Question 1

Which of the following events would increase the supply of tomatoes?

Accepted Answer

A) The introduction of mechanized tomato pickers, which raises the cost of production. 
B) An increase in wages for the tomato pickers. 
C) A decrease in the cost of fertilizers for the tomato plants. 
D) Unseasonably hot, dry weather in the tomato-growing regions of the nation. 
E) A decrease in the price of pasta products. 
A) The introduction of mechanized tomato pickers, which raises the cost of production. 
B) An increase in wages for the tomato pickers. 
C) A decrease in the cost of fertilizers for the tomato plants. 
D) Unseasonably hot, dry weather in the tomato-growing regions of the nation. 
E) A decrease in the price of pasta products.

Question 2

Assuming that bus travel 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 bus travel. 
B) downward movement along the demand curve for bus travel. 
C) rightward shift in the demand curve for bus travel. 
D) leftward shift in the demand curve for bus travel. 
A) upward movement along the demand curve for bus travel. 
B) downward movement along the demand curve for bus travel. 
C) rightward shift in the demand curve for bus travel. 
D) leftward shift in the demand curve for bus travel.

Question 3

Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?

Accepted Answer

A) Luxury goods. 
B) Substitute goods. 
C) Normal goods. 
D) Inferior goods. 
A) Luxury goods. 
B) Substitute goods. 
C) Normal goods. 
D) Inferior goods.

Question 4

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

Accepted Answer

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

Question 5

In economics, the term "surplus" means an excess quantity supplied.

Accepted Answer

A) True 
 B)False

Question 6

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

Accepted Answer

A) True 
 B)False

Question 7

A reduction in production costs will result in a(n):

Accepted Answer

A) rightward shift of the supply curve. 
B) increase in supply. 
C) greater willingness and ability of producers to supply a larger quantity at any given price. 
D) greater willingness and ability of producers to supply the same quantity at a lower price. 
E) all of these. 
A) rightward shift of the supply curve. 
B) increase in supply. 
C) greater willingness and ability of producers to supply a larger quantity at any given price. 
D) greater willingness and ability of producers to supply the same quantity at a lower price. 
E) all of these.

Question 8

A shortage of product means a(n):

Accepted Answer

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

Question 9

Discuss how a market reaches equilibrium. How is it expressed graphically?

Accepted Answer

Equilibrium exists at that one price in

Question 10

A normal good is a good for which demand increases as:

Accepted Answer

A) the income of consumers increases. 
B) its own price increases. 
C) the price of close substitutes decreases. 
D) the total number of consumers increases. 
E) a reflection of changing consumer tastes. 
A) the income of consumers increases. 
B) its own price increases. 
C) the price of close substitutes decreases. 
D) the total number of consumers increases. 
E) a reflection of changing consumer tastes.

Question 11

Exhibit 3-4 Supply curves   In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

Accepted Answer

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

Question 12

If there is a surplus in the oil market, then the price of oil will:

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) react unpredictably. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) react unpredictably.

Question 13

The price of a good will rise when:

Accepted Answer

A) there is a shortage of the good. 
B) there is a surplus of the good. 
C) demand for the good decreases. 
D) the supply of the good increases. 
A) there is a shortage of the good. 
B) there is a surplus of the good. 
C) demand for the good decreases. 
D) the supply of the good increases.

Question 14

With an upward-sloping supply curve, which of the following is true ?

Accepted Answer

A) An increase in price results in a decrease in quantity supplied. 
B) An increase in price results in an increase in supply. 
C) A decrease in price results in a decrease in quantity supplied. 
D) A decrease in price results in an increase in supply. 
A) An increase in price results in a decrease in quantity supplied. 
B) An increase in price results in an increase in supply. 
C) A decrease in price results in a decrease in quantity supplied. 
D) A decrease in price results in an increase in supply.

Question 15

Which of the following will not cause a movement along the supply curve?

Accepted Answer

A) Changes in the sellers' expectations. 
B) Increases in taxes per unit of output. 
C) Advances in technology. 
D) All of these. 
A) Changes in the sellers' expectations. 
B) Increases in taxes per unit of output. 
C) Advances in technology. 
D) All of these.

Question 16

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

Accepted Answer

A) there is an excess supply of 25,000 units of milk. 
B) the price of milk will tend to rise to clear the market. 
C) consumers get the milk they want so market equilibrium exists. 
D) there is an excess demand of 25,000 units of milk. 
E) this is the intersection of market supply and demand curves. 
A) there is an excess supply of 25,000 units of milk. 
B) the price of milk will tend to rise to clear the market. 
C) consumers get the milk they want so market equilibrium exists. 
D) there is an excess demand of 25,000 units of milk. 
E) this is the intersection of market supply and demand curves.

Question 17

Exhibit 3-3 Demand curves   Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for DVDs (a normal good)?

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 18

Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:

Accepted Answer

A) increase the demand for dry cleaning. 
B) decrease the demand for dry cleaning. 
C) increase the quantity demanded of dry cleaning. 
D) decrease the quantity of dry cleaning demanded. 
A) increase the demand for dry cleaning. 
B) decrease the demand for dry cleaning. 
C) increase the quantity demanded of dry cleaning. 
D) decrease the quantity of dry cleaning demanded.

Question 19

If the price of tea is below its equilibrium level, then:

Accepted Answer

A) the demand for tea will decrease. 
B) the market for tea has cleared. 
C) sellers will be stuck with unsold tea. 
D) there is a shortage of tea. 
A) the demand for tea will decrease. 
B) the market for tea has cleared. 
C) sellers will be stuck with unsold tea. 
D) there is a shortage of tea.

Question 20

If two goods are substitutes in consumption, a(n):

Accepted Answer

A) decrease in the price of one product will cause an increase in the demand for the other product. 
B) decrease in the price of one product will cause a decrease in the demand for the other product. 
C) increase in the price of one product will cause an increase in the supply of the other product. 
D) increase in the price of one product will cause a decrease in the supply of the other product. 
E) increase in the price of one product will cause a decrease in the demand for the other product. 
A) decrease in the price of one product will cause an increase in the demand for the other product. 
B) decrease in the price of one product will cause a decrease in the demand for the other product. 
C) increase in the price of one product will cause an increase in the supply of the other product. 
D) increase in the price of one product will cause a decrease in the supply of the other product. 
E) increase in the price of one product will cause a decrease in the demand for the other product.

Exam 3: Market Demand and Supply

Which of the following events would increase the supply of tomatoes?

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

Compared to higher-income families, low-income families would demand proportionately more of which of the following kinds of goods?

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

In economics, the term "surplus" means an excess quantity supplied.

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

A reduction in production costs will result in a(n):

A shortage of product means a(n):

Discuss how a market reaches equilibrium. How is it expressed graphically?

A normal good is a good for which demand increases as:

Exhibit 3-4 Supply curves In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

If there is a surplus in the oil market, then the price of oil will:

The price of a good will rise when:

With an upward-sloping supply curve, which of the following is true ?

Which of the following will not cause a movement along the supply curve?

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

Exhibit 3-3 Demand curves Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for DVDs (a normal good)?

Assuming that dry cleaning is a normal good, an increase in consumer income, other things being equal, will:

If the price of tea is below its equilibrium level, then:

If two goods are substitutes in consumption, a(n):

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 3-4 Supply curves In Exhibit 3-4, a shift in the supply curve from S₁ to S₂ represents a(n):