Question 1

Assuming that wine is a normal good, an increase in consumer income, other things being equal, will:

Accepted Answer

A)  cause an upward movement along the demand curve for wine. 
B)  shift the demand curve for wine to the left. 
C)  cause a downward movement along the demand curve for wine. 
D)  shift the demand curve for wine to the right. 
A)  cause an upward movement along the demand curve for wine. 
B)  shift the demand curve for wine to the left. 
C)  cause a downward movement along the demand curve for wine. 
D)  shift the demand curve for wine to the right.

Question 2

A technological improvement in the production of good X causes the:

Accepted Answer

A)  demand curve for X to shift to the right. 
B)  demand curve for X to shift to the left. 
C)  supply curve for X to shift to the right. 
D)  supply curve for X to shift to the left. 
A)  demand curve for X to shift to the right. 
B)  demand curve for X to shift to the left. 
C)  supply curve for X to shift to the right. 
D)  supply curve for X to shift to the left.

Question 3

A movement along the demand curve for automobiles is caused by a change in:

Accepted Answer

A)  the price of automobiles. 
B)  the price of gasoline. 
C)  the price of steel. 
D)  consumers' incomes. 
A)  the price of automobiles. 
B)  the price of gasoline. 
C)  the price of steel. 
D)  consumers' incomes.

Question 4

Suppose Jones sells a good for $100 at a yard sale. If the producer surplus from the sale is $75, Jones's cost of the good must have been:

Accepted Answer

A)  $100. 
B)  $175. 
C)  $25. 
D)  equal to the deadweight loss. 
A)  $100. 
B)  $175. 
C)  $25. 
D)  equal to the deadweight loss.

Question 5

Which of the following pairs is the best example of complements?

Accepted Answer

A)  Coffee and tea. 
B)  DVDs and tapes. 
C)  Hiking boots and athletic shoes. 
D)  Tortillas and salsa. 
A)  Coffee and tea. 
B)  DVDs and tapes. 
C)  Hiking boots and athletic shoes. 
D)  Tortillas and salsa.

Question 6

Producer surplus:

Accepted Answer

A)  measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. 
B)  is illustrated by the area above the supply curve and below the market price. 
C)  is maximized in market equilibrium. 
D)  all of these. 
A)  measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. 
B)  is illustrated by the area above the supply curve and below the market price. 
C)  is maximized in market equilibrium. 
D)  all of these.

Question 7

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

Accepted Answer

A) True 
 B)False

Question 8

Exhibit 3-3 Demand curves  
-Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for pork and beans (an inferior good)?

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 9

Which of the following is most likely to shift the demand curve for electricity to the left?

Accepted Answer

A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy. 
A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy.

Question 10

A change in demand cannot be caused by a change in:

Accepted Answer

A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself. 
A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself.

Question 11

In accordance with the law of supply, both individual and market supply curves are drawn:

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  downward-sloping. 
D)  upward-sloping. 
A)  horizontal. 
B)  vertical. 
C)  downward-sloping. 
D)  upward-sloping.

Question 12

Two goods that are substitutes are:

Accepted Answer

A)  bacon and eggs. 
B)  camera and film. 
C)  tennis racket and tennis balls. 
D)  movie theater tickets and video rentals. 
E)  coffee and cream. 
A)  bacon and eggs. 
B)  camera and film. 
C)  tennis racket and tennis balls. 
D)  movie theater tickets and video rentals. 
E)  coffee and cream.

Question 13

​If the price of good X increases and this causes an increase in the demand for good Y, then goods X and Y are substitute goods.

Accepted Answer

A) True 
 B)False

Question 14

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

Accepted Answer

A)  A movement up along the demand curve for computers. 
B)  A movement down along the demand curve for computers. 
C)  A leftward shift in the demand curve for computers. 
D)  A rightward shift in the demand curve for computers. 
A)  A movement up along the demand curve for computers. 
B)  A movement down along the demand curve for computers. 
C)  A leftward shift in the demand curve for computers. 
D)  A rightward shift in the demand curve for computers.

Question 15

Which of the following pairs is the best example of substitutes?

Accepted Answer

A)  Coffee and cream. 
B)  Honey and biscuits. 
C)  Tortillas and salsa. 
D)  Hiking boots and athletic shoes. 
A)  Coffee and cream. 
B)  Honey and biscuits. 
C)  Tortillas and salsa. 
D)  Hiking boots and athletic shoes.

Question 16

Ceteris paribus, which of the following would cause a decrease in the demand for HD TVs?

Accepted Answer

A)  decline in the price of HD TVs. 
B)  increase in the price of HD TVs. 
C)  increase in consumers' income. 
D)  decrease in consumers' income. 
A)  decline in the price of HD TVs. 
B)  increase in the price of HD TVs. 
C)  increase in consumers' income. 
D)  decrease in consumers' income.

Question 17

​ Exhibit 3-16 Supply and demand curves for chairs
​   ​
​
-In Exhibit 13-6, assume that the market price of chairs is $15 each. This price is: ​

Accepted Answer

A)  ​ an equilibrium price. 
B)  ​ not an equilibrium price, since there is an excess demand at a price of $10. 
C)  ​an equilibrium price, since suppliers can store inventories in their warehouses. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded. 
A)  ​ an equilibrium price. 
B)  ​ not an equilibrium price, since there is an excess demand at a price of $10. 
C)  ​an equilibrium price, since suppliers can store inventories in their warehouses. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded.

Question 18

Which of the following can bring about a change in the quantity demanded?

Accepted Answer

A)  Change in supply. 
B)  Change in quality. 
C)  Change in income. 
D)  Change in product price. 
E)  Change in taste. 
A)  Change in supply. 
B)  Change in quality. 
C)  Change in income. 
D)  Change in product price. 
E)  Change in taste.

Question 19

The law of demand says that the lower the price charged for a good, ceteris paribus, the:

Accepted Answer

A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time. 
E)  larger the supply of the good per period of time. 
A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time. 
E)  larger the supply of the good per period of time.

Question 20

​
Exhibit 3-7 Demand and supply curves
​
​   ​
​
​
-In Exhibit 3-7, if price happened to currently be $75 in this market, a _______ would result, causing a __________ in price. ​

Accepted Answer

A)  ​shortage; increase 
B)  ​shortage; decrease 
C)  ​surplus; increase 
D)  ​surplus; decrease 
E)  ​market clearing; change 
A)  ​shortage; increase 
B)  ​shortage; decrease 
C)  ​surplus; increase 
D)  ​surplus; decrease 
E)  ​market clearing; change

Assuming that wine is a normal good, an increase in consumer income, other things being equal, will:

A technological improvement in the production of good X causes the:

A movement along the demand curve for automobiles is caused by a change in:

Suppose Jones sells a good for $100 at a yard sale. If the producer surplus from the sale is $75, Jones's cost of the good must have been:

Which of the following pairs is the best example of complements?

Producer surplus:

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for pork and beans (an inferior good)?

Which of the following is most likely to shift the demand curve for electricity to the left?

A change in demand cannot be caused by a change in:

In accordance with the law of supply, both individual and market supply curves are drawn:

Two goods that are substitutes are:

If the price of good X increases and this causes an increase in the demand for good Y, then goods X and Y are substitute goods.

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

Which of the following pairs is the best example of substitutes?

Ceteris paribus, which of the following would cause a decrease in the demand for HD TVs?

Exhibit 3-16 Supply and demand curves for chairs -In Exhibit 13-6, assume that the market price of chairs is $15 each. This price is:

Which of the following can bring about a change in the quantity demanded?

The law of demand says that the lower the price charged for a good, ceteris paribus, the:

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7, if price happened to currently be $75 in this market, a _ would result, causing a ____ in price.

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

Assuming that wine is a normal good, an increase in consumer income, other things being equal, will:

A technological improvement in the production of good X causes the:

A movement along the demand curve for automobiles is caused by a change in:

Suppose Jones sells a good for $100 at a yard sale. If the producer surplus from the sale is $75, Jones's cost of the good must have been:

Which of the following pairs is the best example of complements?

Producer surplus:

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for pork and beans (an inferior good)?

Which of the following is most likely to shift the demand curve for electricity to the left?

A change in demand cannot be caused by a change in:

In accordance with the law of supply, both individual and market supply curves are drawn:

Two goods that are substitutes are:

​If the price of good X increases and this causes an increase in the demand for good Y, then goods X and Y are substitute goods.

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

Which of the following pairs is the best example of substitutes?

Ceteris paribus, which of the following would cause a decrease in the demand for HD TVs?

​ Exhibit 3-16 Supply and demand curves for chairs ​ ​ ​ -In Exhibit 13-6, assume that the market price of chairs is $15 each. This price is: ​

Which of the following can bring about a change in the quantity demanded?

The law of demand says that the lower the price charged for a good, ceteris paribus, the:

​ Exhibit 3-7 Demand and supply curves ​ ​ ​ ​ ​ -In Exhibit 3-7, if price happened to currently be $75 in this market, a _______ would result, causing a __________ in price. ​

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 price of good X increases and this causes an increase in the demand for good Y, then goods X and Y are substitute goods.

Exhibit 3-16 Supply and demand curves for chairs -In Exhibit 13-6, assume that the market price of chairs is $15 each. This price is:

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7, if price happened to currently be $75 in this market, a _ would result, causing a ____ in price.