Question 1

A decrease in supply is caused by:

Accepted Answer

A)  a decrease in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of lower prices in the future. 
D)  an advancement in the technology for producing the good. 
A)  a decrease in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of lower prices in the future. 
D)  an advancement in the technology for producing the good.

Question 2

-(Exhibit: Simultaneous Shifts in Demand and Supply) D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market for a normal good, the shift in the demand curve may have been a result of:

Accepted Answer

A)  a decrease in the price of a substitute good. 
B)  a decrease in the number of buyers. 
C)  falling incomes. 
D)  consumers' expecting the price to go up. 
A)  a decrease in the price of a substitute good. 
B)  a decrease in the number of buyers. 
C)  falling incomes. 
D)  consumers' expecting the price to go up.

Question 3

-(Exhibit: Shifts in Demand and Supply) Which diagram best illustrates what would happen in the handheld calculator industry if elementary schools encouraged their use?

Accepted Answer

A)  the movement from M to N in panel (a) 
B)  the movement from P to O in panel (b) 
C)  the movement from O to P in panel (b) 
D)  the movement from M to N in panel (a). 
A)  the movement from M to N in panel (a) 
B)  the movement from P to O in panel (b) 
C)  the movement from O to P in panel (b) 
D)  the movement from M to N in panel (a).

Question 4

Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?

Accepted Answer

A)  a fall in the price of milk 
B)  an increase in income 
C)  an expected increase in milk prices 
D)  a decrease in the price of cookies (a complement) 
A)  a fall in the price of milk 
B)  an increase in income 
C)  an expected increase in milk prices 
D)  a decrease in the price of cookies (a complement)

Question 5

An increase in income will lead to an increase in demand for inferior goods.

Accepted Answer

A) True 
 B)False

Question 6

-(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

Accepted Answer

A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  h to i in Figure (b). 
A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  h to i in Figure (b).

Question 7

-(Exhibit: Demand and Supply Curves) A price of $25 per unit will result in:

Accepted Answer

A)  a surplus of 50 units. 
B)  a surplus of 200 units. 
C)  a surplus of 250 units. 
D)  quantity demanded exceeding quantity supplied. 
A)  a surplus of 50 units. 
B)  a surplus of 200 units. 
C)  a surplus of 250 units. 
D)  quantity demanded exceeding quantity supplied.

Question 8

The Market for Chocolate-Covered Peanuts
  
-(Exhibit: The Market for Chocolate-Covered Peanuts) A surplus of 210 bags of chocolate-covered peanuts exists if the price is ________ cents per bag.

Accepted Answer

A)  90 
B)  80 
C)  60 
D)  40 
A)  90 
B)  80 
C)  60 
D)  40

Question 9

A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?

Accepted Answer

A)  income 
B)  prices 
C)  consumer preferences 
D)  prices of other goods 
A)  income 
B)  prices 
C)  consumer preferences 
D)  prices of other goods

Question 10

-(Exhibit: The Market for Music Downloads) An increase in buyers' income, assuming music downloads are a normal good, would result in a change illustrated by the move from:

Accepted Answer

A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  j to m in Figure (c). 
A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  j to m in Figure (c).

Question 11

The slope and location of the demand curve depend on:

Accepted Answer

A)  the number of buyers. 
B)  production costs. 
C)  the number of producers. 
D)  all of the above. 
A)  the number of buyers. 
B)  production costs. 
C)  the number of producers. 
D)  all of the above.

Question 12

A competitive market with flexible prices and many buyers and sellers will:

Accepted Answer

A)  tend to create surpluses. 
B)  tend to create shortages. 
C)  reach an equilibrium where the market clears. 
D)  reach and equilibrium only if a government agency sets the price. 
A)  tend to create surpluses. 
B)  tend to create shortages. 
C)  reach an equilibrium where the market clears. 
D)  reach and equilibrium only if a government agency sets the price.

Question 13

A market surplus occurs if the:

Accepted Answer

A)  price is below the equilibrium price. 
B)  price is equal to the equilibrium price. 
C)  equilibrium price is above the actual price. 
D)  equilibrium price is below the actual price. 
A)  price is below the equilibrium price. 
B)  price is equal to the equilibrium price. 
C)  equilibrium price is above the actual price. 
D)  equilibrium price is below the actual price.

Question 14

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

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 15

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

Accepted Answer

A)  is above the market equilibrium price. 
B)  will rise to clear the market. 
C)  will either rise or remain unchanged. 
D)  is below the market equilibrium price. 
A)  is above the market equilibrium price. 
B)  will rise to clear the market. 
C)  will either rise or remain unchanged. 
D)  is below the market equilibrium price.

Question 16

The law of demand implies that the quantity demanded of a commodity is inversely related to income, assuming other things that may affect demand remain the same.

Accepted Answer

A) True 
 B)False

Question 17

There can be no shortages or surpluses at the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 18

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

Accepted Answer

A)  supply shifter 
B)  demand shifter 
C)  false prophet 
D)  spoiler 
A)  supply shifter 
B)  demand shifter 
C)  false prophet 
D)  spoiler

Question 19

There is an increase in incomes. What happens in the market for steak?

Accepted Answer

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

Question 20

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:

Accepted Answer

A)  shifts to the right. 
B)  shifts to the left. 
C)  stays the same. 
D)  shifts to the right and then moves back. 
A)  shifts to the right. 
B)  shifts to the left. 
C)  stays the same. 
D)  shifts to the right and then moves back.

A decrease in supply is caused by:

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good, the shift in the demand curve may have been a result of:

-(Exhibit: Shifts in Demand and Supply) Which diagram best illustrates what would happen in the handheld calculator industry if elementary schools encouraged their use?

Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?

An increase in income will lead to an increase in demand for inferior goods.

-(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

-(Exhibit: Demand and Supply Curves) A price of $25 per unit will result in:

The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) A surplus of 210 bags of chocolate-covered peanuts exists if the price is ________ cents per bag.

A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?

-(Exhibit: The Market for Music Downloads) An increase in buyers' income, assuming music downloads are a normal good, would result in a change illustrated by the move from:

The slope and location of the demand curve depend on:

A competitive market with flexible prices and many buyers and sellers will:

A market surplus occurs if the:

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

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

The law of demand implies that the quantity demanded of a commodity is inversely related to income, assuming other things that may affect demand remain the same.

There can be no shortages or surpluses at the equilibrium price.

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

There is an increase in incomes. What happens in the market for steak?

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:

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

A decrease in supply is caused by:

-(Exhibit: Simultaneous Shifts in Demand and Supply) D1 and S1 are original supply and demand curves, and S2 and D2 are new curves. In this market for a normal good, the shift in the demand curve may have been a result of:

-(Exhibit: Shifts in Demand and Supply) Which diagram best illustrates what would happen in the handheld calculator industry if elementary schools encouraged their use?

Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?

An increase in income will lead to an increase in demand for inferior goods.

-(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

-(Exhibit: Demand and Supply Curves) A price of $25 per unit will result in:

The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) A surplus of 210 bags of chocolate-covered peanuts exists if the price is ________ cents per bag.

A decrease in the demand for eggs caused by concerns over cholesterol is most likely attributable to which demand shifter?

-(Exhibit: The Market for Music Downloads) An increase in buyers' income, assuming music downloads are a normal good, would result in a change illustrated by the move from:

The slope and location of the demand curve depend on:

A competitive market with flexible prices and many buyers and sellers will:

A market surplus occurs if the:

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

If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

The law of demand implies that the quantity demanded of a commodity is inversely related to income, assuming other things that may affect demand remain the same.

There can be no shortages or surpluses at the equilibrium price.

The Case in Point on campus parking suggested that giving students lower fares for taking public transportation was what kind of factor in the demand for parking spaces?

There is an increase in incomes. What happens in the market for steak?

If steak and potatoes are complements, when the price of steak goes up, the demand curve for potatoes:

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

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good, the shift in the demand curve may have been a result of: