Question 1

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Accepted Answer

A) demand curve will shift to the right. 
B) demand curve will shift to the left. 
C) supply curve will shift to the right. 
D) supply curve will shift to the left. 
A) demand curve will shift to the right. 
B) demand curve will shift to the left. 
C) supply curve will shift to the right. 
D) supply curve will shift to the left.

Question 2

Which of the following illustrates the law of demand?

Accepted Answer

A) More people watch college basketball in March than in November. 
B) The number of long distance calls in the United States is greater on Christmas than on Valentine's Day. 
C) College enrollment increases when federal tuition grants are readily available to students. 
D) The prevailing wage rate in an industry determines how many people choose to work in the industry. 
A) More people watch college basketball in March than in November. 
B) The number of long distance calls in the United States is greater on Christmas than on Valentine's Day. 
C) College enrollment increases when federal tuition grants are readily available to students. 
D) The prevailing wage rate in an industry determines how many people choose to work in the industry.

Question 3

-Refer to the above figure.Which panel demonstrates the law of demand?

Accepted Answer

A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D. 
A) Panel A. 
B) Panel B. 
C) Panel C. 
D) Panel D.

Question 4

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

Accepted Answer

A) an increase in the price of that good. 
B) a decrease in the price of that good. 
C) an expectation of an increase in the relative price of that good. 
D) an expectation of a decrease in the relative price of that good. 
A) an increase in the price of that good. 
B) a decrease in the price of that good. 
C) an expectation of an increase in the relative price of that good. 
D) an expectation of a decrease in the relative price of that good.

Question 5

The law of supply states that other things being equal,

Accepted Answer

A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases,quantity supplied increases. 
D) supply will increase to meet demand if demand increases. 
A) supply creates its own demand. 
B) supply will increase if productivity increases. 
C) as price increases,quantity supplied increases. 
D) supply will increase to meet demand if demand increases.

Question 6

The law of demand states that

Accepted Answer

A) consumers will exhaust their incomes as they purchase goods and services at given absolute prices. 
B) the quantity demanded of a good is higher at a lower relative price than at a higher relative price. 
C) there is a direct positive relationship between relative price and quantity demanded. 
D) if the price of a good increases both relatively and absolutely,there will be no change in quantity demanded. 
A) consumers will exhaust their incomes as they purchase goods and services at given absolute prices. 
B) the quantity demanded of a good is higher at a lower relative price than at a higher relative price. 
C) there is a direct positive relationship between relative price and quantity demanded. 
D) if the price of a good increases both relatively and absolutely,there will be no change in quantity demanded.

Question 7

If two goods are substitutes,then

Accepted Answer

A) an increase in the price of one causes the demand for the other to fall. 
B) there is an inverse relationship between changes in the price of one good and changes in the demand for the other. 
C) if the price of one good falls,the demand for the other good falls also. 
D) changes in the quantity demanded of one good will not affect the demand for the other. 
A) an increase in the price of one causes the demand for the other to fall. 
B) there is an inverse relationship between changes in the price of one good and changes in the demand for the other. 
C) if the price of one good falls,the demand for the other good falls also. 
D) changes in the quantity demanded of one good will not affect the demand for the other.

Question 8

A change in the price of a good causes

Accepted Answer

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

Question 9

If two goods,J and K,are complements,then which of the following statements is FALSE?

Accepted Answer

A) They are consumed together. 
B) An increase in the price of J causes the demand for K to rise. 
C) When the quantity demanded of J increases,the demand for K increases. 
D) A decrease in the price of K causes an increase in the demand for J. 
A) They are consumed together. 
B) An increase in the price of J causes the demand for K to rise. 
C) When the quantity demanded of J increases,the demand for K increases. 
D) A decrease in the price of K causes an increase in the demand for J.

Question 10

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50.Which of the following statements is true?

Accepted Answer

A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee. 
A) The relative price of coffee has increased compared to tea. 
B) The money price of coffee has increased. 
C) The law of supply explains why the price of coffee has increased. 
D) Jane will stop consuming coffee.

Question 11

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 12

The law of demand implies that the demand curve

Accepted Answer

A) has a negative slope. 
B) has a positive slope. 
C) shifts to the right when the price of a good increases. 
D) shifts to the left when the price of a good decreases. 
A) has a negative slope. 
B) has a positive slope. 
C) shifts to the right when the price of a good increases. 
D) shifts to the left when the price of a good decreases.

Question 13

The law of demand tells us that people will buy more of a good if

Accepted Answer

A) the price of that good decreases. 
B) the prices of other goods decrease. 
C) people's income increases. 
D) every factor that can affect people's buying decisions changes. 
A) the price of that good decreases. 
B) the prices of other goods decrease. 
C) people's income increases. 
D) every factor that can affect people's buying decisions changes.

Question 14

-Refer to the above figure.A surplus 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 15

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

Accepted Answer

A normal good is one for which demand in

Question 16

-Refer to the above table.At a price of $450,there is an

Accepted Answer

A) equilibrium. 
B) excess quantity supplied of 4,000 tablets. 
C) excess quantity demanded of 6,000 tablets. 
D) excess quantity demanded of 9,000 tablets. 
A) equilibrium. 
B) excess quantity supplied of 4,000 tablets. 
C) excess quantity demanded of 6,000 tablets. 
D) excess quantity demanded of 9,000 tablets.

Question 17

-Refer to the above table.What is the market quantity demanded at a price of $8?

Accepted Answer

A) 5 
B) 15 
C) 35 
D) 44 
A) 5 
B) 15 
C) 35 
D) 44

Question 18

-Refer to the above figure.Suppose that Cheerios and Apple Jacks are substitutes.Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

Accepted Answer

A) A 
B) B 
C) neither graph 
D) both graphs 
A) A 
B) B 
C) neither graph 
D) both graphs

Question 19

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.

Question 20

If the price of margarine falls,the demand for butter will

Accepted Answer

A) remain unchanged. 
B) increase. 
C) decrease. 
D) rise at first and then fall. 
A) remain unchanged. 
B) increase. 
C) decrease. 
D) rise at first and then fall.

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Which of the following illustrates the law of demand?

-Refer to the above figure.Which panel demonstrates the law of demand?

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

The law of supply states that other things being equal,

The law of demand states that

If two goods are substitutes,then

A change in the price of a good causes

If two goods,J and K,are complements,then which of the following statements is FALSE?

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50.Which of the following statements is true?

The law of demand states that there is

The law of demand implies that the demand curve

The law of demand tells us that people will buy more of a good if

-Refer to the above figure.A surplus will exist when

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

-Refer to the above table.At a price of $450,there is an

-Refer to the above table.What is the market quantity demanded at a price of $8?

-Refer to the above figure.Suppose that Cheerios and Apple Jacks are substitutes.Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

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

If the price of margarine falls,the demand for butter will

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

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Which of the following illustrates the law of demand?

-Refer to the above figure.Which panel demonstrates the law of demand?

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

The law of supply states that other things being equal,

The law of demand states that

If two goods are substitutes,then

A change in the price of a good causes

If two goods,J and K,are complements,then which of the following statements is FALSE?

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50.Which of the following statements is true?

The law of demand states that there is

The law of demand implies that the demand curve

The law of demand tells us that people will buy more of a good if

-Refer to the above figure.A surplus will exist when

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

-Refer to the above table.At a price of $450,there is an

-Refer to the above table.What is the market quantity demanded at a price of $8?

-Refer to the above figure.Suppose that Cheerios and Apple Jacks are substitutes.Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

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

If the price of margarine falls,the demand for butter will

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