Question 1

Assume that oranges and peaches can both be grown on the same type of land, a decrease in the price of peaches, other things being equal, will cause a(n):

Accepted Answer

A) upward movement along the supply curve for oranges. 
B) downward movement along the supply curve for oranges. 
C) rightward shift of the supply curve for oranges. 
D) leftward shift of the supply curve for oranges. 
A) upward movement along the supply curve for oranges. 
B) downward movement along the supply curve for oranges. 
C) rightward shift of the supply curve for oranges. 
D) leftward shift of the supply curve for oranges.

Question 2

Exhibit 3-12 Supply and demand data
  In Exhibit 3-12, at a price of $2.00 the market will experience a(n):

Accepted Answer

A) shortage of 150 units. 
B) surplus of 100 units. 
C) shortage of 100 units. 
D) equilibrium. 
A) shortage of 150 units. 
B) surplus of 100 units. 
C) shortage of 100 units. 
D) equilibrium.

Question 3

A surplus of wheat:

Accepted Answer

A) is impossible if people are hungry. 
B) is impossible if the price of wheat is below equilibrium. 
C) will result when the quantity demanded exceeds the quantity supplied at the current price. 
D) is unlikely to cause any change in the price of wheat. 
E) indicates that the problem of scarcity of wheat has been solved. 
A) is impossible if people are hungry. 
B) is impossible if the price of wheat is below equilibrium. 
C) will result when the quantity demanded exceeds the quantity supplied at the current price. 
D) is unlikely to cause any change in the price of wheat. 
E) indicates that the problem of scarcity of wheat has been solved.

Question 4

Exhibit 3-3 Demand curves   Assume that consumers expect the price of gasoline to rise sharply in the future. Which of the graphs in Exhibit 3-3 depicts this effect?

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 5

A surplus means a(n):

Accepted Answer

A) excess demand for this product. 
B) situation where the current market price is too low. 
C) situation where the quantity demanded exceeds the quantity supplied. 
D) situation where the quantity supplied is less than the quantity demanded. 
E) excess supply of the product at the current price. 
A) excess demand for this product. 
B) situation where the current market price is too low. 
C) situation where the quantity demanded exceeds the quantity supplied. 
D) situation where the quantity supplied is less than the quantity demanded. 
E) excess supply of the product at the current price.

Question 6

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Accepted Answer

A) upward movement along the supply curve for cigarettes. 
B) rightward shift of the supply curve for cigarettes. 
C) downward movement along the demand curve for cigarettes. 
D) leftward shift of the supply curve for cigarettes. 
A) upward movement along the supply curve for cigarettes. 
B) rightward shift of the supply curve for cigarettes. 
C) downward movement along the demand curve for cigarettes. 
D) leftward shift of the supply curve for cigarettes.

Question 7

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Accepted Answer

A) Consumer income. 
B) The prices of other goods. 
C) Consumer tastes and preferences. 
D) All of these. 
A) Consumer income. 
B) The prices of other goods. 
C) Consumer tastes and preferences. 
D) All of these.

Question 8

Farmers can produce wheat and\or rice. What will happen in the wheat market if there is an increase in the price of rice?

Accepted Answer

A) Wheat supply will increase. 
B) Wheat supply will decrease. 
C) Wheat demand will increase. 
D) Wheat demand will decrease. 
A) Wheat supply will increase. 
B) Wheat supply will decrease. 
C) Wheat demand will increase. 
D) Wheat demand will decrease.

Question 9

A demand curve for The Steel Porcupines' concert tickets would show the:

Accepted Answer

A) quality of service that customers demand when they buy a ticket. 
B) number of people who like to attend the concert. 
C) number of tickets the promoters are willing to sell at each price. 
D) number of concert tickets that will be purchased at each price. 
A) quality of service that customers demand when they buy a ticket. 
B) number of people who like to attend the concert. 
C) number of tickets the promoters are willing to sell at each price. 
D) number of concert tickets that will be purchased at each price.

Question 10

Assume that peanut butter and jelly are complementary goods. A decrease in the number of peanut butter suppliers will cause the:

Accepted Answer

A) demand for peanut butter to increase. 
B) supply of peanut butter to increase. 
C) demand for jelly to increase. 
D) demand for jelly to decrease. 
E) supply of jelly to decrease. 
A) demand for peanut butter to increase. 
B) supply of peanut butter to increase. 
C) demand for jelly to increase. 
D) demand for jelly to decrease. 
E) supply of jelly to decrease.

Question 11

Assuming that beef and chicken are substitutes, an increase in the price of beef, other things being equal, will:

Accepted Answer

A) increase the demand for chicken. 
B) decrease the demand for chicken. 
C) not change the demand for chicken. 
D) decrease the demand for beef. 
A) increase the demand for chicken. 
B) decrease the demand for chicken. 
C) not change the demand for chicken. 
D) decrease the demand for beef.

Question 12

Which of the following would not cause market demand for a normal good to decline?

Accepted Answer

A) An increase in the price of a substitute. 
B) An increase in the price of a complement. 
C) A decline in consumer income. 
D) Consumer expectations that the good will go on sale in the near future. 
E) An announcement by the Surgeon General that the product contributes to premature death. 
A) An increase in the price of a substitute. 
B) An increase in the price of a complement. 
C) A decline in consumer income. 
D) Consumer expectations that the good will go on sale in the near future. 
E) An announcement by the Surgeon General that the product contributes to premature death.

Question 13

Exhibit 3-8 Demand and supply data for Video games
  In Exhibit 3-8, if there is a shortage of video games of 200 units, the current price of video games must be:

Accepted Answer

A) $60. 
B) $55. 
C) $50. 
D) $45. 
E) $40. 
A) $60. 
B) $55. 
C) $50. 
D) $45. 
E) $40.

Question 14

An equilibrium price is unaffected by nonprice factors.

Accepted Answer

A) True 
 B)False

Question 15

When firms advertise their products, they are attempting to:

Accepted Answer

A) shift the supply curve of the product to the right. 
B) shift the supply curve of the product to the left. 
C) shift the demand for the product to the right. 
D) shift the demand for the product to the left. 
E) create a surplus of the product. 
A) shift the supply curve of the product to the right. 
B) shift the supply curve of the product to the left. 
C) shift the demand for the product to the right. 
D) shift the demand for the product to the left. 
E) create a surplus of the product.

Question 16

Which of the following will cause a movement along the supply curve?

Accepted Answer

A) An increase or decrease in the raw materials costs. 
B) An increase in labor costs. 
C) Changes in the cost of the machinery used to make a good. 
D) Changes in the market price of a good, other things held constant. 
A) An increase or decrease in the raw materials costs. 
B) An increase in labor costs. 
C) Changes in the cost of the machinery used to make a good. 
D) Changes in the market price of a good, other things held constant.

Question 17

If the demand for a good increases when the price of another good increases, then these goods are:

Accepted Answer

A) complementary in consumption. 
B) complementary in production. 
C) substitute in production. 
D) substitute in consumption. 
E) neither substitutes nor complementary. 
A) complementary in consumption. 
B) complementary in production. 
C) substitute in production. 
D) substitute in consumption. 
E) neither substitutes nor complementary.

Question 18

The equilibrium price is best defined as the price at which:

Accepted Answer

A) demand is smaller than supply. 
B) suppliers want to supply more goods. 
C) demanders want to buy more goods. 
D) quantity demanded is equal to quantity supplied. 
E) the quantity demanded increases. 
A) demand is smaller than supply. 
B) suppliers want to supply more goods. 
C) demanders want to buy more goods. 
D) quantity demanded is equal to quantity supplied. 
E) the quantity demanded increases.

Question 19

Three of the four events described below might reasonably be expected to shift the demand curve for Tacos to a new position. One would not shift the demand curve. The single exception is:

Accepted Answer

A) a change in people's tastes with respect to Tacos. 
B) an increase in the money income of beef consumers. 
C) a widespread advertising campaign undertaken by the producers of a product competitive with Tacos. 
D) a fall in the price of Tacos. 
A) a change in people's tastes with respect to Tacos. 
B) an increase in the money income of beef consumers. 
C) a widespread advertising campaign undertaken by the producers of a product competitive with Tacos. 
D) a fall in the price of Tacos.

Question 20

Exhibit 3-8 Demand and supply data for Video games   In Exhibit 3-8, if there is a surplus of video games of 200 units, the current price of video games must be:

Accepted Answer

A) $60. 
B) $55. 
C) $50. 
D) $45. 
E) $40. 
A) $60. 
B) $55. 
C) $50. 
D) $45. 
E) $40.

Exam 3: Market Demand and Supply

Assume that oranges and peaches can both be grown on the same type of land, a decrease in the price of peaches, other things being equal, will cause a(n):

Exhibit 3-12 Supply and demand data In Exhibit 3-12, at a price of $2.00 the market will experience a(n):

A surplus of wheat:

Exhibit 3-3 Demand curves Assume that consumers expect the price of gasoline to rise sharply in the future. Which of the graphs in Exhibit 3-3 depicts this effect?

A surplus means a(n):

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Farmers can produce wheat and\or rice. What will happen in the wheat market if there is an increase in the price of rice?

A demand curve for The Steel Porcupines' concert tickets would show the:

Assume that peanut butter and jelly are complementary goods. A decrease in the number of peanut butter suppliers will cause the:

Assuming that beef and chicken are substitutes, an increase in the price of beef, other things being equal, will:

Which of the following would not cause market demand for a normal good to decline?

Exhibit 3-8 Demand and supply data for Video games In Exhibit 3-8, if there is a shortage of video games of 200 units, the current price of video games must be:

An equilibrium price is unaffected by nonprice factors.

When firms advertise their products, they are attempting to:

Which of the following will cause a movement along the supply curve?

If the demand for a good increases when the price of another good increases, then these goods are:

The equilibrium price is best defined as the price at which:

Three of the four events described below might reasonably be expected to shift the demand curve for Tacos to a new position. One would not shift the demand curve. The single exception is:

Exhibit 3-8 Demand and supply data for Video games In Exhibit 3-8, if there is a surplus of video games of 200 units, the current price of video games must be:

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

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