Question 1

The relationship between quantity supplied and the price of output is such that

Accepted Answer

A) an increase in quantity will automatically lead to a reduction in price. 
B) an increase in price will lead to an increase in quantity supplied. 
C) an increase in price will produce an inward shift in the supply curve. 
D) quantity will decrease as the number of firms increases. 
A) an increase in quantity will automatically lead to a reduction in price. 
B) an increase in price will lead to an increase in quantity supplied. 
C) an increase in price will produce an inward shift in the supply curve. 
D) quantity will decrease as the number of firms increases.

Question 2

If the government imposes a per-unit tax on sales of an industry's product,then we would expect

Accepted Answer

A) the supply curve in that industry would shift to the left. 
B) the supply curve in that industry would shift to the right. 
C) the demand curve for that industry would shift to the right. 
D) the demand curve for that industry would shift to the left. 
A) the supply curve in that industry would shift to the left. 
B) the supply curve in that industry would shift to the right. 
C) the demand curve for that industry would shift to the right. 
D) the demand curve for that industry would shift to the left.

Question 3

-Refer to the above figure.The arrows show the direction of a shift in the demand curve of Good A.Which of the following would be the most likely reason for the shift in the demand curve if Good A is an inferior good?

Accepted Answer

A) An increase in the price of Good A 
B) A decrease in the price of Good A 
C) A decrease in consumers' income 
D) An increase in consumers' income 
A) An increase in the price of Good A 
B) A decrease in the price of Good A 
C) A decrease in consumers' income 
D) An increase in consumers' income

Question 4

-Refer to the above figure.At a price of four cents,the quantity of bubble gum supplied will be

Accepted Answer

A) 3. 
B) 2. 
C) 4. 
D) 5. 
A) 3. 
B) 2. 
C) 4. 
D) 5.

Question 5

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 6

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team,then these season tickets are

Accepted Answer

A) a normal good. 
B) an inferior good. 
C) an income complement. 
D) an income substitute. 
A) a normal good. 
B) an inferior good. 
C) an income complement. 
D) an income substitute.

Question 7

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

Question 8

-Which of the following statements is correct?

Accepted Answer

A) A shortage and scarcity are the same thing. 
B) A shortage occurs when the quantity demanded is less than the quantity supplied at a price below the market clearing price. 
C) A shortage occurs when the quantity demanded is greater than the quantity supplied at a price below the market clearing price. 
D) A shortage occurs when the quantity demanded is less than the quantity supplied at a price above the market clearing price. 
A) A shortage and scarcity are the same thing. 
B) A shortage occurs when the quantity demanded is less than the quantity supplied at a price below the market clearing price. 
C) A shortage occurs when the quantity demanded is greater than the quantity supplied at a price below the market clearing price. 
D) A shortage occurs when the quantity demanded is less than the quantity supplied at a price above the market clearing price.

Question 9

In 1950,a phone call at a pay phone cost 5 cents and a first-class stamp cost 3 cents.Today,those prices are 50 cents and 44 cents respectively.What has happened to the price of each good relative to the other? What has happened to the price of each good relative to all other goods?

Accepted Answer

The price of a phone call has decreased

Question 10

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 11

An increase in quantity demanded is caused by

Accepted Answer

A) an increase in income. 
B) a decrease in the price of the good. 
C) a decrease in the price of a complement. 
D) a change in expectations about price in the future. 
A) an increase in income. 
B) a decrease in the price of the good. 
C) a decrease in the price of a complement. 
D) a change in expectations about price in the future.

Question 12

Which of the following is a non-price determinant of supply?

Accepted Answer

A) the price of related goods consumers may buy 
B) technological advances in production 
C) consumers' incomes 
D) the number of consumers 
A) the price of related goods consumers may buy 
B) technological advances in production 
C) consumers' incomes 
D) the number of consumers

Question 13

-If the market price rises from P0 to P2 in the above figure,then there is a

Accepted Answer

A) surplus equal to the distance Q0,Q2. 
B) surplus equal to the distance Q1,Q2. 
C) shortage equal to the distance Q0,Q2. 
D) shortage equal to the distance Q1,Q2. 
A) surplus equal to the distance Q0,Q2. 
B) surplus equal to the distance Q1,Q2. 
C) shortage equal to the distance Q0,Q2. 
D) shortage equal to the distance Q1,Q2.

Question 14

In any given market,prices are determined by

Accepted Answer

A) specialization of labor. 
B) transactions costs. 
C) supply and demand. 
D) comparative advantage. 
A) specialization of labor. 
B) transactions costs. 
C) supply and demand. 
D) comparative advantage.

Question 15

The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2.What is the relative price of bread to butter?

Accepted Answer

A) 1.39 
B) 0.6 
C) 0.72 
D) 0.50 
A) 1.39 
B) 0.6 
C) 0.72 
D) 0.50

Question 16

When there is a shortage, I.there is a tendency for price to increase.
II.there is an excess quantity demanded.

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 17

A demand curve is derived from

Accepted Answer

A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium. 
A) the production possibilities curve. 
B) consumer's income. 
C) a demand schedule. 
D) an equilibrium.

Question 18

An increase in supply will occur when

Accepted Answer

A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right. 
A) the supply curve shifts downward to the right. 
B) the supply curve shifts upward to the left. 
C) the demand curve shifts downward to the left. 
D) the demand curve shifts upward to the right.

Question 19

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 20

A demand schedule provides

Accepted Answer

A) the quantities of a good people are willing to sell every year. 
B) the amount of a good a person wants to sell during a given time period. 
C) the alternative quantities demanded for a given time period at different possible prices. 
D) the amount of a good a person wants at different times of the day. 
A) the quantities of a good people are willing to sell every year. 
B) the amount of a good a person wants to sell during a given time period. 
C) the alternative quantities demanded for a given time period at different possible prices. 
D) the amount of a good a person wants at different times of the day.

The relationship between quantity supplied and the price of output is such that

If the government imposes a per-unit tax on sales of an industry's product,then we would expect

-Refer to the above figure.The arrows show the direction of a shift in the demand curve of Good A.Which of the following would be the most likely reason for the shift in the demand curve if Good A is an inferior good?

-Refer to the above figure.At a price of four cents,the quantity of bubble gum supplied will be

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

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team,then these season tickets are

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

-Which of the following statements is correct?

In 1950,a phone call at a pay phone cost 5 cents and a first-class stamp cost 3 cents.Today,those prices are 50 cents and 44 cents respectively.What has happened to the price of each good relative to the other? What has happened to the price of each good relative to all other goods?

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

An increase in quantity demanded is caused by

Which of the following is a non-price determinant of supply?

-If the market price rises from P0 to P2 in the above figure,then there is a

In any given market,prices are determined by

The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2.What is the relative price of bread to butter?

When there is a shortage, I.there is a tendency for price to increase. II.there is an excess quantity demanded.

A demand curve is derived from

An increase in supply will occur when

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

A demand schedule provides

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

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Exam 3: Demand and Supply

The relationship between quantity supplied and the price of output is such that

If the government imposes a per-unit tax on sales of an industry's product,then we would expect

-Refer to the above figure.The arrows show the direction of a shift in the demand curve of Good A.Which of the following would be the most likely reason for the shift in the demand curve if Good A is an inferior good?

-Refer to the above figure.At a price of four cents,the quantity of bubble gum supplied will be

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

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team,then these season tickets are

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

-Which of the following statements is correct?

In 1950,a phone call at a pay phone cost 5 cents and a first-class stamp cost 3 cents.Today,those prices are 50 cents and 44 cents respectively.What has happened to the price of each good relative to the other? What has happened to the price of each good relative to all other goods?

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

An increase in quantity demanded is caused by

Which of the following is a non-price determinant of supply?

-If the market price rises from P0 to P2 in the above figure,then there is a

In any given market,prices are determined by

The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2.What is the relative price of bread to butter?

When there is a shortage, I.there is a tendency for price to increase. II.there is an excess quantity demanded.

A demand curve is derived from

An increase in supply will occur when

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

A demand schedule provides

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