Question 1

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 2

The law of demand indicates that as the price of a good increases:

Accepted Answer

A)  suppliers sell less of it. 
B)  suppliers sell more of it. 
C)  buyers buy less of it. 
D)  buyers buy more of it. 
A)  suppliers sell less of it. 
B)  suppliers sell more of it. 
C)  buyers buy less of it. 
D)  buyers buy more of it.

Question 3

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 4

Suppose the prices of petroleum products, including gasoline and fuel oil, fell sharply. Which of the following would most likely occur as the result of the lower prices of petroleum products?

Accepted Answer

A)  A reduction in the consumption of gasoline. 
B)  An increase in demand for solar heating systems. 
C)  An increase in demand for smaller, more efficient automobiles. 
D)  A reduction in the demand for home insulation products. 
A)  A reduction in the consumption of gasoline. 
B)  An increase in demand for solar heating systems. 
C)  An increase in demand for smaller, more efficient automobiles. 
D)  A reduction in the demand for home insulation products.

Question 5

The horizontal summation of all individual demands at different given prices results in the:

Accepted Answer

A)  market supply curve. 
B)  market demand curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
A)  market supply curve. 
B)  market demand curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves.

Question 6

A reduction in production costs will not result in which of the following?

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 consumers to demand a larger quantity at any given price. 
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 consumers to demand a larger quantity at any given price.

Question 7

An increase in the demand for a product means that the:

Accepted Answer

A)  demand curve shifts to the left. 
B)  demand curve shifts to the right. 
C)  supply curve shifts to the right. 
D)  supply curve shifts to the left. 
A)  demand curve shifts to the left. 
B)  demand curve shifts to the right. 
C)  supply curve shifts to the right. 
D)  supply curve shifts to the left.

Question 8

If the demand for a good decreases because consumer income increases, the good is a(n):

Accepted Answer

A)  inferior good. 
B)  normal good. 
C)  necessity good. 
D)  luxury good. 
A)  inferior good. 
B)  normal good. 
C)  necessity good. 
D)  luxury good.

Question 9

A demand curve shows the relationship between:

Accepted Answer

A)  price and quantity demanded. 
B)  the demand and supply schedules. 
C)  demand and supply equilibrium. 
D)  leakages and injections. 
A)  price and quantity demanded. 
B)  the demand and supply schedules. 
C)  demand and supply equilibrium. 
D)  leakages and injections.

Question 10

The " ceteris paribus " clause in the law of demand allows which of the following factors to change?

Accepted Answer

A)  consumer tastes and preferences 
B)  prices of other goods 
C)  expectations 
D)  price of the good demanded 
A)  consumer tastes and preferences 
B)  prices of other goods 
C)  expectations 
D)  price of the good demanded

Question 11

The law of demand shows that:

Accepted Answer

A)  there is an inverse relationship between price and quantity demanded. 
B)  the demand curve is positively sloped. 
C)  when the price of a good increases, the quantity demanded increases. 
D)  individual demand is the same as market demand. 
A)  there is an inverse relationship between price and quantity demanded. 
B)  the demand curve is positively sloped. 
C)  when the price of a good increases, the quantity demanded increases. 
D)  individual demand is the same as market demand.

Question 12

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

Accepted Answer

A)  the demand for good X to shift to the left. 
B)  an upward movement along the demand curve for good Y. 
C)  the demand curve for good Y to shift to the right. 
D)  a downward movement along the demand curve for good Y. 
A)  the demand for good X to shift to the left. 
B)  an upward movement along the demand curve for good Y. 
C)  the demand curve for good Y to shift to the right. 
D)  a downward movement along the demand curve for good Y.

Question 13

​
-In Exhibit 3-7, if price happened to currently be $25 in this market, a _______ would result, causing a _______ in price.

Accepted Answer

A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease 
A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease

Question 14

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

Accepted Answer

A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time. 
A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time.

Question 15

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

Accepted Answer

A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good. 
A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good.

Question 16

When quantity supplied equals quantity demanded, there is:

Accepted Answer

A)  disequilibrium. 
B)  excess quantity supplied. 
C)  a market-clearing price (equilibrium price). 
D)  excess quantity demanded. 
A)  disequilibrium. 
B)  excess quantity supplied. 
C)  a market-clearing price (equilibrium price). 
D)  excess quantity demanded.

Question 17

​
In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are:

Accepted Answer

A)  $0.50, 250. 
B)  $2.00, 300. 
C)  $2.00, 100. 
D)  $1.00, 200. 
A)  $0.50, 250. 
B)  $2.00, 300. 
C)  $2.00, 100. 
D)  $1.00, 200.

Question 18

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. 
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.

Question 19

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 20

A decrease in the price of coffee, other things being equal, causes a(n):

Accepted Answer

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

Exam 3: Market Demand and Supply

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 indicates that as the price of a good increases:

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

Suppose the prices of petroleum products, including gasoline and fuel oil, fell sharply. Which of the following would most likely occur as the result of the lower prices of petroleum products?

The horizontal summation of all individual demands at different given prices results in the:

A reduction in production costs will not result in which of the following?

An increase in the demand for a product means that the:

If the demand for a good decreases because consumer income increases, the good is a(n):

A demand curve shows the relationship between:

The " ceteris paribus " clause in the law of demand allows which of the following factors to change?

The law of demand shows that:

Suppose that X and Y are substitute goods. If the price of good X increases, we can expect:

​ -In Exhibit 3-7, if price happened to currently be $25 in this market, a _______ would result, causing a _______ in price.

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

When quantity supplied equals quantity demanded, there is:

​ In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are:

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

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

A decrease in the price of coffee, other things being equal, causes a(n):

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

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

Understanding Direct and Inverse Relationships between Variables

Filters

-In Exhibit 3-7, if price happened to currently be $25 in this market, a _ would result, causing a _ in price.

In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are: