Question 1

If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely

Accepted Answer

A) shift leftward. 
B) shift rightward. 
C) remain unchanged. 
D) become steeper. 
A) shift leftward. 
B) shift rightward. 
C) remain unchanged. 
D) become steeper.

Question 2

If the supply curve of a product changes so that sellers are now willing to sell 2 additional units at any given price, the supply curve will

Accepted Answer

A) shift leftward by 2 units. 
B) shift rightward by 2 units. 
C) shift vertically up by 2 units. 
D) shift vertically down by 2 units. 
A) shift leftward by 2 units. 
B) shift rightward by 2 units. 
C) shift vertically up by 2 units. 
D) shift vertically down by 2 units.

Question 3

After tickets for a major sporting event are purchased at the official box office price, a market often develops whereby these tickets sell at prices well above the official box office price. Which of the following scenarios would NOT be able to explain this result?

Accepted Answer

A) The official price was below equilibrium from the moment the tickets were available. 
B) Increased publicity causes the demand curve for the event to shift rightward. 
C) The event was not a sellout. 
D) Not everyone who wanted a ticket was able to buy one at the box office. 
A) The official price was below equilibrium from the moment the tickets were available. 
B) Increased publicity causes the demand curve for the event to shift rightward. 
C) The event was not a sellout. 
D) Not everyone who wanted a ticket was able to buy one at the box office.

Question 4

A market equilibrium occurs

Accepted Answer

A) only with government regulation. 
B) only because of the profit motive of firms. 
C) only because of the complacency of consumers. 
D) through the interaction of self-interested buyers and sellers. 
A) only with government regulation. 
B) only because of the profit motive of firms. 
C) only because of the complacency of consumers. 
D) through the interaction of self-interested buyers and sellers.

Question 5

To determine the total demand for all consumers, sum the quantity each consumer demands

Accepted Answer

A) at a given price. 
B) at all prices and then sum this amount across all consumers. 
C) Both A and B will generate the same total demand. 
D) None of the above. 
A) at a given price. 
B) at all prices and then sum this amount across all consumers. 
C) Both A and B will generate the same total demand. 
D) None of the above.

Question 6

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

Accepted Answer

A) there will be excess demand. 
B) there will be excess supply. 
C) the curves will shift to make a new equilibrium at the regulated price. 
D) None of the above. 
A) there will be excess demand. 
B) there will be excess supply. 
C) the curves will shift to make a new equilibrium at the regulated price. 
D) None of the above.

Question 7

If the price of a good is initially below the equilibrium level

Accepted Answer

A) the supply curve will shift leftward. 
B) the supply curve will shift rightward. 
C) firms supply none of the good. 
D) excess demand exists. 
A) the supply curve will shift leftward. 
B) the supply curve will shift rightward. 
C) firms supply none of the good. 
D) excess demand exists.

Question 8

When there is a binding price floor

Accepted Answer

A) there is no equilibrium. 
B) the quantity demanded does not equal the quantity supplied. 
C) all potential producers are happy because they can sell the good at a higher price. 
D) the government is helping consumers at the expense of producers. 
A) there is no equilibrium. 
B) the quantity demanded does not equal the quantity supplied. 
C) all potential producers are happy because they can sell the good at a higher price. 
D) the government is helping consumers at the expense of producers.

Question 9

If the demand curve is vertical a rightward shift of the supply curve will lead to

Accepted Answer

A) an increase in quantity supplied. 
B) an increase in quantity demanded. 
C) a decrease in quantity demanded. 
D) a decrease in price. 
A) an increase in quantity supplied. 
B) an increase in quantity demanded. 
C) a decrease in quantity demanded. 
D) a decrease in price.

Question 10

A price ceiling that is set above the equilibrium price

Accepted Answer

A) causes suppliers to raise their prices. 
B) is binding. 
C) is non-binding. 
D) creates a shortage. 
A) causes suppliers to raise their prices. 
B) is binding. 
C) is non-binding. 
D) creates a shortage.

Question 11

-The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market?

Accepted Answer

A) There is excess supply at the equilibrium price of $7. 
B) The government has selected the appropriate price for pizzas. 
C) The quantity supplied equals the quantity demanded. 
D) Supply equals demand. 
A) There is excess supply at the equilibrium price of $7. 
B) The government has selected the appropriate price for pizzas. 
C) The quantity supplied equals the quantity demanded. 
D) Supply equals demand.

Question 12

If a city were to ban the use of automobiles within its city limits, we would expect

Accepted Answer

A) the demand curve for automobiles to shift to the left. 
B) people to move to another city. 
C) the demand curve for bicycles to shift to the left. 
D) the demand curve for automobiles to remain the same. 
A) the demand curve for automobiles to shift to the left. 
B) people to move to another city. 
C) the demand curve for bicycles to shift to the left. 
D) the demand curve for automobiles to remain the same.

Question 13

-The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computers after technological advances in making computers occur?

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 14

Consumers and firms are known as price takers only if

Accepted Answer

A) no market exists to determine the equilibrium price. 
B) they can set the market price. 
C) they cannot unilaterally affect the market price. 
D) excess demand exists. 
A) no market exists to determine the equilibrium price. 
B) they can set the market price. 
C) they cannot unilaterally affect the market price. 
D) excess demand exists.

Question 15

If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely

Accepted Answer

A) shift rightward. 
B) shift leftward. 
C) remain unchanged. 
D) remain unchanged while quantity demanded would change. 
A) shift rightward. 
B) shift leftward. 
C) remain unchanged. 
D) remain unchanged while quantity demanded would change.

Question 16

The CB radio was very popular in the 1970s and 1980s for communicating while driving. People bought them because other drivers had them too and they could therefore talk with many others on their trips. This illustrates

Accepted Answer

A) that the demand curve for CB radios was inelastic. 
B) the network effect. 
C) that CB radios and gasoline are complementary goods. 
D) the effects of mobile phones on the demand curve for CB radios. 
A) that the demand curve for CB radios was inelastic. 
B) the network effect. 
C) that CB radios and gasoline are complementary goods. 
D) the effects of mobile phones on the demand curve for CB radios.

Question 17

Which of the following is NOT a characteristic of perfectly competitive markets?

Accepted Answer

A) Transactions costs are a very small part of the sale. 
B) Information about the product is difficult to find and understand. 
C) It is easy to find a trading partner. 
D) All products are identical. 
A) Transactions costs are a very small part of the sale. 
B) Information about the product is difficult to find and understand. 
C) It is easy to find a trading partner. 
D) All products are identical.

Question 18

An increase in the price of oil will

Accepted Answer

A) shift the supply curve of oil to the left. 
B) shift the supply curve of oil to the right. 
C) leave the supply curve of oil unchanged. 
D) Not enough information to answer the question. 
A) shift the supply curve of oil to the left. 
B) shift the supply curve of oil to the right. 
C) leave the supply curve of oil unchanged. 
D) Not enough information to answer the question.

Question 19

If the price of automobiles were to increase substantially, the demand curve for automobiles would most likely

Accepted Answer

A) shift rightward. 
B) shift leftward. 
C) remain unchanged. 
D) become steeper. 
A) shift rightward. 
B) shift leftward. 
C) remain unchanged. 
D) become steeper.

Question 20

When there is a binding price ceiling,

Accepted Answer

A) there is no equilibrium. 
B) the quantity demanded does not equal the quantity supplied. 
C) all potential customers are happy because they can buy the good at a lower price. 
D) producers move production to another country. 
A) there is no equilibrium. 
B) the quantity demanded does not equal the quantity supplied. 
C) all potential customers are happy because they can buy the good at a lower price. 
D) producers move production to another country.

If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely

If the supply curve of a product changes so that sellers are now willing to sell 2 additional units at any given price, the supply curve will

After tickets for a major sporting event are purchased at the official box office price, a market often develops whereby these tickets sell at prices well above the official box office price. Which of the following scenarios would NOT be able to explain this result?

A market equilibrium occurs

To determine the total demand for all consumers, sum the quantity each consumer demands

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

If the price of a good is initially below the equilibrium level

When there is a binding price floor

If the demand curve is vertical a rightward shift of the supply curve will lead to

A price ceiling that is set above the equilibrium price

-The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market?

If a city were to ban the use of automobiles within its city limits, we would expect

-The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computers after technological advances in making computers occur?

Consumers and firms are known as price takers only if

If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely

The CB radio was very popular in the 1970s and 1980s for communicating while driving. People bought them because other drivers had them too and they could therefore talk with many others on their trips. This illustrates

Which of the following is NOT a characteristic of perfectly competitive markets?

An increase in the price of oil will

If the price of automobiles were to increase substantially, the demand curve for automobiles would most likely

When there is a binding price ceiling,

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 2: Supply and Demand

If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely

If the supply curve of a product changes so that sellers are now willing to sell 2 additional units at any given price, the supply curve will

After tickets for a major sporting event are purchased at the official box office price, a market often develops whereby these tickets sell at prices well above the official box office price. Which of the following scenarios would NOT be able to explain this result?

A market equilibrium occurs

To determine the total demand for all consumers, sum the quantity each consumer demands

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

If the price of a good is initially below the equilibrium level

When there is a binding price floor

If the demand curve is vertical a rightward shift of the supply curve will lead to

A price ceiling that is set above the equilibrium price

-The figure above shows a graph of the market for pizzas in a large town. What characterizes the equilibrium in this market?

If a city were to ban the use of automobiles within its city limits, we would expect

-The above figure shows four different markets with changes in either the supply curve or the demand curve. Which graph best illustrates the market for computers after technological advances in making computers occur?

Consumers and firms are known as price takers only if

If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely

The CB radio was very popular in the 1970s and 1980s for communicating while driving. People bought them because other drivers had them too and they could therefore talk with many others on their trips. This illustrates

Which of the following is NOT a characteristic of perfectly competitive markets?

An increase in the price of oil will

If the price of automobiles were to increase substantially, the demand curve for automobiles would most likely

When there is a binding price ceiling,

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters