Question 1

In accordance with the law of supply, both individual and market supply curves are drawn:

Accepted Answer

A) horizontal. 
B) vertical. 
C) downward-sloping. 
D) upward-sloping. 
A) horizontal. 
B) vertical. 
C) downward-sloping. 
D) upward-sloping.

Question 2

Ceteris paribus , a change in the price of a good always results in a change in:

Accepted Answer

A) income. 
B) tastes. 
C) quantity demanded. 
D) both income and tastes. 
E) the price of other goods. 
A) income. 
B) tastes. 
C) quantity demanded. 
D) both income and tastes. 
E) the price of other goods.

Question 3

Which of the following would increase the supply of laptop computers?

Accepted Answer

A) Higher wage rates for the workers that produce laptop computers. 
B) A technological improvement that lowers the cost of producing laptop computers. 
C) An increase in the price of computer chips used to produce laptop computers. 
D) All of these. 
A) Higher wage rates for the workers that produce laptop computers. 
B) A technological improvement that lowers the cost of producing laptop computers. 
C) An increase in the price of computer chips used to produce laptop computers. 
D) All of these.

Question 4

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

Accepted Answer

A) increase in demand and a decrease in supply, where the increase in demand is relatively bigger. 
B) decrease in both demand and supply, where the decrease in supply is relatively bigger. 
C) increase in demand and a decrease in supply, where the decrease in supply is relatively bigger. 
D) decrease in demand and increase in supply, where the increase in supply is relatively bigger. 
E) increase in both demand and supply, where the increase in supply is relatively bigger. 
A) increase in demand and a decrease in supply, where the increase in demand is relatively bigger. 
B) decrease in both demand and supply, where the decrease in supply is relatively bigger. 
C) increase in demand and a decrease in supply, where the decrease in supply is relatively bigger. 
D) decrease in demand and increase in supply, where the increase in supply is relatively bigger. 
E) increase in both demand and supply, where the increase in supply is relatively bigger.

Question 5

A supply curve:

Accepted Answer

A) has a negative slope. 
B) is based on the assumption of a stable demand curve. 
C) illustrates the negative relationship between price and quantity supplied. 
D) illustrates the positive relationship between price and quantity supplied. 
E) shifts about in random fashion. 
A) has a negative slope. 
B) is based on the assumption of a stable demand curve. 
C) illustrates the negative relationship between price and quantity supplied. 
D) illustrates the positive relationship between price and quantity supplied. 
E) shifts about in random fashion.

Question 6

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

Accepted Answer

A) increase in demand and an increase in the quantity supplied. 
B) increase in the quantity demanded and an increase in supply. 
C) decrease in demand and a decrease in the quantity supplied. 
D) decrease in the quantity demanded and a decrease in supply. 
E) decrease in the quantity demanded and an increase in supply. 
A) increase in demand and an increase in the quantity supplied. 
B) increase in the quantity demanded and an increase in supply. 
C) decrease in demand and a decrease in the quantity supplied. 
D) decrease in the quantity demanded and a decrease in supply. 
E) decrease in the quantity demanded and an increase in supply.

Question 7

Assuming coffee and tea are substitutes, a rise in the price of coffee will have which of the following effects on the market for tea?

Accepted Answer

A) A movement up along the tea demand curve. 
B) A movement down along the tea demand curve. 
C) A leftward shift in the tea demand curve. 
D) A rightward shift in the tea demand curve. 
A) A movement up along the tea demand curve. 
B) A movement down along the tea demand curve. 
C) A leftward shift in the tea demand curve. 
D) A rightward shift in the tea demand curve.

Question 8

If a shortage exists in a market then:

Accepted Answer

A) the price is below equilibrium. 
B) the quantity demanded exceeds the quantity supplied. 
C) the price will rise in the near future. 
D) all of these. 
A) the price is below equilibrium. 
B) the quantity demanded exceeds the quantity supplied. 
C) the price will rise in the near future. 
D) all of these.

Question 9

If X and Y are complementary goods, the demand curve for X will shift to the right when the price of Y increases.

Accepted Answer

A) True 
 B)False

Question 10

According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease.

Accepted Answer

A) True 
 B)False

Question 11

If the demand for a good increases because consumer income increases, the good is a(n):

Accepted Answer

A) inferior good. 
B) normal good. 
C) necessity good. 
D) luxury good. 
A) inferior good. 
B) normal good. 
C) necessity good. 
D) luxury good.

Question 12

Suppose the market price of a good X is below the equilibrium price. The result is a shortage and sellers can be expected to decrease the quantity of that good X supplied.

Accepted Answer

A) True 
 B)False

Question 13

According to the law of demand, if:

Accepted Answer

A) product price increases, quantity demanded will decrease. 
B) consumer income increases, quantity demanded will increase. 
C) product price increases, quantity demanded will increase. 
D) consumer income increases, quantity demanded will decrease. 
E) supply increases, demand will increase. 
A) product price increases, quantity demanded will decrease. 
B) consumer income increases, quantity demanded will increase. 
C) product price increases, quantity demanded will increase. 
D) consumer income increases, quantity demanded will decrease. 
E) supply increases, demand will increase.

Question 14

Exhibit 3-3 Demand curves   Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

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 15

Which of the following would cause a shift in the demand curve for a good?

Accepted Answer

A) An increase in consumers' income. 
B) A decrease in the number of consumers. 
C) The expectation that the price of a good will increase in the future. 
D) All of these. 
A) An increase in consumers' income. 
B) A decrease in the number of consumers. 
C) The expectation that the price of a good will increase in the future. 
D) All of these.

Question 16

A decrease in the number of dry cleaners in an area is represented by a(n):

Accepted Answer

A) downward movement along the dry cleaning supply curve. 
B) upward movement along the dry cleaning supply curve. 
C) leftward shift in the dry cleaning supply curve. 
D) rightward shift in the dry cleaning supply curve. 
E) vertical dry cleaning supply curve. 
A) downward movement along the dry cleaning supply curve. 
B) upward movement along the dry cleaning supply curve. 
C) leftward shift in the dry cleaning supply curve. 
D) rightward shift in the dry cleaning supply curve. 
E) vertical dry cleaning supply curve.

Question 17

A movement along a demand curve is called a change in:

Accepted Answer

A) income. 
B) quantity demanded. 
C) demand. 
D) tastes. 
E) population. 
A) income. 
B) quantity demanded. 
C) demand. 
D) tastes. 
E) population.

Question 18

According to the law of supply:

Accepted Answer

A) more of a good is desired by consumers as the price falls. 
B) less of a good is desired by consumers as the price rises. 
C) more of a good will be offered by suppliers as the price rises. 
D) less of a good will be offered by suppliers as the price rises. 
A) more of a good is desired by consumers as the price falls. 
B) less of a good is desired by consumers as the price rises. 
C) more of a good will be offered by suppliers as the price rises. 
D) less of a good will be offered by suppliers as the price rises.

Question 19

If people expect the price of packaged coffee to rise next week, coffee demand will:

Accepted Answer

A) decrease now. 
B) increase now. 
C) stay the same now and increase next week. 
D) stay the same now and decrease next week. 
E) stay the same now and next week. 
A) decrease now. 
B) increase now. 
C) stay the same now and increase next week. 
D) stay the same now and decrease next week. 
E) stay the same now and next week.

Question 20

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Accepted Answer

A) A rightward shift in the demand curve for orange juice. 
B) An increase in the quantity demanded for orange juice. 
C) A leftward shift in the demand curve for orange juice. 
D) A decrease in the quantity demanded orange juice. 
A) A rightward shift in the demand curve for orange juice. 
B) An increase in the quantity demanded for orange juice. 
C) A leftward shift in the demand curve for orange juice. 
D) A decrease in the quantity demanded orange juice.

Exam 3: Market Demand and Supply

In accordance with the law of supply, both individual and market supply curves are drawn:

Ceteris paribus , a change in the price of a good always results in a change in:

Which of the following would increase the supply of laptop computers?

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

A supply curve:

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

Assuming coffee and tea are substitutes, a rise in the price of coffee will have which of the following effects on the market for tea?

If a shortage exists in a market then:

If X and Y are complementary goods, the demand curve for X will shift to the right when the price of Y increases.

According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease.

If the demand for a good increases because consumer income increases, the good is a(n):

Suppose the market price of a good X is below the equilibrium price. The result is a shortage and sellers can be expected to decrease the quantity of that good X supplied.

According to the law of demand, if:

Exhibit 3-3 Demand curves Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Which of the following would cause a shift in the demand curve for a good?

A decrease in the number of dry cleaners in an area is represented by a(n):

A movement along a demand curve is called a change in:

According to the law of supply:

If people expect the price of packaged coffee to rise next week, coffee demand will:

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

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