Question 1

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

Accepted Answer

A)  demand curve that is relatively flat (more horizontal). 
B)  demand curve that is relatively steep (more vertical). 
C)  supply curve that is relatively flat (more horizontal). 
D)  supply curve that is relatively steep (more vertical). 
A)  demand curve that is relatively flat (more horizontal). 
B)  demand curve that is relatively steep (more vertical). 
C)  supply curve that is relatively flat (more horizontal). 
D)  supply curve that is relatively steep (more vertical).

Question 2

If price rises, what happens to the quantity demanded for a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain--economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain--economic theory has no answer to this question.

Question 3

Which of the following is true of equity funds?

Accepted Answer

A)  Managed equity funds generally outperform indexed equity mutual funds. 
B)  Managed equity funds merely hold stocks in the same proportion they are represented in a broad stock market index such as the Standard & Poor's 500. 
C)  Indexed equity funds generally have lower management and operating costs than managed funds. 
D)  Indexed equity funds generally engage in more stock trading than managed funds. 
A)  Managed equity funds generally outperform indexed equity mutual funds. 
B)  Managed equity funds merely hold stocks in the same proportion they are represented in a broad stock market index such as the Standard & Poor's 500. 
C)  Indexed equity funds generally have lower management and operating costs than managed funds. 
D)  Indexed equity funds generally engage in more stock trading than managed funds.

Question 4

Use the figure below to answer the following question(s).
Figure 3-9  
-Given the demand (D) and supply (S) for gasoline in Figure 3-9, if the price of gasoline were $3 per gallon,

Accepted Answer

A)  consumers would wish to purchase more than was being supplied. 
B)  producers would be supplying more than consumers wished to purchase. 
C)  the quantity consumers wished to purchase would equal the quantity that producers wished to supply. 
D)  there would be a tendency for the price of gasoline to rise. 
A)  consumers would wish to purchase more than was being supplied. 
B)  producers would be supplying more than consumers wished to purchase. 
C)  the quantity consumers wished to purchase would equal the quantity that producers wished to supply. 
D)  there would be a tendency for the price of gasoline to rise.

Question 5

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

Accepted Answer

A)  a decrease in the supply of sugarcane. 
B)  an increase in the supply of sugarcane. 
C)  a decrease in the demand for sugarcane. 
D)  an increase in the demand for sugarcane. 
A)  a decrease in the supply of sugarcane. 
B)  an increase in the supply of sugarcane. 
C)  a decrease in the demand for sugarcane. 
D)  an increase in the demand for sugarcane.

Question 6

When economists say the supply of a product has increased, they mean the

Accepted Answer

A)  supply curve has shifted to the right. 
B)  price of the product has risen, and consequently, suppliers are producing more of it. 
C)  supply curve has shifted to the left. 
D)  amount of the product that consumers are willing to purchase at various prices has increased. 
A)  supply curve has shifted to the right. 
B)  price of the product has risen, and consequently, suppliers are producing more of it. 
C)  supply curve has shifted to the left. 
D)  amount of the product that consumers are willing to purchase at various prices has increased.

Question 7

An increase in demand will cause

Accepted Answer

A)  an increase in supply. 
B)  a decrease in supply. 
C)  an increase in quantity supplied. 
D)  a decrease in quantity supplied. 
E)  a decrease in equilibrium price. 
A)  an increase in supply. 
B)  a decrease in supply. 
C)  an increase in quantity supplied. 
D)  a decrease in quantity supplied. 
E)  a decrease in equilibrium price.

Question 8

If the price of coffee decreases, the demand curve for tea (a substitute good) will

Accepted Answer

A)  remain unchanged. 
B)  shift to the right. 
C)  shift to the left. 
D)  do none of the above 
A)  remain unchanged. 
B)  shift to the right. 
C)  shift to the left. 
D)  do none of the above

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

If price rises, what happens to the quantity demanded for a product?

Which of the following is true of equity funds?

Use the figure below to answer the following question(s). Figure 3-9 -Given the demand (D) and supply (S) for gasoline in Figure 3-9, if the price of gasoline were $3 per gallon,

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

When economists say the supply of a product has increased, they mean the

An increase in demand will cause

If the price of coffee decreases, the demand curve for tea (a substitute good) will

The Economic Approach

Some Tools of the Economist

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters

Exam 3: Demand, Supply, and the Market Process

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

If price rises, what happens to the quantity demanded for a product?

Which of the following is true of equity funds?

Use the figure below to answer the following question(s). Figure 3-9 -Given the demand (D) and supply (S) for gasoline in Figure 3-9, if the price of gasoline were $3 per gallon,

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

When economists say the supply of a product has increased, they mean the

An increase in demand will cause

If the price of coffee decreases, the demand curve for tea (a substitute good) will

The Economic Approach

Some Tools of the Economist

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Gaining From International Trade

Filters