Question 1

Demand for a good will always rise when:

Accepted Answer

A)  the price of a complementary good falls. 
B)  the price of a substitute good falls. 
C)  tastes change. 
D)  incomes decrease. 
E)  the price of the good falls. 
A)  the price of a complementary good falls. 
B)  the price of a substitute good falls. 
C)  tastes change. 
D)  incomes decrease. 
E)  the price of the good falls.

Question 2

A fall in the price of a good causes an increase in its:

Accepted Answer

A)  quantity demanded. 
B)  demand. 
C)  quantity supplied. 
D)  supply. 
A)  quantity demanded. 
B)  demand. 
C)  quantity supplied. 
D)  supply.

Question 3

​ Exhibit 3-16 Supply and demand curves for chairs
​   ​
​
-In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is: ​

Accepted Answer

A)  ​an equilibrium price. 
B)  not an equilibrium price, since there is an excess supply at a price of $5. 
C)  ​not an equilibrium price, since there is an excess demand at a price of $5. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded. 
A)  ​an equilibrium price. 
B)  not an equilibrium price, since there is an excess supply at a price of $5. 
C)  ​not an equilibrium price, since there is an excess demand at a price of $5. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded.

Question 4

Consumer surplus:

Accepted Answer

A)  is minimized in market equilibrium. 
B)  measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. 
C)  measures the value between the price consumers are willing to pay for a product and the price they actually pay. 
D)  measures the price at which sellers extract excess profits from consumers. 
A)  is minimized in market equilibrium. 
B)  measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. 
C)  measures the value between the price consumers are willing to pay for a product and the price they actually pay. 
D)  measures the price at which sellers extract excess profits from consumers.

Question 5

​Exhibit 3-11 Demand and supply curves  
-​In Exhibit 3-11, in Panel A the movement from A to C describes a (an):

Accepted Answer

A)  ​ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  ​increase in both price and quantity. 
D)  ​decrease in both price and quantity. 
E)  ​change in supply that dominates a change in demand. 
A)  ​ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  ​increase in both price and quantity. 
D)  ​decrease in both price and quantity. 
E)  ​change in supply that dominates a change in demand.

Question 6

A demand curve for The Steel Porcupines' concert tickets would show the:

Accepted Answer

A)  number of tickets the box office is willing to sell at various prices. 
B)  number of people who need tickets. 
C)  quality of people who want to buy these concert tickets. 
D)  number of tickets that will be purchased at various prices. 
A)  number of tickets the box office is willing to sell at various prices. 
B)  number of people who need tickets. 
C)  quality of people who want to buy these concert tickets. 
D)  number of tickets that will be purchased at various prices.

Question 7

Assume that the equilibrium price for a good is $5. If the market price is $10, a:

Accepted Answer

A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5. 
A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5.

Question 8

Assume that eggnog and cookies are complements. If the price of eggnog goes up, what happens to the demand for cookies?

Accepted Answer

A)  Demand for cookies increases. 
B)  Demand for cookies decreases. 
C)  Demand for cookies remains unchanged. 
D)  The shift in demand will depend on the original price of cookies. 
A)  Demand for cookies increases. 
B)  Demand for cookies decreases. 
C)  Demand for cookies remains unchanged. 
D)  The shift in demand will depend on the original price of cookies.

Question 9

Assuming that professional and college football are substitutes, an increase in the ticket price for professional football, other things being equal, will:

Accepted Answer

A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games. 
A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games.

Question 10

The supply curve reflects the:

Accepted Answer

A)  inverse relationship between price and quantity offered. 
B)  positive relationship between demand and supply. 
C)  negative relationship between price and quantity bought. 
D)  positive relationship between price and quantity bought. 
E)  positive relationship between price and quantity offered. 
A)  inverse relationship between price and quantity offered. 
B)  positive relationship between demand and supply. 
C)  negative relationship between price and quantity bought. 
D)  positive relationship between price and quantity bought. 
E)  positive relationship between price and quantity offered.

Question 11

Which of the following will increase the demand for large automobiles?

Accepted Answer

A)  A fall in the price of small automobiles. 
B)  A rise in insurance rates for large automobiles. 
C)  A fall in the price of large automobiles. 
D)  A rise in buyers' incomes (assuming large automobiles to be a normal good). 
A)  A fall in the price of small automobiles. 
B)  A rise in insurance rates for large automobiles. 
C)  A fall in the price of large automobiles. 
D)  A rise in buyers' incomes (assuming large automobiles to be a normal good).

Question 12

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 area ____ appears.

Accepted Answer

A)  ABEFD 
B)  ABEC 
C)  EGF 
D)  BEF 
A)  ABEFD 
B)  ABEC 
C)  EGF 
D)  BEF

Question 13

Three of the four events described below might reasonably be expected to shift the demand curve for beef to a new position. One would not shift that demand curve. The single exception is a(n):

Accepted Answer

A)  change in people's tastes for beef. 
B)  increase in the money incomes of beef consumers. 
C)  fall in the price of beef. 
D)  change in the price of a product competitive with beef (e.g. pork). 
A)  change in people's tastes for beef. 
B)  increase in the money incomes of beef consumers. 
C)  fall in the price of beef. 
D)  change in the price of a product competitive with beef (e.g. pork).

Question 14

​Exhibit 3-14 Supply and demand curves  
-​ In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require:

Accepted Answer

A)  ​no change, because an equilibrium already exists. 
B)  ​the price to fall below $15 and both the quantity supplied and the quantity demanded to fall. 
C)  ​the price to remain the same, but the supply curve to shift to the left. 
D)  ​the price to fall below $15, the quantity supplied to fall, and the quantity demanded to rise. 
A)  ​no change, because an equilibrium already exists. 
B)  ​the price to fall below $15 and both the quantity supplied and the quantity demanded to fall. 
C)  ​the price to remain the same, but the supply curve to shift to the left. 
D)  ​the price to fall below $15, the quantity supplied to fall, and the quantity demanded to rise.

Question 15

If people expect the price of packaged coffee to rise next week, coffee demand will:

Accepted Answer

A)  decrease now. 
B)  increase now. 
C)  stay the same now and increase next week. 
D)  stay the same now and decrease next week. 
E)  stay the same now and next week. 
A)  decrease now. 
B)  increase now. 
C)  stay the same now and increase next week. 
D)  stay the same now and decrease next week. 
E)  stay the same now and next week.

Question 16

Coffee and tea are:

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  inferior goods. 
D)  unrelated goods. 
E)  nonmarket goods. 
A)  complements. 
B)  substitutes. 
C)  inferior goods. 
D)  unrelated goods. 
E)  nonmarket goods.

Question 17

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Accepted Answer

A)  Yes, Martha is correct. Sam's demand has decreased. 
B)  No, Martha is incorrect. Sam's demand has increased. 
C)  No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed. 
D)  No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased. 
E)  No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased. 
A)  Yes, Martha is correct. Sam's demand has decreased. 
B)  No, Martha is incorrect. Sam's demand has increased. 
C)  No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed. 
D)  No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased. 
E)  No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased.

Question 18

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home. When average prices rise to $175,000, she decides that she will put her home on the market. This is an example of:

Accepted Answer

A)  market demand. 
B)  market-day supply. 
C)  an excess supply of homes. 
D)  a positively-sloped supply curve. 
E)  a negatively-sloped supply curve. 
A)  market demand. 
B)  market-day supply. 
C)  an excess supply of homes. 
D)  a positively-sloped supply curve. 
E)  a negatively-sloped supply curve.

Question 19

Exhibit 3-3 Demand curves  
-Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  Graph D.

Question 20

A movement along a demand curve is called a change in:

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population. 
A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population.

Demand for a good will always rise when:

A fall in the price of a good causes an increase in its:

Exhibit 3-16 Supply and demand curves for chairs -In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is:

Consumer surplus:

Exhibit 3-11 Demand and supply curves -In Exhibit 3-11, in Panel A the movement from A to C describes a (an):

A demand curve for The Steel Porcupines' concert tickets would show the:

Assume that the equilibrium price for a good is $5. If the market price is $10, a:

Assume that eggnog and cookies are complements. If the price of eggnog goes up, what happens to the demand for cookies?

Assuming that professional and college football are substitutes, an increase in the ticket price for professional football, other things being equal, will:

The supply curve reflects the:

Which of the following will increase the demand for large automobiles?

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 area ____ appears.

Three of the four events described below might reasonably be expected to shift the demand curve for beef to a new position. One would not shift that demand curve. The single exception is a(n):

Exhibit 3-14 Supply and demand curves - In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require:

If people expect the price of packaged coffee to rise next week, coffee demand will:

Coffee and tea are:

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home. When average prices rise to $175,000, she decides that she will put her home on the market. This is an example of:

Exhibit 3-3 Demand curves -Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

A movement along a demand curve is called a change in:

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

Demand for a good will always rise when:

A fall in the price of a good causes an increase in its:

​ Exhibit 3-16 Supply and demand curves for chairs ​ ​ ​ -In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is: ​

Consumer surplus:

​Exhibit 3-11 Demand and supply curves -​In Exhibit 3-11, in Panel A the movement from A to C describes a (an):

A demand curve for The Steel Porcupines' concert tickets would show the:

Assume that the equilibrium price for a good is $5. If the market price is $10, a:

Assume that eggnog and cookies are complements. If the price of eggnog goes up, what happens to the demand for cookies?

Assuming that professional and college football are substitutes, an increase in the ticket price for professional football, other things being equal, will:

The supply curve reflects the:

Which of the following will increase the demand for large automobiles?

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 area ____ appears.

Three of the four events described below might reasonably be expected to shift the demand curve for beef to a new position. One would not shift that demand curve. The single exception is a(n):

​Exhibit 3-14 Supply and demand curves -​ In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require:

If people expect the price of packaged coffee to rise next week, coffee demand will:

Coffee and tea are:

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home. When average prices rise to $175,000, she decides that she will put her home on the market. This is an example of:

Exhibit 3-3 Demand curves -Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

A movement along a demand curve is called a change in:

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

Exhibit 3-16 Supply and demand curves for chairs -In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is:

Exhibit 3-11 Demand and supply curves -In Exhibit 3-11, in Panel A the movement from A to C describes a (an):

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 area ____ appears.

Exhibit 3-14 Supply and demand curves - In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require: