Question 1

When supply and demand both increase, the

Accepted Answer

A)  quantity definitely decreases. 
B)  price definitely increases. 
C)  quantity definitely increases. 
D)  price definitely decreases. 
A)  quantity definitely decreases. 
B)  price definitely increases. 
C)  quantity definitely increases. 
D)  price definitely decreases.

Question 2

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will and the equilibrium quantity will .

Accepted Answer

A)  fall; decrease 
B)  rise; decrease 
C)  rise; increase 
D)  fall; increase 
A)  fall; decrease 
B)  rise; decrease 
C)  rise; increase 
D)  fall; increase

Question 3

A normal good is one

Accepted Answer

A)  for which demand increases when income increases. 
B)  with a downward sloping demand curve. 
C)  for which demand increases when the price of a substitute rises. 
D)  none of the above 
A)  for which demand increases when income increases. 
B)  with a downward sloping demand curve. 
C)  for which demand increases when the price of a substitute rises. 
D)  none of the above

Question 4

The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

Accepted Answer

A)  is $6. 
B)  is more than $6. 
C)  is less than $6. 
D)  could be less than, equal to, or more than $6. 
A)  is $6. 
B)  is more than $6. 
C)  is less than $6. 
D)  could be less than, equal to, or more than $6.

Question 5

Last year a very severe ice storm hit the north counties of New York state, and the states of Vermont and Maine. Electric poles were down and no one had power for days. It was reported that the price of kerosene heaters skyrocketed and the number purchased increased during this time. Using a supply and demand diagram, show the impact of the ice storm on the market for kerosene heaters.

Accepted Answer

@#IMG-DLM& The demand for kerosene heate

Question 6

The existence of a shortage

Accepted Answer

A)  pushes the price down 
B)  pushes the price up 
C)  means resources are being allocated efficiently 
D)  is impossible in a market economy 
A)  pushes the price down 
B)  pushes the price up 
C)  means resources are being allocated efficiently 
D)  is impossible in a market economy

Question 7

A complement is a good

Accepted Answer

A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  of higher quality than another good. 
D)  used instead of another good. 
A)  of lower quality than another good. 
B)  used in conjunction with another good. 
C)  of higher quality than another good. 
D)  used instead of another good.

Question 8

When supply decreases and demand does not change, the equilibrium quantity and the equilibrium price _.

Accepted Answer

A)  decreases; rises 
B)  increases; falls 
C)  decreases; falls 
D)  increases; rises 
A)  decreases; rises 
B)  increases; falls 
C)  decreases; falls 
D)  increases; rises

Question 9

The "law of demand" states that, other thing remaining the same, the higher

Accepted Answer

A)  consumers' incomes, the greater is the demand. 
B)  the price of a good, the higher is the quantity demanded. 
C)  the price of a good, the lower is the demand for this good. 
D)  the price of a good, the smaller is the quantity demanded. 
A)  consumers' incomes, the greater is the demand. 
B)  the price of a good, the higher is the quantity demanded. 
C)  the price of a good, the lower is the demand for this good. 
D)  the price of a good, the smaller is the quantity demanded.

Question 10

When there is a surplus in the market, the quantity sold is

Accepted Answer

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

Question 11

-The above figures show the market for oranges. Which figure(s) shows the effect of existing orange growers increasing the size of their orange groves?

Accepted Answer

A)  Figures A and C 
B)  Figures B and D 
C)  Figure A 
D)  Figure D 
A)  Figures A and C 
B)  Figures B and D 
C)  Figure A 
D)  Figure D

Question 12

The price of the steel used to produce engines increases. How does this price hike affect the demand for cars?

Accepted Answer

A)  It does not change the demand so that the demand curve does not shift. 
B)  It decreases the demand so that the demand curve shifts leftward. 
C)  It increases the demand so that the demand curve shifts rightward. 
D)  There is not enough information to tell how the change affects the demand for cars. 
A)  It does not change the demand so that the demand curve does not shift. 
B)  It decreases the demand so that the demand curve shifts leftward. 
C)  It increases the demand so that the demand curve shifts rightward. 
D)  There is not enough information to tell how the change affects the demand for cars.

Question 13

If the price of chocolate chip cookies falls, then

Accepted Answer

A)  there is a movement downward along the supply curve of chocolate chip cookies. 
B)  the supply curve of chocolate chip cookies shifts leftward. 
C)  there is a movement upward along the supply curve of chocolate chip cookies. 
D)  the supply curve of chocolate chip cookies shifts rightward. 
A)  there is a movement downward along the supply curve of chocolate chip cookies. 
B)  the supply curve of chocolate chip cookies shifts leftward. 
C)  there is a movement upward along the supply curve of chocolate chip cookies. 
D)  the supply curve of chocolate chip cookies shifts rightward.

Question 14

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

Accepted Answer

A)  an advance in the technology for producing X 
B)  an increase in the price of good Y, a complement in the production of X 
C)  an increase in the price of X 
D)  a fall in the price of a factor production used to produce X 
A)  an advance in the technology for producing X 
B)  an increase in the price of good Y, a complement in the production of X 
C)  an increase in the price of X 
D)  a fall in the price of a factor production used to produce X

Question 15

When the price of a good is

Accepted Answer

A)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
B)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
C)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. 
D)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises. 
A)  above the equilibrium price, quantity supplied exceeds quantity demanded and price falls. 
B)  below the equilibrium price, quantity supplied exceeds quantity demanded and price rises. 
C)  below the equilibrium price, quantity demanded exceeds quantity supplied and price falls. 
D)  above the equilibrium price, quantity demanded exceeds quantity supplied and price rises.

Question 16

-Using the above figure, suppose there is a decrease in the number of suppliers. Then

Accepted Answer

A)  the equilibrium price will decrease below $25 per dozen roses. 
B)  we cannot predict what will happen to equilibrium quantity. 
C)  both the equilibrium price and quantity will increase. 
D)  the equilibrium quantity will decrease below 10 dozen roses. 
A)  the equilibrium price will decrease below $25 per dozen roses. 
B)  we cannot predict what will happen to equilibrium quantity. 
C)  both the equilibrium price and quantity will increase. 
D)  the equilibrium quantity will decrease below 10 dozen roses.

Question 17

-The above figures show the market for gasoline. Which figure shows the effect of a nation- wide strike by municipal bus drivers, which causes more people to drive their cars to work?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 18

Which of the following statements is correct?

Accepted Answer

A)  A change in demand means a shift in the demand curve while change in the quantity demanded means a movement along the demand curve. 
B)  A change in demand and change in quantity demanded means the same thing. 
C)  A change in the quantity demanded means a shift in the demand curve. 
D)  A change in demand means a movement along the demand curve. 
A)  A change in demand means a shift in the demand curve while change in the quantity demanded means a movement along the demand curve. 
B)  A change in demand and change in quantity demanded means the same thing. 
C)  A change in the quantity demanded means a shift in the demand curve. 
D)  A change in demand means a movement along the demand curve.

Question 19

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

Accepted Answer

A)  a shortage of Q4 - Q3. 
B)  a shortage of Q3 - Q1. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0. 
A)  a shortage of Q4 - Q3. 
B)  a shortage of Q3 - Q1. 
C)  a surplus of Q3 - Q1. 
D)  a surplus of Q4 - Q0.

Question 20

The quantity demanded of a good or service is the quantity that a consumer

Accepted Answer

A)  should buy at a particular price during a given time period. 
B)  is willing to buy at a particular price during a given time period. 
C)  actually buys at a particular price during a given time period. 
D)  needs to buy at a particular price during a given time period. 
A)  should buy at a particular price during a given time period. 
B)  is willing to buy at a particular price during a given time period. 
C)  actually buys at a particular price during a given time period. 
D)  needs to buy at a particular price during a given time period.

When supply and demand both increase, the

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will and the equilibrium quantity will .

A normal good is one

The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

The existence of a shortage

A complement is a good

When supply decreases and demand does not change, the equilibrium quantity and the equilibrium price _.

The "law of demand" states that, other thing remaining the same, the higher

When there is a surplus in the market, the quantity sold is

-The above figures show the market for oranges. Which figure(s) shows the effect of existing orange growers increasing the size of their orange groves?

The price of the steel used to produce engines increases. How does this price hike affect the demand for cars?

If the price of chocolate chip cookies falls, then

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

When the price of a good is

-Using the above figure, suppose there is a decrease in the number of suppliers. Then

-The above figures show the market for gasoline. Which figure shows the effect of a nation- wide strike by municipal bus drivers, which causes more people to drive their cars to work?

Which of the following statements is correct?

-In the above figure, if D₂is the demand curve, then a price of P₃would result in

The quantity demanded of a good or service is the quantity that a consumer

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 3: Demand and Supply

When supply and demand both increase, the

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will and the equilibrium quantity will .

A normal good is one

The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

The existence of a shortage

A complement is a good

When supply decreases and demand does not change, the equilibrium quantity and the equilibrium price _.

The "law of demand" states that, other thing remaining the same, the higher

When there is a surplus in the market, the quantity sold is

-The above figures show the market for oranges. Which figure(s) shows the effect of existing orange growers increasing the size of their orange groves?

The price of the steel used to produce engines increases. How does this price hike affect the demand for cars?

If the price of chocolate chip cookies falls, then

Which of the following increases the quantity supplied of good X but does NOT increase the supply of good X?

When the price of a good is

-Using the above figure, suppose there is a decrease in the number of suppliers. Then

-The above figures show the market for gasoline. Which figure shows the effect of a nation- wide strike by municipal bus drivers, which causes more people to drive their cars to work?

Which of the following statements is correct?

-In the above figure, if D2 is the demand curve, then a price of P3 would result in

The quantity demanded of a good or service is the quantity that a consumer

What Is Economics

The Economic Problem

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-In the above figure, if D₂is the demand curve, then a price of P₃would result in