Question 1

The "law of supply" states that, other things remaining the same, firms produce

Accepted Answer

A)  less of a good as the required resources become scarcer. 
B)  more of a good the less it costs to produce it. 
C)  more of a good the higher its price. 
D)  less of a good the more it costs to produce it. 
A)  less of a good as the required resources become scarcer. 
B)  more of a good the less it costs to produce it. 
C)  more of a good the higher its price. 
D)  less of a good the more it costs to produce it.

Question 2

-The above figure represents the market for oil. When a hurricane destroys a major refinery the

Accepted Answer

A)  demand curve for oil does not shift, and the supply curve for oil shifts from S2 to S1. 
B)  demand curve for oil shifts from D1 to D2 and the supply curve for oil shifts from S2 to S1. 
C)  demand curve for oil does not shift, and the supply curve for oil shifts from S1 to S2. 
D)  demand curve for oil shifts from D1 to D2 and the supply curve for oil does not shift. 
A)  demand curve for oil does not shift, and the supply curve for oil shifts from S2 to S1. 
B)  demand curve for oil shifts from D1 to D2 and the supply curve for oil shifts from S2 to S1. 
C)  demand curve for oil does not shift, and the supply curve for oil shifts from S1 to S2. 
D)  demand curve for oil shifts from D1 to D2 and the supply curve for oil does not shift.

Question 3

Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will

Accepted Answer

A)  increase, so that equilibrium price will decrease and equilibrium quantity will increase. 
B)  decrease, so that equilibrium price and equilibrium quantity will increase. 
C)  increase, but the new equilibrium price and quantity are indeterminate. 
D)  increase, so that equilibrium price and equilibrium quantity will increase. 
A)  increase, so that equilibrium price will decrease and equilibrium quantity will increase. 
B)  decrease, so that equilibrium price and equilibrium quantity will increase. 
C)  increase, but the new equilibrium price and quantity are indeterminate. 
D)  increase, so that equilibrium price and equilibrium quantity will increase.

Question 4

A price below the equilibrium price results in

Accepted Answer

A)  a surplus. 
B)  a shortage. 
C)  a further price fall. 
D)  excess supply. 
A)  a surplus. 
B)  a shortage. 
C)  a further price fall. 
D)  excess supply.

Question 5

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of an increase in the price of a substitute like hot dogs?

Accepted Answer

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

Question 6

When income increases, the demand curve for product X shifts rightward and the demand curve for product Y shifts leftward. These shifts mean that

Accepted Answer

A)  X and Y both normal goods. 
B)  X and Y are complements. 
C)  X is a normal good and Y is an inferior good. 
D)  X is an inferior good and Y is a normal good. 
A)  X and Y both normal goods. 
B)  X and Y are complements. 
C)  X is a normal good and Y is an inferior good. 
D)  X is an inferior good and Y is a normal good.

Question 7

All of the following statements are true EXCEPT:

Accepted Answer

A)  A relative price is an opportunity cost. 
B)  The relative price of a good can be calculated by multiplying its money price by a price index. 
C)  Relative prices are determined in markets. 
D)  The theory of demand and supply is concerned with adjustments in relative prices. 
A)  A relative price is an opportunity cost. 
B)  The relative price of a good can be calculated by multiplying its money price by a price index. 
C)  Relative prices are determined in markets. 
D)  The theory of demand and supply is concerned with adjustments in relative prices.

Question 8

The opportunity cost of good A in terms of good B is equal to the

Accepted Answer

A)  money price of good A minus the money price of good B. 
B)  ratio of the money price of good A to the money price of good B. 
C)  money price of good B minus the money price of good A. 
D)  ratio of the money price of good B to the money price of good A. 
A)  money price of good A minus the money price of good B. 
B)  ratio of the money price of good A to the money price of good B. 
C)  money price of good B minus the money price of good A. 
D)  ratio of the money price of good B to the money price of good A.

Question 9

-The above table gives the demand and supply schedules for cat food. If the price is $1.00 per pound of cat food, will there be a shortage, a surplus, or is this price the equilibrium price? If there is a shortage, how much is the shortage? If there is a surplus, how much is the surplus? If $3.00 is the equilibrium price, what is the equilibrium quantity?

Accepted Answer

At a price of $1.00 per pound

Question 10

In a market, at the equilibrium price,

Accepted Answer

A)  neither buyers nor sellers can do business at a better price. 
B)  buyers are paying the minimum price they are willing to pay for any amount of output and sellers are charging the maximum price they are willing to charge for any amount of production. 
C)  buyers are willing to pay a higher price, but sellers do not ask for a higher price. 
D)  None of the above is true. 
A)  neither buyers nor sellers can do business at a better price. 
B)  buyers are paying the minimum price they are willing to pay for any amount of output and sellers are charging the maximum price they are willing to charge for any amount of production. 
C)  buyers are willing to pay a higher price, but sellers do not ask for a higher price. 
D)  None of the above is true.

Question 11

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a CD burner increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of CD- Rs?

Accepted Answer

The initial equilibrium price is $1.50 a

Question 12

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

Accepted Answer

A)  is 300 units. 
B)  is more than 300 units. 
C)  is less than 300 units. 
D)  could be less than, equal to, or more than 300 units. 
A)  is 300 units. 
B)  is more than 300 units. 
C)  is less than 300 units. 
D)  could be less than, equal to, or more than 300 units.

Question 13

auto workers negotiate a wage increase; how does this change affect the supply of cars?

Accepted Answer

A)  It decreases the supply. 
B)  It has no effect. 
C)  It increase the supply. 
D)  There is not enough information to tell if the change increases, decreases, or has no effect on the supply of cars 
A)  It decreases the supply. 
B)  It has no effect. 
C)  It increase the supply. 
D)  There is not enough information to tell if the change increases, decreases, or has no effect on the supply of cars

Question 14

Wants, as opposed to demands,

Accepted Answer

A)  are the goods the consumer plans to acquire. 
B)  are the goods the consumer has acquired. 
C)  are the unlimited desires of the consumer 
D)  depend on the price. 
A)  are the goods the consumer plans to acquire. 
B)  are the goods the consumer has acquired. 
C)  are the unlimited desires of the consumer 
D)  depend on the price.

Question 15

The opportunity cost of a hot dog in terms of hamburgers is the

Accepted Answer

A)  ratio of the slope of the demand curve for hot dogs to the slope of the demand curve for hamburgers. 
B)  ratio of the money price of a hot dog to the money price of a hamburger. 
C)  money price of a hot dog minus the money price of a hamburger. 
D)  ratio of the slope of the supply curve for hot dogs to the slope of the supply curve for hamburgers. 
A)  ratio of the slope of the demand curve for hot dogs to the slope of the demand curve for hamburgers. 
B)  ratio of the money price of a hot dog to the money price of a hamburger. 
C)  money price of a hot dog minus the money price of a hamburger. 
D)  ratio of the slope of the supply curve for hot dogs to the slope of the supply curve for hamburgers.

Question 16

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

Accepted Answer

A)  demand for a good decreases and the supply of it increases. 
B)  demand and the supply of a good both increase. 
C)  demand for a good increases and the supply of it decreases. 
D)  demand and the supply of a good both decrease. 
A)  demand for a good decreases and the supply of it increases. 
B)  demand and the supply of a good both increase. 
C)  demand for a good increases and the supply of it decreases. 
D)  demand and the supply of a good both decrease.

Question 17

When does a shortage occur?

Accepted Answer

A shortage occurs when the pri

Question 18

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

Accepted Answer

If the price is too high, the quantity s

The "law of supply" states that, other things remaining the same, firms produce

-The above figure represents the market for oil. When a hurricane destroys a major refinery the

Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will

A price below the equilibrium price results in

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of an increase in the price of a substitute like hot dogs?

When income increases, the demand curve for product X shifts rightward and the demand curve for product Y shifts leftward. These shifts mean that

All of the following statements are true EXCEPT:

The opportunity cost of good A in terms of good B is equal to the

In a market, at the equilibrium price,

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a CD burner increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of CD- Rs?

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

auto workers negotiate a wage increase; how does this change affect the supply of cars?

Wants, as opposed to demands,

The opportunity cost of a hot dog in terms of hamburgers is the

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

When does a shortage occur?

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

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

The "law of supply" states that, other things remaining the same, firms produce

-The above figure represents the market for oil. When a hurricane destroys a major refinery the

Doctors find that one aspirin per day reduces the risk of heart attacks. Demand for aspirin will

A price below the equilibrium price results in

-The above figures show the market for hamburger meat. Which figure(s) shows the effect of an increase in the price of a substitute like hot dogs?

When income increases, the demand curve for product X shifts rightward and the demand curve for product Y shifts leftward. These shifts mean that

All of the following statements are true EXCEPT:

The opportunity cost of good A in terms of good B is equal to the

In a market, at the equilibrium price,

-Suppose the market for CD- Rs has the demand and supply schedules shown in the table above. Suppose a decrease in the price of a CD burner increases the quantity of disks demanded at each price by 20 million. What are the new equilibrium price and equilibrium quantity of CD- Rs?

If the good in the above figure is a normal good and income rises, then the new equilibrium quantity

auto workers negotiate a wage increase; how does this change affect the supply of cars?

Wants, as opposed to demands,

The opportunity cost of a hot dog in terms of hamburgers is the

The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the

When does a shortage occur?

Explain how price can be a regulator, that is, how it can coordinate the plans of buyers and sellers.

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