Question 1

-The above figure shows a graph of the market for pizzas in a large town. What are the equilibrium price and quantity?

Accepted Answer

A) p = 8, Q = 60 
B) p = 7, Q = 40 
C) p = 7, Q = 70 
D) p = 10, Q = 40 
A) p = 8, Q = 60 
B) p = 7, Q = 40 
C) p = 7, Q = 70 
D) p = 10, Q = 40

Question 2

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) All market participants are price-takers. 
C) It is easy to find a trading partner. 
D) Products are differentiated. 
A) Transactions costs are a very small part of the sale. 
B) All market participants are price-takers. 
C) It is easy to find a trading partner. 
D) Products are differentiated.

Question 3

-The above figure shows a graph of the market for pizzas in a large town. At a price of $10, there will be

Accepted Answer

A) no pizzas supplied. 
B) equilibrium. 
C) excess supply. 
D) excess demand. 
A) no pizzas supplied. 
B) equilibrium. 
C) excess supply. 
D) excess demand.

Question 4

A price ceiling that is set below the equilibrium price

Accepted Answer

A) causes suppliers to lose money. 
B) creates a shortage. 
C) is non-binding. 
D) creates a surplus. 
A) causes suppliers to lose money. 
B) creates a shortage. 
C) is non-binding. 
D) creates a surplus.

Question 5

Suppose a market with a downward-sloping demand curve were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

Accepted Answer

A) increase in price and a decrease in quantity. 
B) decrease in price and an increase in quantity. 
C) increase in both price and quantity. 
D) decrease in both price and quantity. 
A) increase in price and a decrease in quantity. 
B) decrease in price and an increase in quantity. 
C) increase in both price and quantity. 
D) decrease in both price and quantity.

Question 6

A increase in quantity demanded as a result of a change in price

Accepted Answer

A) is a rightward shift of the demand curve. 
B) is a leftward shift of the demand curve. 
C) leaves the demand curve unchanged. 
D) is not possible. 
A) is a rightward shift of the demand curve. 
B) is a leftward shift of the demand curve. 
C) leaves the demand curve unchanged. 
D) is not possible.

Question 7

If oranges were found to cure cancer

Accepted Answer

A) the equilibrium price of apples would likely fall. 
B) the equilibrium price of oranges would likely increase in the near term. 
C) the equilibrium quantity of oranges would likely increase. 
D) All of the above. 
A) the equilibrium price of apples would likely fall. 
B) the equilibrium price of oranges would likely increase in the near term. 
C) the equilibrium quantity of oranges would likely increase. 
D) All of the above.

Question 8

A market is said to "clear" when

Accepted Answer

A) sellers give up selling their goods because they can't find any buyers. 
B) buyers and sellers are able to buy and sell as much as they want at the market price. 
C) the government decides to shut it down. 
D) sellers run out of goods to sell. 
A) sellers give up selling their goods because they can't find any buyers. 
B) buyers and sellers are able to buy and sell as much as they want at the market price. 
C) the government decides to shut it down. 
D) sellers run out of goods to sell.

Question 9

During a severe winter, the price of home heating oil is expected to be more than it would be during a normal winter.

Accepted Answer

A) True 
 B)False

Question 10

A price floor that is set below the equilibrium price

Accepted Answer

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

Question 11

Government regulations

Accepted Answer

A) have no impact on supply. 
B) only change the quantity supplied, not the supply curve. 
C) are generally ineffective due to lobbying by suppliers. 
D) can change both quantity supplied as well as the supply curve. 
A) have no impact on supply. 
B) only change the quantity supplied, not the supply curve. 
C) are generally ineffective due to lobbying by suppliers. 
D) can change both quantity supplied as well as the supply curve.

Question 12

Explain why the equilibrium price is called the market clearing price.

Accepted Answer

At the equilibrium price, sell

Question 13

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) There are three suppliers that form an oligopoly. 
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) There are three suppliers that form an oligopoly. 
C) It is easy to find a trading partner. 
D) All products are identical.

Question 14

A restriction on the number of people allowed to be medical doctors in the United States would most likely

Accepted Answer

A) increase doctors' fees. 
B) decrease the demand for doctors. 
C) decrease the demand for nurses. 
D) decrease the number of people who get sick. 
A) increase doctors' fees. 
B) decrease the demand for doctors. 
C) decrease the demand for nurses. 
D) decrease the number of people who get sick.

Question 15

If a yet-to-be released video game receives a positive review in a popular gaming magazine, what happens to the demand curve for the video game?

Accepted Answer

A) The demand curve is expected to shift to the right. 
B) The demand curve is expected to shift to the left. 
C) The demand curve is not expected to change. 
D) For those who read the review, demand shifts to the left. For those who don't read the review, demand shifts to the right. 
A) The demand curve is expected to shift to the right. 
B) The demand curve is expected to shift to the left. 
C) The demand curve is not expected to change. 
D) For those who read the review, demand shifts to the left. For those who don't read the review, demand shifts to the right.

Question 16

Suppose there is a linear downward-sloping demand curve and a linear upward-sloping supply curve for a good. The price of a substitute good increases and the price of an input to production also increases. Graph the original demand and supply curves, and the curves after the substitute good and input prices increase. How will the equilibrium price change after the substitute and input prices increase?

Accepted Answer

@#IMG-DLM& See the above figure. The new demand cu

Question 17

Consumer groups tend to lobby for

Accepted Answer

A) price floors. 
B) price ceilings. 
C) quantity quotas. 
D) taxes. 
A) price floors. 
B) price ceilings. 
C) quantity quotas. 
D) taxes.

Question 18

The quantity demanded for a good

Accepted Answer

A) must equal the quantity actually sold. 
B) can be less than the quantity actually sold. 
C) can be greater than the quantity actually sold. 
D) is always greater than the quantity actually sold. 
A) must equal the quantity actually sold. 
B) can be less than the quantity actually sold. 
C) can be greater than the quantity actually sold. 
D) is always greater than the quantity actually sold.

Question 19

-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 non-dairy coffee creamer after severe weather destroys a large portion of the coffee crop?

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 20

-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 tea after severe weather destroys a large portion of the coffee crop?

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

-The above figure shows a graph of the market for pizzas in a large town. What are the equilibrium price and quantity?

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

-The above figure shows a graph of the market for pizzas in a large town. At a price of $10, there will be

A price ceiling that is set below the equilibrium price

Suppose a market with a downward-sloping demand curve were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

A increase in quantity demanded as a result of a change in price

If oranges were found to cure cancer

A market is said to "clear" when

During a severe winter, the price of home heating oil is expected to be more than it would be during a normal winter.

A price floor that is set below the equilibrium price

Government regulations

Explain why the equilibrium price is called the market clearing price.

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

A restriction on the number of people allowed to be medical doctors in the United States would most likely

If a yet-to-be released video game receives a positive review in a popular gaming magazine, what happens to the demand curve for the video game?

Consumer groups tend to lobby for

The quantity demanded for a good

-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 non-dairy coffee creamer after severe weather destroys a large portion of the coffee crop?

-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 tea after severe weather destroys a large portion of the coffee crop?

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

-The above figure shows a graph of the market for pizzas in a large town. What are the equilibrium price and quantity?

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

-The above figure shows a graph of the market for pizzas in a large town. At a price of $10, there will be

A price ceiling that is set below the equilibrium price

Suppose a market with a downward-sloping demand curve were currently at equilibrium. A rightward shift of the supply curve would cause a(n)

A increase in quantity demanded as a result of a change in price

If oranges were found to cure cancer

A market is said to "clear" when

During a severe winter, the price of home heating oil is expected to be more than it would be during a normal winter.

A price floor that is set below the equilibrium price

Government regulations

Explain why the equilibrium price is called the market clearing price.

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

A restriction on the number of people allowed to be medical doctors in the United States would most likely

If a yet-to-be released video game receives a positive review in a popular gaming magazine, what happens to the demand curve for the video game?

Consumer groups tend to lobby for

The quantity demanded for a good

-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 non-dairy coffee creamer after severe weather destroys a large portion of the coffee crop?

-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 tea after severe weather destroys a large portion of the coffee crop?

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