Question 1

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 2

The law of demand refers to the:

Accepted Answer

A) inverse relationship between the price of a good and the willingness of consumers to buy it. 
B) price increase that results from an increase in demand for a good of limited supply. 
C) inverse relationship between the price of a good and the quantity offered for sale. 
D) increase in the quantity of a good available when its price increases. 
A) inverse relationship between the price of a good and the willingness of consumers to buy it. 
B) price increase that results from an increase in demand for a good of limited supply. 
C) inverse relationship between the price of a good and the quantity offered for sale. 
D) increase in the quantity of a good available when its price increases.

Question 3

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

Accepted Answer

A) The number of sellers. 
B) Resource prices. 
C) Consumer income. 
D) Prices of other goods that firms could produce. 
A) The number of sellers. 
B) Resource prices. 
C) Consumer income. 
D) Prices of other goods that firms could produce.

Question 4

Exhibit 3-10 Demand and supply curves   In Exhibit 3-10, which of the following is true about this graph?

Accepted Answer

A) When the price is $4, there is an excess supply. 
B) When the price is $8, there is an excess demand. 
C) When the price is $4, excess supply is greater than excess demand. 
D) When the price is $8, excess demand is greater than excess supply. 
E) When the price is $6, there is no excess demand or excess supply. 
A) When the price is $4, there is an excess supply. 
B) When the price is $8, there is an excess demand. 
C) When the price is $4, excess supply is greater than excess demand. 
D) When the price is $8, excess demand is greater than excess supply. 
E) When the price is $6, there is no excess demand or excess supply.

Question 5

Which of the following explain(s)better the fact that computers are cheaper now than 10 years ago?

Accepted Answer

A) c and d. 
B) c and e. 
C) The technology used in the production of computers has improved during this period. 
D) Resources used in the production of computers have become cheaper during this period. 
E) The demand for computers has increased substantially during this period. 
A) c and d. 
B) c and e. 
C) The technology used in the production of computers has improved during this period. 
D) Resources used in the production of computers have become cheaper during this period. 
E) The demand for computers has increased substantially during this period.

Question 6

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 pork and beans (an inferior 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 7

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

Accepted Answer

A) decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B) decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C) increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D) increase in the supply of automobiles, which is a shift to the left of the supply curve. 
A) decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B) decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C) increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D) increase in the supply of automobiles, which is a shift to the left of the supply curve.

Question 8

If consumer incomes go up and Harley Davidson motorcycles are a normal good, the effect on the demand for motorcycles, ceteris paribus , will be a(n):

Accepted Answer

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

Question 9

Suppose A and B are substitute 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 10

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 11

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 12

If the market price is below the equilibrium price, then:

Accepted Answer

A) a surplus of product will result. 
B) the quantity supplied will exceed the quantity demanded. 
C) the market supply curve will shift to the right. 
D) the quantity demanded will exceed the quantity supplied. 
E) the market demand curve will shift to the left. 
A) a surplus of product will result. 
B) the quantity supplied will exceed the quantity demanded. 
C) the market supply curve will shift to the right. 
D) the quantity demanded will exceed the quantity supplied. 
E) the market demand curve will shift to the left.

Question 13

When there is a surplus of a product in a market the:

Accepted Answer

A) price will rise. 
B) price must be above the equilibrium price. 
C) producers will expand output and sales will rise. 
D) price must be below the equilibrium price. 
A) price will rise. 
B) price must be above the equilibrium price. 
C) producers will expand output and sales will rise. 
D) price must be below the equilibrium price.

Question 14

The use of a price system eliminates:

Accepted Answer

A) scarcity. 
B) equilibrium. 
C) shortages and surpluses. 
D) changes in supply and demand. 
A) scarcity. 
B) equilibrium. 
C) shortages and surpluses. 
D) changes in supply and demand.

Question 15

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 up.

Accepted Answer

A) True 
 B)False

Question 16

Substitute goods are goods that are:

Accepted Answer

A) jointly consumed. 
B) competing for consumer spending. 
C) used late in the game. 
D) inferior. 
E) normal. 
A) jointly consumed. 
B) competing for consumer spending. 
C) used late in the game. 
D) inferior. 
E) normal.

Question 17

According to the law of supply, there is a direct relationship between quantity supplied and:

Accepted Answer

A) the number of sellers. 
B) costs of resources. 
C) technology. 
D) the price of the good. 
A) the number of sellers. 
B) costs of resources. 
C) technology. 
D) the price of the good.

Question 18

Assuming that hamburgers and hot dogs are substitutes, an increase in the price of hamburgers, other things being equal, results in a:

Accepted Answer

A) rightward shift in the demand curve for hot dogs. 
B) leftward shift in the demand curve for hamburgers. 
C) rightward shift in the demand curve for hamburgers. 
D) leftward shift in the demand curve for hot dogs. 
A) rightward shift in the demand curve for hot dogs. 
B) leftward shift in the demand curve for hamburgers. 
C) rightward shift in the demand curve for hamburgers. 
D) leftward shift in the demand curve for hot dogs.

Question 19

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Accepted Answer

A) True 
 B)False

Question 20

We can find the market demand for pears by:

Accepted Answer

A) adding up all the prices people are willing to pay for pears. 
B) multiplying the number of people times the price of pears. 
C) adding up the number of pears that producers are willing to sell. 
D) multiplying the number of pears by the price of pears. 
E) adding up all the individual demand curves for pears. 
A) adding up all the prices people are willing to pay for pears. 
B) multiplying the number of people times the price of pears. 
C) adding up the number of pears that producers are willing to sell. 
D) multiplying the number of pears by the price of pears. 
E) adding up all the individual demand curves for pears.

Exam 3: Market Demand and Supply

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

The law of demand refers to the:

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

Exhibit 3-10 Demand and supply curves In Exhibit 3-10, which of the following is true about this graph?

Which of the following explain(s)better the fact that computers are cheaper now than 10 years ago?

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 pork and beans (an inferior good)?

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

If consumer incomes go up and Harley Davidson motorcycles are a normal good, the effect on the demand for motorcycles, ceteris paribus , will be a(n):

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

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

If the market price is below the equilibrium price, then:

When there is a surplus of a product in a market the:

The use of a price system eliminates:

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 up.

Substitute goods are goods that are:

According to the law of supply, there is a direct relationship between quantity supplied and:

Assuming that hamburgers and hot dogs are substitutes, an increase in the price of hamburgers, other things being equal, results in a:

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

We can find the market demand for pears by:

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