Question 1

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will

Accepted Answer

A) increase equilibrium price and quantity. 
B) decrease equilibrium price and quantity. 
C) decrease equilibrium price and increase equilibrium quantity. 
D) increase equilibrium price and decrease equilibrium quantity. 
A) increase equilibrium price and quantity. 
B) decrease equilibrium price and quantity. 
C) decrease equilibrium price and increase equilibrium quantity. 
D) increase equilibrium price and decrease equilibrium quantity.

Question 2

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Accepted Answer

A) In neither statement. 
B) In the second statement. 
C) In the first statement. 
D) In both statements. 
A) In neither statement. 
B) In the second statement. 
C) In the first statement. 
D) In both statements.

Question 3

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.If X is a normal good, an increase in income will

Accepted Answer

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

Question 4

A decrease in the price of digital cameras would lead to a(n)

Accepted Answer

A) increase in the price and quantity sold of memory cards. 
B) decrease in the price and quantity sold of memory cards. 
C) increase in the price and a decrease in quantity sold of memory cards. 
D) decrease in the price and an increase in quantity sold of memory cards. 
A) increase in the price and quantity sold of memory cards. 
B) decrease in the price and quantity sold of memory cards. 
C) increase in the price and a decrease in quantity sold of memory cards. 
D) decrease in the price and an increase in quantity sold of memory cards.

Question 5

The horizontal axis of a graph that shows a market demand curve indicates the

Accepted Answer

A) different prices at which various levels of output can be sold. 
B) number of consumers who are in the market for this product. 
C) various quantities of output at which the market will be cleared. 
D) quantities which consumers will be willing and able to buy at various prices. 
A) different prices at which various levels of output can be sold. 
B) number of consumers who are in the market for this product. 
C) various quantities of output at which the market will be cleared. 
D) quantities which consumers will be willing and able to buy at various prices.

Question 6

The location of the product supply curve depends on

Accepted Answer

A) production technology. 
B) the number of buyers in the market. 
C) the tastes of buyers. 
D) the location of the demand curve. 
A) production technology. 
B) the number of buyers in the market. 
C) the tastes of buyers. 
D) the location of the demand curve.

Question 7

Which of the following will not cause the demand for product K to change?

Accepted Answer

A) a change in the price of close-substitute product J 
B) an increase in incomes of buyers of product K 
C) a change in the price of product K 
D) a change in consumer tastes for product K 
A) a change in the price of close-substitute product J 
B) an increase in incomes of buyers of product K 
C) a change in the price of product K 
D) a change in consumer tastes for product K

Question 8

An inferior good is

Accepted Answer

A) one whose demand curve will shift rightward as incomes rise. 
B) one whose price and quantity demanded vary directly. 
C) one that has not been approved by the Federal Food and Drug Administration. 
D) not accurately defined by any of these statements. 
A) one whose demand curve will shift rightward as incomes rise. 
B) one whose price and quantity demanded vary directly. 
C) one that has not been approved by the Federal Food and Drug Administration. 
D) not accurately defined by any of these statements.

Question 9

If price is above the equilibrium level, competition among sellers to reduce the resulting

Accepted Answer

A) surplus will increase quantity demanded and decrease quantity supplied. 
B) shortage will decrease quantity demanded and increase quantity supplied. 
C) surplus will decrease quantity demanded and increase quantity supplied. 
D) shortage will increase quantity demanded and decrease quantity supplied. 
A) surplus will increase quantity demanded and decrease quantity supplied. 
B) shortage will decrease quantity demanded and increase quantity supplied. 
C) surplus will decrease quantity demanded and increase quantity supplied. 
D) shortage will increase quantity demanded and decrease quantity supplied.

Question 10

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Accepted Answer

A) The increase in demand was greater than the decrease in supply. 
B) The decrease in demand was greater than the decrease in supply. 
C) The increase in supply was greater than the decrease in demand. 
D) The decrease in supply was greater than the increase in demand. 
A) The increase in demand was greater than the decrease in supply. 
B) The decrease in demand was greater than the decrease in supply. 
C) The increase in supply was greater than the decrease in demand. 
D) The decrease in supply was greater than the increase in demand.

Question 11

A market that achieves productive efficiency is necessarily producing the quantity of goods most desired by society.

Accepted Answer

A) True 
 B)False

Question 12

When high-school and college graduates apply for jobs in the labor markets,

Accepted Answer

A) job applicants are the "buyers" while employers are the "sellers." 
B) job applicants are the "sellers" while employers are the "buyers." 
C) job applicants and employers are both "sellers" in the market. 
D) job applicants and employers are both "buyers" in the market. 
A) job applicants are the "buyers" while employers are the "sellers." 
B) job applicants are the "sellers" while employers are the "buyers." 
C) job applicants and employers are both "sellers" in the market. 
D) job applicants and employers are both "buyers" in the market.

Question 13

An increase in quantity supplied might be caused by an increase in production costs.

Accepted Answer

A) True 
 B)False

Question 14

Price floors and ceiling prices both

Accepted Answer

A) cause shortages. 
B) cause surpluses. 
C) cause the supply and demand curves to shift until equilibrium is established. 
D) interfere with the rationing function of prices. 
A) cause shortages. 
B) cause surpluses. 
C) cause the supply and demand curves to shift until equilibrium is established. 
D) interfere with the rationing function of prices.

Question 15

The "dynamic pricing" model used by the ride-sharing firm Uber, along with a few other firms, illustrates which of the following?

Accepted Answer

A) When there is shortage in a market, the equilibrium price will rise. 
B) Once the equilibrium price is reached, it will remain there for at least several days. 
C) Since actual quantity bought always equals actual quantity sold, the market is always at equilibrium. 
D) When there is surplus in a market, the equilibrium price will rise. 
A) When there is shortage in a market, the equilibrium price will rise. 
B) Once the equilibrium price is reached, it will remain there for at least several days. 
C) Since actual quantity bought always equals actual quantity sold, the market is always at equilibrium. 
D) When there is surplus in a market, the equilibrium price will rise.

Question 16

A price ceiling imposed by the government is intended to benefit the sellers of the product.

Accepted Answer

A) True 
 B)False

Question 17

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Accepted Answer

A) an increase in the demand for hybrid cars 
B) a decrease in the demand for hybrid cars 
C) higher prices of car batteries 
D) lower prices for gasoline 
A) an increase in the demand for hybrid cars 
B) a decrease in the demand for hybrid cars 
C) higher prices of car batteries 
D) lower prices for gasoline

Question 18

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda.When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by

Accepted Answer

A) the substitution effect. 
B) the income effect. 
C) the price effect. 
D) a rightward shift in the demand curve for hamburgers. 
A) the substitution effect. 
B) the income effect. 
C) the price effect. 
D) a rightward shift in the demand curve for hamburgers.

Question 19

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)

Accepted Answer

A) increase in the price and in the quantity purchased of coffee. 
B) decrease in the price and in the quantity purchased of coffee. 
C) increase in the price and a decrease in the quantity purchased of coffee. 
D) decrease in the price and an increase in quantity purchased of coffee. 
A) increase in the price and in the quantity purchased of coffee. 
B) decrease in the price and in the quantity purchased of coffee. 
C) increase in the price and a decrease in the quantity purchased of coffee. 
D) decrease in the price and an increase in quantity purchased of coffee.

Question 20

If an economy produces its most wanted goods but uses outdated production methods, it is

Accepted Answer

A) achieving productive efficiency but not allocative efficiency. 
B) not achieving productive efficiency. 
C) achieving both productive and allocative efficiency. 
D) engaged in roundabout production. 
A) achieving productive efficiency but not allocative efficiency. 
B) not achieving productive efficiency. 
C) achieving both productive and allocative efficiency. 
D) engaged in roundabout production.

Exam 3: Demand, Supply, and Market Equilibrium

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

A decrease in the price of digital cameras would lead to a(n)

The horizontal axis of a graph that shows a market demand curve indicates the

The location of the product supply curve depends on

Which of the following will not cause the demand for product K to change?

An inferior good is

If price is above the equilibrium level, competition among sellers to reduce the resulting

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

A market that achieves productive efficiency is necessarily producing the quantity of goods most desired by society.

When high-school and college graduates apply for jobs in the labor markets,

An increase in quantity supplied might be caused by an increase in production costs.

Price floors and ceiling prices both

The "dynamic pricing" model used by the ride-sharing firm Uber, along with a few other firms, illustrates which of the following?

A price ceiling imposed by the government is intended to benefit the sellers of the product.

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda.When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)

If an economy produces its most wanted goods but uses outdated production methods, it is

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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