Question 1

A surplus of a product will arise when price is

Accepted Answer

A)  above equilibrium, with the result that quantity demanded exceeds quantity supplied. 
B)  above equilibrium, with the result that quantity supplied exceeds quantity demanded. 
C)  below equilibrium, with the result that quantity demanded exceeds quantity supplied. 
D)  below equilibrium, with the result that quantity supplied exceeds quantity demanded. 
A)  above equilibrium, with the result that quantity demanded exceeds quantity supplied. 
B)  above equilibrium, with the result that quantity supplied exceeds quantity demanded. 
C)  below equilibrium, with the result that quantity demanded exceeds quantity supplied. 
D)  below equilibrium, with the result that quantity supplied exceeds quantity demanded. B

Question 2

If X is a normal good, a rise in money income will shift the

Accepted Answer

A)  supply curve for X to the left. 
B)  supply curve for X to the right. 
C)  demand curve for X to the left. 
D)  demand curve for X to the right. 
A)  supply curve for X to the left. 
B)  supply curve for X to the right. 
C)  demand curve for X to the left. 
D)  demand curve for X to the right. D

Question 3

Surpluses drive market prices up; shortages drive them down.

Accepted Answer

A) True 
 B)False  False

Question 4

(Consider This) A primary advantage of Uber to government-regulated taxis is that

Accepted Answer

A)  Uber riders are guaranteed lower fares. 
B)  Uber drivers are required to meet more stringent safety standards. 
C)  Uber's dynamic pricing avoids the ineﬃciencies caused by regulated taxi fares. 
D)  the greater monopoly for rides increases proﬁts for both Uber and regular taxi drivers. 
A)  Uber riders are guaranteed lower fares. 
B)  Uber drivers are required to meet more stringent safety standards. 
C)  Uber's dynamic pricing avoids the ineﬃciencies caused by regulated taxi fares. 
D)  the greater monopoly for rides increases proﬁts for both Uber and regular taxi drivers.

Question 5

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Accepted Answer

A)  increase in demand. 
B)  increase in supply. 
C)  decrease in demand. 
D)  decrease in supply. 
A)  increase in demand. 
B)  increase in supply. 
C)  decrease in demand. 
D)  decrease in supply.

Question 6

In a competitive market, every consumer willing to pay the market price can buy a product and
every producer willing to sell the product at that price can sell it.

Accepted Answer

A) True 
 B)False

Question 7

If the demand for steak (a normal good) shifts to the left, the most likely reason is that

Accepted Answer

A)  consumer incomes have fallen. 
B)  cattle production has declined. 
C)  the price of steak has risen. 
D)  the price of cattle feed has gone up. 
A)  consumer incomes have fallen. 
B)  cattle production has declined. 
C)  the price of steak has risen. 
D)  the price of cattle feed has gone up.

Question 8

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Accepted Answer

A)  productive eﬃciency. 
B)  allocative eﬃciency. 
C)  minimum opportunity costs. 
D)  maximum process and revenues. 
A)  productive eﬃciency. 
B)  allocative eﬃciency. 
C)  minimum opportunity costs. 
D)  maximum process and revenues.

Question 9

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

Accepted Answer

A)  shortage of 20 million gallons. 
B)  shortage of 10 million gallons. 
C)  surplus of 10 million gallons. 
D)  surplus of 30 million gallons. 
A)  shortage of 20 million gallons. 
B)  shortage of 10 million gallons. 
C)  surplus of 10 million gallons. 
D)  surplus of 30 million gallons.

Question 10

A fall in the price of milk, used in the production of ice cream, will

Accepted Answer

A)  decrease the supply of ice cream. 
B)  increase the supply of ice cream. 
C)  cause a movement along the supply curve of ice cream. 
D)  have no effect on the supply of ice cream. 
A)  decrease the supply of ice cream. 
B)  increase the supply of ice cream. 
C)  cause a movement along the supply curve of ice cream. 
D)  have no effect on the supply of ice cream.

Question 11

$$\begin{array} { | c | c | c | } 
\hline \text { Price Per Unit } & \text { Quantity Supplied } & \text { Quantity Demanded } \
\hline \$ 10 & 100 & 295 \
\hline 11 & 150 & 275 \
\hline 12 & 190 & 250 \
\hline 13 & 220 & 220 \
\hline 14 & 245 & 180 \
\hline 15 & 265 & 135 \
\hline
\end{array}$$ If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price, the new equilibrium price would be

Accepted Answer

A)  $11. 
B)  $12. 
C)  $13. 
D)  $14. 
A)  $11. 
B)  $12. 
C)  $13. 
D)  $14.

Question 12

If there is a shortage of product X, and the price is free to change,

Accepted Answer

A)  fewer resources will be allocated to the production of this good. 
B)  the price of the product will rise. 
C)  the price of the product will decline. 
D)  the supply curve will shift to the left and the demand curve to the right, eliminating the shortage. 
A)  fewer resources will be allocated to the production of this good. 
B)  the price of the product will rise. 
C)  the price of the product will decline. 
D)  the supply curve will shift to the left and the demand curve to the right, eliminating the shortage.

Question 13

If products A and B are complements and the price of B decreases, the

Accepted Answer

A)  demand curves for both A and B will shift to the left. 
B)  amount of B purchased will increase, but the demand curve for A will not shift. 
C)  demand for A will increase and the quantity of B demanded will increase. 
D)  demand for A will decline and the demand for B will increase. 
A)  demand curves for both A and B will shift to the left. 
B)  amount of B purchased will increase, but the demand curve for A will not shift. 
C)  demand for A will increase and the quantity of B demanded will increase. 
D)  demand for A will decline and the demand for B will increase.

Question 14

A market for a product reaches equilibrium when

Accepted Answer

A)  the actual quantity bought by buyers equals actual quantity sold by sellers. 
B)  the price rises further after there is a surplus. 
C)  buyers intend to buy a quantity equal to the quantity that sellers intend to sell. 
D)  price falls further after there is a shortage. 
A)  the actual quantity bought by buyers equals actual quantity sold by sellers. 
B)  the price rises further after there is a surplus. 
C)  buyers intend to buy a quantity equal to the quantity that sellers intend to sell. 
D)  price falls further after there is a shortage.

Question 15

Refer to the diagram. A decrease in demand is depicted by a

Accepted Answer

A)  move from point x to point y. 
B)  shift from D1 to D2. 
C)  shift from D2 to D1. 
D)  move from point y to point x. 
A)  move from point x to point y. 
B)  shift from D1 to D2. 
C)  shift from D2 to D1. 
D)  move from point y to point x.

Question 16

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Accepted Answer

A)  increase the supply of X and decrease the demand for X. 
B)  increase the demand for X and decrease the supply of X. 
C)  increase the quantity supplied of X and decrease the quantity demanded of X. 
D)  decrease the quantity supplied of X and increase the quantity demanded of X. 
A)  increase the supply of X and decrease the demand for X. 
B)  increase the demand for X and decrease the supply of X. 
C)  increase the quantity supplied of X and decrease the quantity demanded of X. 
D)  decrease the quantity supplied of X and increase the quantity demanded of X.

Question 17

Other things equal, if the price of a key resource used to produce product X falls, the

Accepted Answer

A)  supply curve of product X will shift to the right. 
B)  demand curve of product X will shift to the right. 
C)  supply curve of product X will shift to the left. 
D)  supply curve of product X will not shift. 
A)  supply curve of product X will shift to the right. 
B)  demand curve of product X will shift to the right. 
C)  supply curve of product X will shift to the left. 
D)  supply curve of product X will not shift.

Question 18

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 decrease in the number of consumers of product X will

Accepted Answer

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

Question 19

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Accepted Answer

A)  price to go up and quantity to go down. 
B)  price to go up and quantity to go up. 
C)  price to go down and quantity to go down. 
D)  price to go down and quantity to go up. 
A)  price to go up and quantity to go down. 
B)  price to go up and quantity to go up. 
C)  price to go down and quantity to go down. 
D)  price to go down and quantity to go up.

Question 20

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will
Be

Accepted Answer

A)  F and C, respectively. 
B)  G and B, respectively. 
C)  F and A, respectively. 
D)  E and B, respectively. 
A)  F and C, respectively. 
B)  G and B, respectively. 
C)  F and A, respectively. 
D)  E and B, respectively.

A surplus of a product will arise when price is

If X is a normal good, a rise in money income will shift the

Surpluses drive market prices up; shortages drive them down.

(Consider This) A primary advantage of Uber to government-regulated taxis is that

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

If the demand for steak (a normal good) shifts to the left, the most likely reason is that

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

A fall in the price of milk, used in the production of ice cream, will

Price Per Unit Quantity Supplied Quantity Demanded \ 10 100 295 11 150 275 12 190 250 13 220 220 14 245 180 15 265 135 If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price, the new equilibrium price would be

If there is a shortage of product X, and the price is free to change,

If products A and B are complements and the price of B decreases, the

A market for a product reaches equilibrium when

Refer to the diagram. A decrease in demand is depicted by a

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Other things equal, if the price of a key resource used to produce product X falls, the

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will Be

The Market System and the Circular Flow

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

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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Exam 3: Demand, Supply, and Market Equilibrium

A surplus of a product will arise when price is

If X is a normal good, a rise in money income will shift the

Surpluses drive market prices up; shortages drive them down.

(Consider This) A primary advantage of Uber to government-regulated taxis is that

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

If the demand for steak (a normal good) shifts to the left, the most likely reason is that

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

A fall in the price of milk, used in the production of ice cream, will

Price Per Unit Quantity Supplied Quantity Demanded \ 10 100 295 11 150 275 12 190 250 13 220 220 14 245 180 15 265 135 If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price, the new equilibrium price would be

If there is a shortage of product X, and the price is free to change,

If products A and B are complements and the price of B decreases, the

A market for a product reaches equilibrium when

Refer to the diagram. A decrease in demand is depicted by a

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Other things equal, if the price of a key resource used to produce product X falls, the

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will Be

The Market System and the Circular Flow

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

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

Filters