Question 1

Refer to the graphs shown. The curve that best demonstrates the law of demand is:

Accepted Answer

A) I. 
B) II. 
C) III. 
D) IV. 
A) I. 
B) II. 
C) III. 
D) IV.

Question 2

If supply and demand intersect at a price of $5.00, then a reduction in price from $6.00 to $5.00 will cause an increase in quantity:

Accepted Answer

A) supplied, a decrease in quantity demanded, and the alleviation of a shortage. 
B) demanded, a decrease in quantity supplied, and the alleviation of a shortage. 
C) supplied, a decrease in quantity demanded, and the alleviation of a surplus. 
D) demanded, a decrease in quantity supplied, and the alleviation of a surplus. 
A) supplied, a decrease in quantity demanded, and the alleviation of a shortage. 
B) demanded, a decrease in quantity supplied, and the alleviation of a shortage. 
C) supplied, a decrease in quantity demanded, and the alleviation of a surplus. 
D) demanded, a decrease in quantity supplied, and the alleviation of a surplus.

Question 3

An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of:

Accepted Answer

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

Question 4

Suppose that the table shown shows the demand and supply schedules for pork bellies. There is a shortage of 15,000 pounds at a price of: $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (\$/lb.) }
\end{array} & \text { Quantity demanded (lbs.) } & \text { Quantity Supplied (lbs.) } \
\hline \$ 0.10 & 30,000 & 5,000 \
\hline \$ 0.20 & 25,000 & 10,000 \
\hline \$ 0.50 & 20,000 & 20,000 \
\hline \$ 0.75 & 15,000 & 30,000 \
\hline \$ 0.95 & 5,000 & 40,000 \
\hline
\end{array}$$

Accepted Answer

A) $0.25. 
B) $0.50. 
C) $0.75. 
D) $0.95. 
A) $0.25. 
B) $0.50. 
C) $0.75. 
D) $0.95.

Question 5

The increase in the availability of organic foods likely:

Accepted Answer

A) lowers equilibrium quantity and raises equilibrium price for organic foods. 
B) raises equilibrium quantity and price for organic foods. 
C) raises equilibrium quantity and lowers equilibrium price for organic foods. 
D) lowers equilibrium quantity and price for organic foods. 
A) lowers equilibrium quantity and raises equilibrium price for organic foods. 
B) raises equilibrium quantity and price for organic foods. 
C) raises equilibrium quantity and lowers equilibrium price for organic foods. 
D) lowers equilibrium quantity and price for organic foods.

Question 6

Refer to the graph showing the demand for books. If the price is changed from $12.00 to $4.00, the quantity demanded increases by:

Accepted Answer

A) 2 books. 
B) 4 books. 
C) 6 books. 
D) 8 books. 
A) 2 books. 
B) 4 books. 
C) 6 books. 
D) 8 books.

Question 7

Suppose that the following table shows the supply and demand schedules for Arabian light crude oil on the free market: $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (Dalars/barrel) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded (mil. } \
\text { barrels per day) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied (mil. } \
\text { barrels per day) }
\end{array} \
\hline 26 & 14 & 10 \
\hline 27 & 13 & 11 \
\hline 28 & 12 & 12 \
\hline 29 & 11 & 13 \
\hline 30 & 10 & 14 \
\hline
\end{array}$$ Given the information in the table, the only price at which there is neither shortage nor surplus is:

Accepted Answer

A) $26 per barrel. 
B) $27 per barrel. 
C) $28 per barrel. 
D) $29 per barrel. 
A) $26 per barrel. 
B) $27 per barrel. 
C) $28 per barrel. 
D) $29 per barrel.

Question 8

Refer to the graph showing the supply of books. A shift from S0 to S1 would most likely occur for what reason?

Accepted Answer

A) A decrease in the number of suppliers in the market 
B) An increase in taxes levied on producers of books 
C) An increase in the price of books 
D) A decrease in the cost of producing books 
A) A decrease in the number of suppliers in the market 
B) An increase in taxes levied on producers of books 
C) An increase in the price of books 
D) A decrease in the cost of producing books

Question 9

Refer to the table that presents Mike and Janet's demand for apples by the bushel. If they are the only two in the market, a market demand curve derived from this data would show quantity demanded is: $\begin{array} { | c | c | c | } 
\hline \text { Price per pedk } & \text { Mike Quantity in pecks } &\text { Janet Quantity in pecks }\
\hline \$ 1 & 22 & 6 \
\hline \$ 2 & 18 & 3 \
\hline \$ 3 & 14 & 0 \
\hline \$ 4 & 10 & 0 \
\hline \$ 5 & 6 & 0 \
\hline

\end{array}$

Accepted Answer

A) 22 at price = $1 and 18 at price = $2. 
B) 21 at price = $1 and 17 at price = $2. 
C) 28 at price = $1 and 21 at price = $2. 
D) 21 at price = $1 and 28 at price = $2. 
A) 22 at price = $1 and 18 at price = $2. 
B) 21 at price = $1 and 17 at price = $2. 
C) 28 at price = $1 and 21 at price = $2. 
D) 21 at price = $1 and 28 at price = $2.

Question 10

Suppose that the table shown shows the demand and supply schedules for pork bellies. Which of the following statements is true? $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (\$/lb.) }
\end{array} & \text { Quantity demanded (lbs.) } & \text { Quantity Supplied (lbs.) } \
\hline \$ 0.10 & 30,000 & 5,000 \
\hline \$ 0.20 & 25,000 & 10,000 \
\hline \$ 0.50 & 20,000 & 20,000 \
\hline \$ 0.75 & 15,000 & 30,000 \
\hline \$ 0.95 & 5,000 & 40,000 \
\hline
\end{array}$$

Accepted Answer

A) There would be a surplus of pork bellies if the price were $0.50 per pound. 
B) There would be a shortage of pork bellies if the price were $0.50 per pound. 
C) There would be a shortage of pork bellies if the price were $0.25 per pound. 
D) There would be a surplus of pork bellies if the price were $0.25 per pound. 
A) There would be a surplus of pork bellies if the price were $0.50 per pound. 
B) There would be a shortage of pork bellies if the price were $0.50 per pound. 
C) There would be a shortage of pork bellies if the price were $0.25 per pound. 
D) There would be a surplus of pork bellies if the price were $0.25 per pound.

Question 11

Given the following supply table, an increase in the price of pants from $30 to $50 per pair will increase the: $$\begin{array} { | c | c | } 
\hline \text { Price (dallars per pair) } & \begin{array} { c } 
\text { A Supply Schedulefor Pants Quantity } \
\text { Supplied (Pairs per week) }
\end{array} \
\hline \$ 20 & 400 \
\hline \$ 30 & 500 \
\hline \$ 40 & 600 \
\hline \$ 50 & 700 \
\hline
\end{array}$$

Accepted Answer

A) supply of pants by 200 pairs. 
B) quantity of pants supplied by 200 pairs. 
C) supply of pants by 700 pairs. 
D) quantity supplied of pants by 500 pairs. 
A) supply of pants by 200 pairs. 
B) quantity of pants supplied by 200 pairs. 
C) supply of pants by 700 pairs. 
D) quantity supplied of pants by 500 pairs.

Question 12

Given the graph, the quantity that would be associated with the price of $1 in a demand table would be:

Accepted Answer

A) 6. 
B) 5. 
C) 4. 
D) 3. 
A) 6. 
B) 5. 
C) 4. 
D) 3.

Question 13

Refer to the graphs shown. The arrow that best shows an increase in supply is:

Accepted Answer

A) W. 
B) X. 
C) Y. 
D) Z. 
A) W. 
B) X. 
C) Y. 
D) Z.

Question 14

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

Accepted Answer

A) increase the demand for diesel cars. 
B) decrease the demand for gasoline. 
C) decrease the demand for diesel cars. 
D) increase the demand for gasoline. 
A) increase the demand for diesel cars. 
B) decrease the demand for gasoline. 
C) decrease the demand for diesel cars. 
D) increase the demand for gasoline.

Question 15

Refer to the graphs shown. If quantity supplied is a fixed amount that does not vary with price, then the supply curve looks like:

Accepted Answer

A) I. 
B) II. 
C) III. 
D) IV. 
A) I. 
B) II. 
C) III. 
D) IV.

Question 16

When quantity supplied is greater than quantity demanded, prices tend to:

Accepted Answer

A) fall. 
B) rise. 
C) stay the same. 
D) remain constant until the next season. 
A) fall. 
B) rise. 
C) stay the same. 
D) remain constant until the next season.

Question 17

Suppose a market has an excess demand and price starts to rise. What will the rise in price cause?

Accepted Answer

A) A fall in both quantity supplied and quantity demanded 
B) A rise in both quantity supplied and quantity demanded 
C) A rise in quantity supplied and a fall in quantity demanded 
D) A fall in quantity supplied and a rise in quantity demanded 
A) A fall in both quantity supplied and quantity demanded 
B) A rise in both quantity supplied and quantity demanded 
C) A rise in quantity supplied and a fall in quantity demanded 
D) A fall in quantity supplied and a rise in quantity demanded

Question 18

The effect of higher gasoline prices is most likely to:

Accepted Answer

A) increase the demand for hybrid cars and increase the demand for gas guzzlers. 
B) decrease the demand for hybrid cars and decrease the demand for gas guzzlers. 
C) increase the demand for hybrid cars and decrease the demand for gas guzzlers. 
D) decrease the demand for hybrid cars and increase the demand for gas guzzlers. 
A) increase the demand for hybrid cars and increase the demand for gas guzzlers. 
B) decrease the demand for hybrid cars and decrease the demand for gas guzzlers. 
C) increase the demand for hybrid cars and decrease the demand for gas guzzlers. 
D) decrease the demand for hybrid cars and increase the demand for gas guzzlers.

Question 19

Refer to the graph showing the supply of books. A shift from S1 to S0 would most likely occur for what reason?

Accepted Answer

A) An increase in the number of suppliers in the market 
B) A decrease in taxes levied on producers of books 
C) An increase in the price of books 
D) An increase in the cost of producing books 
A) An increase in the number of suppliers in the market 
B) A decrease in taxes levied on producers of books 
C) An increase in the price of books 
D) An increase in the cost of producing books

Question 20

An upward-sloping supply curve implies that:

Accepted Answer

A) quantity supplied increases when price decreases. 
B) quantity supplied increases when price increases. 
C) the law of supply is invalid. 
D) there is no relationship between price and quantity supplied. 
A) quantity supplied increases when price decreases. 
B) quantity supplied increases when price increases. 
C) the law of supply is invalid. 
D) there is no relationship between price and quantity supplied.

Exam 4: Supply and Demand

Refer to the graphs shown. The curve that best demonstrates the law of demand is:

If supply and demand intersect at a price of $5.00, then a reduction in price from $6.00 to $5.00 will cause an increase in quantity:

An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of:

The increase in the availability of organic foods likely:

Refer to the graph showing the demand for books. If the price is changed from $12.00 to $4.00, the quantity demanded increases by:

Refer to the graph showing the supply of books. A shift from S0 to S1 would most likely occur for what reason?

Suppose that the table shown shows the demand and supply schedules for pork bellies. Which of the following statements is true? Price ( \/ lb.) Quantity demanded (lbs.) Quantity Supplied (lbs.) \ 0.10 30,000 5,000 \ 0.20 25,000 10,000 \ 0.50 20,000 20,000 \ 0.75 15,000 30,000 \ 0.95 5,000 40,000

Given the following supply table, an increase in the price of pants from $30 to $50 per pair will increase the: Price (dallars per pair) A Supply Schedulefor Pants Quantity Supplied (Pairs per week) \ 20 400 \ 30 500 \ 40 600 \ 50 700

Given the graph, the quantity that would be associated with the price of $1 in a demand table would be:

Refer to the graphs shown. The arrow that best shows an increase in supply is:

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

Refer to the graphs shown. If quantity supplied is a fixed amount that does not vary with price, then the supply curve looks like:

When quantity supplied is greater than quantity demanded, prices tend to:

Suppose a market has an excess demand and price starts to rise. What will the rise in price cause?

The effect of higher gasoline prices is most likely to:

Refer to the graph showing the supply of books. A shift from S1 to S0 would most likely occur for what reason?

An upward-sloping supply curve implies that:

Economics and Economic Reasoning

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