Question 1

If a demand curve shifts to the left, then:

Accepted Answer

A)  the equilibrium price would go up and the equilibrium quantity would go down. 
B)  the equilibrium price would go down and the equilibrium quantity would go up. 
C)  a lower equilibrium price and quantity would result. 
D)  a higher equilibrium price and quantity would result. 
A)  the equilibrium price would go up and the equilibrium quantity would go down. 
B)  the equilibrium price would go down and the equilibrium quantity would go up. 
C)  a lower equilibrium price and quantity would result. 
D)  a higher equilibrium price and quantity would result. C

Question 2

A shift of a demand curve to the right, all other things unchanged, will:

Accepted Answer

A)  increase equilibrium price and quantity. 
B)  decrease equilibrium price and quantity. 
C)  decrease quantity and increase price. 
D)  increase quantity and decrease price. 
A)  increase equilibrium price and quantity. 
B)  decrease equilibrium price and quantity. 
C)  decrease quantity and increase price. 
D)  increase quantity and decrease price. A

Question 3

Demand is best defined as the:

Accepted Answer

A)  amount of a commodity that buyers would be willing and able to purchase at a specific price. 
B)  price that buyers would be willing and able to pay for a specific quantity of a good. 
C)  relationship between the price of a good and the quantity people are able to purchase, all other things unchanged. 
D)  relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged. 
A)  amount of a commodity that buyers would be willing and able to purchase at a specific price. 
B)  price that buyers would be willing and able to pay for a specific quantity of a good. 
C)  relationship between the price of a good and the quantity people are able to purchase, all other things unchanged. 
D)  relationship between the price of a good and the quantity people are willing and able to purchase, all other things unchanged. D

Question 4

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

Accepted Answer

A) True 
 B)False

Question 5

An increase in the price of a good will lead to an increase in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

If demand and supply both decrease:

Accepted Answer

A)  both price and quantity will be less. 
B)  both price and quantity will go up. 
C)  price will fall but quantity will go up. 
D)  quantity will go down but the effect on price is indeterminate. 
A)  both price and quantity will be less. 
B)  both price and quantity will go up. 
C)  price will fall but quantity will go up. 
D)  quantity will go down but the effect on price is indeterminate.

Question 7

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose oil becomes more expensive. Which panel best describes how this will affect the market for gasoline, which is made from oil?

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 8

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the technology for producing handheld calculators improves. Which panel best describes how this will affect the market for handheld calculators?

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 9

-(Exhibit: Demand and Supply) Given the demand curve, what is the price some buyers are willing and able to pay for 3 units?

Accepted Answer

A)  $2 
B)  $4 
C)  $6 
D)  $8 
A)  $2 
B)  $4 
C)  $6 
D)  $8

Question 10

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

Accepted Answer

A)  supply. 
B)  demand. 
C)  equilibrium. 
D)  disequilibrium. 
A)  supply. 
B)  demand. 
C)  equilibrium. 
D)  disequilibrium.

Question 11

Assuming that pizza is a normal good, if students' income at your college increases substantially, there would be:

Accepted Answer

A)  a reduction in the demand for pizza. 
B)  an increase in the quantity of pizza demanded. 
C)  no change in the demand for pizza. 
D)  an increase in the demand for pizza. 
A)  a reduction in the demand for pizza. 
B)  an increase in the quantity of pizza demanded. 
C)  no change in the demand for pizza. 
D)  an increase in the demand for pizza.

Question 12

When economists study the behavior of sellers, they are studying:

Accepted Answer

A)  supply. 
B)  the role of government. 
C)  demand. 
D)  accounting. 
A)  supply. 
B)  the role of government. 
C)  demand. 
D)  accounting.

Question 13

A decrease in supply, with no change in demand, will lead to ________ in equilibrium quantity and ________ in equilibrium price.

Accepted Answer

A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease 
A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease

Question 14

Demand and supply curves are drawn assuming ceteris paribus. This means that:

Accepted Answer

A)  economists ignore all assumptions. 
B)  economists don't watch for the fallacy of false cause. 
C)  changes will be proportional. 
D)  all other things besides price and quantity are assumed unchanged. 
A)  economists ignore all assumptions. 
B)  economists don't watch for the fallacy of false cause. 
C)  changes will be proportional. 
D)  all other things besides price and quantity are assumed unchanged.

Question 15

When economists study the behavior of buyers, they are studying:

Accepted Answer

A)  supply. 
B)  the role of government. 
C)  demand. 
D)  psychology. 
A)  supply. 
B)  the role of government. 
C)  demand. 
D)  psychology.

Question 16

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?

Accepted Answer

A)  The equilibrium price and quantity rise. 
B)  The equilibrium price rises, and the equilibrium quantity falls. 
C)  The equilibrium price and quantity fall. 
D)  The equilibrium price falls, and the equilibrium quantity rises. 
A)  The equilibrium price and quantity rise. 
B)  The equilibrium price rises, and the equilibrium quantity falls. 
C)  The equilibrium price and quantity fall. 
D)  The equilibrium price falls, and the equilibrium quantity rises.

Question 17

If the price in the market for a commodity is above the market equilibrium price, the:

Accepted Answer

A)  price will remain unchanged. 
B)  price will rise to clear the market. 
C)  quantity supplied exceeds the quantity demanded. 
D)  quantity demanded exceeds the quantity supplied. 
A)  price will remain unchanged. 
B)  price will rise to clear the market. 
C)  quantity supplied exceeds the quantity demanded. 
D)  quantity demanded exceeds the quantity supplied.

Question 18

The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?

Accepted Answer

A)  The equilibrium price falls and the equilibrium quantity rises. 
B)  The equilibrium price rises and the equilibrium quantity falls. 
C)  The equilibrium price and quantity rise. 
D)  The equilibrium price and quantity fall. 
A)  The equilibrium price falls and the equilibrium quantity rises. 
B)  The equilibrium price rises and the equilibrium quantity falls. 
C)  The equilibrium price and quantity rise. 
D)  The equilibrium price and quantity fall.

Question 19

An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.

Accepted Answer

A)  decrease; decrease 
B)  indeterminate change; increase 
C)  indeterminate change; decrease 
D)  increase; indeterminate change 
A)  decrease; decrease 
B)  indeterminate change; increase 
C)  indeterminate change; decrease 
D)  increase; indeterminate change

Question 20

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's sweet pea crop by 20 percent. Which panel best describes how this will affect the market for frozen sweet corn, a substitute for sweet peas?

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)

If a demand curve shifts to the left, then:

A shift of a demand curve to the right, all other things unchanged, will:

Demand is best defined as the:

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

An increase in the price of a good will lead to an increase in the quantity supplied.

If demand and supply both decrease:

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose oil becomes more expensive. Which panel best describes how this will affect the market for gasoline, which is made from oil?

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the technology for producing handheld calculators improves. Which panel best describes how this will affect the market for handheld calculators?

-(Exhibit: Demand and Supply) Given the demand curve, what is the price some buyers are willing and able to pay for 3 units?

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

Assuming that pizza is a normal good, if students' income at your college increases substantially, there would be:

When economists study the behavior of sellers, they are studying:

A decrease in supply, with no change in demand, will lead to in equilibrium quantity and in equilibrium price.

Demand and supply curves are drawn assuming ceteris paribus. This means that:

When economists study the behavior of buyers, they are studying:

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?

If the price in the market for a commodity is above the market equilibrium price, the:

The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?

An increase in demand and a decrease in supply, will lead to a(n) in equilibrium quantity and a(n) in equilibrium price.

Economics: the Study of Choice

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters

Exam 3: Demand and Supply

If a demand curve shifts to the left, then:

A shift of a demand curve to the right, all other things unchanged, will:

Demand is best defined as the:

At any price below the equilibrium price, the quantity demanded exceeds the quantity supplied, and the price tends to rise.

An increase in the price of a good will lead to an increase in the quantity supplied.

If demand and supply both decrease:

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose oil becomes more expensive. Which panel best describes how this will affect the market for gasoline, which is made from oil?

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events. Suppose the technology for producing handheld calculators improves. Which panel best describes how this will affect the market for handheld calculators?

-(Exhibit: Demand and Supply) Given the demand curve, what is the price some buyers are willing and able to pay for 3 units?

The relationship between the quantity of a good or service sellers are willing to offer for sale at different prices is:

Assuming that pizza is a normal good, if students' income at your college increases substantially, there would be:

When economists study the behavior of sellers, they are studying:

A decrease in supply, with no change in demand, will lead to ________ in equilibrium quantity and ________ in equilibrium price.

Demand and supply curves are drawn assuming ceteris paribus. This means that:

When economists study the behavior of buyers, they are studying:

Given that milk and cookies are complements, suppose the price of flour (an ingredient in cookies) rises. What happens in the market for cookies?

If the price in the market for a commodity is above the market equilibrium price, the:

The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?

An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.

Economics: the Study of Choice

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

Filters

A decrease in supply, with no change in demand, will lead to in equilibrium quantity and in equilibrium price.

An increase in demand and a decrease in supply, will lead to a(n) in equilibrium quantity and a(n) in equilibrium price.