Question 1

Which of the following will increase the supply of a good?

Accepted Answer

A) An increase in the price of another good that producers could produce. 
B) A lower price paid for resources used in the production of the good. 
C) A decrease in the number of sellers. 
D) An increase in taxes paid to the government by producers. 
A) An increase in the price of another good that producers could produce. 
B) A lower price paid for resources used in the production of the good. 
C) A decrease in the number of sellers. 
D) An increase in taxes paid to the government by producers.

Question 2

Coffee and tea are:

Accepted Answer

A) complements. 
B) substitutes. 
C) inferior goods. 
D) unrelated goods. 
E) nonmarket goods. 
A) complements. 
B) substitutes. 
C) inferior goods. 
D) unrelated goods. 
E) nonmarket goods.

Question 3

Exhibit 3-3 Demand curves   Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

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 4

Equilibrium in a market exists when there is neither a surplus nor a shortage of the item.

Accepted Answer

A) True 
 B)False

Question 5

Assume Qs represents the quantity supplied at a given price and Qd represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?

Accepted Answer

A) Qs = 1,000, Qd = 750. 
B) Qs = 750, Qd = 750. 
C) Qs = 750, Qd = 1,000. 
D) Qs = 1,000, Qd = 1,000. 
A) Qs = 1,000, Qd = 750. 
B) Qs = 750, Qd = 750. 
C) Qs = 750, Qd = 1,000. 
D) Qs = 1,000, Qd = 1,000.

Question 6

Higher milk prices reduce the demand for milk.

Accepted Answer

A) True 
 B)False

Question 7

If equilibrium is present in a market:

Accepted Answer

A) there is either a shortage or a surplus. 
B) the quantity demanded equals quantity supplied. 
C) the quantity demanded exceeds quantity supplied. 
D) the quantity supplied exceeds quantity demanded. 
A) there is either a shortage or a surplus. 
B) the quantity demanded equals quantity supplied. 
C) the quantity demanded exceeds quantity supplied. 
D) the quantity supplied exceeds quantity demanded.

Question 8

How will an increase in lumber prices influence the home construction market?

Accepted Answer

A) The demand for newly constructed homes will increase. 
B) The demand for newly constructed homes will decrease. 
C) The supply of newly constructed homes will increase. 
D) The supply of newly constructed homes will decrease. 
A) The demand for newly constructed homes will increase. 
B) The demand for newly constructed homes will decrease. 
C) The supply of newly constructed homes will increase. 
D) The supply of newly constructed homes will decrease.

Question 9

Assuming that clothing is a normal good, an increase in consumer income, other things being equal, would:

Accepted Answer

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

Question 10

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Accepted Answer

A) not change; only quantity demanded will change. 
B) increase, because the goods are substitutes. 
C) decrease, because the goods are substitutes. 
D) decrease, because the goods are complements. 
E) increase, because the goods are complements. 
A) not change; only quantity demanded will change. 
B) increase, because the goods are substitutes. 
C) decrease, because the goods are substitutes. 
D) decrease, because the goods are complements. 
E) increase, because the goods are complements.

Question 11

Exhibit 3-12 Supply and demand data   In Exhibit 3-12, which of the following occurs at a price of $1.00?

Accepted Answer

A) A shortage puts a downward pressure on price. 
B) Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C) Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D) The surplus would be so small that there would be only slight upward pressure on price. 
A) A shortage puts a downward pressure on price. 
B) Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C) Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D) The surplus would be so small that there would be only slight upward pressure on price.

Question 12

A baby boom will have what immediate effect on the disposable diaper market?

Accepted Answer

A) Supply decreases. 
B) Supply increases. 
C) Demand decreases. 
D) Demand increases. 
E) Supply and demand remains the same. 
A) Supply decreases. 
B) Supply increases. 
C) Demand decreases. 
D) Demand increases. 
E) Supply and demand remains the same.

Question 13

Exhibit 3-9 Demand and supply curves   In Exhibit 3-9, if the market price is $50,

Accepted Answer

A) this market will be in equilibrium. 
B) a shortage of 27 units would result. 
C) the price is below the equilibrium price. 
D) a surplus of 26 units would result. 
E) a surplus of 27 units would result. 
A) this market will be in equilibrium. 
B) a shortage of 27 units would result. 
C) the price is below the equilibrium price. 
D) a surplus of 26 units would result. 
E) a surplus of 27 units would result.

Question 14

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Accepted Answer

A) Yes, Martha is correct. Sam's demand has decreased. 
B) No, Martha is incorrect. Sam's demand has increased. 
C) No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed. 
D) No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased. 
E) No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased. 
A) Yes, Martha is correct. Sam's demand has decreased. 
B) No, Martha is incorrect. Sam's demand has increased. 
C) No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed. 
D) No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased. 
E) No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased.

Question 15

Complementary goods are goods:

Accepted Answer

A) that are consumed jointly. 
B) that are consumed one in place of the other. 
C) for which demand increases when the price of its complementary goods increases. 
D) for which demand decreases when the price of its complementary goods decreases. 
E) that are inversely related. 
A) that are consumed jointly. 
B) that are consumed one in place of the other. 
C) for which demand increases when the price of its complementary goods increases. 
D) for which demand decreases when the price of its complementary goods decreases. 
E) that are inversely related.

Question 16

For a normal good, an increase in consumer income will cause the market demand for the product to:

Accepted Answer

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

Question 17

A leftward shift of a supply curve is called a(n):

Accepted Answer

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

Question 18

If two goods are complementary, a(n):

Accepted Answer

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

Question 19

Which of the following will cause the demand curve for a good to shift to the right?

Accepted Answer

A) Decrease in income for a normal good. 
B) Increase in the price of a complementary good. 
C) Decrease in the price of the good. 
D) Increase in the price of a substitute good. 
E) Expectation of a future price decline. 
A) Decrease in income for a normal good. 
B) Increase in the price of a complementary good. 
C) Decrease in the price of the good. 
D) Increase in the price of a substitute good. 
E) Expectation of a future price decline.

Question 20

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Accepted Answer

A) True 
 B)False

Exam 3: Market Demand and Supply

Which of the following will increase the supply of a good?

Coffee and tea are:

Exhibit 3-3 Demand curves Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Equilibrium in a market exists when there is neither a surplus nor a shortage of the item.

Assume Qs represents the quantity supplied at a given price and Qd represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?

Higher milk prices reduce the demand for milk.

If equilibrium is present in a market:

How will an increase in lumber prices influence the home construction market?

Assuming that clothing is a normal good, an increase in consumer income, other things being equal, would:

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Exhibit 3-12 Supply and demand data In Exhibit 3-12, which of the following occurs at a price of $1.00?

A baby boom will have what immediate effect on the disposable diaper market?

Exhibit 3-9 Demand and supply curves In Exhibit 3-9, if the market price is $50,

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Complementary goods are goods:

For a normal good, an increase in consumer income will cause the market demand for the product to:

A leftward shift of a supply curve is called a(n):

If two goods are complementary, a(n):

Which of the following will cause the demand curve for a good to shift to the right?

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

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

Assume Q_s represents the quantity supplied at a given price and Q_d represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?