Question 1

The law of demand is graphically demonstrated by a(n):

Accepted Answer

A)  perfectly vertical demand curve. 
B)  perfectly horizontal demand curve. 
C)  downward-sloping demand curve. 
D)  upward-sloping demand curve. 
E)  curved demand line. 
A)  perfectly vertical demand curve. 
B)  perfectly horizontal demand curve. 
C)  downward-sloping demand curve. 
D)  upward-sloping demand curve. 
E)  curved demand line.

Question 2

​ When the price of a good in a market is above equilibrium:

Accepted Answer

A)  ​the quantity supplied exceeds the quantity demanded. 
B)  ​ a surplus is observed. 
C)  ​ the price will fall in the near future. 
D)  ​ all of the above. 
A)  ​the quantity supplied exceeds the quantity demanded. 
B)  ​ a surplus is observed. 
C)  ​ the price will fall in the near future. 
D)  ​ all of the above.

Question 3

Which of the following will reduce the supply of motorcycles?

Accepted Answer

A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles. 
A)  An increase in the population age 16 to 35, the primary consumers of motorcycles. 
B)  An increase in taxes imposed on motorcycle producers. 
C)  A technological improvement reducing the production costs of motorcycles. 
D)  A government study that reveals motorcycle riders, on average, live 10 years longer than those who don't ride motorcycles.

Question 4

The points along the demand curve represent the maximum willingness of consumers to purchase a product.

Accepted Answer

A) True 
 B)False

Question 5

An improvement in a firm's technology that reduces its production costs will result in a(n):

Accepted Answer

A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  increase in quantity supplied at any given price. 
D)  all of these are true. 
A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  increase in quantity supplied at any given price. 
D)  all of these are true.

Question 6

Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?

Accepted Answer

A)  Luxury goods. 
B)  Substitute goods. 
C)  Normal goods. 
D)  Inferior goods. 
A)  Luxury goods. 
B)  Substitute goods. 
C)  Normal goods. 
D)  Inferior goods.

Question 7

Which of the following would not cause market demand for a normal good to decline?

Accepted Answer

A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death. 
A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death.

Question 8

Consumer surplus is the:

Accepted Answer

A)  amount by which the quantity supplied of a good exceeds the quantity demanded of a good. 
B)  measure of consumes' willingness to buy a good plus the price of the good. 
C)  measure of how much consumers value a good. 
D)  amount consumers are willing to pay for a good minus the amount the consumers actually pays for it. 
A)  amount by which the quantity supplied of a good exceeds the quantity demanded of a good. 
B)  measure of consumes' willingness to buy a good plus the price of the good. 
C)  measure of how much consumers value a good. 
D)  amount consumers are willing to pay for a good minus the amount the consumers actually pays for it.

Question 9

Which of the following would lead to an increase in the demand for computer software?

Accepted Answer

A)  A decrease in the price of computer software. 
B)  A decrease in the price of personal computers. 
C)  An decrease in the cost of producing computer software. 
D)  An decrease in personal income. 
A)  A decrease in the price of computer software. 
B)  A decrease in the price of personal computers. 
C)  An decrease in the cost of producing computer software. 
D)  An decrease in personal income.

Question 10

A rightward shift of a demand curve is called a(n):

Accepted Answer

A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
E)  increase in supply. 
A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
E)  increase in supply.

Question 11

If tofu is a normal good, an increase in income will:

Accepted Answer

A)  cause tofu to sell at a lower price. 
B)  increase the production of tofu. 
C)  shift the demand curve for tofu to the left. 
D)  shift the demand curve for tofu to the right. 
E)  rotate the supply curve in a clockwise manner. 
A)  cause tofu to sell at a lower price. 
B)  increase the production of tofu. 
C)  shift the demand curve for tofu to the left. 
D)  shift the demand curve for tofu to the right. 
E)  rotate the supply curve in a clockwise manner.

Question 12

​ Which of the following best explains the determination of the equilibrium price of a product?

Accepted Answer

A)  ​Production costs. 
B)  ​The supply of a good. 
C)  ​The interaction of supply and demand. 
D)  ​The decisions of government. 
A)  ​Production costs. 
B)  ​The supply of a good. 
C)  ​The interaction of supply and demand. 
D)  ​The decisions of government.

Question 13

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Accepted Answer

A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes. 
A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes.

Question 14

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

Accepted Answer

A)  total surplus increases. 
B)  deadweight loss decreases. 
C)  overproduction increases. 
D)  underproduction decreases. 
A)  total surplus increases. 
B)  deadweight loss decreases. 
C)  overproduction increases. 
D)  underproduction decreases.

Question 15

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

Accepted Answer

A)  decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  increase in the supply of automobiles, which is a shift to the left of the supply curve. 
A)  decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  increase in the supply of automobiles, which is a shift to the left of the supply curve.

Question 16

A normal good is a good for which demand increases as:

Accepted Answer

A)  the income of consumers increases. 
B)  its own price increases. 
C)  the price of close substitutes decreases. 
D)  the total number of consumers increases. 
E)  a reflection of changing consumer tastes. 
A)  the income of consumers increases. 
B)  its own price increases. 
C)  the price of close substitutes decreases. 
D)  the total number of consumers increases. 
E)  a reflection of changing consumer tastes.

Question 17

The law of demand indicates that as the price of a good increases:

Accepted Answer

A)  suppliers sell less of it. 
B)  suppliers sell more of it. 
C)  buyers buy less of it. 
D)  buyers buy more of it. 
A)  suppliers sell less of it. 
B)  suppliers sell more of it. 
C)  buyers buy less of it. 
D)  buyers buy more of it.

Question 18

Which of the following would most likely increase the demand for televisions?

Accepted Answer

A)  A decrease in the price of televisions. 
B)  A decline in consumer income. 
C)  A decrease in the price of home stereo systems, a substitute for televisions. 
D)  A decrease in the price of DVD players, a product that is complementary with televisions. 
A)  A decrease in the price of televisions. 
B)  A decline in consumer income. 
C)  A decrease in the price of home stereo systems, a substitute for televisions. 
D)  A decrease in the price of DVD players, a product that is complementary with televisions.

Question 19

An improvement in a firm's technology that improves productivity results in a(n):

Accepted Answer

A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve. 
A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve.

Question 20

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q1, the result is a deadweight loss represented by area:

Accepted Answer

A)  BEG. 
B)  CBEFD. 
C)  EGH. 
D)  BEF. 
A)  BEG. 
B)  CBEFD. 
C)  EGH. 
D)  BEF.

The law of demand is graphically demonstrated by a(n):

When the price of a good in a market is above equilibrium:

Which of the following will reduce the supply of motorcycles?

The points along the demand curve represent the maximum willingness of consumers to purchase a product.

An improvement in a firm's technology that reduces its production costs will result in a(n):

Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?

Which of the following would not cause market demand for a normal good to decline?

Consumer surplus is the:

Which of the following would lead to an increase in the demand for computer software?

A rightward shift of a demand curve is called a(n):

If tofu is a normal good, an increase in income will:

Which of the following best explains the determination of the equilibrium price of a product?

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the market price falls from P₂ to P₃, then:

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

A normal good is a good for which demand increases as:

The law of demand indicates that as the price of a good increases:

Which of the following would most likely increase the demand for televisions?

An improvement in a firm's technology that improves productivity results in a(n):

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q₁, the result is a deadweight loss represented by area:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 3: Market Demand and Supply

The law of demand is graphically demonstrated by a(n):

​ When the price of a good in a market is above equilibrium:

Which of the following will reduce the supply of motorcycles?

The points along the demand curve represent the maximum willingness of consumers to purchase a product.

An improvement in a firm's technology that reduces its production costs will result in a(n):

Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?

Which of the following would not cause market demand for a normal good to decline?

Consumer surplus is the:

Which of the following would lead to an increase in the demand for computer software?

A rightward shift of a demand curve is called a(n):

If tofu is a normal good, an increase in income will:

​ Which of the following best explains the determination of the equilibrium price of a product?

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the market price falls from P2 to P3, then:

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

A normal good is a good for which demand increases as:

The law of demand indicates that as the price of a good increases:

Which of the following would most likely increase the demand for televisions?

An improvement in a firm's technology that improves productivity results in a(n):

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q1, the result is a deadweight loss represented by area:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

When the price of a good in a market is above equilibrium:

Which of the following best explains the determination of the equilibrium price of a product?

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the market price falls from P₂ to P₃, then:

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the quantity supplied of good X per year is Q₁, the result is a deadweight loss represented by area: