Question 1

A leftward shift of a product supply curve might be caused by

Accepted Answer

A) an improvement in the relevant technique of production. 
B) a decline in the prices of needed inputs. 
C) an increase in consumer incomes. 
D) some firms leaving an industry. 
A) an improvement in the relevant technique of production. 
B) a decline in the prices of needed inputs. 
C) an increase in consumer incomes. 
D) some firms leaving an industry.

Question 2

Refer to the diagram. A decrease in quantity demanded 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 3

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

Accepted Answer

A) $2. 
B) $4. 
C) $6. 
D) $7. 
A) $2. 
B) $4. 
C) $6. 
D) $7.

Question 4

What are some of the ways that Uber has been innovative?

Accepted Answer

Uber is innovative in many ways, includi

Question 5

By an "increase in demand," economists mean that

Accepted Answer

A) product price has fallen, so consumers move down to a new point on the demand curve. 
B) the quantity demanded at each price in a set of prices is greater. 
C) the quantity demanded at each price in a set of prices is smaller. 
D) a leftward shift of the demand curve has occurred. 
A) product price has fallen, so consumers move down to a new point on the demand curve. 
B) the quantity demanded at each price in a set of prices is greater. 
C) the quantity demanded at each price in a set of prices is smaller. 
D) a leftward shift of the demand curve has occurred.

Question 6

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Accepted Answer

A) True 
 B)False

Question 7

State the law of demand, and explain why the other-things-equal assumption is critical to it.

Accepted Answer

The law of demand states that as price r

Question 8

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Accepted Answer

A) True 
 B)False

Question 9

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 10

A government subsidy per unit of output increases supply.

Accepted Answer

A) True 
 B)False

Question 11

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Accepted Answer

A) True 
 B)False

Question 12

A ceiling price in a competitive market will result in persistent surpluses of a product.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the above table. A shortage of 500 units will occur when the price is

Accepted Answer

A) $20. 
B) $10. 
C) $25. 
D) $5. 
E) $15. 
A) $20. 
B) $10. 
C) $25. 
D) $5. 
E) $15.

Question 14

What is the difference between a change in supply and a change in quantity supplied?

Accepted Answer

A change in supply is a shift of the sup

Question 15

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.Removing the subsidy placed on product X years ago will

Accepted Answer

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

Question 16

The following are explanations of the Law of Demand, except

Accepted Answer

A) expectations effect. 
B) diminishing marginal utility. 
C) income effect. 
D) substitution effect. 
A) expectations effect. 
B) diminishing marginal utility. 
C) income effect. 
D) substitution effect.

Question 17

An increase in both supply and demand will lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 18

Describe and give a reason for the law of supply.

Accepted Answer

The law of supply states that as the pri

Question 19

Refer to the diagram. A shortage of 160 units would be encountered if price was

Accepted Answer

A) $1.10, that is, $1.60 minus $.50. 
B) $1.60. 
C) $1.00. 
D) $0.50. 
A) $1.10, that is, $1.60 minus $.50. 
B) $1.60. 
C) $1.00. 
D) $0.50.

Question 20

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other. This indicates that the two goods are complements.

Accepted Answer

A) True 
 B)False

Exam 3: Demand, Supply, and Market Equilibrium

A leftward shift of a product supply curve might be caused by

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

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

What are some of the ways that Uber has been innovative?

By an "increase in demand," economists mean that

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

State the law of demand, and explain why the other-things-equal assumption is critical to it.

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

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

A government subsidy per unit of output increases supply.

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

A ceiling price in a competitive market will result in persistent surpluses of a product.

Refer to the above table. A shortage of 500 units will occur when the price is

What is the difference between a change in supply and a change in quantity supplied?

The following are explanations of the Law of Demand, except

An increase in both supply and demand will lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity.

Describe and give a reason for the law of supply.

Refer to the diagram. A shortage of 160 units would be encountered if price was

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other. This indicates that the two goods are complements.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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