Question 1

By an "increase in demand" we mean:

Accepted Answer

A) that product price has fallen so consumers move down to a new point on the demand curve. 
B) the quantity demanded at each price in a set of prices is greater. 
C) the quantity demanded at each price in a set of prices is smaller. 
D) none of the above. 
A) that product price has fallen so consumers move down to a new point on the demand curve. 
B) the quantity demanded at each price in a set of prices is greater. 
C) the quantity demanded at each price in a set of prices is smaller. 
D) none of the above.

Question 2

If the supply of a product decreases and demand increases, the equilibrium price and quantity will increase.

Accepted Answer

A) True 
 B)False

Question 3

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Accepted Answer

A) higher education is an exception to the law of demand. 
B) the supply of education provided by IU has also increased over the twenty-year period. 
C) school-age population, incomes, and preferences for education have changed over the twenty-year period. 
D) IU's supply curve of education is downward sloping. 
A) higher education is an exception to the law of demand. 
B) the supply of education provided by IU has also increased over the twenty-year period. 
C) school-age population, incomes, and preferences for education have changed over the twenty-year period. 
D) IU's supply curve of education is downward sloping.

Question 4

If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:

Accepted Answer

A) both A and B are inferior goods. 
B) A is a superior good and B is an inferior good. 
C) A is an inferior good and B is a superior good. 
D) A and B are complementary goods. 
A) both A and B are inferior goods. 
B) A is a superior good and B is an inferior good. 
C) A is an inferior good and B is a superior good. 
D) A and B are complementary goods.

Question 5

A price ceiling means that:

Accepted Answer

A) there is currently a surplus of the relevant product. 
B) government is imposing a legal price which is below the equilibrium price. 
C) government wants to stop a deflationary spiral. 
D) government is imposing a legal price which is above the equilibrium price. 
A) there is currently a surplus of the relevant product. 
B) government is imposing a legal price which is below the equilibrium price. 
C) government wants to stop a deflationary spiral. 
D) government is imposing a legal price which is above the equilibrium price.

Question 6

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

Accepted Answer

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

Question 7

Which of the following statements is correct?

Accepted Answer

A) If demand increases and supply decreases, equilibrium price will fall. 
B) If supply increases and demand decreases, equilibrium price will fall. 
C) If demand decreases and supply increases, equilibrium price will rise. 
D) If supply declines and demand remains constant, equilibrium price will fall. 
A) If demand increases and supply decreases, equilibrium price will fall. 
B) If supply increases and demand decreases, equilibrium price will fall. 
C) If demand decreases and supply increases, equilibrium price will rise. 
D) If supply declines and demand remains constant, equilibrium price will fall.

Question 8

A market demand schedule for a product indicates that:

Accepted Answer

A) as the product's price falls, consumers buy less of the good. 
B) there is a direct relationship between price and quantity demanded. 
C) as a product's price rises, consumers buy less of other goods. 
D) there is an inverse relationship between price and quantity demanded. 
A) as the product's price falls, consumers buy less of the good. 
B) there is a direct relationship between price and quantity demanded. 
C) as a product's price rises, consumers buy less of other goods. 
D) there is an inverse relationship between price and quantity demanded.

Question 9

The concept of economic efficiency is primarily concerned with:

Accepted Answer

A) the limited wants-unlimited resources dilemma. 
B) considerations of equity in the distribution of wealth. 
C) obtaining the maximum output from available resources. 
D) the conservation of irreplaceable natural resources. 
A) the limited wants-unlimited resources dilemma. 
B) considerations of equity in the distribution of wealth. 
C) obtaining the maximum output from available resources. 
D) the conservation of irreplaceable natural resources.

Question 10

The further a ceiling price is below the equilibrium price, the smaller will be the shortage of the product.

Accepted Answer

A) True 
 B)False

Question 11

If demand for a good decreases and supply remains constant, equilibrium price:

Accepted Answer

A) and quantity will both increase. 
B) will increase, and equilibrium quantity will decrease. 
C) will decrease, and equilibrium quantity will increase. 
D) and quantity will both decrease. 
A) and quantity will both increase. 
B) will increase, and equilibrium quantity will decrease. 
C) will decrease, and equilibrium quantity will increase. 
D) and quantity will both decrease.

Question 12

At the point where the demand and supply curves for a product intersect:

Accepted Answer

A) the "selling price" and the "buying price" need not be equal. 
B) the market may, or may not, be in equilibrium. 
C) either a shortage or a surplus of the product might exist, depending on the degree of competition. 
D) the quantity which consumers want to purchase and the amount producers choose to sell are the same. 
A) the "selling price" and the "buying price" need not be equal. 
B) the market may, or may not, be in equilibrium. 
C) either a shortage or a surplus of the product might exist, depending on the degree of competition. 
D) the quantity which consumers want to purchase and the amount producers choose to sell are the same.

Question 13

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X.Refer to the above.An increase in the price of a product which is a close substitute for X will:

Accepted Answer

A) decrease D, increase P, and decrease Q. 
B) increase D, increase P, and decrease Q. 
C) increase D, increase P, and increase Q. 
D) increase D, decrease P, and increase Q. 
A) decrease D, increase P, and decrease Q. 
B) increase D, increase P, and decrease Q. 
C) increase D, increase P, and increase Q. 
D) increase D, decrease P, and increase Q.

Question 14

An effective ceiling price will:

Accepted Answer

A) induce new firms to enter the industry. 
B) result in a product surplus. 
C) result in a product shortage. 
D) clear the market. 
A) induce new firms to enter the industry. 
B) result in a product surplus. 
C) result in a product shortage. 
D) clear the market.

Question 15

If a product is in surplus supply, we can conclude that its price:

Accepted Answer

A) is below the equilibrium level. 
B) is above the equilibrium level. 
C) will rise in the near future. 
D) is in equilibrium. 
A) is below the equilibrium level. 
B) is above the equilibrium level. 
C) will rise in the near future. 
D) is in equilibrium.

Question 16

Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point:

Accepted Answer

A) d and the quantity supplied at point a. 
B) g and the quantity supplied at point b. 
C) f and the quantity supplied at point d. 
D) g and the quantity supplied at point a. 
A) d and the quantity supplied at point a. 
B) g and the quantity supplied at point b. 
C) f and the quantity supplied at point d. 
D) g and the quantity supplied at point a.

Question 17

If peanut butter and grape jelly are complementary products, which diagram above illustrates the effect on the peanut butter market as a result of a decrease in the price of grape jelly?

Accepted Answer

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

Question 18

In constructing a stable demand curve for product X:

Accepted Answer

A) consumer preferences are allowed to vary. 
B) the prices of other goods are assumed to be constant. 
C) money incomes are allowed to vary. 
D) the supply curve of product X is assumed to be fixed. 
A) consumer preferences are allowed to vary. 
B) the prices of other goods are assumed to be constant. 
C) money incomes are allowed to vary. 
D) the supply curve of product X is assumed to be fixed.

Question 19

Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the market for AIDS research?

Accepted Answer

A) A only 
B) B only 
C) C only 
D) D only 
A) A only 
B) B only 
C) C only 
D) D only

Question 20

A normal good is defined as one:

Accepted Answer

A) whose amount demanded will increase as its price decreases. 
B) whose amount demanded will increase as its price increases. 
C) whose demand curve will shift leftward as incomes rise. 
D) the consumption of which varies directly with incomes. 
A) whose amount demanded will increase as its price decreases. 
B) whose amount demanded will increase as its price increases. 
C) whose demand curve will shift leftward as incomes rise. 
D) the consumption of which varies directly with incomes.

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

By an "increase in demand" we mean:

If the supply of a product decreases and demand increases, the equilibrium price and quantity will increase.

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:

A price ceiling means that:

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

Which of the following statements is correct?

A market demand schedule for a product indicates that:

The concept of economic efficiency is primarily concerned with:

The further a ceiling price is below the equilibrium price, the smaller will be the shortage of the product.

If demand for a good decreases and supply remains constant, equilibrium price:

At the point where the demand and supply curves for a product intersect:

An effective ceiling price will:

If a product is in surplus supply, we can conclude that its price:

Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point:

If peanut butter and grape jelly are complementary products, which diagram above illustrates the effect on the peanut butter market as a result of a decrease in the price of grape jelly?

In constructing a stable demand curve for product X:

Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the market for AIDS research?

A normal good is defined as one:

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

Filters

Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S₂ because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point: