Question 1

Toothpaste and toothbrushes are substitute goods.

Accepted Answer

A) True 
 B)False

Question 2

A decrease in the demand for recreational fishing boats might be caused by an increase in the

Accepted Answer

A) income of sports fishers. 
B) price of outboard motors. 
C) size and number of fish available. 
D) price of sailing boats. 
A) income of sports fishers. 
B) price of outboard motors. 
C) size and number of fish available. 
D) price of sailing boats.

Question 3

If the price of a product decreases, we would expect

Accepted Answer

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

Question 4

If the newspapers report that there is a shortage of strawberries, it must mean that the current price of strawberries is below the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 5

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.A reduction in the number of firms producing X will

Accepted Answer

A) increase D, increase P, and increase Q. 
B) increase S, decrease P, and increase Q. 
C) decrease S, increase P, and decrease Q. 
D) decrease S, decrease P, and increase Q. 
A) increase D, increase P, and increase Q. 
B) increase S, decrease P, and increase Q. 
C) decrease S, increase P, and decrease Q. 
D) decrease S, decrease P, and increase Q.

Question 6

A black market could arise as a result of

Accepted Answer

A) the imposition of a legal price floor below the equilibrium price. 
B) the imposition of a legal price ceiling above the equilibrium price. 
C) the imposition of a legal price floor at the equilibrium price. 
D) the imposition of a legal price ceiling below the equilibrium price. 
A) the imposition of a legal price floor below the equilibrium price. 
B) the imposition of a legal price ceiling above the equilibrium price. 
C) the imposition of a legal price floor at the equilibrium price. 
D) the imposition of a legal price ceiling below the equilibrium price.

Question 7

The development of a new production technique that lowers the cost of producing 3-D movies will shift the supply curve of 3-D movies to the right.

Accepted Answer

A) True 
 B)False

Question 8

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates the

Accepted Answer

A) demand for oranges will necessarily rise. 
B) equilibrium quantity of oranges will rise. 
C) amount of oranges that will be available at various prices has declined. 
D) price of oranges will fall. 
A) demand for oranges will necessarily rise. 
B) equilibrium quantity of oranges will rise. 
C) amount of oranges that will be available at various prices has declined. 
D) price of oranges will fall.

Question 9

Government-subsidized student loans tend to

Accepted Answer

A) increase demand for higher education, causing the price of education to rise. 
B) reduce the price of higher education, because supply increases. 
C) raise the price of higher education, because supply decreases. 
D) reduce demand for higher education, causing the price of education to fall. 
A) increase demand for higher education, causing the price of education to rise. 
B) reduce the price of higher education, because supply increases. 
C) raise the price of higher education, because supply decreases. 
D) reduce demand for higher education, causing the price of education to fall.

Question 10

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Accepted Answer

A) True 
 B)False

Question 11

An increase in the price of digital cameras will result in a(n)

Accepted Answer

A) shift of the demand curve for digital cameras to the left. 
B) decrease in the demand for digital cameras. 
C) shift of the demand curve for digital cameras to the right. 
D) movement up and to the left along the demand curve for digital cameras. 
A) shift of the demand curve for digital cameras to the left. 
B) decrease in the demand for digital cameras. 
C) shift of the demand curve for digital cameras to the right. 
D) movement up and to the left along the demand curve for digital cameras.

Question 12

Which would be a likely cause of an increase in the demand for pizza?

Accepted Answer

A) a reduced desire for take-out and fast-food dining 
B) a decrease in the price of hamburger sandwiches 
C) a decrease in the prices of cheese, pepperoni, and mushrooms 
D) a health report stating that eating pizza reduces stress 
A) a reduced desire for take-out and fast-food dining 
B) a decrease in the price of hamburger sandwiches 
C) a decrease in the prices of cheese, pepperoni, and mushrooms 
D) a health report stating that eating pizza reduces stress

Question 13

If a legal ceiling price is set above the equilibrium price,

Accepted Answer

A) a shortage of the product will occur. 
B) a surplus of the product will occur. 
C) a black market will evolve. 
D) neither the equilibrium price nor the equilibrium quantity will be affected. 
A) a shortage of the product will occur. 
B) a surplus of the product will occur. 
C) a black market will evolve. 
D) neither the equilibrium price nor the equilibrium quantity will be affected.

Question 14

The demand curve shows the relationship between

Accepted Answer

A) money income and quantity demanded. 
B) price and production costs. 
C) price and quantity demanded. 
D) consumer tastes and quantity demanded. 
A) money income and quantity demanded. 
B) price and production costs. 
C) price and quantity demanded. 
D) consumer tastes and quantity demanded.

Question 15

When economists say that the demand for a product has decreased, they mean that

Accepted Answer

A) the demand curve has shifted to the right. 
B) the product has become particularly scarce for some reason. 
C) the product has become more expensive and thus consumers are buying less of it. 
D) consumers are now willing and able to buy less of this product at each possible price. 
A) the demand curve has shifted to the right. 
B) the product has become particularly scarce for some reason. 
C) the product has become more expensive and thus consumers are buying less of it. 
D) consumers are now willing and able to buy less of this product at each possible price.

Question 16

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will

Accepted Answer

A) decrease, quantity demanded will decrease, and quantity supplied will increase. 
B) decrease and quantity demanded and quantity supplied will both decrease. 
C) increase, quantity demanded will increase, and quantity supplied will decrease. 
D) increase, quantity demanded will decrease, and quantity supplied will increase. 
A) decrease, quantity demanded will decrease, and quantity supplied will increase. 
B) decrease and quantity demanded and quantity supplied will both decrease. 
C) increase, quantity demanded will increase, and quantity supplied will decrease. 
D) increase, quantity demanded will decrease, and quantity supplied will increase.

Exam 3: Demand, Supply, and Market Equilibrium

Toothpaste and toothbrushes are substitute goods.

A decrease in the demand for recreational fishing boats might be caused by an increase in the

If the price of a product decreases, we would expect

If the newspapers report that there is a shortage of strawberries, it must mean that the current price of strawberries is below the equilibrium price.

A black market could arise as a result of

The development of a new production technique that lowers the cost of producing 3-D movies will shift the supply curve of 3-D movies to the right.

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates the

Government-subsidized student loans tend to

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

An increase in the price of digital cameras will result in a(n)

Which would be a likely cause of an increase in the demand for pizza?

If a legal ceiling price is set above the equilibrium price,

The demand curve shows the relationship between

When economists say that the demand for a product has decreased, they mean that

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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