Question 1

A rightward shift in the demand curve is called a(an):

Accepted Answer

A)  decrease in output. 
B)  decrease in demand. 
C)  increase in demand. 
D)  increase in income. 
A)  decrease in output. 
B)  decrease in demand. 
C)  increase in demand. 
D)  increase in income.

Question 2

A supply curve:

Accepted Answer

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

Question 3

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the quantity supplied is 2 million pounds of ground beef per year, the result is a deadweight loss represented by area:

Accepted Answer

A)  ABEC. 
B)  CEFD. 
C)  EGH. 
D)  BEF. 
A)  ABEC. 
B)  CEFD. 
C)  EGH. 
D)  BEF.

Question 4

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:

Accepted Answer

A)  a downward movement along the demand curve for bus travel. 
B)  no change in the demand curve for bus travel. 
C)  an upward movement along the demand curve for air travel. 
D)  a rightward shift in the demand curve for bus travel. 
A)  a downward movement along the demand curve for bus travel. 
B)  no change in the demand curve for bus travel. 
C)  an upward movement along the demand curve for air travel. 
D)  a rightward shift in the demand curve for bus travel.

Question 5

Assuming gasoline and oil to be complementary goods, the effect on the oil market of an increase in the price of gasoline (other things being equal) would best be described as a(n):

Accepted Answer

A)  increase in the demand for oil. 
B)  decrease in the demand for oil. 
C)  increase in the quantity of oil demanded. 
D)  increase in the quantity of oil demanded 
A)  increase in the demand for oil. 
B)  decrease in the demand for oil. 
C)  increase in the quantity of oil demanded. 
D)  increase in the quantity of oil demanded

Question 6

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

Question 7

The law of supply states that an increase in supply is represented graphically as a rightward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 3-4 Supply curves  
-In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S1 to S2?

Accepted Answer

A)  Increase in demand. 
B)  Decrease in demand. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates. 
E)  Increase in materials cost. 
A)  Increase in demand. 
B)  Decrease in demand. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates. 
E)  Increase in materials cost.

Question 9

Ceteris paribus, a change in the price of a good always results in a change in:

Accepted Answer

A)  income. 
B)  tastes. 
C)  quantity demanded. 
D)  both income and tastes. 
E)  the price of other goods. 
A)  income. 
B)  tastes. 
C)  quantity demanded. 
D)  both income and tastes. 
E)  the price of other goods.

Question 10

When firms advertise their products, they are attempting to:

Accepted Answer

A)  shift the supply curve of the product to the right. 
B)  shift the supply curve of the product to the left. 
C)  shift the demand for the product to the right. 
D)  shift the demand for the product to the left. 
E)  create a surplus of the product. 
A)  shift the supply curve of the product to the right. 
B)  shift the supply curve of the product to the left. 
C)  shift the demand for the product to the right. 
D)  shift the demand for the product to the left. 
E)  create a surplus of the product.

Question 11

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

Accepted Answer

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

Question 12

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

A)  a decrease in the price of tires 
B)  a decrease in the price of cars 
C)  an increase in consumer income 
D)  an increase in the number of miles people drive per year 
A)  a decrease in the price of tires 
B)  a decrease in the price of cars 
C)  an increase in consumer income 
D)  an increase in the number of miles people drive per year

Question 13

If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:

Accepted Answer

A)  a rightward shift of demand for margarine. 
B)  a leftward shift of demand for margarine. 
C)  the quantity demanded for margarine to increase. 
D)  the quantity demanded for margarine to decline. 
E)  a decline in the price of margarine. 
A)  a rightward shift of demand for margarine. 
B)  a leftward shift of demand for margarine. 
C)  the quantity demanded for margarine to increase. 
D)  the quantity demanded for margarine to decline. 
E)  a decline in the price of margarine.

Question 14

Which of the following would most likely 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 15

Which of the following must be true if good X is a normal good and income increases?

Accepted Answer

A)  The demand for X will increase, and thus the price and quantity sold and bought will decrease. 
B)  The demand for X will decrease, and thus the price and quantity sold and bought will decrease. 
C)  The demand for X will increase, and thus the price and quantity sold and bought will increase. 
D)  The demand for X will decrease, and thus the price and quantity sold and bought will increase. 
E)  The demand for X will increase, and thus the price and quantity sold and bought will remain the same. 
A)  The demand for X will increase, and thus the price and quantity sold and bought will decrease. 
B)  The demand for X will decrease, and thus the price and quantity sold and bought will decrease. 
C)  The demand for X will increase, and thus the price and quantity sold and bought will increase. 
D)  The demand for X will decrease, and thus the price and quantity sold and bought will increase. 
E)  The demand for X will increase, and thus the price and quantity sold and bought will remain the same.

Question 16

Which of the following is not true concerning producer surplus?

Accepted Answer

A)  ​It is qraphically the area under the supply curve and above the market price. 
B)  ​It exists in equilibrium. 
C)  ​A leftward shift of the supply curve will decrease producer surplus. 
D)  ​A rightward shift of the supply curve will increase producer surplus.​ 
A)  ​It is qraphically the area under the supply curve and above the market price. 
B)  ​It exists in equilibrium. 
C)  ​A leftward shift of the supply curve will decrease producer surplus. 
D)  ​A rightward shift of the supply curve will increase producer surplus.​

Question 17

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

Accepted Answer

The law of demand states that there is a

Question 18

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 19

The development of new technology typically:

Accepted Answer

A)  shifts the supply curve to the right. 
B)  reduces profits. 
C)  results in a downward movement along a supply curve. 
D)  increases costs of production. 
E)  shifts the demand curve to the right. 
A)  shifts the supply curve to the right. 
B)  reduces profits. 
C)  results in a downward movement along a supply curve. 
D)  increases costs of production. 
E)  shifts the demand curve to the right.

Question 20

​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 shortage 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.

A rightward shift in the demand curve is called a(an):

A supply curve:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the quantity supplied is 2 million pounds of ground beef per year, the result is a deadweight loss represented by area:

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:

Assuming gasoline and oil to be complementary goods, the effect on the oil market of an increase in the price of gasoline (other things being equal) would best be described as a(n):

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:

The law of supply states that an increase in supply is represented graphically as a rightward shift of the supply curve.

Exhibit 3-4 Supply curves -In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S₁ to S₂?

Ceteris paribus, a change in the price of a good always results in a change in:

When firms advertise their products, they are attempting to:

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

Which of the following is least likely to increase the demand for new tires?

If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:

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

Which of the following must be true if good X is a normal good and income increases?

Which of the following is not true concerning producer surplus?

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

The development of new technology typically:

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 rightward shift in the demand curve is called a(an):

A supply curve:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the quantity supplied is 2 million pounds of ground beef per year, the result is a deadweight loss represented by area:

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:

Assuming gasoline and oil to be complementary goods, the effect on the oil market of an increase in the price of gasoline (other things being equal) would best be described as a(n):

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:

The law of supply states that an increase in supply is represented graphically as a rightward shift of the supply curve.

Exhibit 3-4 Supply curves -In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S1 to S2?

Ceteris paribus, a change in the price of a good always results in a change in:

When firms advertise their products, they are attempting to:

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

Which of the following is least likely to increase the demand for new tires?

If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:

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

Which of the following must be true if good X is a normal good and income increases?

Which of the following is not true concerning producer surplus?

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

The development of new technology typically:

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 3-4 Supply curves -In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S₁ to S₂?