Question 1

In the short-run if there is a surplus in the market for a product,the rationing function of price can be expected to cause

Accepted Answer

A) an increasing shift in the demand for the product. 
B) a decreasing shift in the supply of the product. 
C) an increase in the market price of the product. 
D) a decrease in the market price of the product. 
A) an increasing shift in the demand for the product. 
B) a decreasing shift in the supply of the product. 
C) an increase in the market price of the product. 
D) a decrease in the market price of the product. D

Question 2

Which of the following would cause a leftward shift in the demand curve for a good?

Accepted Answer

A) an increase in income 
B) an increase in the price of a complementary good 
C) an increase in the price of a substitute 
D) the expectation that there will be a shortage in the availability of the good 
A) an increase in income 
B) an increase in the price of a complementary good 
C) an increase in the price of a substitute 
D) the expectation that there will be a shortage in the availability of the good B

Question 3

Which of the following will result in a decrease in demand for residential housing in the short run?

Accepted Answer

A) a decrease in the price of lumber 
B) an increase in the wages of carpenters 
C) a decrease in real household incomes 
D) a decrease in the prices of residential housing 
A) a decrease in the price of lumber 
B) an increase in the wages of carpenters 
C) a decrease in real household incomes 
D) a decrease in the prices of residential housing C

Question 4

Two goods are ________ if the quantity consumed of one increases when the price of the other decreases.

Accepted Answer

A) normal 
B) superior 
C) complementary 
D) substitute 
A) normal 
B) superior 
C) complementary 
D) substitute

Question 5

Coke and Pepsi are substitutes if

Accepted Answer

A) the demand for Coke increases when the price of Pepsi falls. 
B) the demand for Coke increases when the price of Pepsi rises. 
C) the supply of Coke increases when the price of Pepsi falls. 
D) the demand for Coke and Pepsi rise and fall together. 
A) the demand for Coke increases when the price of Pepsi falls. 
B) the demand for Coke increases when the price of Pepsi rises. 
C) the supply of Coke increases when the price of Pepsi falls. 
D) the demand for Coke and Pepsi rise and fall together.

Question 6

A good that is similar to another,and can be consumed in place of it,is called

Accepted Answer

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

Question 7

List the major non-price determinants of demand.

Accepted Answer

Consumer preferences (tastes),

Question 8

Annual demand and supply for the Entronics company is given by:
QD = 5,000 + 0.5 I + 0.2 A - 100P,and QS = -5000 + 100P
where Q is the quantity per year,P is price,I is income per household,and A is advertising expenditure.
a.If A = $10,000 and I = $25,000,what is the demand curve?
b.Given the demand curve in part a.,what is equilibrium price and quantity?
c.If consumer incomes increase to $30,000,what will be the impact on equilibrium price and quantity?

Accepted Answer

a.QD = 19,500 - 100P b.P = $12

Question 9

Which of the following indicates that there is a shortage in the market?

Accepted Answer

A) Demand is rising. 
B) Demand is falling. 
C) Price is rising. 
D) Price is falling. 
A) Demand is rising. 
B) Demand is falling. 
C) Price is rising. 
D) Price is falling.

Question 10

Which of the following would cause a decrease in the price of a good?

Accepted Answer

A) an increasing shift in the supply of a good and no shift in demand 
B) a decreasing shift in the supply of a good and no shift in demand 
C) an increasing shift in the demand for good and no shift in supply 
D) an increasing shift in the demand for good and a decreasing shift in supply 
A) an increasing shift in the supply of a good and no shift in demand 
B) a decreasing shift in the supply of a good and no shift in demand 
C) an increasing shift in the demand for good and no shift in supply 
D) an increasing shift in the demand for good and a decreasing shift in supply

Question 11

Which of the following can result in a decrease in the demand for I-Pods in the short run?

Accepted Answer

A) a decrease in the population 
B) a decrease in real household incomes 
C) a decrease in the price of MP4s 
D) All of the above 
A) a decrease in the population 
B) a decrease in real household incomes 
C) a decrease in the price of MP4s 
D) All of the above

Question 12

The rationing function of price

Accepted Answer

A) occurs when there is a movement of resources into or out of markets as a result of changes in the equilibrium market price. 
B) is also known as the guiding function of price. 
C) occurs when consumers change their tastes and preferences. 
D) occurs only when the market experiences severe shortages. 
A) occurs when there is a movement of resources into or out of markets as a result of changes in the equilibrium market price. 
B) is also known as the guiding function of price. 
C) occurs when consumers change their tastes and preferences. 
D) occurs only when the market experiences severe shortages.

Question 13

List the major non-price determinants of supply.

Accepted Answer

Input costs,technology,prices

Question 14

A movement along a demand curve may be caused by a change in

Accepted Answer

A) the non-price determinants of demand. 
B) the change in consumer expectations. 
C) the change in demand. 
D) the change in supply. 
A) the non-price determinants of demand. 
B) the change in consumer expectations. 
C) the change in demand. 
D) the change in supply.

Question 15

Which of the following refers to a shift in the demand curve?

Accepted Answer

A) "This new advertising campaign should really increase our demand." 
B) "Let's drop our price to increase our demand." 
C) "We dare not raise our price because our demand will drop." 
D) "If new sellers enter the market,the demand for the product is bound to increase." 
A) "This new advertising campaign should really increase our demand." 
B) "Let's drop our price to increase our demand." 
C) "We dare not raise our price because our demand will drop." 
D) "If new sellers enter the market,the demand for the product is bound to increase."

Question 16

Which of the following best applies to the distinction between the "long run" and the "short run"?

Accepted Answer

A) The short run is a period of approximately 1-6 months while the long run is any time frame which is longer. 
B) In the short run,only new firms may enter,while in the long-run firms may either enter or exit the market. 
C) The rationing function of price is a short-run phenomenon whereas the guiding function is a long-run phenomenon. 
D) All of the above statements are correct. 
A) The short run is a period of approximately 1-6 months while the long run is any time frame which is longer. 
B) In the short run,only new firms may enter,while in the long-run firms may either enter or exit the market. 
C) The rationing function of price is a short-run phenomenon whereas the guiding function is a long-run phenomenon. 
D) All of the above statements are correct.

Question 17

Which of the following applies most generally to supply in the long run?

Accepted Answer

A) Average total cost must decline. 
B) Producers are able to make change in all their factors of production. 
C) Producers are only able to make change in their variable factors of production. 
D) All original producers will leave the market. 
A) Average total cost must decline. 
B) Producers are able to make change in all their factors of production. 
C) Producers are only able to make change in their variable factors of production. 
D) All original producers will leave the market.

Question 18

A market is in equilibrium when

Accepted Answer

A) supply is equal to demand. 
B) the price is adjusting upward. 
C) the quantity supplied is equal to the quantity demanded. 
D) tastes and preference remain constant. 
A) supply is equal to demand. 
B) the price is adjusting upward. 
C) the quantity supplied is equal to the quantity demanded. 
D) tastes and preference remain constant.

Question 19

All of the following are non-price determinants of supply except

Accepted Answer

A) costs. 
B) technology. 
C) income. 
D) future expectations. 
A) costs. 
B) technology. 
C) income. 
D) future expectations.

Question 20

Which of the following best describes the "guiding function" of price?

Accepted Answer

A) In response to a surplus or shortage in two markets,price serves as a "guiding function" by decreasing in one market and increasing in the other market in the short run. 
B) The guiding function of price is the movement of resources into or out of markets in response to a change in the equilibrium price of a good or service. 
C) The guiding function of price occurs when the market price changes to eliminate the imbalance between supply and demand caused by a shortage or surplus at the original price. 
D) The guiding function usually occurs in the short run while the rationing function usually occurs in the long run. 
A) In response to a surplus or shortage in two markets,price serves as a "guiding function" by decreasing in one market and increasing in the other market in the short run. 
B) The guiding function of price is the movement of resources into or out of markets in response to a change in the equilibrium price of a good or service. 
C) The guiding function of price occurs when the market price changes to eliminate the imbalance between supply and demand caused by a shortage or surplus at the original price. 
D) The guiding function usually occurs in the short run while the rationing function usually occurs in the long run.

In the short-run if there is a surplus in the market for a product,the rationing function of price can be expected to cause

Which of the following would cause a leftward shift in the demand curve for a good?

Which of the following will result in a decrease in demand for residential housing in the short run?

Two goods are ________ if the quantity consumed of one increases when the price of the other decreases.

Coke and Pepsi are substitutes if

A good that is similar to another,and can be consumed in place of it,is called

List the major non-price determinants of demand.

Which of the following indicates that there is a shortage in the market?

Which of the following would cause a decrease in the price of a good?

Which of the following can result in a decrease in the demand for I-Pods in the short run?

The rationing function of price

List the major non-price determinants of supply.

A movement along a demand curve may be caused by a change in

Which of the following refers to a shift in the demand curve?

Which of the following best applies to the distinction between the "long run" and the "short run"?

Which of the following applies most generally to supply in the long run?

A market is in equilibrium when

All of the following are non-price determinants of supply except

Which of the following best describes the "guiding function" of price?

Introduction

The Firm and Its Goals

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Production Appendices 6A,6B,and 6C

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

Government and Industry: Challenges and Opportunities for Todays Manager

The Global Soft Drink Industry

Filters

Exam 3: Supply and Demand

In the short-run if there is a surplus in the market for a product,the rationing function of price can be expected to cause

Which of the following would cause a leftward shift in the demand curve for a good?

Which of the following will result in a decrease in demand for residential housing in the short run?

Two goods are ________ if the quantity consumed of one increases when the price of the other decreases.

Coke and Pepsi are substitutes if

A good that is similar to another,and can be consumed in place of it,is called

List the major non-price determinants of demand.

Which of the following indicates that there is a shortage in the market?

Which of the following would cause a decrease in the price of a good?

Which of the following can result in a decrease in the demand for I-Pods in the short run?

The rationing function of price

List the major non-price determinants of supply.

A movement along a demand curve may be caused by a change in

Which of the following refers to a shift in the demand curve?

Which of the following best applies to the distinction between the "long run" and the "short run"?

Which of the following applies most generally to supply in the long run?

A market is in equilibrium when

All of the following are non-price determinants of supply except

Which of the following best describes the "guiding function" of price?

Introduction

The Firm and Its Goals

Demand Elasticity

Demand Estimation and Forecasting Appendices 5A and 5B

The Theory and Estimation of Production Appendices 6A,6B,and 6C

The Theory and Estimation of Cost Appendices 7A,7B,and 7C

Pricing and Output Decisions: Perfect Competition and Monopoly Appendices 8A and 8B

Pricing and Output Decisions: Monopolistic Competition and Oligopoly

Special Pricing Practices

Game Theory and Asymmetric Information

Capital Budgeting and Risk

The Multinational Corporation in a Global Setting

Government and Industry: Challenges and Opportunities for Todays Manager

The Global Soft Drink Industry

Filters