Question 1

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

Accepted Answer

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

Question 2

Assuming DVDs and DVD players are complements, the effect of an increase in the price of DVD players on the market for DVDs is a(n):

Accepted Answer

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

Question 3

The supply curve reflects the:

Accepted Answer

A) inverse relationship between price and quantity offered. 
B) positive relationship between demand and supply. 
C) negative relationship between price and quantity bought. 
D) positive relationship between price and quantity bought. 
E) positive relationship between price and quantity offered. 
A) inverse relationship between price and quantity offered. 
B) positive relationship between demand and supply. 
C) negative relationship between price and quantity bought. 
D) positive relationship between price and quantity bought. 
E) positive relationship between price and quantity offered.

Question 4

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

Accepted Answer

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

Question 5

The law of demand refers to the:

Accepted Answer

A) tendency of prices to increase as more units of a product are demanded. 
B) increase in price that results from an increase in demand for a good with a limited supply. 
C) inverse relationship between the price of a good and the quantity of the good demanded. 
D) increase in the quantity of a good available as the price of the good increases. 
A) tendency of prices to increase as more units of a product are demanded. 
B) increase in price that results from an increase in demand for a good with a limited supply. 
C) inverse relationship between the price of a good and the quantity of the good demanded. 
D) increase in the quantity of a good available as the price of the good increases.

Question 6

Other things being equal, a fall in the price of Coca-Cola will increase the quantity of Coca-Cola demanded.

Accepted Answer

A) True 
 B)False

Question 7

Seller A, has an upward-sloping supply curve, and is willing to supply 400 units of a commodity at a price of $5 per unit. Seller A is now willing to supply 500 units at a price of $5 per unit. Evidently, seller A has experienced a(n):

Accepted Answer

A) increase in supply. 
B) decrease in supply. 
C) increase in quantity supplied. 
D) decrease in the quantity supplied. 
E) decrease in demand. 
A) increase in supply. 
B) decrease in supply. 
C) increase in quantity supplied. 
D) decrease in the quantity supplied. 
E) decrease in demand.

Question 8

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

Accepted Answer

A) normal goods. 
B) complementary goods. 
C) substitute goods. 
D) equilibrium goods. 
E) market-day goods. 
A) normal goods. 
B) complementary goods. 
C) substitute goods. 
D) equilibrium goods. 
E) market-day goods.

Question 9

The law of demand states that:

Accepted Answer

A) as the price of a good increases, more units are demanded. 
B) there is a direct relationship between the price of a good and the quantity of the good produced. 
C) there is a negative relationship between the price of a good and the quantity of the good demanded. 
D) there is an increase in the need for a good as the price of the good increases. 
A) as the price of a good increases, more units are demanded. 
B) there is a direct relationship between the price of a good and the quantity of the good produced. 
C) there is a negative relationship between the price of a good and the quantity of the good demanded. 
D) there is an increase in the need for a good as the price of the good increases.

Question 10

An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus , the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):

Accepted Answer

A) increase in demand. 
B) decrease in demand. 
C) increase in quantity demanded. 
D) decrease in quantity demanded. 
A) increase in demand. 
B) decrease in demand. 
C) increase in quantity demanded. 
D) decrease in quantity demanded.

Question 11

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:

Accepted Answer

A) a downward movement along the demand curve for bus travel. 
B) no change in the demand curve for bus travel. 
C) an upward movement along the demand curve for air travel. 
D) a rightward shift in the demand curve for bus travel. 
A) a downward movement along the demand curve for bus travel. 
B) no change in the demand curve for bus travel. 
C) an upward movement along the demand curve for air travel. 
D) a rightward shift in the demand curve for bus travel.

Question 12

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

Accepted Answer

A) the market price is too high. 
B) the quantity demanded is less than the quantity supplied. 
C) the quantity demanded exceeds the quantity supplied at the market price. 
D) there is an excess supply of the product. 
E) there will be a tendency for the price to fall. 
A) the market price is too high. 
B) the quantity demanded is less than the quantity supplied. 
C) the quantity demanded exceeds the quantity supplied at the market price. 
D) there is an excess supply of the product. 
E) there will be a tendency for the price to fall.

Question 13

Which of the following pairs of goods would be considered complementary?

Accepted Answer

A) Coca-Cola and Pepsi. 
B) Computers and computer software. 
C) Radios and televisions. 
D) Mass transit and private automobiles. 
E) Compact discs and cassette tapes. 
A) Coca-Cola and Pepsi. 
B) Computers and computer software. 
C) Radios and televisions. 
D) Mass transit and private automobiles. 
E) Compact discs and cassette tapes.

Question 14

When economists say the supply of a product has decreased, they mean that:

Accepted Answer

A) the supply curve has shifted to the left. 
B) the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C) producers are now willing to sell more of this product at each possible price. 
D) the supply curve has shifted to the right. 
A) the supply curve has shifted to the left. 
B) the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C) producers are now willing to sell more of this product at each possible price. 
D) the supply curve has shifted to the right.

Question 15

If people buy more of a generic brand when consumer income falls, it is an inferior good.

Accepted Answer

A) True 
 B)False

Question 16

Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):

Accepted Answer

A) rightward shift of the supply curve for tobacco. 
B) upward movement along the supply curve for soybeans. 
C) rightward shift in the supply curve for soybeans. 
D) leftward shift in the supply curve for soybeans. 
A) rightward shift of the supply curve for tobacco. 
B) upward movement along the supply curve for soybeans. 
C) rightward shift in the supply curve for soybeans. 
D) leftward shift in the supply curve for soybeans.

Question 17

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

Accepted Answer

A) True 
 B)False

Question 18

Ceteris paribus , which of the following would cause a decrease in the demand for HD TVs?

Accepted Answer

A) decline in the price of HD TVs. 
B) increase in the price of HD TVs. 
C) increase in consumers' income. 
D) decrease in consumers' income. 
A) decline in the price of HD TVs. 
B) increase in the price of HD TVs. 
C) increase in consumers' income. 
D) decrease in consumers' income.

Question 19

Exhibit 3-1 Market Demand   Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is ____.

Accepted Answer

A) 3 
B) 25 
C) 17 
D) 8 
E) 26 
A) 3 
B) 25 
C) 17 
D) 8 
E) 26

Question 20

If the current market price is above the equilibrium price, then:

Accepted Answer

A) the quantity demanded exceeds the quantity supplied. 
B) there will be a shortage. 
C) the quantity supplied will exceed the quantity demanded. 
D) the price will have to increase to establish equilibrium. 
E) demand will shift to the left. 
A) the quantity demanded exceeds the quantity supplied. 
B) there will be a shortage. 
C) the quantity supplied will exceed the quantity demanded. 
D) the price will have to increase to establish equilibrium. 
E) demand will shift to the left.

Exam 3: Market Demand and Supply

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

Assuming DVDs and DVD players are complements, the effect of an increase in the price of DVD players on the market for DVDs is a(n):

The supply curve reflects the:

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

The law of demand refers to the:

Other things being equal, a fall in the price of Coca-Cola will increase the quantity of Coca-Cola demanded.

Seller A, has an upward-sloping supply curve, and is willing to supply 400 units of a commodity at a price of $5 per unit. Seller A is now willing to supply 500 units at a price of $5 per unit. Evidently, seller A has experienced a(n):

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

The law of demand states that:

An economist has conducted extensive research and has found that Jones Cola is a substitute for Tucker Cola. Ceteris paribus , the price of Jones Cola increases. The impact on the demand curve for Tucker Cola is a(n):

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause:

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

Which of the following pairs of goods would be considered complementary?

When economists say the supply of a product has decreased, they mean that:

If people buy more of a generic brand when consumer income falls, it is an inferior good.

Assuming that soybeans and tobacco can both be grown on the same land, a decrease in the price of tobacco, other things being equal, causes a(n):

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

Ceteris paribus , which of the following would cause a decrease in the demand for HD TVs?

Exhibit 3-1 Market Demand Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is ____.

If the current market price is above the equilibrium price, then:

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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