Question 1

Which of the following states the definition of supply?

Accepted Answer

A) More of a good is supplied at a lower price. 
B) There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C) There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D) There is a negative relationship between the price of a good and the quantity offered for sale by suppliers. 
A) More of a good is supplied at a lower price. 
B) There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C) There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D) There is a negative relationship between the price of a good and the quantity offered for sale by suppliers.

Question 2

Which of the following is true if the price of coffee increases?

Accepted Answer

A) The demand for tea, a substitute good, will decrease. 
B) The demand for coffee will increase. 
C) The demand for coffee and tea will decrease. 
D) Both the demand for coffee and tea will increase. 
E) The demand for tea, a substitute good, will increase. 
A) The demand for tea, a substitute good, will decrease. 
B) The demand for coffee will increase. 
C) The demand for coffee and tea will decrease. 
D) Both the demand for coffee and tea will increase. 
E) The demand for tea, a substitute good, will increase.

Question 3

A decrease in quantity demanded is given by a(n):

Accepted Answer

A) downward shift of the demand curve. 
B) upward shift of the demand curve. 
C) downward movement to the right along the demand curve. 
D) upward movement to the left along the demand curve. 
E) downward shift of both demand and supply curves. 
A) downward shift of the demand curve. 
B) upward shift of the demand curve. 
C) downward movement to the right along the demand curve. 
D) upward movement to the left along the demand curve. 
E) downward shift of both demand and supply curves.

Question 4

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

Accepted Answer

A) Y and Z are complements. 
B) Y and Z are substitutes. 
C) Y and Z are unrelated. 
D) Y is a normal good and Z is an inferior good. 
A) Y and Z are complements. 
B) Y and Z are substitutes. 
C) Y and Z are unrelated. 
D) Y is a normal good and Z is an inferior good.

Question 5

If good X is an inferior good, a decrease in consumer income, other things being equal, will shift the:

Accepted Answer

A) demand curve for good X to the right. 
B) demand curve for good X to the left. 
C) supply curve for good X to the right. 
D) supply curve for good X to the left. 
A) demand curve for good X to the right. 
B) demand curve for good X to the left. 
C) supply curve for good X to the right. 
D) supply curve for good X to the left.

Question 6

Which of the following is most likely to shift the demand curve for electricity to the left?

Accepted Answer

A) consumers becoming more energy conscious. 
B) an increase in income. 
C) a decrease in the price of electricity. 
D) an increase in the price of natural gas, a substitute source of energy. 
A) consumers becoming more energy conscious. 
B) an increase in income. 
C) a decrease in the price of electricity. 
D) an increase in the price of natural gas, a substitute source of energy.

Question 7

Exhibit 3-16 Supply and demand curves for chairs   In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is:

Accepted Answer

A) an equilibrium price. 
B) not an equilibrium price, since there is an excess supply at a price of $5. 
C) not an equilibrium price, since there is an excess demand at a price of $5. 
D) not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded. 
A) an equilibrium price. 
B) not an equilibrium price, since there is an excess supply at a price of $5. 
C) not an equilibrium price, since there is an excess demand at a price of $5. 
D) not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded.

Question 8

A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

A) a decrease in the price of tires 
B) a decrease in the price of cars 
C) an increase in consumer income 
D) an increase in the number of miles people drive per year 
A) a decrease in the price of tires 
B) a decrease in the price of cars 
C) an increase in consumer income 
D) an increase in the number of miles people drive per year

Question 10

Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:

Accepted Answer

A) cause an upward movement along the demand curve for computers. 
B) cause a downward movement along the demand curve for computers. 
C) shift the demand curve for computers to the left. 
D) shift the demand curve for computers to the right. 
A) cause an upward movement along the demand curve for computers. 
B) cause a downward movement along the demand curve for computers. 
C) shift the demand curve for computers to the left. 
D) shift the demand curve for computers to the right.

Question 11

Exhibit 3-8 Demand and supply data for Video games   In Exhibit 3-8, if the price of video games was currently $45, there would be an ____ of ____ video games in this market.

Accepted Answer

A) excess demand; 700 
B) excess demand; 500 
C) excess supply; 100 
D) excess supply; 600 
E) excess demand; 100 
A) excess demand; 700 
B) excess demand; 500 
C) excess supply; 100 
D) excess supply; 600 
E) excess demand; 100

Question 12

Two goods that are complementary are:

Accepted Answer

A) wrapping paper and scotch tape. 
B) letter and fax. 
C) beef and chicken. 
D) bicycle and motorcycle. 
E) Coke and Pepsi. 
A) wrapping paper and scotch tape. 
B) letter and fax. 
C) beef and chicken. 
D) bicycle and motorcycle. 
E) Coke and Pepsi.

Question 13

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 14

Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n):

Accepted Answer

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

Question 15

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

Accepted Answer

A) greater the quantity demanded per period of time. 
B) greater the demand for the good per period of time. 
C) smaller the demand for the good per period of time. 
D) smaller the quantity demanded per period of time. 
E) larger the supply of the good per period of time. 
A) greater the quantity demanded per period of time. 
B) greater the demand for the good per period of time. 
C) smaller the demand for the good per period of time. 
D) smaller the quantity demanded per period of time. 
E) larger the supply of the good per period of time.

Question 16

Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?

Accepted Answer

A) A rightward shift in the demand curve for Coca-Cola. 
B) A downward movement along the demand curve for Coca-Cola. 
C) A leftward shift in the demand curve for Coca-Cola. 
D) An upward movement along the demand curve for Coca-Cola. 
A) A rightward shift in the demand curve for Coca-Cola. 
B) A downward movement along the demand curve for Coca-Cola. 
C) A leftward shift in the demand curve for Coca-Cola. 
D) An upward movement along the demand curve for Coca-Cola.

Question 17

Which of the following will not cause a shift in the demand curve for good X?

Accepted Answer

A) A change in the price of a complementary good. 
B) A change in the price of good X. 
C) A change in consumer tastes and preferences for good X. 
D) An increase in consumer income. 
A) A change in the price of a complementary good. 
B) A change in the price of good X. 
C) A change in consumer tastes and preferences for good X. 
D) An increase in consumer income.

Question 18

At any price below the equilibrium price, the:

Accepted Answer

A) demand is greater than supply. 
B) supply is greater than demand. 
C) quantity demanded is greater than quantity supplied. 
D) quantity supplied is greater than quantity demanded. 
A) demand is greater than supply. 
B) supply is greater than demand. 
C) quantity demanded is greater than quantity supplied. 
D) quantity supplied is greater than quantity demanded.

Question 19

Exhibit 3-2 Demand curves   In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

Accepted Answer

A) Decrease in price. 
B) Increase in expected future prices. 
C) Increase in the price of a complement. 
D) Decrease in income if it is a normal good. 
A) Decrease in price. 
B) Increase in expected future prices. 
C) Increase in the price of a complement. 
D) Decrease in income if it is a normal good.

Question 20

In economics, the demand for a good refers to the amount of the good people:

Accepted Answer

A) would like to have if the good were free. 
B) are willing to buy at various prices. 
C) need to achieve a minimum standard of living. 
D) will buy at alternative income levels. 
A) would like to have if the good were free. 
B) are willing to buy at various prices. 
C) need to achieve a minimum standard of living. 
D) will buy at alternative income levels.

Exam 3: Market Demand and Supply

Which of the following states the definition of supply?

Which of the following is true if the price of coffee increases?

A decrease in quantity demanded is given by a(n):

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

If good X is an inferior good, a decrease in consumer income, other things being equal, will shift the:

Which of the following is most likely to shift the demand curve for electricity to the left?

Exhibit 3-16 Supply and demand curves for chairs In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is:

A shortage means that the quantity demanded is greater than the quantity supplied at the prevailing price.

Which of the following is least likely to increase the demand for new tires?

Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:

Exhibit 3-8 Demand and supply data for Video games In Exhibit 3-8, if the price of video games was currently $45, there would be an ____ of ____ video games in this market.

Two goods that are complementary are:

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Other things being equal, the effects of an increase in the price of orange juice would best be represented by a(n):

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?

Which of the following will not cause a shift in the demand curve for good X?

At any price below the equilibrium price, the:

Exhibit 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

In economics, the demand for a good refers to the amount of the good people:

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, if the price of video games was currently $45, there would be an of video games in this market.

Exhibit 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D₁to D₂ could have been caused by which of the following?