Question 1

Productive eﬃciency refers to

Accepted Answer

A)  the use of the least-cost method of production. 
B)  the production of the product mix most wanted by society. 
C)  the full employment of all available resources. 
D)  production at some point inside of the production possibilities curve. 
A)  the use of the least-cost method of production. 
B)  the production of the product mix most wanted by society. 
C)  the full employment of all available resources. 
D)  production at some point inside of the production possibilities curve.

Question 2

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Accepted Answer

A)  supply has decreased and equilibrium price has increased. 
B)  demand has increased and equilibrium price has decreased. 
C)  demand has decreased and equilibrium price has decreased. 
D)  demand has increased and equilibrium price has increased. 
A)  supply has decreased and equilibrium price has increased. 
B)  demand has increased and equilibrium price has decreased. 
C)  demand has decreased and equilibrium price has decreased. 
D)  demand has increased and equilibrium price has increased.

Question 3

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Accepted Answer

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

Question 4

If the price of Pepsi decreases, other factors constant, then we'd expect to see a consequent shift of the demand curve for

Accepted Answer

A)  Coke to the left. 
B)  Coke to the right. 
C)  Pepsi to the left. 
D)  Pepsi to the right. 
A)  Coke to the left. 
B)  Coke to the right. 
C)  Pepsi to the left. 
D)  Pepsi to the right.

Question 5

$$\begin{array} { | c | c | c | c | c | } 
\hline ( 1 ) & ( 2 ) & ( 3 ) & ( 4 ) & \text { (5) } \
Q _ { d } & Q _ { d } & \text { Price } & Q _ { S } & Q _ { S } \
\hline 50 & 40 & \$ 10 & 70 & 80 \
\hline 60 & 50 & 9 & 60 & 70 \
\hline 80 & 60 & 8 & 50 & 60 \
\hline 90 & 70 & 7 & 40 & 50 \
\hline 100 & 80 & 6 & 30 & 40 \
\hline
\end{array}$$ Refer to the table. In relation to column (3), a change from column (2) to column (1) would indicate a(n)

Accepted Answer

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

Question 6

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Accepted Answer

A)  price of electric cars 
B)  price of gasoline cars 
C)  quantity of electric cars demanded by buyers 
D)  how much sellers are charging customers for electric cars 
A)  price of electric cars 
B)  price of gasoline cars 
C)  quantity of electric cars demanded by buyers 
D)  how much sellers are charging customers for electric cars

Question 7

Which of the following statements is correct?

Accepted Answer

A)  If demand increases and supply decreases, equilibrium price will fall. 
B)  If supply increases and demand decreases, equilibrium price will fall. 
C)  If demand decreases and supply increases, equilibrium price will rise. 
D)  If supply declines and demand remains constant, equilibrium price will fall. 
A)  If demand increases and supply decreases, equilibrium price will fall. 
B)  If supply increases and demand decreases, equilibrium price will fall. 
C)  If demand decreases and supply increases, equilibrium price will rise. 
D)  If supply declines and demand remains constant, equilibrium price will fall.

Question 8

Which statement is true about supply?

Accepted Answer

A)  There is an inverse relationship between price and quantity supplied. 
B)  Supply refers to the amount of inventory that sellers have in their warehouses. 
C)  As price decreases, producers are willing to put more of the good on the market for sale. 
D)  To entice producers to offer more of a good on the market for sale, price must rise. 
A)  There is an inverse relationship between price and quantity supplied. 
B)  Supply refers to the amount of inventory that sellers have in their warehouses. 
C)  As price decreases, producers are willing to put more of the good on the market for sale. 
D)  To entice producers to offer more of a good on the market for sale, price must rise.

Question 9

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that
Price), then we would expect both Camille's and Julia's to

Accepted Answer

A)  raise their price and reduce their quantity supplied. 
B)  raise their price and increase their quantity supplied. 
C)  lower their price and reduce their quantity supplied. 
D)  lower their price and increase their quantity supplied. 
A)  raise their price and reduce their quantity supplied. 
B)  raise their price and increase their quantity supplied. 
C)  lower their price and reduce their quantity supplied. 
D)  lower their price and increase their quantity supplied.

Question 10

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. The equilibrium quantity is

Accepted Answer

A)  10. 
B)  20. 
C)  15. 
D)  30. 
A)  10. 
B)  20. 
C)  15. 
D)  30.

Question 11

(Last Word) In examining the relationship between student loans and college tuition, researchers found that

Accepted Answer

A)  increases in tuition costs caused an increase in student borrowing. 
B)  increases in student borrowing caused tuition costs to rise. 
C)  while student borrowing and tuition costs have both risen over time, there is no causal relationship between the two. 
D)  subsidizing the supply of higher education has increased both tuition costs and student borrowing. 
A)  increases in tuition costs caused an increase in student borrowing. 
B)  increases in student borrowing caused tuition costs to rise. 
C)  while student borrowing and tuition costs have both risen over time, there is no causal relationship between the two. 
D)  subsidizing the supply of higher education has increased both tuition costs and student borrowing.

Question 12

If products C and D are close substitutes, an increase in the price of C will

Accepted Answer

A)  tend to cause the price of D to fall. 
B)  shift the demand curve for C to the left and the demand curve for D to the right. 
C)  shift the demand curve for D to the right. 
D)  shift the demand curves of both products to the right. 
A)  tend to cause the price of D to fall. 
B)  shift the demand curve for C to the left and the demand curve for D to the right. 
C)  shift the demand curve for D to the right. 
D)  shift the demand curves of both products to the right.

Question 13

Which of the following would cause a leftward shift in the supply curve for car washes?

Accepted Answer

A)  an increase in the number of cars in the city 
B)  a decrease in taxes on car washes 
C)  an increase in the price of car washing equipment 
D)  a decrease in the price of water 
A)  an increase in the number of cars in the city 
B)  a decrease in taxes on car washes 
C)  an increase in the price of car washing equipment 
D)  a decrease in the price of water

Question 14

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

Accepted Answer

A)  demand curve for cigarettes rightward. 
B)  demand curve for cigarettes leftward. 
C)  supply curve for cigarettes rightward. 
D)  supply curve for cigarettes leftward. 
A)  demand curve for cigarettes rightward. 
B)  demand curve for cigarettes leftward. 
C)  supply curve for cigarettes rightward. 
D)  supply curve for cigarettes leftward.

Question 15

If the price of a product decreases, we would expect

Accepted Answer

A)  demand to increase. 
B)  quantity supplied to decrease. 
C)  supply to decrease. 
D)  quantity supplied to increase. 
A)  demand to increase. 
B)  quantity supplied to decrease. 
C)  supply to decrease. 
D)  quantity supplied to increase.

Question 16

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

Accepted Answer

A)  decrease, quantity demanded will decrease, and quantity supplied will increase. 
B)  decrease and quantity demanded and quantity supplied will both decrease. 
C)  decrease, quantity demanded will increase, and quantity supplied will decrease. 
D)  increase, quantity demanded will decrease, and quantity supplied will increase. 
A)  decrease, quantity demanded will decrease, and quantity supplied will increase. 
B)  decrease and quantity demanded and quantity supplied will both decrease. 
C)  decrease, quantity demanded will increase, and quantity supplied will decrease. 
D)  increase, quantity demanded will decrease, and quantity supplied will increase.

Question 17

An "increase in the quantity supplied" suggests a

Accepted Answer

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

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.
An improvement in the technology used to produce X will

Accepted Answer

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

Question 19

If there was initially a shortage in the market for a product, then

Accepted Answer

A)  sellers will drive the price down. 
B)  sellers will drive the price up. 
C)  buyers will drive the price down. 
D)  buyers will drive the price up. 
A)  sellers will drive the price down. 
B)  sellers will drive the price up. 
C)  buyers will drive the price down. 
D)  buyers will drive the price up.

Question 20

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium quantity is

Accepted Answer

A)  10. 
B)  20. 
C)  15. 
D)  30. 
A)  10. 
B)  20. 
C)  15. 
D)  30.

Productive eﬃciency refers to

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

If the price of Pepsi decreases, other factors constant, then we'd expect to see a consequent shift of the demand curve for

(1) (2) (3) (4) (5) Price 50 40 \ 10 70 80 60 50 9 60 70 80 60 8 50 60 90 70 7 40 50 100 80 6 30 40 Refer to the table. In relation to column (3), a change from column (2) to column (1) would indicate a(n)

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Which of the following statements is correct?

Which statement is true about supply?

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that Price), then we would expect both Camille's and Julia's to

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. The equilibrium quantity is

(Last Word) In examining the relationship between student loans and college tuition, researchers found that

If products C and D are close substitutes, an increase in the price of C will

Which of the following would cause a leftward shift in the supply curve for car washes?

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

If the price of a product decreases, we would expect

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

An "increase in the quantity supplied" suggests a

If there was initially a shortage in the market for a product, then

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium quantity is

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

Productive eﬃciency refers to

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

If the price of Pepsi decreases, other factors constant, then we'd expect to see a consequent shift of the demand curve for

(1) (2) (3) (4) (5) Price 50 40 \ 10 70 80 60 50 9 60 70 80 60 8 50 60 90 70 7 40 50 100 80 6 30 40 Refer to the table. In relation to column (3), a change from column (2) to column (1) would indicate a(n)

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Which of the following statements is correct?

Which statement is true about supply?

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that Price), then we would expect both Camille's and Julia's to

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. The equilibrium quantity is

(Last Word) In examining the relationship between student loans and college tuition, researchers found that

If products C and D are close substitutes, an increase in the price of C will

Which of the following would cause a leftward shift in the supply curve for car washes?

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

If the price of a product decreases, we would expect

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

An "increase in the quantity supplied" suggests a

If there was initially a shortage in the market for a product, then

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium quantity is

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