Question 1

There is a surplus of tomatoes in the market. This implies that

Accepted Answer

A)  the current price is set above the equilibrium level. 
B)  the price will be rising, as a result. 
C)  supply of tomatoes is more than the demand. 
D)  quantity demanded is more than quantity supplied. 
A)  the current price is set above the equilibrium level. 
B)  the price will be rising, as a result. 
C)  supply of tomatoes is more than the demand. 
D)  quantity demanded is more than quantity supplied.

Question 2

Refer to the diagram. An increase in quantity supplied is depicted by a

Accepted Answer

A)  move from point y to point x. 
B)  shift from S1 to S2. 
C)  shift from S2 to S1. 
D)  move from point x to point y. 
A)  move from point y to point x. 
B)  shift from S1 to S2. 
C)  shift from S2 to S1. 
D)  move from point x to point y.

Question 3

Assume the demand curve for product X shifts to the right. This might be caused by

Accepted Answer

A)  a decline in income if X is an inferior good. 
B)  a decline in the price of Z if X and Z are substitute goods. 
C)  a change in consumer tastes that is unfavorable to X. 
D)  an increase in the price of Y if X and Y are complementary goods. 
A)  a decline in income if X is an inferior good. 
B)  a decline in the price of Z if X and Z are substitute goods. 
C)  a change in consumer tastes that is unfavorable to X. 
D)  an increase in the price of Y if X and Y are complementary goods.

Question 4

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Accepted Answer

A)  complementary goods, and the higher price for oil increased the demand for natural gas. 
B)  substitute goods, and the higher price for oil increased the demand for natural gas. 
C)  complementary goods, and the higher price for oil decreased the supply of natural gas. 
D)  substitute goods, and the higher price for oil decreased the supply of natural gas. 
A)  complementary goods, and the higher price for oil increased the demand for natural gas. 
B)  substitute goods, and the higher price for oil increased the demand for natural gas. 
C)  complementary goods, and the higher price for oil decreased the supply of natural gas. 
D)  substitute goods, and the higher price for oil decreased the supply of natural gas.

Question 5

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 6

$$\begin{array} { | c | r | c | } 
\hline \text { Quantity Demanded } & \text { Price } & \text { Quantity Supplied } \
\hline 52 & \$ 50 & 73 \
\hline 62 & 45 & 62 \
\hline 72 & 40 & 51 \
\hline 82 & 35 & 42 \
\hline 92 & 30 & 33 \
\hline
\end{array}$$ If government set a maximum price of $45 in the market,

Accepted Answer

A)  a shortage of 21 units would arise. 
B)  a surplus of 21 units would arise. 
C)  a surplus of 40 units would arise. 
D)  it would create neither a shortage nor a surplus. 
A)  a shortage of 21 units would arise. 
B)  a surplus of 21 units would arise. 
C)  a surplus of 40 units would arise. 
D)  it would create neither a shortage nor a surplus.

Question 7

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

Accepted Answer

A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in quantity supplied. 
A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in quantity supplied.

Question 8

The law of demand states that, other things equal,

Accepted Answer

A)  price and quantity demanded are inversely related. 
B)  the larger the number of buyers in a market, the lower will be product price. 
C)  price and quantity demanded are directly related. 
D)  consumers will buy more of a product at high prices than at low prices. 
A)  price and quantity demanded are inversely related. 
B)  the larger the number of buyers in a market, the lower will be product price. 
C)  price and quantity demanded are directly related. 
D)  consumers will buy more of a product at high prices than at low prices.

Question 9

Assume that the graphs show a competitive market for the product stated in the question.   Select the graph above that best shows the change in the market speciﬁed in the following
Situation: the market for digital cameras, when the productivity of workers in the digital camera
Industry increases.

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 10

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Accepted Answer

A)  an inferior good. 
B)  the rationing function of prices. 
C)  the substitution effect. 
D)  the income effect. 
A)  an inferior good. 
B)  the rationing function of prices. 
C)  the substitution effect. 
D)  the income effect.

Question 11

Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Accepted Answer

A)  B only 
B)  C only 
C)  B and C 
D)  D only 
A)  B only 
B)  C only 
C)  B and C 
D)  D only

Question 12

Which of the following is not a determinant of demand for laptop computers?

Accepted Answer

A)  income of buyers of laptop computers 
B)  the cost of inputs for producing laptop computers 
C)  the prices of related goods such as software and iPads 
D)  expectations about the future price of laptop computers 
A)  income of buyers of laptop computers 
B)  the cost of inputs for producing laptop computers 
C)  the prices of related goods such as software and iPads 
D)  expectations about the future price of laptop computers

Question 13

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Accepted Answer

A) True 
 B)False

Question 14

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

Accepted Answer

A)  A only 
B)  A and D 
C)  B only 
D)  D only 
A)  A only 
B)  A and D 
C)  B only 
D)  D only

Question 15

If we say that a price is too high to clear the market, we mean that

Accepted Answer

A)  quantity demanded exceeds quantity supplied. 
B)  the equilibrium price is above the current price. 
C)  quantity supplied exceeds quantity demanded. 
D)  the price of the good is likely to rise. 
A)  quantity demanded exceeds quantity supplied. 
B)  the equilibrium price is above the current price. 
C)  quantity supplied exceeds quantity demanded. 
D)  the price of the good is likely to rise.

Question 16

A demand curve

Accepted Answer

A)  shows the relationship between price and quantity supplied. 
B)  indicates the quantity demanded at each price in a series of prices. 
C)  graphs as an upsloping line. 
D)  shows the relationship between income and spending. 
A)  shows the relationship between price and quantity supplied. 
B)  indicates the quantity demanded at each price in a series of prices. 
C)  graphs as an upsloping line. 
D)  shows the relationship between income and spending.

Question 17

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)  a widely publicized study that indicates beef consumption increases one's cholesterol 
B)  a reduction in the price of cattle feed 
C)  an effective advertising campaign by pork producers 
D)  a change in the incomes of beef consumers 
A)  a widely publicized study that indicates beef consumption increases one's cholesterol 
B)  a reduction in the price of cattle feed 
C)  an effective advertising campaign by pork producers 
D)  a change in the incomes of beef consumers

Question 18

An increase in the price of digital cameras will result in a(n)

Accepted Answer

A)  shift of the demand curve for digital cameras to the left. 
B)  decrease in the demand for digital cameras. 
C)  shift of the demand curve for digital cameras to the right. 
D)  movement up and to the left along the demand curve for digital cameras. 
A)  shift of the demand curve for digital cameras to the left. 
B)  decrease in the demand for digital cameras. 
C)  shift of the demand curve for digital cameras to the right. 
D)  movement up and to the left along the demand curve for digital cameras.

Question 19

What combination of changes would most likely decrease the equilibrium price?

Accepted Answer

A)  when supply decreases and demand increases 
B)  when demand increases and supply increases 
C)  when demand decreases and supply decreases 
D)  when supply increases and demand decreases 
A)  when supply decreases and demand increases 
B)  when demand increases and supply increases 
C)  when demand decreases and supply decreases 
D)  when supply increases and demand decreases

Question 20

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

Accepted Answer

A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in supply 
D)  an increase in supply 
A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in supply 
D)  an increase in supply

There is a surplus of tomatoes in the market. This implies that

Refer to the diagram. An increase in quantity supplied is depicted by a

Assume the demand curve for product X shifts to the right. This might be caused by

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Quantity Demanded Price Quantity Supplied 52 \ 50 73 62 45 62 72 40 51 82 35 42 92 30 33 If government set a maximum price of $45 in the market,

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

The law of demand states that, other things equal,

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for digital cameras, when the productivity of workers in the digital camera Industry increases.

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Which of the following is not a determinant of demand for laptop computers?

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

If we say that a price is too high to clear the market, we mean that

A demand curve

Which of the following would not shift the demand curve for beef?

An increase in the price of digital cameras will result in a(n)

What combination of changes would most likely decrease the equilibrium price?

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

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

Exam 3: Demand, Supply, and Market Equilibrium

There is a surplus of tomatoes in the market. This implies that

Refer to the diagram. An increase in quantity supplied is depicted by a

Assume the demand curve for product X shifts to the right. This might be caused by

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Quantity Demanded Price Quantity Supplied 52 \ 50 73 62 45 62 72 40 51 82 35 42 92 30 33 If government set a maximum price of $45 in the market,

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

The law of demand states that, other things equal,

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for digital cameras, when the productivity of workers in the digital camera Industry increases.

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Which of the following is not a determinant of demand for laptop computers?

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

If we say that a price is too high to clear the market, we mean that

A demand curve

Which of the following would not shift the demand curve for beef?

An increase in the price of digital cameras will result in a(n)

What combination of changes would most likely decrease the equilibrium price?

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

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