Question 1

Discuss how a market reaches equilibrium. How is it expressed graphically? ​

Accepted Answer

Equilibrium exists at that one price in

Question 2

​Exhibit 3-9 Demand and supply curves
​   ​
-In Exhibit 3-9, if the market price is $20,​

Accepted Answer

A)  ​this market will be in equilibrium. 
B)  ​a shortage of 27 units will result. 
C)  ​the price is above the equilibrium price. 
D)  ​a surplus of 26 units will result. 
E)  ​a shortage of 26 units will result. 
A)  ​this market will be in equilibrium. 
B)  ​a shortage of 27 units will result. 
C)  ​the price is above the equilibrium price. 
D)  ​a surplus of 26 units will result. 
E)  ​a shortage of 26 units will result.

Question 3

An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus, the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):

Accepted Answer

A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded. 
A)  increase in demand. 
B)  decrease in demand. 
C)  increase in quantity demanded. 
D)  decrease in quantity demanded.

Question 4

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Accepted Answer

A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease. 
A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease.

Question 5

Which of the following corresponds to the definition of the supply curve?

Accepted Answer

A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied. 
E)  It depicts a proportional relationship between prices and quantity supplied. 
A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied. 
E)  It depicts a proportional relationship between prices and quantity supplied.

Question 6

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 7

Assuming that chicken and beef are substitutes, a decrease in the price of beef, other things being equal, will:

Accepted Answer

A)  decrease the demand for beef. 
B)  increase the demand for chicken. 
C)  decrease the demand for chicken. 
D)  increase the demand for beef. 
A)  decrease the demand for beef. 
B)  increase the demand for chicken. 
C)  decrease the demand for chicken. 
D)  increase the demand for beef.

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, at any market price of video games above $50, a(n) ______________ would result, causing price to __________.

Accepted Answer

A)  ?excess demand; rise 
B)  ?excess supply; rise 
C)  ?excess demand; fall 
D)  ?excess supply; fall 
E)  ?shortage; rise 
A)  ?excess demand; rise 
B)  ?excess supply; rise 
C)  ?excess demand; fall 
D)  ?excess supply; fall 
E)  ?shortage; rise

Question 9

Which of the following best represents the effects of a decrease in the price of coffee, other things being equal?

Accepted Answer

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

Question 10

Which of the following best represents the effects of an increase in the price of coffee, other things being equal?

Accepted Answer

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

Question 11

A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  equals the deadweight loss increase. 
A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  equals the deadweight loss increase.

Question 12

Which of the following is true if the price of coffee increases?

Accepted Answer

A)  The demand for tea, a substitute good, will decrease. 
B)  The demand for coffee will increase. 
C)  The demand for coffee and tea will decrease. 
D)  Both the demand for coffee and tea will increase. 
E)  The demand for tea, a substitute good, will increase. 
A)  The demand for tea, a substitute good, will decrease. 
B)  The demand for coffee will increase. 
C)  The demand for coffee and tea will decrease. 
D)  Both the demand for coffee and tea will increase. 
E)  The demand for tea, a substitute good, will increase.

Question 13

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

Accepted Answer

A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves. 
A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves.

Question 14

​A surplus in a market exists when there is an excess quantity demanded.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 3-6 Milk market $$\begin{array} { | c | c | c | } 
\hline \text { Price per Quart } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Quarts per week) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Quarts per week) }
\end{array} \
\hline 0.70 & 20 & 180 \
0.60 & 60 & 140 \
0.50 & 100 & 100 \
0.40 & 140 & 60 \
0.30 & 180 & 20 \
\hline
\end{array}$$ ​
​
-???In Exhibit 3-6, which of the following is true about the milk market?

Accepted Answer

A)  ?At price 0.60 there is an excess demand of milk. 
B)  ?At price 0.40 there is an excess supply of milk. 
C)  ?At price 0.30 there is an excess supply of milk. 
D)  ?At price 0.50 there is an excess demand of milk. 
E)  ?At price 0.70 there is an excess supply of milk. 
A)  ?At price 0.60 there is an excess demand of milk. 
B)  ?At price 0.40 there is an excess supply of milk. 
C)  ?At price 0.30 there is an excess supply of milk. 
D)  ?At price 0.50 there is an excess demand of milk. 
E)  ?At price 0.70 there is an excess supply of milk.

Question 16

If a shortage exists in a market then:

Accepted Answer

A)  ​the price is below equilibrium. 
B)  ​the quantity demanded exceeds the quantity supplied. 
C)  ​ the price will rise in the near future. 
D)  ​all of the above. 
A)  ​the price is below equilibrium. 
B)  ​the quantity demanded exceeds the quantity supplied. 
C)  ​ the price will rise in the near future. 
D)  ​all of the above.

Question 17

When economists say the quantity supplied of a product has decreased, they mean the:

Accepted Answer

A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it. 
A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it.

Question 18

The law of demand shows that:

Accepted Answer

A)  there is an inverse relationship between price and quantity demanded. 
B)  the demand curve is positively sloped. 
C)  when the price of a good increases, the quantity demanded increases. 
D)  the supply curve is vertical. 
E)  individual demand is the same as market demand. 
A)  there is an inverse relationship between price and quantity demanded. 
B)  the demand curve is positively sloped. 
C)  when the price of a good increases, the quantity demanded increases. 
D)  the supply curve is vertical. 
E)  individual demand is the same as market demand.

Question 19

If consumer tastes are changing more in favor of the consumption of a particular good the:

Accepted Answer

A)  market demand curve will shift to the left. 
B)  consumer will move up a given demand curve, decreasing the quantity demanded. 
C)  consumer would move down a given demand curve, decreasing the quantity demanded. 
D)  consumer would move down a given demand curve, increasing the quantity demanded. 
E)  market demand curve would shift to the right. 
A)  market demand curve will shift to the left. 
B)  consumer will move up a given demand curve, decreasing the quantity demanded. 
C)  consumer would move down a given demand curve, decreasing the quantity demanded. 
D)  consumer would move down a given demand curve, increasing the quantity demanded. 
E)  market demand curve would shift to the right.

Question 20

A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:

Accepted Answer

A)  decreases. 
B)  increases. 
C)  remains unchanged. 
D)  depends on the deadweight loss. 
A)  decreases. 
B)  increases. 
C)  remains unchanged. 
D)  depends on the deadweight loss.

Discuss how a market reaches equilibrium. How is it expressed graphically?

Exhibit 3-9 Demand and supply curves -In Exhibit 3-9, if the market price is $20,

An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus, the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Which of the following corresponds to the definition of the supply curve?

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Assuming that chicken and beef are substitutes, a decrease in the price of beef, other things being equal, will:

Which of the following best represents the effects of a decrease in the price of coffee, other things being equal?

Which of the following best represents the effects of an increase in the price of coffee, other things being equal?

A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:

Which of the following is true if the price of coffee increases?

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

A surplus in a market exists when there is an excess quantity demanded.

Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 -???In Exhibit 3-6, which of the following is true about the milk market?

If a shortage exists in a market then:

When economists say the quantity supplied of a product has decreased, they mean the:

The law of demand shows that:

If consumer tastes are changing more in favor of the consumption of a particular good the:

A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:

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

Discuss how a market reaches equilibrium. How is it expressed graphically? ​

​Exhibit 3-9 Demand and supply curves ​ ​ -In Exhibit 3-9, if the market price is $20,​

An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus, the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Which of the following corresponds to the definition of the supply curve?

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Assuming that chicken and beef are substitutes, a decrease in the price of beef, other things being equal, will:

Which of the following best represents the effects of a decrease in the price of coffee, other things being equal?

Which of the following best represents the effects of an increase in the price of coffee, other things being equal?

A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:

Which of the following is true if the price of coffee increases?

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

​A surplus in a market exists when there is an excess quantity demanded.

Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 ​ ​ -???In Exhibit 3-6, which of the following is true about the milk market?

If a shortage exists in a market then:

When economists say the quantity supplied of a product has decreased, they mean the:

The law of demand shows that:

If consumer tastes are changing more in favor of the consumption of a particular good the:

A drought destroys much of the grape crop. As a result, consumer surplus in the market for wine:

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

Discuss how a market reaches equilibrium. How is it expressed graphically?

Exhibit 3-9 Demand and supply curves -In Exhibit 3-9, if the market price is $20,

A surplus in a market exists when there is an excess quantity demanded.

Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 -???In Exhibit 3-6, which of the following is true about the milk market?