Question 1

The minimum wage imposes a legal floor under the wage of the least skilled worker.

Accepted Answer

A) True 
 B)False  True

Question 2

For some commodities, purchases tend to decrease as the buyer's income increases.Such commodities are known as:

Accepted Answer

A) common goods. 
B) inferior goods. 
C) inverse goods. 
D) normal goods. 
A) common goods. 
B) inferior goods. 
C) inverse goods. 
D) normal goods. B

Question 3

The income and substitution effects account for:

Accepted Answer

A) the upward sloping supply curve. 
B) the downward sloping demand curve. 
C) movements along a given supply curve. 
D) the "other things equal" assumption. 
A) the upward sloping supply curve. 
B) the downward sloping demand curve. 
C) movements along a given supply curve. 
D) the "other things equal" assumption. B

Question 4

The following graph represents a competitive market for a product.where the government now has introduced a price floor of 0C.Which area in the graph represents the producers' revenue after the imposition of the price floor?

Accepted Answer

A) 0CFL 
B) 0CEJ 
C) 0BGK 
D) 0BHL 
A) 0CFL 
B) 0CEJ 
C) 0BGK 
D) 0BHL

Question 5

Uber's pricing model creates what type of waiting lines?

Accepted Answer

A) Long 
B) Short 
C) Normal 
D) Uncertain 
A) Long 
B) Short 
C) Normal 
D) Uncertain

Question 6

A television station reports that the price of orange juice has declined but the quantity sold has increased.This situation would be caused by a(n):

Accepted Answer

A) increase in demand. 
B) increase in supply. 
C) decrease in demand. 
D) decrease in supply. 
A) increase in demand. 
B) increase in supply. 
C) decrease in demand. 
D) decrease in supply.

Question 7

An "increase in demand" means that:

Accepted Answer

A) given supply, the price of the product can be expected to decline. 
B) the demand curve has shifted to the right. 
C) price has declined and consumers therefore want to purchase more of the product. 
D) the demand curve has shifted to the left. 
A) given supply, the price of the product can be expected to decline. 
B) the demand curve has shifted to the right. 
C) price has declined and consumers therefore want to purchase more of the product. 
D) the demand curve has shifted to the left.

Question 8

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A) a decline in income if X is an inferior good. 
B) a decline in the price of Z if X and Z are substitute goods. 
C) a change in consumer tastes which is unfavourable to X. 
D) an increase in the price of Y if X and Y are complementary goods. 
A) a decline in income if X is an inferior good. 
B) a decline in the price of Z if X and Z are substitute goods. 
C) a change in consumer tastes which is unfavourable to X. 
D) an increase in the price of Y if X and Y are complementary goods.

Question 9

All of the following are held to be constant when the supply curve for a product is drawn, except the:

Accepted Answer

A) price of the product. 
B) state of technology. 
C) number of producers. 
D) price of inputs used to make the product. 
A) price of the product. 
B) state of technology. 
C) number of producers. 
D) price of inputs used to make the product.

Question 10

During the 1970s the price of oil rose dramatically, which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

Accepted Answer

A) complementary goods and the higher price for oil increased the demand for coal. 
B) substitute goods and the higher price for oil increased the demand for coal. 
C) complementary goods and the higher price for oil decreased the supply of coal. 
D) substitute goods and the higher price for oil decreased the supply of coal. 
A) complementary goods and the higher price for oil increased the demand for coal. 
B) substitute goods and the higher price for oil increased the demand for coal. 
C) complementary goods and the higher price for oil decreased the supply of coal. 
D) substitute goods and the higher price for oil decreased the supply of coal.

Question 11

The law of supply:

Accepted Answer

A) reflects the amounts which producers will want to offer at each price in a series of prices. 
B) is reflected in an upsloping supply curve. 
C) shows that the relationship between price and quantity supplied is positive. 
D) is reflected in all of the above. 
A) reflects the amounts which producers will want to offer at each price in a series of prices. 
B) is reflected in an upsloping supply curve. 
C) shows that the relationship between price and quantity supplied is positive. 
D) is reflected in all of the above.

Question 12

What combination of changes in supply and demand would most likely increase the equilibrium price?

Accepted Answer

A) when supply increases and demand decreases 
B) when supply decreases and demand increases 
C) when supply decreases and demand decreases 
D) when supply increases and demand increases 
A) when supply increases and demand decreases 
B) when supply decreases and demand increases 
C) when supply decreases and demand decreases 
D) when supply increases and demand increases

Question 13

Assuming an economy has fixed quantities of resources, that economy:

Accepted Answer

A) is more efficient, the larger the amount of goods and services it produces. 
B) is able to satisfy all consumer wants. 
C) will produce the same output whether or not resources are used efficiently. 
D) is able to produce the same amount of output regardless of the production technologies it chooses. 
A) is more efficient, the larger the amount of goods and services it produces. 
B) is able to satisfy all consumer wants. 
C) will produce the same output whether or not resources are used efficiently. 
D) is able to produce the same amount of output regardless of the production technologies it chooses.

Question 14

A headline reads "Soccer is the new popular sport among youth." In a competitive market, this situation would lead to a(n):

Accepted Answer

A) increase in the price of soccer shoes and quantity sold. 
B) decrease in the price of soccer shoes and quantity sold. 
C) increase in the price of soccer shoes and decrease in quantity sold. 
D) decrease in the price of soccer shoes and increase in quantity sold. 
A) increase in the price of soccer shoes and quantity sold. 
B) decrease in the price of soccer shoes and quantity sold. 
C) increase in the price of soccer shoes and decrease in quantity sold. 
D) decrease in the price of soccer shoes and increase in quantity sold.

Question 15

The location of the product supply curve depends on:

Accepted Answer

A) production technology. 
B) the number of buyers in the market. 
C) the tastes of buyers. 
D) the location of the demand curve. 
A) production technology. 
B) the number of buyers in the market. 
C) the tastes of buyers. 
D) the location of the demand curve.

Question 16

If product Y is an inferior good, an increase in consumer incomes will:

Accepted Answer

A) result in a surplus of product Y. 
B) not affect the sales of product Y. 
C) shift the demand curve for product Y to the left. 
D) shift the demand curve for product Y to the right. 
A) result in a surplus of product Y. 
B) not affect the sales of product Y. 
C) shift the demand curve for product Y to the left. 
D) shift the demand curve for product Y to the right.

Question 17

The equation for the supply curve in the above diagram:

Accepted Answer

A) is P = 5 + 1/3Q. 
B) is P = 5 + 2Q. 
C) is P = 5 + 3Q. 
D) is P = 5 - 3Q. 
A) is P = 5 + 1/3Q. 
B) is P = 5 + 2Q. 
C) is P = 5 + 3Q. 
D) is P = 5 - 3Q.

Question 18

Because of their scarcity, the efficient use of resources is:

Accepted Answer

A) an important issue in all economies. 
B) an important issue only in centrally planned economies. 
C) an important issue only in market economies. 
D) not an important issue. 
A) an important issue in all economies. 
B) an important issue only in centrally planned economies. 
C) an important issue only in market economies. 
D) not an important issue.

Question 19

In moving along a stable supply curve which of the following is not held constant?

Accepted Answer

A) the number of firms producing this good 
B) expectations about the future price of the product 
C) techniques used in producing this product 
D) the price of the product for which the supply curve is relevant 
A) the number of firms producing this good 
B) expectations about the future price of the product 
C) techniques used in producing this product 
D) the price of the product for which the supply curve is relevant

Question 20

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Accepted Answer

A) An increase in supply with a decrease in demand will result in an increase in price. 
B) An increase in supply with no change in demand will result in an increase in price. 
C) An increase in supply with no change in demand will result in a decline in sales. 
D) An increase in demand with no change in supply will result in an increase in sales. 
A) An increase in supply with a decrease in demand will result in an increase in price. 
B) An increase in supply with no change in demand will result in an increase in price. 
C) An increase in supply with no change in demand will result in a decline in sales. 
D) An increase in demand with no change in supply will result in an increase in sales.

Exam 3: B: Demand, Supply, and Market Equilibrium

The minimum wage imposes a legal floor under the wage of the least skilled worker.

For some commodities, purchases tend to decrease as the buyer's income increases.Such commodities are known as:

The income and substitution effects account for:

The following graph represents a competitive market for a product.where the government now has introduced a price floor of 0C.Which area in the graph represents the producers' revenue after the imposition of the price floor?

Uber's pricing model creates what type of waiting lines?

A television station reports that the price of orange juice has declined but the quantity sold has increased.This situation would be caused by a(n):

An "increase in demand" means that:

Assume the demand curve for product X shifts to the right.This might be caused by:

All of the following are held to be constant when the supply curve for a product is drawn, except the:

During the 1970s the price of oil rose dramatically, which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

The law of supply:

What combination of changes in supply and demand would most likely increase the equilibrium price?

Assuming an economy has fixed quantities of resources, that economy:

A headline reads "Soccer is the new popular sport among youth." In a competitive market, this situation would lead to a(n):

The location of the product supply curve depends on:

If product Y is an inferior good, an increase in consumer incomes will:

The equation for the supply curve in the above diagram:

Because of their scarcity, the efficient use of resources is:

In moving along a stable supply curve which of the following is not held constant?

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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