Question 1

If people buy less chewing gum at every price when their incomes fall, then:

Accepted Answer

A) chewing gum is a normal good. 
B) the demand for chewing gum is positively sloped. 
C) demand for chewing gum has increased. 
D) the price of chewing gum has increased. 
E) there has been a decrease in population that changed demand. 
A) chewing gum is a normal good. 
B) the demand for chewing gum is positively sloped. 
C) demand for chewing gum has increased. 
D) the price of chewing gum has increased. 
E) there has been a decrease in population that changed demand. A

Question 2

A fall in the price of a good causes an increase in its:

Accepted Answer

A) quantity demanded. 
B) demand. 
C) quantity supplied. 
D) supply. 
A) quantity demanded. 
B) demand. 
C) quantity supplied. 
D) supply. A

Question 3

Exhibit 3-11 Demand and supply curves   In Exhibit 3-11, in Panel A the movement from A to C describes a(n):

Accepted Answer

A) ambiguous change in price and a decrease in quantity. 
B) increase in price and an ambiguous change in quantity. 
C) increase in both price and quantity. 
D) decrease in both price and quantity. 
E) change in supply that dominates a change in demand. 
A) ambiguous change in price and a decrease in quantity. 
B) increase in price and an ambiguous change in quantity. 
C) increase in both price and quantity. 
D) decrease in both price and quantity. 
E) change in supply that dominates a change in demand. D

Question 4

Two goods, X and Y, are complementary goods if the demand for X:

Accepted Answer

A) increases when the price of Y increases. 
B) increases when income increases. 
C) decreases when the price of Y increases. 
D) increases as the price of its substitute good increases. 
E) decreases as the price of its substitute good decreases. 
A) increases when the price of Y increases. 
B) increases when income increases. 
C) decreases when the price of Y increases. 
D) increases as the price of its substitute good increases. 
E) decreases as the price of its substitute good decreases.

Question 5

Exhibit 3-13 Supply and demand curves   Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

Accepted Answer

A) Diagram A. 
B) Diagram B. 
C) Diagram C. 
D) Diagrams A and C. 
A) Diagram A. 
B) Diagram B. 
C) Diagram C. 
D) Diagrams A and C.

Question 6

Which of the following is true for the law of demand?

Accepted Answer

A) Sellers increase the quantity of a good available as the price of the good increases. 
B) An increase in price results from false needs. 
C) There is an inverse relationship between the price of a good and the quantity of the good demanded. 
D) Prices increase as more units of a product are demanded. 
A) Sellers increase the quantity of a good available as the price of the good increases. 
B) An increase in price results from false needs. 
C) There is an inverse relationship between the price of a good and the quantity of the good demanded. 
D) Prices increase as more units of a product are demanded.

Question 7

If input prices increase, the supply curve for cheese will shift to the right.

Accepted Answer

A) True 
 B)False

Question 8

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Accepted Answer

A) The quantity of eggs demanded will increase. 
B) Egg demand will decrease. 
C) Egg supply will increase. 
D) Egg supply will decrease. 
A) The quantity of eggs demanded will increase. 
B) Egg demand will decrease. 
C) Egg supply will increase. 
D) Egg supply will decrease.

Question 9

Which of the following will not cause a change in demand for crackers?

Accepted Answer

A) A change in consumers' income. 
B) A change in the price of crackers. 
C) A change in the price of cheese. 
D) A change in the number of cracker-eaters. 
E) A change in consumers' tastes for crackers. 
A) A change in consumers' income. 
B) A change in the price of crackers. 
C) A change in the price of cheese. 
D) A change in the number of cracker-eaters. 
E) A change in consumers' tastes for crackers.

Question 10

Exhibit 3-8 Demand and supply data for Video games   In Exhibit 3-8, at any market price of video games below $50, a(n)____ would result, causing price to ____.

Accepted Answer

A) excess demand; rise 
B) excess supply; rise 
C) excess demand; fall 
D) excess supply; fall 
E) surplus; rise 
A) excess demand; rise 
B) excess supply; rise 
C) excess demand; fall 
D) excess supply; fall 
E) surplus; rise

Question 11

Exhibit 3-15 Supply and demand curves for good X   In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

Accepted Answer

A) no change, because an equilibrium already exists. 
B) the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C) the price to remain the same, but the supply curve to shift to the left. 
D) the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise. 
A) no change, because an equilibrium already exists. 
B) the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C) the price to remain the same, but the supply curve to shift to the left. 
D) the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise.

Question 12

In economic terms, to say that there has been an increase in demand for a product means that:

Accepted Answer

A) the demand curve has shifted to the left. 
B) the product's price has fallen and as a result consumers are buying a larger quantity of the product. 
C) the product has become scarce for some reason. 
D) consumers are now willing to purchase more of the product at each possible price. 
A) the demand curve has shifted to the left. 
B) the product's price has fallen and as a result consumers are buying a larger quantity of the product. 
C) the product has become scarce for some reason. 
D) consumers are now willing to purchase more of the product at each possible price.

Question 13

A decrease in supply means that:

Accepted Answer

A) demand will increase by the same amount. 
B) the quantity demanded will increase. 
C) there is a movement down and to the left along the supply curve. 
D) the quantity supplied at every price will decrease. 
E) the supply curve will shift out and to the right. 
A) demand will increase by the same amount. 
B) the quantity demanded will increase. 
C) there is a movement down and to the left along the supply curve. 
D) the quantity supplied at every price will decrease. 
E) the supply curve will shift out and to the right.

Question 14

Exhibit 3-7 Demand and supply curves   In Exhibit 3-7, if price happened to currently be $75 in this market, a ____ would result, causing a(n)____ in price.

Accepted Answer

A) shortage; increase 
B) shortage; decrease 
C) surplus; increase 
D) surplus; decrease 
E) market clearing; change 
A) shortage; increase 
B) shortage; decrease 
C) surplus; increase 
D) surplus; decrease 
E) market clearing; change

Question 15

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase and then decrease. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase and then decrease.

Question 16

An improvement in a firm's technology that improves productivity results in a(n):

Accepted Answer

A) leftward shift of the supply curve. 
B) upward movement along the supply curve. 
C) willingness to supply a larger quantity than before at any given price. 
D) downward movement along the supply curve. 
A) leftward shift of the supply curve. 
B) upward movement along the supply curve. 
C) willingness to supply a larger quantity than before at any given price. 
D) downward movement along the supply curve.

Question 17

A change in supply cannot be caused by a change in:

Accepted Answer

A) resource prices. 
B) technology. 
C) prices of other goods. 
D) the price of the good itself. 
E) the number of suppliers. 
A) resource prices. 
B) technology. 
C) prices of other goods. 
D) the price of the good itself. 
E) the number of suppliers.

Question 18

According to the law of supply:

Accepted Answer

A) producers are willing to supply larger amounts of a good as its price increases. 
B) a direct relationship exists between the price of a good and the amount buyers choose to buy. 
C) an inverse relationship exists between the price of a good and the amount buyers wish to buy. 
D) an inverse relationship exists between the price of a good and the amount producers supply. 
A) producers are willing to supply larger amounts of a good as its price increases. 
B) a direct relationship exists between the price of a good and the amount buyers choose to buy. 
C) an inverse relationship exists between the price of a good and the amount buyers wish to buy. 
D) an inverse relationship exists between the price of a good and the amount producers supply.

Question 19

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus , will be a(n):

Accepted Answer

A) upward movement along the demand curve for cars. 
B) downward movement along the demand curve for cars. 
C) rightward shift in the demand curve for cars. 
D) leftward shift in the demand curve for cars. 
A) upward movement along the demand curve for cars. 
B) downward movement along the demand curve for cars. 
C) rightward shift in the demand curve for cars. 
D) leftward shift in the demand curve for cars.

Question 20

Which of the following situations results from a ticket price to a concert set below the equilibrium price?

Accepted Answer

A) A long line of people wanting to purchase tickets to the concert. 
B) No line of people wanting to buy tickets to the concert. 
C) Tickets available at the box office, but no line of people wanting to buy them. 
D) None of these. 
A) A long line of people wanting to purchase tickets to the concert. 
B) No line of people wanting to buy tickets to the concert. 
C) Tickets available at the box office, but no line of people wanting to buy them. 
D) None of these.

Exam 3: Market Demand and Supply

If people buy less chewing gum at every price when their incomes fall, then:

A fall in the price of a good causes an increase in its:

Exhibit 3-11 Demand and supply curves In Exhibit 3-11, in Panel A the movement from A to C describes a(n):

Two goods, X and Y, are complementary goods if the demand for X:

Exhibit 3-13 Supply and demand curves Which of the graphs in Exhibit 3-13 illustrates a surplus exists at the indicated market price?

Which of the following is true for the law of demand?

If input prices increase, the supply curve for cheese will shift to the right.

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Which of the following will not cause a change in demand for crackers?

Exhibit 3-8 Demand and supply data for Video games In Exhibit 3-8, at any market price of video games below $50, a(n)____ would result, causing price to ____.

Exhibit 3-15 Supply and demand curves for good X In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

In economic terms, to say that there has been an increase in demand for a product means that:

A decrease in supply means that:

Exhibit 3-7 Demand and supply curves In Exhibit 3-7, if price happened to currently be $75 in this market, a ____ would result, causing a(n)____ in price.

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

An improvement in a firm's technology that improves productivity results in a(n):

A change in supply cannot be caused by a change in:

According to the law of supply:

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus , will be a(n):

Which of the following situations results from a ticket price to a concert set below the equilibrium price?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters

Exhibit 3-8 Demand and supply data for Video games In Exhibit 3-8, at any market price of video games below $50, a(n) would result, causing price to .

Exhibit 3-7 Demand and supply curves In Exhibit 3-7, if price happened to currently be $75 in this market, a would result, causing a(n) in price.