Question 1

An increase in both supply and demand must increase both equilibrium price and quantity.

Accepted Answer

A) True 
 B)False

Question 2

A price below the equilibrium price will:

Accepted Answer

A)  result in pressure for price to rise. 
B)  result in a surplus. 
C)  never be the case. 
D)  result in pressure for price to fall. 
A)  result in pressure for price to rise. 
B)  result in a surplus. 
C)  never be the case. 
D)  result in pressure for price to fall.

Question 3

Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:

Accepted Answer

A)  an increase in price and quantity. 
B)  a decrease in price and an increase in quantity. 
C)  a decrease in both price and quantity. 
D)  an increase in price and a decrease in quantity. 
A)  an increase in price and quantity. 
B)  a decrease in price and an increase in quantity. 
C)  a decrease in both price and quantity. 
D)  an increase in price and a decrease in quantity.

Question 4

Use the following to answer questions .
Exhibit: The Determinants of Demand and Supply  
-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events. Suppose consumer incomes increase. Which panel best describes how this will affect the market for used furniture, an inferior good?

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 5

Use the following to answer questions .
Exhibit: The Determinants of Demand and Supply  
-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events. Suppose the population increases. Which panel best describes how this will affect the market for apples?

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 6

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 7

Use the following to answer questions .
Exhibit: The Market for Music Downloads  
-(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 8

Use the following to answer questions.
Exhibit: The Market for Chocolate-Covered Peanuts
  
-(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 40 cents, the price will:

Accepted Answer

A)  remain unchanged. 
B)  fall to 30 cents. 
C)  rise to 50 cents. 
D)  rise to 60 cents. 
A)  remain unchanged. 
B)  fall to 30 cents. 
C)  rise to 50 cents. 
D)  rise to 60 cents.

Question 9

A shortage or a surplus can exist when the current price is equal to the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 10

A substantial increase in the price of oranges (a normal good) is likely to result from:

Accepted Answer

A)  an increase in the amount of imported oranges. 
B)  a prolonged freeze in Florida. 
C)  a decline in buyers' incomes. 
D)  a decrease in the public's demand for orange juice. 
A)  an increase in the amount of imported oranges. 
B)  a prolonged freeze in Florida. 
C)  a decline in buyers' incomes. 
D)  a decrease in the public's demand for orange juice.

Question 11

A negative relationship between the quantity demanded and price is called the law of ______.

Accepted Answer

A)  demand 
B)  diminishing marginal returns 
C)  market clearing 
D)  supply 
A)  demand 
B)  diminishing marginal returns 
C)  market clearing 
D)  supply

Question 12

An increase in demand, with no change in supply, 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 13

A market surplus occurs if the quantity:

Accepted Answer

A)  demanded is greater than the quantity supplied. 
B)  demanded is less than the quantity supplied. 
C)  demanded is equal to the quantity supplied. 
D)  supplied is less than the quantity demanded. 
A)  demanded is greater than the quantity supplied. 
B)  demanded is less than the quantity supplied. 
C)  demanded is equal to the quantity supplied. 
D)  supplied is less than the quantity demanded.

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

The price of oranges rises. 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 16

The demand curve for on-demand videos has shifted to the right. What could have caused it?

Accepted Answer

A)  A fall in the price of on-demand videos. 
B)  An increase in the price of on-demand videos. 
C)  An increase in the supply of on-demand videos. 
D)  An increase in the income of buyers. 
A)  A fall in the price of on-demand videos. 
B)  An increase in the price of on-demand videos. 
C)  An increase in the supply of on-demand videos. 
D)  An increase in the income of buyers.

Question 17

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

Accepted Answer

A)  prices. 
B)  preferences. 
C)  government mandates. 
D)  expectations. 
A)  prices. 
B)  preferences. 
C)  government mandates. 
D)  expectations.

Question 18

A shift to the left of a supply curve is caused by:

Accepted Answer

A)  an increase in the number of sellers. 
B)  a technological improvement. 
C)  an increase in the returns from other supply possibilities. 
D)  an increase in the number of buyers. 
A)  an increase in the number of sellers. 
B)  a technological improvement. 
C)  an increase in the returns from other supply possibilities. 
D)  an increase in the number of buyers.

Question 19

Use the following to answer questions.
Exhibit: Demand and Supply Schedules for a Good
  
-(Exhibit: Supply and Demand Schedules for a Good) If there were a decrease in supply by 100 units at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.

Accepted Answer

A)  $2.00; 100 
B)  $3.00; 140 
C)  $3.50; 175 
D)  $4.00; 160 
A)  $2.00; 100 
B)  $3.00; 140 
C)  $3.50; 175 
D)  $4.00; 160

Question 20

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

Accepted Answer

A)  n to o in Figure (a). 
B)  p to q in Figure (b). 
C)  s to t in Figure (c). 
D)  u to v in Figure (d). 
A)  n to o in Figure (a). 
B)  p to q in Figure (b). 
C)  s to t in Figure (c). 
D)  u to v in Figure (d).

An increase in both supply and demand must increase both equilibrium price and quantity.

A price below the equilibrium price will:

Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:

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

Use the following to answer questions . Exhibit: The Market for Music Downloads -(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:

Use the following to answer questions. Exhibit: The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 40 cents, the price will:

A shortage or a surplus can exist when the current price is equal to the equilibrium price.

A substantial increase in the price of oranges (a normal good) is likely to result from:

A negative relationship between the quantity demanded and price is called the law of ______.

An increase in demand, with no change in supply, will lead to in equilibrium quantity and in equilibrium price.

A market surplus occurs if the quantity:

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

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

The demand curve for on-demand videos has shifted to the right. What could have caused it?

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

A shift to the left of a supply curve is caused by:

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Supply and Demand Schedules for a Good) If there were a decrease in supply by 100 units at each price, the equilibrium price and quantity would be and units, respectively.

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

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

An increase in both supply and demand must increase both equilibrium price and quantity.

A price below the equilibrium price will:

Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:

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

Use the following to answer questions . Exhibit: The Market for Music Downloads -(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:

Use the following to answer questions. Exhibit: The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 40 cents, the price will:

A shortage or a surplus can exist when the current price is equal to the equilibrium price.

A substantial increase in the price of oranges (a normal good) is likely to result from:

A negative relationship between the quantity demanded and price is called the law of ______.

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

A market surplus occurs if the quantity:

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

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

The demand curve for on-demand videos has shifted to the right. What could have caused it?

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

A shift to the left of a supply curve is caused by:

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Supply and Demand Schedules for a Good) If there were a decrease in supply by 100 units at each price, the equilibrium price and quantity would be ________ and ________ units, respectively.

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

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

An increase in demand, with no change in supply, will lead to in equilibrium quantity and in equilibrium price.

Use the following to answer questions. Exhibit: Demand and Supply Schedules for a Good -(Exhibit: Supply and Demand Schedules for a Good) If there were a decrease in supply by 100 units at each price, the equilibrium price and quantity would be and units, respectively.