Question 1

Complementary goods are goods:

Accepted Answer

A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related. 
A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related.

Question 2

If the current price of a good is the same as that found at the intersection of the market demand and supply curves, then:​

Accepted Answer

A)  ​excess demand exists. 
B)  ​excess supply exists. 
C)  ​ price will rise. 
D)  ​ price will fall. 
E)  ​the market is in equilibrium. 
A)  ​excess demand exists. 
B)  ​excess supply exists. 
C)  ​ price will rise. 
D)  ​ price will fall. 
E)  ​the market is in equilibrium.

Question 3

A shortage of product means a(n):

Accepted Answer

A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high. 
A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high.

Question 4

Total producer surplus is the area below the equilibrium price and above the supply curve.

Accepted Answer

A) True 
 B)False

Question 5

​The supply curve for chicken will shift to the right, if production costs increase.

Accepted Answer

A) True 
 B)False

Question 6

A curve that depicts the relationship between price and quantity demanded is the:

Accepted Answer

A)  supply curve. 
B)  supply schedule. 
C)  demand curve. 
D)  equilibrium price. 
A)  supply curve. 
B)  supply schedule. 
C)  demand curve. 
D)  equilibrium price.

Question 7

Suppose the market price of a good X is below the equilibrium price. The result is a shortage and sellers can be expected to decrease the quantity of that good X supplied.

Accepted Answer

A) True 
 B)False

Question 8

If there is a surplus in the oil market, then the price of oil will:

Accepted Answer

A)  rise. 
B)  fall. 
C)  remain unchanged. 
D)  react unpredictably. 
A)  rise. 
B)  fall. 
C)  remain unchanged. 
D)  react unpredictably.

Question 9

In an efficient market, deadweight loss is ____.

Accepted Answer

A)  maximum. 
B)  minimum. 
C)  constant. 
D)  zero. 
A)  maximum. 
B)  minimum. 
C)  constant. 
D)  zero.

Question 10

Farmers can produce wheat and/or rice. What will happen in the wheat market if there is an increase in the price of rice?

Accepted Answer

A)  Wheat supply will increase. 
B)  Wheat supply will decrease. 
C)  Wheat demand will increase. 
D)  Wheat demand will decrease. 
A)  Wheat supply will increase. 
B)  Wheat supply will decrease. 
C)  Wheat demand will increase. 
D)  Wheat demand will decrease.

Question 11

The price of a good will rise when:

Accepted Answer

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

Question 12

​ Exhibit 3-13 Supply and demand curves  
-​Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

Accepted Answer

A)  ​Diagram A. 
B)  ​Diagram B. 
C)  ​Diagram C. 
D)  ​Diagrams A and C. 
A)  ​Diagram A. 
B)  ​Diagram B. 
C)  ​Diagram C. 
D)  ​Diagrams A and C.

Question 13

With an upward-sloping supply curve, which of the following is true?

Accepted Answer

A)  An increase in price results in a decrease in quantity supplied. 
B)  An increase in price results in an increase in supply. 
C)  A decrease in price results in a decrease in quantity supplied. 
D)  A decrease in price results in an increase in supply. 
A)  An increase in price results in a decrease in quantity supplied. 
B)  An increase in price results in an increase in supply. 
C)  A decrease in price results in a decrease in quantity supplied. 
D)  A decrease in price results in an increase in supply.

Question 14

If X and Y are substitutes, the demand curve for X will shift to the right when the price of Y decreases. ​

Accepted Answer

A) True 
 B)False

Question 15

A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price.

Accepted Answer

A) True 
 B)False

Question 16

Exhibit 3-2 Demand curves
​  
-In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

Accepted Answer

A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good. 
A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good.

Question 17

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

Accepted Answer

A)  normal goods. 
B)  complementary goods. 
C)  substitute goods. 
D)  equilibrium goods. 
E)  market-day goods. 
A)  normal goods. 
B)  complementary goods. 
C)  substitute goods. 
D)  equilibrium goods. 
E)  market-day goods.

Question 18

Which of the following will increase the demand for motorcycles?

Accepted Answer

A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good). 
E)  A fall in consumer preference for motorcycles. 
A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good). 
E)  A fall in consumer preference for motorcycles.

Question 19

Which of the following will not cause a shift in the demand curve for good X?

Accepted Answer

A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income. 
A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income.

Question 20

In a market, competitive forces guarantee that any price other than the equilibrium price is:

Accepted Answer

A)  ​market-clearing. 
B)  ​ stable. 
C)  ​temporary. 
D)  ​unaffordable. 
A)  ​market-clearing. 
B)  ​ stable. 
C)  ​temporary. 
D)  ​unaffordable.

Complementary goods are goods:

If the current price of a good is the same as that found at the intersection of the market demand and supply curves, then:

A shortage of product means a(n):

Total producer surplus is the area below the equilibrium price and above the supply curve.

The supply curve for chicken will shift to the right, if production costs increase.

A curve that depicts the relationship between price and quantity demanded is the:

Suppose the market price of a good X is below the equilibrium price. The result is a shortage and sellers can be expected to decrease the quantity of that good X supplied.

If there is a surplus in the oil market, then the price of oil will:

In an efficient market, deadweight loss is ____.

Farmers can produce wheat and/or rice. What will happen in the wheat market if there is an increase in the price of rice?

The price of a good will rise when:

Exhibit 3-13 Supply and demand curves -Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

With an upward-sloping supply curve, which of the following is true?

If X and Y are substitutes, the demand curve for X will shift to the right when the price of Y decreases.

A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price.

Exhibit 3-2 Demand curves -In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

Which of the following will increase the demand for motorcycles?

Which of the following will not cause a shift in the demand curve for good X?

In a market, competitive forces guarantee that any price other than the equilibrium price is:

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

Complementary goods are goods:

If the current price of a good is the same as that found at the intersection of the market demand and supply curves, then:​

A shortage of product means a(n):

Total producer surplus is the area below the equilibrium price and above the supply curve.

​The supply curve for chicken will shift to the right, if production costs increase.

A curve that depicts the relationship between price and quantity demanded is the:

Suppose the market price of a good X is below the equilibrium price. The result is a shortage and sellers can be expected to decrease the quantity of that good X supplied.

If there is a surplus in the oil market, then the price of oil will:

In an efficient market, deadweight loss is ____.

Farmers can produce wheat and/or rice. What will happen in the wheat market if there is an increase in the price of rice?

The price of a good will rise when:

​ Exhibit 3-13 Supply and demand curves -​Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

With an upward-sloping supply curve, which of the following is true?

If X and Y are substitutes, the demand curve for X will shift to the right when the price of Y decreases. ​

A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price.

Exhibit 3-2 Demand curves ​ -In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

Which of the following will increase the demand for motorcycles?

Which of the following will not cause a shift in the demand curve for good X?

In a market, competitive forces guarantee that any price other than the equilibrium price is:

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

If the current price of a good is the same as that found at the intersection of the market demand and supply curves, then:

The supply curve for chicken will shift to the right, if production costs increase.

Exhibit 3-13 Supply and demand curves -Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

If X and Y are substitutes, the demand curve for X will shift to the right when the price of Y decreases.

Exhibit 3-2 Demand curves -In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?