Question 1

A reduction in production costs will result in a(n):

Accepted Answer

A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  greater willingness and ability of producers to supply a larger quantity at any given price. 
D)  greater willingness and ability of producers to supply the same quantity at a lower price. 
E)  all of these. 
A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  greater willingness and ability of producers to supply a larger quantity at any given price. 
D)  greater willingness and ability of producers to supply the same quantity at a lower price. 
E)  all of these.

Question 2

If the demand for a good increases when the price of another good increases, then these goods are:

Accepted Answer

A)  complementary in consumption. 
B)  complementary in production. 
C)  substitute in production. 
D)  substitute in consumption. 
E)  neither substitutes nor complementary. 
A)  complementary in consumption. 
B)  complementary in production. 
C)  substitute in production. 
D)  substitute in consumption. 
E)  neither substitutes nor complementary.

Question 3

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline. ​

Accepted Answer

A) True 
 B)False

Question 4

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:

Accepted Answer

A)  deadweight loss. 
B)  inefficiency. 
C)  underproduction. 
D)  all of the above are true. 
E)  none of the above are true. 
A)  deadweight loss. 
B)  inefficiency. 
C)  underproduction. 
D)  all of the above are true. 
E)  none of the above are true.

Question 5

Supply curves slope upward because:

Accepted Answer

A)  the quality is assumed to vary with price. 
B)  technology improves over time, increasing the ability of firms to produce more at each possible price. 
C)  increases in the price of a good lead to rightward shifts of the supply curve. 
D)  rising prides provide producers with the incentives needed to increase the quantity supplied. 
A)  the quality is assumed to vary with price. 
B)  technology improves over time, increasing the ability of firms to produce more at each possible price. 
C)  increases in the price of a good lead to rightward shifts of the supply curve. 
D)  rising prides provide producers with the incentives needed to increase the quantity supplied.

Question 6

According to the law of supply:

Accepted Answer

A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises. 
A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises.

Question 7

​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 there is a surplus of video games of 200 units, the current price of video games must be:

Accepted Answer

A)  ?$60. 
B)  ?$55. 
C)  ?$50. 
D)  ? $45. 
E)  ?$40. 
A)  ?$60. 
B)  ?$55. 
C)  ?$50. 
D)  ? $45. 
E)  ?$40.

Question 8

If there is an increase in income, which of the following is true?

Accepted Answer

A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases. 
A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases.

Question 9

An increase in demand:

Accepted Answer

A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve. 
A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve.

Question 10

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

Accepted Answer

A)  a change in people's tastes with respect to Tacos. 
B)  an increase in the money income of beef consumers. 
C)  a widespread advertising campaign undertaken by the producers of a product competitive with Tacos. 
D)  a fall in the price of Tacos. 
A)  a change in people's tastes with respect to Tacos. 
B)  an increase in the money income of beef consumers. 
C)  a widespread advertising campaign undertaken by the producers of a product competitive with Tacos. 
D)  a fall in the price of Tacos.

Question 11

Which of the following could cause the supply of carrots to decrease?

Accepted Answer

A)  Consumers' incomes decrease. 
B)  There is a technological advance in carrot production. 
C)  Fertilizer costs increase. 
D)  The number of farmers growing carrots increases. 
E)  The price of carrots decreases. 
A)  Consumers' incomes decrease. 
B)  There is a technological advance in carrot production. 
C)  Fertilizer costs increase. 
D)  The number of farmers growing carrots increases. 
E)  The price of carrots decreases.

Question 12

When quantity supplied equals quantity demanded, there is: ​

Accepted Answer

A)  ​disequilibrium. 
B)  ​excess quantity supplied. 
C)  ​ a market-clearing price (equilibrium price). 
D)  ​excess quantity demanded. 
E)  ​ a shortage. 
A)  ​disequilibrium. 
B)  ​excess quantity supplied. 
C)  ​ a market-clearing price (equilibrium price). 
D)  ​excess quantity demanded. 
E)  ​ a shortage.

Question 13

If people buy less chewing gum at every price when their incomes fall, then:

Accepted Answer

A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand. 
A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand.

Question 14

The law of demand states that:

Accepted Answer

A)  as the price of a good increases, more units are demanded. 
B)  there is a direct relationship between the price of a good and the quantity of the good produced. 
C)  there is a negative relationship between the price of a good and the quantity of the good demanded. 
D)  there is an increase in the need for a good as the price of the good increases. 
A)  as the price of a good increases, more units are demanded. 
B)  there is a direct relationship between the price of a good and the quantity of the good produced. 
C)  there is a negative relationship between the price of a good and the quantity of the good demanded. 
D)  there is an increase in the need for a good as the price of the good increases.

Question 15

An equilibrium price is unaffected by nonprice factors.

Accepted Answer

A) True 
 B)False

Question 16

The points along the supply curve represent the maximum willingness of firms to accept payment for a product offered for sale at various prices.

Accepted Answer

A) True 
 B)False

Question 17

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus, will be a(n):

Accepted Answer

A)  upward movement along the demand curve for cars. 
B)  downward movement along the demand curve for cars. 
C)  rightward shift in the demand curve for cars. 
D)  leftward shift in the demand curve for cars. 
A)  upward movement along the demand curve for cars. 
B)  downward movement along the demand curve for cars. 
C)  rightward shift in the demand curve for cars. 
D)  leftward shift in the demand curve for cars.

Question 18

Which of the following is true about the market equilibrium?

Accepted Answer

A)  ​As the price increases, the quantity demanded and the quantity supplied increases. 
B)  ​As the price increases, the quantity demanded and the quantity supplied decreases. 
C)  ​As the price increases, the quantity demanded increases and the quantity supplied decreases. 
D)  ​As the price increases, the quantity demanded decreases and the quantity supplied increases. 
E)  ​As the price increases, neither the quantity demanded nor quantity supplied change.
​ 
A)  ​As the price increases, the quantity demanded and the quantity supplied increases. 
B)  ​As the price increases, the quantity demanded and the quantity supplied decreases. 
C)  ​As the price increases, the quantity demanded increases and the quantity supplied decreases. 
D)  ​As the price increases, the quantity demanded decreases and the quantity supplied increases. 
E)  ​As the price increases, neither the quantity demanded nor quantity supplied change.
​

Question 19

Which of the following is closest to the definition of demand?

Accepted Answer

A)  People's willingness to supply goods at specific prices. 
B)  People's willingness to buy goods and services at given prices. 
C)  People's expectations of lower prices of goods and services. 
D)  Producer's expectations of selling more goods. 
E)  The interaction of people's willingness to buy and sell goods. 
A)  People's willingness to supply goods at specific prices. 
B)  People's willingness to buy goods and services at given prices. 
C)  People's expectations of lower prices of goods and services. 
D)  Producer's expectations of selling more goods. 
E)  The interaction of people's willingness to buy and sell goods.

Question 20

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

Accepted Answer

A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  deadweight loss is eliminated. 
D)  all of the above are true. 
E)  none of the above are true. 
A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  deadweight loss is eliminated. 
D)  all of the above are true. 
E)  none of the above are true.

A reduction in production costs will result in a(n):

If the demand for a good increases when the price of another good increases, then these goods are:

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

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:

Supply curves slope upward because:

According to the law of supply:

If there is an increase in income, which of the following is true?

An increase in demand:

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

Which of the following could cause the supply of carrots to decrease?

When quantity supplied equals quantity demanded, there is:

If people buy less chewing gum at every price when their incomes fall, then:

The law of demand states that:

An equilibrium price is unaffected by nonprice factors.

The points along the supply curve represent the maximum willingness of firms to accept payment for a product offered for sale at various prices.

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus, will be a(n):

Which of the following is true about the market equilibrium?

Which of the following is closest to the definition of demand?

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

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 reduction in production costs will result in a(n):

If the demand for a good increases when the price of another good increases, then these goods are:

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline. ​

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:

Supply curves slope upward because:

According to the law of supply:

If there is an increase in income, which of the following is true?

An increase in demand:

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

Which of the following could cause the supply of carrots to decrease?

When quantity supplied equals quantity demanded, there is: ​

If people buy less chewing gum at every price when their incomes fall, then:

The law of demand states that:

An equilibrium price is unaffected by nonprice factors.

The points along the supply curve represent the maximum willingness of firms to accept payment for a product offered for sale at various prices.

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus, will be a(n):

Which of the following is true about the market equilibrium?

Which of the following is closest to the definition of demand?

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

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

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

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:

When quantity supplied equals quantity demanded, there is: