known as

The data points on a supply curve come from

Equilibrium in a market occurs when

Which of the following are complementary goods?

-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

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 above figure,a shortage will occur at a price at which

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

When economists talk about a demand schedule for a product,they mean

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

Market demand is

If consumers expect that the price of pretzels will decrease next week,what would happen today?

Suppose a shortage for good X exists.Given this information,we know that

For a demand schedule,which of the following is held constant?

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

-According to the above figure for a gasoline market,at a price of $1 per gallon of gasoline,there would be

-If the market price falls from P0 to P1 in the above figure,then

-According to the above figure,a shortage is shown between which two points?

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

A demand curve for a normal good

Other things being equal,an increase in the price of a good leads to a decrease in the amount people purchase.This is known as

The data points on a supply curve come from

Equilibrium in a market occurs when

Which of the following are complementary goods?

-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

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 above figure,a shortage will occur at a price at which

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

When economists talk about a demand schedule for a product,they mean

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

Market demand is

If consumers expect that the price of pretzels will decrease next week,what would happen today?

Suppose a shortage for good X exists.Given this information,we know that

For a demand schedule,which of the following is held constant?

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

-According to the above figure for a gasoline market,at a price of $1 per gallon of gasoline,there would be

-If the market price falls from P0 to P1 in the above figure,then

-According to the above figure,a shortage is shown between which two points?

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

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 .