Question 1

A competitive equilibrium is described by

Accepted Answer

A) a price only. 
B) a quantity only. 
C) the excess supply minus the excess demand. 
D) a price and a quantity. 
A) a price only. 
B) a quantity only. 
C) the excess supply minus the excess demand. 
D) a price and a quantity.

Question 2

In some markets, ________ act to adjust the price to bring the market into equilibrium.

Accepted Answer

A) bulls 
B) regulators 
C) market makers 
D) web sites 
A) bulls 
B) regulators 
C) market makers 
D) web sites

Question 3

If the price of automobiles were to decrease substantially, the demand curve for pizza 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 4

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in

Accepted Answer

A) a rightward shift of the supply curve. 
B) an increase in quantity supplied. 
C) a leftward shift of the supply curve. 
D) a downward movement along the supply curve. 
A) a rightward shift of the supply curve. 
B) an increase in quantity supplied. 
C) a leftward shift of the supply curve. 
D) a downward movement along the supply curve.

Question 5

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Accepted Answer

A) Joe is not considered part of the demand for Ferraris. 
B) Joe won't be sold a Ferrari. 
C) Joe is not considered rational. 
D) Joe's willingness to pay is not indicative of how much he values the Ferrari. 
A) Joe is not considered part of the demand for Ferraris. 
B) Joe won't be sold a Ferrari. 
C) Joe is not considered rational. 
D) Joe's willingness to pay is not indicative of how much he values the Ferrari.

Question 6

Which of the following is NOT possible according to the law of demand?

Accepted Answer

A) a horizontal demand curve 
B) a vertical demand curve 
C) a downward-sloping supply curve 
D) an upward-sloping demand curve 
A) a horizontal demand curve 
B) a vertical demand curve 
C) a downward-sloping supply curve 
D) an upward-sloping demand curve

Question 7

-The above figure shows the market for apples. If apple farmers convince the government to set a minimum price of $4 per pound, then

Accepted Answer

A) 100 pounds of apples will be sold at $4. 
B) no apples will be supplied. 
C) no apples will be demanded. 
D) None of the above. 
A) 100 pounds of apples will be sold at $4. 
B) no apples will be supplied. 
C) no apples will be demanded. 
D) None of the above.

Question 8

According to Adam Smith's invisible hand

Accepted Answer

A) markets need the government to intervene. 
B) forces are constantly pushing markets out of equilibrium 
C) people and firms coordinate their activities, resulting in equilibrium in the market. 
D) there is an invisible glove that restricts what markets can do. 
A) markets need the government to intervene. 
B) forces are constantly pushing markets out of equilibrium 
C) people and firms coordinate their activities, resulting in equilibrium in the market. 
D) there is an invisible glove that restricts what markets can do.

Question 9

Which of the following cultural events likely increased the demand for the product highlighted in the event?

Accepted Answer

A) The banning of cigarette advertising on television. 
B) The inclusion of Reese's Pieces in the movie E.T. 
C) Increased environmental awareness about the negative impacts of sport utility vehicles (SUVs). 
D) Concerns over "Mad Cow" disease in beef. 
A) The banning of cigarette advertising on television. 
B) The inclusion of Reese's Pieces in the movie E.T. 
C) Increased environmental awareness about the negative impacts of sport utility vehicles (SUVs). 
D) Concerns over "Mad Cow" disease in beef.

Question 10

Assume the price of a movie is $10. Jenna demands 2 movies per week, Sam demands 3 movies per week, and Jordan demands 8 movies per week. From this information we can conclude that

Accepted Answer

A) the market quantity demanded at a price of $10 is at least 13 movies per week. 
B) Jordan is obviously more wealthy than either Sam or Jeanna. 
C) Sam is irrational compared to Jenna or Jordan. 
D) the movie industry is unprofitable. 
A) the market quantity demanded at a price of $10 is at least 13 movies per week. 
B) Jordan is obviously more wealthy than either Sam or Jeanna. 
C) Sam is irrational compared to Jenna or Jordan. 
D) the movie industry is unprofitable.

Question 11

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

Accepted Answer

A) There is free entry and exit. 
B) All market participants are price-takers. 
C) It is hard to find a trading partner. 
D) All products are identical. 
A) There is free entry and exit. 
B) All market participants are price-takers. 
C) It is hard to find a trading partner. 
D) All products are identical.

Question 12

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

Accepted Answer

A) The government restricts the number of producers through licensing requirements. 
B) All market participants are price-takers. 
C) It is easy to find a trading partner. 
D) All products are identical. 
A) The government restricts the number of producers through licensing requirements. 
B) All market participants are price-takers. 
C) It is easy to find a trading partner. 
D) All products are identical.

Question 13

When a market is in disequilibrium consumers and producers change their behavior. As a result, the market reaches equilibrium.

Accepted Answer

A) True 
 B)False

Question 14

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) be indeterminable. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) be indeterminable.

Question 15

The expression "increase in quantity supplied" is illustrated graphically as a

Accepted Answer

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

Question 16

-The above figure shows a graph of the market for pizzas in a large town. No pizzas will be supplied unless the price is above

Accepted Answer

A) $0. 
B) $5. 
C) $12. 
D) $14. 
A) $0. 
B) $5. 
C) $12. 
D) $14.

Question 17

-The above figure shows a graph of the market for pizzas in a large town. Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce only 40 pizzas. As a result, for prices greater than $7, the

Accepted Answer

A) supply curve is unchanged. 
B) supply curve is vertical. 
C) demand curve becomes vertical. 
D) demand curve becomes horizontal. 
A) supply curve is unchanged. 
B) supply curve is vertical. 
C) demand curve becomes vertical. 
D) demand curve becomes horizontal.

Question 18

The market supply curve is found by

Accepted Answer

A) horizontally summing all individual supply curves at a price. 
B) vertically summing all individual supply curves at a quantity. 
C) either A or B above since they both give the same answer. 
D) None of the above. 
A) horizontally summing all individual supply curves at a price. 
B) vertically summing all individual supply curves at a quantity. 
C) either A or B above since they both give the same answer. 
D) None of the above.

Question 19

If the government places a $1500 tax on each hybrid car sold,

Accepted Answer

A) consumers will stop buying hybrid cars. 
B) the demand curve will shift to the right by $1500. 
C) the supply curve will shift to the right by $1500. 
D) None of the above. 
A) consumers will stop buying hybrid cars. 
B) the demand curve will shift to the right by $1500. 
C) the supply curve will shift to the right by $1500. 
D) None of the above.

Question 20

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

Accepted Answer

A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above. 
A) is not in equilibrium. 
B) has excess supply. 
C) does not have excess demand. 
D) All of the above.

A competitive equilibrium is described by

In some markets, ________ act to adjust the price to bring the market into equilibrium.

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

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Which of the following is NOT possible according to the law of demand?

-The above figure shows the market for apples. If apple farmers convince the government to set a minimum price of $4 per pound, then

According to Adam Smith's invisible hand

Which of the following cultural events likely increased the demand for the product highlighted in the event?

Assume the price of a movie is $10. Jenna demands 2 movies per week, Sam demands 3 movies per week, and Jordan demands 8 movies per week. From this information we can conclude that

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

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

When a market is in disequilibrium consumers and producers change their behavior. As a result, the market reaches equilibrium.

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

The expression "increase in quantity supplied" is illustrated graphically as a

-The above figure shows a graph of the market for pizzas in a large town. No pizzas will be supplied unless the price is above

-The above figure shows a graph of the market for pizzas in a large town. Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce only 40 pizzas. As a result, for prices greater than $7, the

The market supply curve is found by

If the government places a $1500 tax on each hybrid car sold,

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

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

A competitive equilibrium is described by

In some markets, ________ act to adjust the price to bring the market into equilibrium.

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

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Which of the following is NOT possible according to the law of demand?

-The above figure shows the market for apples. If apple farmers convince the government to set a minimum price of $4 per pound, then

According to Adam Smith's invisible hand

Which of the following cultural events likely increased the demand for the product highlighted in the event?

Assume the price of a movie is $10. Jenna demands 2 movies per week, Sam demands 3 movies per week, and Jordan demands 8 movies per week. From this information we can conclude that

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

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

When a market is in disequilibrium consumers and producers change their behavior. As a result, the market reaches equilibrium.

-The above figure shows a graph of the market for pizzas in a large town. As a result of concern over the affordability of pizza, the government restricts sellers from charging a price over $7. As a result, the quantity of pizzas consumed will

The expression "increase in quantity supplied" is illustrated graphically as a

-The above figure shows a graph of the market for pizzas in a large town. No pizzas will be supplied unless the price is above

-The above figure shows a graph of the market for pizzas in a large town. Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce only 40 pizzas. As a result, for prices greater than $7, the

The market supply curve is found by

If the government places a $1500 tax on each hybrid car sold,

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

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