Question 1

Which of the following reflects the downward-sloping demand curve?

Accepted Answer

A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls, buyers willingly buy less. 
A)  Price is positively related to quantity supplied. 
B)  There is an inverse relationship between price and quantity demanded. 
C)  There is a direct relationship between price and quantity demanded. 
D)  When the price falls, buyers willingly buy less.

Question 2

What is the unique point at which the supply and demand curves intersect?

Accepted Answer

A)  market unity 
B)  an agreement 
C)  cohesion 
D)  equilibrium 
A)  market unity 
B)  an agreement 
C)  cohesion 
D)  equilibrium

Question 3

Flour is the main input in the production of bread. All else equal, if the price of flour increases, what would we expect?

Accepted Answer

A)  the supply of bread to increase 
B)  the supply of bread to decrease 
C)  the demand for bread to increase 
D)  the demand for bread to decrease 
A)  the supply of bread to increase 
B)  the supply of bread to decrease 
C)  the demand for bread to increase 
D)  the demand for bread to decrease

Question 4

Figure 4-1  
-Refer to the Figure 4-1. What is the movement from S1 to S called?

Accepted Answer

A)  a decrease in supply 
B)  a decrease in quantity supplied 
C)  an increase in supply 
D)  an increase in quantity supplied 
A)  a decrease in supply 
B)  a decrease in quantity supplied 
C)  an increase in supply 
D)  an increase in quantity supplied

Question 5

Figure 4-3  
-Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

Accepted Answer

A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 50 and quantity demanded would be 50. 
C)  Quantity supplied would be 60 and quantity demanded would be 40. 
D)  Quantity supplied would be 70 and quantity demanded would be 30. 
A)  Quantity supplied would be 40 and quantity demanded would be 60. 
B)  Quantity supplied would be 50 and quantity demanded would be 50. 
C)  Quantity supplied would be 60 and quantity demanded would be 40. 
D)  Quantity supplied would be 70 and quantity demanded would be 30.

Question 6

If the supply of a product decreases, what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 7

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Accepted Answer

A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 40 
D)  a shortage of 40 
A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 40 
D)  a shortage of 40

Question 8

Lauren buys five lattes per month when the price is $4.00 each and seven lattes per month when the price is $3.50. What has Lauren demonstrated?

Accepted Answer

A)  law of price 
B)  law of supply 
C)  actions of an irrational consumer 
D)  law of demand 
A)  law of price 
B)  law of supply 
C)  actions of an irrational consumer 
D)  law of demand

Question 9

Which chain of events is listed in the correct order?

Accepted Answer

A)  quantity supplied increases, price increases, demand increases 
B)  price increases, demand increases, quantity supplied increases 
C)  demand increases, price increases, quantity supplied increases 
D)  demand increases, quantity supplied increases, price increases 
A)  quantity supplied increases, price increases, demand increases 
B)  price increases, demand increases, quantity supplied increases 
C)  demand increases, price increases, quantity supplied increases 
D)  demand increases, quantity supplied increases, price increases

Question 10

Currently you purchase six packages of hot dogs a month. You graduate in December and will start your new job on January 2. You have no plans to purchase hot dogs in January. What are hot dogs for you?

Accepted Answer

A)  a "college-only" good 
B)  a normal good 
C)  an inferior good 
D)  a consumer good 
A)  a "college-only" good 
B)  a normal good 
C)  an inferior good 
D)  a consumer good

Question 11

If a solar panel manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

Accepted Answer

A)  less labour to be used 
B)  the supply of solar panels produced to increase 
C)  costs to the firm to fall 
D)  the price of solar panels to be increased by the firm 
A)  less labour to be used 
B)  the supply of solar panels produced to increase 
C)  costs to the firm to fall 
D)  the price of solar panels to be increased by the firm

Question 12

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 13

What can be said about economists in general?

Accepted Answer

A)  They do not try to explain people's tastes but do try to explain what happens when tastes change. 
B)  They must be able to explain people's tastes to explain what happens when tastes change. 
C)  They do not believe that people's tastes determine demand and therefore ignore the subject of tastes. 
D)  They believe that tastes and demand move in opposite directions. 
A)  They do not try to explain people's tastes but do try to explain what happens when tastes change. 
B)  They must be able to explain people's tastes to explain what happens when tastes change. 
C)  They do not believe that people's tastes determine demand and therefore ignore the subject of tastes. 
D)  They believe that tastes and demand move in opposite directions.

Question 14

Figure 4-6  
-Refer to the Figure 4-6. What is the shift from D to D1 called?

Accepted Answer

A)  an increase in demand 
B)  a decrease in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded 
A)  an increase in demand 
B)  a decrease in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded

Question 15

What is the law of demand?

Accepted Answer

A)  When the price of a good falls, buyers respond by purchasing more. 
B)  When income levels increase, buyers respond by purchasing more. 
C)  When buyers' tastes for the good increase, they purchase more of the good. 
D)  When the price of a good or service rises, buyers respond by purchasing more. 
A)  When the price of a good falls, buyers respond by purchasing more. 
B)  When income levels increase, buyers respond by purchasing more. 
C)  When buyers' tastes for the good increase, they purchase more of the good. 
D)  When the price of a good or service rises, buyers respond by purchasing more.

Question 16

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $35 and quantity will be 150 
B)  price will be $100 and quantity will be 250 
C)  price will be $150 and quantity will be 300 
D)  price will be $200 and quantity will be 150 
A)  price will be $35 and quantity will be 150 
B)  price will be $100 and quantity will be 250 
C)  price will be $150 and quantity will be 300 
D)  price will be $200 and quantity will be 150

Question 17

If the demand for a product decreases, what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 18

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Accepted Answer

A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  an 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking 
A)  a 6 percent drop in teenage smoking 
B)  a 12 percent drop in teenage smoking 
C)  an 18 percent drop in teenage smoking 
D)  a 24 percent drop in teenage smoking

Question 19

Figure 4-2  
-Refer to the Figure 4-2. What would happen at a price of $35?

Accepted Answer

A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall. 
A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall.

Question 20

What happens when there is a shortage in a market?

Accepted Answer

A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium. 
A)  There is downward pressure on price. 
B)  There is upward pressure on price. 
C)  The market is operating above the equilibrium level. 
D)  The price must be above equilibrium.

Which of the following reflects the downward-sloping demand curve?

What is the unique point at which the supply and demand curves intersect?

Flour is the main input in the production of bread. All else equal, if the price of flour increases, what would we expect?

Figure 4-1 -Refer to the Figure 4-1. What is the movement from S1 to S called?

Figure 4-3 -Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

If the supply of a product decreases, what would we expect?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Lauren buys five lattes per month when the price is $4.00 each and seven lattes per month when the price is $3.50. What has Lauren demonstrated?

Which chain of events is listed in the correct order?

Currently you purchase six packages of hot dogs a month. You graduate in December and will start your new job on January 2. You have no plans to purchase hot dogs in January. What are hot dogs for you?

If a solar panel manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

What can be said about economists in general?

Figure 4-6 -Refer to the Figure 4-6. What is the shift from D to D1 called?

What is the law of demand?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

If the demand for a product decreases, what would we expect?

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

What happens when there is a shortage in a market?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

Which of the following reflects the downward-sloping demand curve?

What is the unique point at which the supply and demand curves intersect?

Flour is the main input in the production of bread. All else equal, if the price of flour increases, what would we expect?

Figure 4-1 -Refer to the Figure 4-1. What is the movement from S1 to S called?

Figure 4-3 -Refer to the Figure 4-3. If price in this market is currently $8, what would happen?

If the supply of a product decreases, what would we expect?

Market demand is given as Qd = 80 - P. Market supply is given as Qs = 3P. What would result if the market price were $30?

Lauren buys five lattes per month when the price is $4.00 each and seven lattes per month when the price is $3.50. What has Lauren demonstrated?

Which chain of events is listed in the correct order?

Currently you purchase six packages of hot dogs a month. You graduate in December and will start your new job on January 2. You have no plans to purchase hot dogs in January. What are hot dogs for you?

If a solar panel manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

What can be said about economists in general?

Figure 4-6 -Refer to the Figure 4-6. What is the shift from D to D1 called?

What is the law of demand?

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

If the demand for a product decreases, what would we expect?

For teens, what does a 10 percent increase in the price of cigarettes lead to?

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

What happens when there is a shortage in a market?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters