Question 1

The law of supply states that there is

Accepted Answer

A) an inverse relationship between price and technology,ceteris paribus. 
B) a direct relationship between profit and quantity supplied,ceteris paribus. 
C) no relationship between price of resources and number of suppliers,ceteris paribus. 
D) a direct relationship between price and quantity supplied,ceteris paribus. 
A) an inverse relationship between price and technology,ceteris paribus. 
B) a direct relationship between profit and quantity supplied,ceteris paribus. 
C) no relationship between price of resources and number of suppliers,ceteris paribus. 
D) a direct relationship between price and quantity supplied,ceteris paribus.

Question 2

When income rises,

Accepted Answer

A) demand for a normal good rises. 
B) demand for a normal good falls. 
C) demand for an inferior good rises. 
D) quantity of a normal good demanded rises. 
A) demand for a normal good rises. 
B) demand for a normal good falls. 
C) demand for an inferior good rises. 
D) quantity of a normal good demanded rises.

Question 3

Which of the following factors will lead to a shift in the demand curve?

Accepted Answer

A) Changes in the costs of inputs 
B) Changes in technology 
C) Changes in the price of the good 
D) Changes in consumers' tastes and preferences 
A) Changes in the costs of inputs 
B) Changes in technology 
C) Changes in the price of the good 
D) Changes in consumers' tastes and preferences

Question 4

Mary decreases her consumption of Good X after the price of Good Y decreased.For Mary

Accepted Answer

A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good. 
A) Good X and Good Y are substitutes. 
B) Good X and Good Y are complements. 
C) Good X is an inferior good. 
D) Good Y is an inferior good.

Question 5

After the price of milk increases,David buys more eggs and less cereal.For David,

Accepted Answer

A) milk,eggs,and cereal are all complements. 
B) milk and eggs are complements,and milk and cereal are substitutes. 
C) milk and eggs are substitutes,and milk and cereal are complements. 
D) milk,eggs,and cereal are all substitutes. 
A) milk,eggs,and cereal are all complements. 
B) milk and eggs are complements,and milk and cereal are substitutes. 
C) milk and eggs are substitutes,and milk and cereal are complements. 
D) milk,eggs,and cereal are all substitutes.

Question 6

Which one of the following is NOT a determinant of demand?

Accepted Answer

A) Prices of related goods 
B) Cost of inputs in production 
C) Income 
D) Future price expectations 
A) Prices of related goods 
B) Cost of inputs in production 
C) Income 
D) Future price expectations

Question 7

A change in quantity demanded

Accepted Answer

A) is a shift of the demand curve. 
B) is a movement along the demand curve. 
C) can be either a shift or a movement along the demand curve. 
D) is caused when there is a change in a ceteris paribus factor. 
A) is a shift of the demand curve. 
B) is a movement along the demand curve. 
C) can be either a shift or a movement along the demand curve. 
D) is caused when there is a change in a ceteris paribus factor.

Question 8

Which of the following represents the law of supply?

Accepted Answer

A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above 
A) An increase in the price of a good causes an increase in the supply of that good. 
B) An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C) An increase in the price of a good causes an increase in the quantity supplied of that good. 
D) all of the above

Question 9

Suppose that,at a rental rate of $1000 per month,650 residents wish to rent apartments and that landlords offer 800 apartments available for rent.Which one of the following statements is then true?

Accepted Answer

A) There is a shortage of 150 apartments. 
B) There is an excess demand for apartments. 
C) The market clearing rental price of apartments is too low. 
D) The market clearing rental price of apartments is less than $1000 per month. 
A) There is a shortage of 150 apartments. 
B) There is an excess demand for apartments. 
C) The market clearing rental price of apartments is too low. 
D) The market clearing rental price of apartments is less than $1000 per month.

Question 10

Explain why there is a direct relationship between price and quantity supplied.

Accepted Answer

For firms to produce more of a good per

Question 11

The supply curve has a

Accepted Answer

A) negative slope. 
B) positive slope. 
C) slope equal to -1. 
D) undefined slope. 
A) negative slope. 
B) positive slope. 
C) slope equal to -1. 
D) undefined slope.

Question 12

-Refer to the above figure.At a price of four cents,a(n)________ of bubble gum will exist in the market.

Accepted Answer

A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity 
A) surplus 
B) shortage 
C) excess quantity demanded 
D) equilibrium quantity

Question 13

Suppose a change takes place and the new equilibrium is at point A in the above figure.This change could have been caused by

Accepted Answer

A) an increase in the per-unit tax on CDs. 
B) a decrease in the income of consumers. 
C) a reduction in the wages paid to workers in the CD industry. 
D) a reduction in the price of CD players. 
A) an increase in the per-unit tax on CDs. 
B) a decrease in the income of consumers. 
C) a reduction in the wages paid to workers in the CD industry. 
D) a reduction in the price of CD players.

Question 14

An increase in demand is represented by a

Accepted Answer

A) shift of the demand curve to the left. 
B) shift of the demand curve to the right. 
C) movement down the demand curve. 
D) movement up the demand curve. 
A) shift of the demand curve to the left. 
B) shift of the demand curve to the right. 
C) movement down the demand curve. 
D) movement up the demand curve.

Question 15

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

Accepted Answer

A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences. 
A) consumer income. 
B) the price of the good concerned in the law of demand. 
C) the prices of substitutes. 
D) tastes and preferences.

Question 16

Suppose we observe that the demand for eggs increases when people buy more potatoes.We can conclude that eggs and potatoes are

Accepted Answer

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

Question 17

-Refer to the above figure.At a price of $6,excess quantity supplied equals

Accepted Answer

A) 0. 
B) 12. 
C) 15. 
D) infinity. 
A) 0. 
B) 12. 
C) 15. 
D) infinity.

Question 18

Which of the following will NOT affect the supply of cars?

Accepted Answer

A) an increase in the price of steel 
B) an improvement in automobile production technology 
C) an increase in the productivity of auto workers 
D) a decrease in the price of cars 
A) an increase in the price of steel 
B) an improvement in automobile production technology 
C) an increase in the productivity of auto workers 
D) a decrease in the price of cars

Question 19

In economics,"demand" refers to

Accepted Answer

A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) the quantities of a good that people will buy at various prices. 
A) the intensity of desire for a good. 
B) the amount of a good people need rather than the amount they want. 
C) the satisfaction a good will provide a person. 
D) the quantities of a good that people will buy at various prices.

Question 20

-Refer to the above figure for a particular good.The rightward shift of the curve could have been caused by

Accepted Answer

A) a decrease in the price of an input. 
B) a decrease in the price of that good. 
C) an increase in the price of a complementary good. 
D) an increase in the price of a substitute good. 
A) a decrease in the price of an input. 
B) a decrease in the price of that good. 
C) an increase in the price of a complementary good. 
D) an increase in the price of a substitute good.

The law of supply states that there is

When income rises,

Which of the following factors will lead to a shift in the demand curve?

Mary decreases her consumption of Good X after the price of Good Y decreased.For Mary

After the price of milk increases,David buys more eggs and less cereal.For David,

Which one of the following is NOT a determinant of demand?

A change in quantity demanded

Which of the following represents the law of supply?

Suppose that,at a rental rate of $1000 per month,650 residents wish to rent apartments and that landlords offer 800 apartments available for rent.Which one of the following statements is then true?

Explain why there is a direct relationship between price and quantity supplied.

The supply curve has a

-Refer to the above figure.At a price of four cents,a(n)________ of bubble gum will exist in the market.

Suppose a change takes place and the new equilibrium is at point A in the above figure.This change could have been caused by

An increase in demand is represented by a

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

Suppose we observe that the demand for eggs increases when people buy more potatoes.We can conclude that eggs and potatoes are

-Refer to the above figure.At a price of $6,excess quantity supplied equals

Which of the following will NOT affect the supply of cars?

In economics,"demand" refers to

-Refer to the above figure for a particular good.The rightward shift of the curve could have been caused by

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

The law of supply states that there is

When income rises,

Which of the following factors will lead to a shift in the demand curve?

Mary decreases her consumption of Good X after the price of Good Y decreased.For Mary

After the price of milk increases,David buys more eggs and less cereal.For David,

Which one of the following is NOT a determinant of demand?

A change in quantity demanded

Which of the following represents the law of supply?

Suppose that,at a rental rate of $1000 per month,650 residents wish to rent apartments and that landlords offer 800 apartments available for rent.Which one of the following statements is then true?

Explain why there is a direct relationship between price and quantity supplied.

The supply curve has a

-Refer to the above figure.At a price of four cents,a(n)________ of bubble gum will exist in the market.

Suppose a change takes place and the new equilibrium is at point A in the above figure.This change could have been caused by

An increase in demand is represented by a

The statement "other things being equal" in the law of demand means all of the following remain constant EXCEPT

Suppose we observe that the demand for eggs increases when people buy more potatoes.We can conclude that eggs and potatoes are

-Refer to the above figure.At a price of $6,excess quantity supplied equals

Which of the following will NOT affect the supply of cars?

In economics,"demand" refers to

-Refer to the above figure for a particular good.The rightward shift of the curve could have been caused by

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