Question 1

A shift occurs in the supply curve for salt when:

Accepted Answer

A)  the price of salt increases. 
B)  improvements are made in the production process. 
C)  salt is found to be associated with high blood pressure. 
D)  consumers expect the price of salt to increase in the future. 
A)  the price of salt increases. 
B)  improvements are made in the production process. 
C)  salt is found to be associated with high blood pressure. 
D)  consumers expect the price of salt to increase in the future.

Question 2

​Surpluses cause prices to fall while shortages cause prices to rise.

Accepted Answer

A) True 
 B)False

Question 3

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):

Accepted Answer

A)  decrease in supply. 
B)  increase in supply. 
C)  decrease in quantity supplied. 
D)  increase in quantity supplied. 
A)  decrease in supply. 
B)  increase in supply. 
C)  decrease in quantity supplied. 
D)  increase in quantity supplied.

Question 4

Two goods are considered substitutes only if a(n):

Accepted Answer

A)  decrease in the demand for one leads to a decrease in the supply of the other. 
B)  increase in the demand for one leads to a decrease in the supply of the other. 
C)  increase in the price of one leads to an increase in the demand for the other. 
D)  decrease in the price of one leads to an increase in the demand for the other. 
E)  decrease in the supply of one leads producers to switch to production of the other. 
A)  decrease in the demand for one leads to a decrease in the supply of the other. 
B)  increase in the demand for one leads to a decrease in the supply of the other. 
C)  increase in the price of one leads to an increase in the demand for the other. 
D)  decrease in the price of one leads to an increase in the demand for the other. 
E)  decrease in the supply of one leads producers to switch to production of the other.

Question 5

To finance medical care, the federal government raises the tax per pack paid by sellers of cigarettes. Other things being equal, the price of cigarettes rises because of a(n):

Accepted Answer

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

Question 6

The law of demand is illustrated by a demand curve that is:

Accepted Answer

A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping. 
A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping.

Question 7

Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:

Accepted Answer

A)  increase the demand for dry cleaning. 
B)  decrease the demand for dry cleaning. 
C)  increase the quantity demanded of dry cleaning. 
D)  decrease the quantity of dry cleaning demanded. 
A)  increase the demand for dry cleaning. 
B)  decrease the demand for dry cleaning. 
C)  increase the quantity demanded of dry cleaning. 
D)  decrease the quantity of dry cleaning demanded.

Question 8

​Exhibit 3-8 Demand and supply data for Video games
​ $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { of Video games }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { of Video games }
\end{array} \
\hline \$ 75 & 400 & 900 \
70 & 450 & 850 \
65 & 500 & 800 \
60 & 550 & 750 \
55 & 600 & 700 \
50 & 650 & 650 \
45 & 700 & 600 \
40 & 750 & 550 \
\hline
\end{array}$$ ​
-?In Exhibit 3-8, the equilibrium market price in this video game market would be:

Accepted Answer

A)  ?$65 
B)  ?$60 
C)  ?$55 
D)  $50 
E)  ?$45 
A)  ?$65 
B)  ?$60 
C)  ?$55 
D)  $50 
E)  ?$45

Question 9

Coke and Pepsi are an example of:

Accepted Answer

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

Question 10

​Exhibit 3-8 Demand and supply data for Video games
​ $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { of Video games }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { of Video games }
\end{array} \
\hline \$ 75 & 400 & 900 \
70 & 450 & 850 \
65 & 500 & 800 \
60 & 550 & 750 \
55 & 600 & 700 \
50 & 650 & 650 \
45 & 700 & 600 \
40 & 750 & 550 \
\hline
\end{array}$$ ​
-In Exhibit 3-8, if the price of video games was currently $45, there would be an ____________ of ______________ video games in this market.?

Accepted Answer

A)  ?excess demand; 700 
B)  ?excess demand; 500 
C)  ?excess supply; 100 
D)  excess supply; 600 
E)  ?excess demand; 100 
A)  ?excess demand; 700 
B)  ?excess demand; 500 
C)  ?excess supply; 100 
D)  excess supply; 600 
E)  ?excess demand; 100

Question 11

The price of a good will fall when:

Accepted Answer

A)  there is a shortage of the good. 
B)  there is a surplus of the good. 
C)  demand for the good increases. 
D)  the supply of the good decreases. 
A)  there is a shortage of the good. 
B)  there is a surplus of the good. 
C)  demand for the good increases. 
D)  the supply of the good decreases.

Question 12

Which of the following goods are most likely to be substitutes?

Accepted Answer

A)  potato chips and chip dip 
B)  bread and peanut butter 
C)  ketchup and French fries 
D)  bananas and apples 
A)  potato chips and chip dip 
B)  bread and peanut butter 
C)  ketchup and French fries 
D)  bananas and apples

Question 13

The most important characteristic of the equilibrium price is that it:

Accepted Answer

A)  ​guarantees that producers earn profit. 
B)  ​clears the market. 
C)  increases the quantity demanded. 
D)  ​decreases the quantity demanded. 
A)  ​guarantees that producers earn profit. 
B)  ​clears the market. 
C)  increases the quantity demanded. 
D)  ​decreases the quantity demanded.

Question 14

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Accepted Answer

A) True 
 B)False

Question 15

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

A)  upward movement along the demand curve for name brand Y. 
B)  downward movement along the demand curve for brand X. 
C)  rightward shift in the demand curve for brand X. 
D)  leftward shift in the demand curve for brand X. 
A)  upward movement along the demand curve for name brand Y. 
B)  downward movement along the demand curve for brand X. 
C)  rightward shift in the demand curve for brand X. 
D)  leftward shift in the demand curve for brand X.

Question 16

If the current market price is above the equilibrium price, then:

Accepted Answer

A)  the quantity demanded exceeds the quantity supplied. 
B)  there will be a shortage. 
C)  the quantity supplied will exceed the quantity demanded. 
D)  the price will have to increase to establish equilibrium. 
E)  demand will shift to the left. 
A)  the quantity demanded exceeds the quantity supplied. 
B)  there will be a shortage. 
C)  the quantity supplied will exceed the quantity demanded. 
D)  the price will have to increase to establish equilibrium. 
E)  demand will shift to the left.

Question 17

If good X is an inferior good, a decrease in consumer income, other things being equal, will shift the:

Accepted Answer

A)  demand curve for good X to the right. 
B)  demand curve for good X to the left. 
C)  supply curve for good X to the right. 
D)  supply curve for good X to the left. 
A)  demand curve for good X to the right. 
B)  demand curve for good X to the left. 
C)  supply curve for good X to the right. 
D)  supply curve for good X to the left.

Question 18

A demand curve:

Accepted Answer

A)  has a positive slope. 
B)  illustrates the negative relationship between price and quantity demanded. 
C)  illustrates the positive relationship between price and quantity demanded. 
D)  is based on the assumption of a stable supply curve. 
E)  shifts about in a random fashion. 
A)  has a positive slope. 
B)  illustrates the negative relationship between price and quantity demanded. 
C)  illustrates the positive relationship between price and quantity demanded. 
D)  is based on the assumption of a stable supply curve. 
E)  shifts about in a random fashion.

Question 19

Exhibit 3-4 Supply curves  
-In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

Accepted Answer

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

Question 20

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the market is in equilibrium, then ____ represents consumer surplus.

Accepted Answer

A)  ABEC 
B)  AED 
C)  EGH 
D)  BEF 
A)  ABEC 
B)  AED 
C)  EGH 
D)  BEF

A shift occurs in the supply curve for salt when:

Surpluses cause prices to fall while shortages cause prices to rise.

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):

Two goods are considered substitutes only if a(n):

To finance medical care, the federal government raises the tax per pack paid by sellers of cigarettes. Other things being equal, the price of cigarettes rises because of a(n):

The law of demand is illustrated by a demand curve that is:

Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:

Exhibit 3-8 Demand and supply data for Video games Price Quantity Demanded of Video games Quantity Supplied of Video games \ 75 400 900 70 450 850 65 500 800 60 550 750 55 600 700 50 650 650 45 700 600 40 750 550 -?In Exhibit 3-8, the equilibrium market price in this video game market would be:

Coke and Pepsi are an example of:

The price of a good will fall when:

Which of the following goods are most likely to be substitutes?

The most important characteristic of the equilibrium price is that it:

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n):

If the current market price is above the equilibrium price, then:

If good X is an inferior good, a decrease in consumer income, other things being equal, will shift the:

A demand curve:

Exhibit 3-4 Supply curves -In Exhibit 3-4, a shift in the supply curve from S₁ to S₂ represents a(n):

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market is in equilibrium, then ____ represents consumer surplus.

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

A shift occurs in the supply curve for salt when:

​Surpluses cause prices to fall while shortages cause prices to rise.

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):

Two goods are considered substitutes only if a(n):

To finance medical care, the federal government raises the tax per pack paid by sellers of cigarettes. Other things being equal, the price of cigarettes rises because of a(n):

The law of demand is illustrated by a demand curve that is:

Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:

Coke and Pepsi are an example of:

The price of a good will fall when:

Which of the following goods are most likely to be substitutes?

The most important characteristic of the equilibrium price is that it:

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n):

If the current market price is above the equilibrium price, then:

If good X is an inferior good, a decrease in consumer income, other things being equal, will shift the:

A demand curve:

Exhibit 3-4 Supply curves -In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market is in equilibrium, then ____ represents consumer surplus.

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

Surpluses cause prices to fall while shortages cause prices to rise.

Exhibit 3-4 Supply curves -In Exhibit 3-4, a shift in the supply curve from S₁ to S₂ represents a(n):