Question 1

Travel by bus and pawn-shop services would be expected to be examples of:

Accepted Answer

A)  normal goods. 
B)  inferior goods. 
C)  substitute goods. 
D)  complementary goods. 
A)  normal goods. 
B)  inferior goods. 
C)  substitute goods. 
D)  complementary goods.

Question 2

The price system eliminates scarcity.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would not cause a shift in the supply curve for a good?

Accepted Answer

A)  An increase in demand for that good. 
B)  An increase in the cost of labor used to produce that good. 
C)  A change in the cost of raw materials used to produce that good. 
D)  A decrease in the cost of machinery used to produce that good. 
A)  An increase in demand for that good. 
B)  An increase in the cost of labor used to produce that good. 
C)  A change in the cost of raw materials used to produce that good. 
D)  A decrease in the cost of machinery used to produce that good.

Question 4

In general, supply curves slope upward because:

Accepted Answer

A)  increases in the price of a good result in lower opportunity costs. 
B)  rising prices provide producers with a greater profit incentive. 
C)  consumers buy a greater quantity. 
D)  technology improves the ability of firms to produce more at each possible price. 
A)  increases in the price of a good result in lower opportunity costs. 
B)  rising prices provide producers with a greater profit incentive. 
C)  consumers buy a greater quantity. 
D)  technology improves the ability of firms to produce more at each possible price.

Question 5

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase and then decrease. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase and then decrease.

Question 6

If the quantity supplied exceeds the quantity demanded in a market, then the result is which of the following?

Accepted Answer

A)  Deadweight loss 
B)  Inefficiency 
C)  Overproduction 
D)  Each of these are true. 
A)  Deadweight loss 
B)  Inefficiency 
C)  Overproduction 
D)  Each of these are true.

Question 7

Which of the following will not cause a movement along the supply curve?

Accepted Answer

A)  Changes in the sellers' expectations. 
B)  Increases in taxes per unit of output. 
C)  Advances in technology. 
D)  All of these. 
A)  Changes in the sellers' expectations. 
B)  Increases in taxes per unit of output. 
C)  Advances in technology. 
D)  All of these.

Question 8

The market demand is the:

Accepted Answer

A)  sum of all individual demand curves in a market. 
B)  sum of all individual prices in a market. 
C)  sum of all individual demand curves and supplies in a market. 
D)  vertical sum of all individual demand curves. 
A)  sum of all individual demand curves in a market. 
B)  sum of all individual prices in a market. 
C)  sum of all individual demand curves and supplies in a market. 
D)  vertical sum of all individual demand curves.

Question 9

The law of supply states that:

Accepted Answer

A)  there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. 
B)  there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. 
C)  there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. 
D)  at a lower price, a greater quantity will be supplied. 
A)  there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. 
B)  there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. 
C)  there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. 
D)  at a lower price, a greater quantity will be supplied.

Question 10

We can find the market demand for pears by:

Accepted Answer

A)  adding up all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding up the number of pears that producers are willing to sell. 
D)  multiplying the number of pears by the price of pears. 
E)  adding up all the individual demand curves for pears. 
A)  adding up all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding up the number of pears that producers are willing to sell. 
D)  multiplying the number of pears by the price of pears. 
E)  adding up all the individual demand curves for pears.

Question 11

Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):

Accepted Answer

A)  rightward shift of the supply curve for tobacco. 
B)  upward movement along the supply curve for soybeans. 
C)  rightward shift in the supply curve for soybeans. 
D)  leftward shift in the supply curve for soybeans. 
A)  rightward shift of the supply curve for tobacco. 
B)  upward movement along the supply curve for soybeans. 
C)  rightward shift in the supply curve for soybeans. 
D)  leftward shift in the supply curve for soybeans.

Question 12

A decrease in the price of coffee, other things being equal, causes a(n):

Accepted Answer

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

Question 13

The deadweight loss equals the consumer surplus minus the producer surplus resulting from a non-equilibrium price.

Accepted Answer

A) True 
 B)False

Question 14

Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:

Accepted Answer

A)  increase the demand for potatoes. 
B)  decrease the demand for potatoes. 
C)  increase the demand for steak. 
D)  decrease the demand for steak. 
A)  increase the demand for potatoes. 
B)  decrease the demand for potatoes. 
C)  increase the demand for steak. 
D)  decrease the demand for steak.

Question 15

A leftward shift of a supply curve is called a(n):

Accepted Answer

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

Question 16

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Accepted Answer

A)  A rightward shift in the demand curve for orange juice. 
B)  An increase in the quantity demanded for orange juice. 
C)  A leftward shift in the demand curve for orange juice. 
D)  A decrease in the quantity demanded orange juice. 
A)  A rightward shift in the demand curve for orange juice. 
B)  An increase in the quantity demanded for orange juice. 
C)  A leftward shift in the demand curve for orange juice. 
D)  A decrease in the quantity demanded orange juice.

Question 17

Which of the following pairs of goods would be considered substitutes?

Accepted Answer

A)  Milk and cookies. 
B)  Tires and automobiles. 
C)  Ink and pens. 
D)  Coca-Cola and Pepsi. 
E)  Computers and computer software. 
A)  Milk and cookies. 
B)  Tires and automobiles. 
C)  Ink and pens. 
D)  Coca-Cola and Pepsi. 
E)  Computers and computer software.

Question 18

Exhibit 3-3 Demand curves  
-Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

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 19

Suppose that X and Y are complementary goods. If the price of good X decreases, we can expect the:

Accepted Answer

A)  demand for good X to increase. 
B)  quantity demanded of good Y to decrease. 
C)  quantity demanded of good Y to increase. 
D)  demand for good Y to decrease. 
E)  demand for good Y to increase. 
A)  demand for good X to increase. 
B)  quantity demanded of good Y to decrease. 
C)  quantity demanded of good Y to increase. 
D)  demand for good Y to decrease. 
E)  demand for good Y to increase.

Question 20

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

Travel by bus and pawn-shop services would be expected to be examples of:

The price system eliminates scarcity.

Which of the following would not cause a shift in the supply curve for a good?

In general, supply curves slope upward because:

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

If the quantity supplied exceeds the quantity demanded in a market, then the result is which of the following?

Which of the following will not cause a movement along the supply curve?

The market demand is the:

The law of supply states that:

We can find the market demand for pears by:

Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):

A decrease in the price of coffee, other things being equal, causes a(n):

The deadweight loss equals the consumer surplus minus the producer surplus resulting from a non-equilibrium price.

Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:

A leftward shift of a supply curve is called a(n):

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Which of the following pairs of goods would be considered substitutes?

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Suppose that X and Y are complementary goods. If the price of good X decreases, we can expect the:

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

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

Travel by bus and pawn-shop services would be expected to be examples of:

The price system eliminates scarcity.

Which of the following would not cause a shift in the supply curve for a good?

In general, supply curves slope upward because:

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

If the quantity supplied exceeds the quantity demanded in a market, then the result is which of the following?

Which of the following will not cause a movement along the supply curve?

The market demand is the:

The law of supply states that:

We can find the market demand for pears by:

Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):

A decrease in the price of coffee, other things being equal, causes a(n):

The deadweight loss equals the consumer surplus minus the producer surplus resulting from a non-equilibrium price.

Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:

A leftward shift of a supply curve is called a(n):

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Which of the following pairs of goods would be considered substitutes?

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Suppose that X and Y are complementary goods. If the price of good X decreases, we can expect the:

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

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