Question 1

Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?

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 2

Use the following to answer questions .
Exhibit: Demand Shifters and Supply Shifters  
-(Exhibit: Demand Shifters 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 corn crop by 20 percent. Which panel best describes how this will affect the market for frozen peas, a substitute for sweet corn?

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 3

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 4

An example of a supply shifter is:

Accepted Answer

A)  demographic characteristics. 
B)  technology. 
C)  income. 
D)  consumer expectations. 
A)  demographic characteristics. 
B)  technology. 
C)  income. 
D)  consumer expectations.

Question 5

If the demand for housing increases and the supply of housing decreases:

Accepted Answer

A)  price will go up and quantity will go down. 
B)  price and quantity will both go up. 
C)  price will increase, but the quantity change is indeterminate. 
D)  the quantity will be higher, but the change in price is indeterminate. 
A)  price will go up and quantity will go down. 
B)  price and quantity will both go up. 
C)  price will increase, but the quantity change is indeterminate. 
D)  the quantity will be higher, but the change in price is indeterminate.

Question 6

Price changes for complements and substitutes have the same effect on demand.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer questions 
Exhibit: The Demand for Music Downloads  
-(Exhibit: The Demand for music downloads) A decrease in the fee charged for music downloads would result in a change illustrated by:

Accepted Answer

A)  the move from f to g in Figure (a). 
B)  the move from h to i in Figure (b). 
C)  the move from j to k in Figure (c). 
D)  the move from l to m in Figure (d). 
A)  the move from f to g in Figure (a). 
B)  the move from h to i in Figure (b). 
C)  the move from j to k in Figure (c). 
D)  the move from l to m in Figure (d).

Question 8

Use the following to answer questions .
Exhibit: Demand and Supply of Wheat  
-(Exhibit: Demand and Supply of Wheat) If a price of $10 temporarily exists in this market, a:

Accepted Answer

A)  shortage of 10,000 bushels will result. 
B)  shortage of 8,000 bushels will result. 
C)  surplus of 8,000 bushels will result. 
D)  surplus of 6,000 bushels will result. 
A)  shortage of 10,000 bushels will result. 
B)  shortage of 8,000 bushels will result. 
C)  surplus of 8,000 bushels will result. 
D)  surplus of 6,000 bushels will result.

Question 9

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

Accepted Answer

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

Question 10

A shortage occurs at any price above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 11

In a competitive market, if there should be a surplus of a product at a given price:

Accepted Answer

A)  sellers will drive the price down. 
B)  sellers will drive the price up. 
C)  buyers will drive the price up. 
D)  the price will tend to remain constant. 
A)  sellers will drive the price down. 
B)  sellers will drive the price up. 
C)  buyers will drive the price up. 
D)  the price will tend to remain constant.

Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?

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.

An example of a supply shifter is:

If the demand for housing increases and the supply of housing decreases:

Price changes for complements and substitutes have the same effect on demand.

Use the following to answer questions Exhibit: The Demand for Music Downloads -(Exhibit: The Demand for music downloads) A decrease in the fee charged for music downloads would result in a change illustrated by:

Use the following to answer questions . Exhibit: Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) If a price of $10 temporarily exists in this market, a:

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

A shortage occurs at any price above the equilibrium price.

In a competitive market, if there should be a surplus of a product at a given price:

Economics: the Study of Choice

Applications of Supply and Demand

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

Filters

Exam 3: Demand and Supply

Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?

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.

An example of a supply shifter is:

If the demand for housing increases and the supply of housing decreases:

Price changes for complements and substitutes have the same effect on demand.

Use the following to answer questions Exhibit: The Demand for Music Downloads -(Exhibit: The Demand for music downloads) A decrease in the fee charged for music downloads would result in a change illustrated by:

Use the following to answer questions . Exhibit: Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) If a price of $10 temporarily exists in this market, a:

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

A shortage occurs at any price above the equilibrium price.

In a competitive market, if there should be a surplus of a product at a given price:

Economics: the Study of Choice

Applications of Supply and Demand

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

Filters