Question 1

Exhibit 3-16 Supply and demand curves for chairs   In Exhibit 3-16, assume that the market price of chairs is $15 each. This price is:

Accepted Answer

A) an equilibrium price. 
B) not an equilibrium price, since there is an excess demand at a price of $10. 
C) an equilibrium price, since suppliers can store inventories in their warehouses. 
D) not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded. 
A) an equilibrium price. 
B) not an equilibrium price, since there is an excess demand at a price of $10. 
C) an equilibrium price, since suppliers can store inventories in their warehouses. 
D) not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded.

Question 2

A market demand curve:

Accepted Answer

A) is the sum of the demand curves of all the individuals in a particular market. 
B) is determined by the demand of those who purchase in quantity. 
C) is always horizontal. 
D) cannot be estimated. 
E) never includes demand by the government. 
A) is the sum of the demand curves of all the individuals in a particular market. 
B) is determined by the demand of those who purchase in quantity. 
C) is always horizontal. 
D) cannot be estimated. 
E) never includes demand by the government.

Question 3

A movement along the demand curve for automobiles is caused by a change in:

Accepted Answer

A) the price of automobiles. 
B) the price of gasoline. 
C) the price of steel. 
D) consumers' incomes. 
A) the price of automobiles. 
B) the price of gasoline. 
C) the price of steel. 
D) consumers' incomes.

Question 4

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

Accepted Answer

A) the demand for good X to shift to the left. 
B) an upward movement along the demand curve for good Y. 
C) the demand curve for good Y to shift to the right. 
D) a downward movement along the demand curve for good Y. 
E) the demand curve for good Y to shift to the left. 
A) the demand for good X to shift to the left. 
B) an upward movement along the demand curve for good Y. 
C) the demand curve for good Y to shift to the right. 
D) a downward movement along the demand curve for good Y. 
E) the demand curve for good Y to shift to the left.

Question 5

An increase in the cost of chicken feed will reduce the supply of eggs.

Accepted Answer

A) True 
 B)False

Question 6

The curve that shows the relationship between the price of a good and the quantity that consumers are willing to purchase at each price is the

Accepted Answer

A) supply curve. 
B) demand curve. 
C) production possibilities curve. 
D) consumption curve. 
A) supply curve. 
B) demand curve. 
C) production possibilities curve. 
D) consumption curve.

Question 7

Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):

Accepted Answer

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

Question 8

An increase in the supply of the product implies:

Accepted Answer

A) producers will now charge a higher price for a given quantity of output. 
B) the supply curve will shift to the left. 
C) some producers are dropping out of this market. 
D) producers will now charge a lower price for a given quantity of output. 
E) the price of this product has increased. 
A) producers will now charge a higher price for a given quantity of output. 
B) the supply curve will shift to the left. 
C) some producers are dropping out of this market. 
D) producers will now charge a lower price for a given quantity of output. 
E) the price of this product has increased.

Question 9

Exhibit 3-6 Milk market
  In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?

Accepted Answer

A) $0.70 per quart and 200 quarts of milk. 
B) $0.60 per quart and 100 quarts of milk. 
C) $0.50 per quart and 100 quarts of milk. 
D) $0.40 per quart and 60 quarts of milk. 
E) $0.30 per quart and 20 quarts of milk. 
A) $0.70 per quart and 200 quarts of milk. 
B) $0.60 per quart and 100 quarts of milk. 
C) $0.50 per quart and 100 quarts of milk. 
D) $0.40 per quart and 60 quarts of milk. 
E) $0.30 per quart and 20 quarts of milk.

Question 10

Exhibit 3-3 Demand curves   Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of pizza on the demand curve for pizza?

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 11

An increase in the demand for a product means that the:

Accepted Answer

A) demand curve shifts to the left. 
B) demand curve shifts to the right. 
C) supply curve shifts to the right. 
D) supply curve shifts to the left. 
E) quantity supplied has increased. 
A) demand curve shifts to the left. 
B) demand curve shifts to the right. 
C) supply curve shifts to the right. 
D) supply curve shifts to the left. 
E) quantity supplied has increased.

Question 12

When economists say the quantity demanded of a product has increased, they mean the:

Accepted Answer

A) demand curve has shifted to the left. 
B) demand curve has shifted to the right. 
C) price of the product has fallen, and consequently, consumers are buying more of it. 
D) price of the product has risen, and consequently, consumers are buying less of it. 
A) demand curve has shifted to the left. 
B) demand curve has shifted to the right. 
C) price of the product has fallen, and consequently, consumers are buying more of it. 
D) price of the product has risen, and consequently, consumers are buying less of it.

Question 13

The law of demand indicates that:

Accepted Answer

A) every physical good has a use. 
B) when people want a good badly enough, they will find a way to pay for it. 
C) the desire for a good is unrelated to its price. 
D) the quantity of a good that people will buy is inversely related to the price of the good. 
A) every physical good has a use. 
B) when people want a good badly enough, they will find a way to pay for it. 
C) the desire for a good is unrelated to its price. 
D) the quantity of a good that people will buy is inversely related to the price of the good.

Question 14

All of the following apply to the description of a market in equilibrium except :

Accepted Answer

A) quantity supplied equals quantity demanded. 
B) the intersection of the supply and demand curves. 
C) no excess supply exists. 
D) no excess demand exists. 
E) the price of the good is falling. 
A) quantity supplied equals quantity demanded. 
B) the intersection of the supply and demand curves. 
C) no excess supply exists. 
D) no excess demand exists. 
E) the price of the good is falling.

Question 15

A curve that depicts the relationship between price and quantity demanded is the:

Accepted Answer

A) supply curve. 
B) supply schedule. 
C) demand curve. 
D) equilibrium price. 
A) supply curve. 
B) supply schedule. 
C) demand curve. 
D) equilibrium price.

Question 16

If a surplus of a product currently exists in the market,

Accepted Answer

A) the market price is too low. 
B) the quantity demanded exceeds the quantity supplied at the current price. 
C) the quantity supplied exceeds the quantity demanded at the current price. 
D) there is a shortage of the product. 
E) there will be a tendency for the price to rise. 
A) the market price is too low. 
B) the quantity demanded exceeds the quantity supplied at the current price. 
C) the quantity supplied exceeds the quantity demanded at the current price. 
D) there is a shortage of the product. 
E) there will be a tendency for the price to rise.

Question 17

Coke and Pepsi are an example of:

Accepted Answer

A) inferior goods. 
B) unrelated goods. 
C) substitutes. 
D) complements. 
A) inferior goods. 
B) unrelated goods. 
C) substitutes. 
D) complements.

Question 18

A shortage occurs when the quantity demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following will increase the demand for large automobiles?

Accepted Answer

A) A fall in the price of small automobiles. 
B) A rise in insurance rates for large automobiles. 
C) A fall in the price of large automobiles. 
D) A rise in buyers' incomes (assuming large automobiles to be a normal good). 
A) A fall in the price of small automobiles. 
B) A rise in insurance rates for large automobiles. 
C) A fall in the price of large automobiles. 
D) A rise in buyers' incomes (assuming large automobiles to be a normal good).

Question 20

The demand schedule for a good shows:

Accepted Answer

A) the specific quantity of the good that people are willing and able to sell at different prices. 
B) the positive relationship between the price and the quantity of the good. 
C) no relationship between the price and the quantity of the good. 
D) the specific quantity of the good that people are willing and able to buy at different prices. 
E) the quantity of the good that is sold in the market. 
A) the specific quantity of the good that people are willing and able to sell at different prices. 
B) the positive relationship between the price and the quantity of the good. 
C) no relationship between the price and the quantity of the good. 
D) the specific quantity of the good that people are willing and able to buy at different prices. 
E) the quantity of the good that is sold in the market.

Exam 3: Market Demand and Supply

Exhibit 3-16 Supply and demand curves for chairs In Exhibit 3-16, assume that the market price of chairs is $15 each. This price is:

A market demand curve:

A movement along the demand curve for automobiles is caused by a change in:

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

An increase in the cost of chicken feed will reduce the supply of eggs.

The curve that shows the relationship between the price of a good and the quantity that consumers are willing to purchase at each price is the

Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):

An increase in the supply of the product implies:

Exhibit 3-6 Milk market In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?

Exhibit 3-3 Demand curves Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of pizza on the demand curve for pizza?

An increase in the demand for a product means that the:

When economists say the quantity demanded of a product has increased, they mean the:

The law of demand indicates that:

All of the following apply to the description of a market in equilibrium except :

A curve that depicts the relationship between price and quantity demanded is the:

If a surplus of a product currently exists in the market,

Coke and Pepsi are an example of:

A shortage occurs when the quantity demanded exceeds the quantity supplied.

Which of the following will increase the demand for large automobiles?

The demand schedule for a good shows:

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