Question 1

All of the following apply to the description of a market in equilibrium except:

Accepted Answer

A)  quantity supplied equals quantity demanded. 
B)  the intersection of the supply and demand curves. 
C)  no excess supply exists. 
D)  the price of the good is falling. 
A)  quantity supplied equals quantity demanded. 
B)  the intersection of the supply and demand curves. 
C)  no excess supply exists. 
D)  the price of the good is falling.

Question 2

Exhibit 3-3 Demand curves
 
-Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

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 3

The price of a good will fall if:

Accepted Answer

A)  there is an excess demand of the good. 
B)  demand and supply of the good are the same. 
C)  there is an excess supply of the good. 
D)  the price is below the equilibrium price. 
A)  there is an excess demand of the good. 
B)  demand and supply of the good are the same. 
C)  there is an excess supply of the good. 
D)  the price is below the equilibrium price.

Question 4

Suppose ABC Corporation is willing to sell 100 shirts when the price is $10 and 200 shirts when the price is $15, but XYZ Inc is willing to sell 500 shirts when the price is $10 and 350 shirts when the price is $15. Which of the following statements about the two companies is correct?

Accepted Answer

A)  ABC Corporation follows the law of supply, but XYZ Inc does not. 
B)  ABC Corporation does not follow the law of supply, but XYZ Inc does. 
C)  Both ABC Corporation and XYZ Inc follow the law of supply. 
D)  Neither ABC Corporation nor XYZ Inc follow the law of supply. 
A)  ABC Corporation follows the law of supply, but XYZ Inc does not. 
B)  ABC Corporation does not follow the law of supply, but XYZ Inc does. 
C)  Both ABC Corporation and XYZ Inc follow the law of supply. 
D)  Neither ABC Corporation nor XYZ Inc follow the law of supply.

Question 5

Exhibit 3-8  Demand and Supply Data for Video Games
    Price   Quantity Demanded of Video Games   Quantity Supplied of Video Games     $75   400   900     70   450   850     65   500   800     60   550   750     55   600   700     50   650   650     45   700   600     40   750   550   
-Exhibit 3-8 presents supply and demand data for the video game market. If the price of video games was currently $70, there would be an ____________ of ______________ video games in this market.

Accepted Answer

A)  excess demand; 450 
B)  excess demand; 500 
C)  excess supply; 400 
D)  excess supply; 850 
A)  excess demand; 450 
B)  excess demand; 500 
C)  excess supply; 400 
D)  excess supply; 850

Question 6

The demand schedule for a good shows:

Accepted Answer

A)  the specific quantity of the good that people are willing and able to sell at different prices. 
B)  the positive relationship between the price and the quantity of the good. 
C)  no relationship between the price and the quantity of the good. 
D)  the specific quantity of the good that people are willing and able to buy at different prices. 
A)  the specific quantity of the good that people are willing and able to sell at different prices. 
B)  the positive relationship between the price and the quantity of the good. 
C)  no relationship between the price and the quantity of the good. 
D)  the specific quantity of the good that people are willing and able to buy at different prices.

Question 7

A supply schedule shows the relationship between:

Accepted Answer

A)  demand and supply. 
B)  supply and income. 
C)  price and income. 
D)  quantity supplied and price. 
A)  demand and supply. 
B)  supply and income. 
C)  price and income. 
D)  quantity supplied and price.

Question 8

Which of the following corresponds to the definition of the supply curve?

Accepted Answer

A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied. 
A)  It depicts a positive relationship between income and quantity supplied. 
B)  It depicts a positive relationship between technology and prices. 
C)  It depicts a positive relationship between prices and quantity supplied. 
D)  It depicts a negative relationship between prices and quantity supplied.

Question 9

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Accepted Answer

A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease. 
A)  The quantity of eggs demanded will increase. 
B)  Egg demand will decrease. 
C)  Egg supply will increase. 
D)  Egg supply will decrease.

Question 10

Which of the following will increase the demand for motorcycles?

Accepted Answer

A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good). 
A)  A fall in the price of motorcycles. 
B)  A fall in insurance rates for motorcycles. 
C)  A fall in the price of automobiles. 
D)  A fall in buyers' incomes (assuming motorcycles are a normal good).

Question 11

Demand curves are negatively sloped when people buy:

Accepted Answer

A)  less as the price decreases. 
B)  more as the price increases. 
C)  less as incomes decrease. 
D)  more as the price decreases. 
A)  less as the price decreases. 
B)  more as the price increases. 
C)  less as incomes decrease. 
D)  more as the price decreases.

Question 12

Exhibit 3-5 Supply for Tucker's Cola Data
   Quantity supplied per week (millions of gallons)   Price per gallon     6   $3.00     5     2.50     4     2.00     3     1.50     2     1.00     1       .50   
As shown in Exhibit 3-5, the price and quantity supplied by sellers of Tucker's Cola have a(n) ____ relationship.

Accepted Answer

A)  direct. 
B)  inverse. 
C)  negative. 
D)  zero. 
A)  direct. 
B)  inverse. 
C)  negative. 
D)  zero.

Question 13

A demand curve:

Accepted Answer

A)  has a positive slope. 
B)  illustrates the negative relationship between price and quantity demanded. 
C)  illustrates the positive relationship between price and quantity demanded. 
D)  is based on the assumption of a stable supply curve. 
A)  has a positive slope. 
B)  illustrates the negative relationship between price and quantity demanded. 
C)  illustrates the positive relationship between price and quantity demanded. 
D)  is based on the assumption of a stable supply curve.

Question 14

In general, supply curves slope upward because:

Accepted Answer

A)  the government requires that more units be produced. 
B)  rising prices provide producers with a greater profit incentive. 
C)  consumers buy a greater quantity. 
D)  technology improves the ability of firms to produce more at each possible price. 
A)  the government requires that more units be produced. 
B)  rising prices provide producers with a greater profit incentive. 
C)  consumers buy a greater quantity. 
D)  technology improves the ability of firms to produce more at each possible price.

Question 15

An improvement in a firm's technology that reduces its production costs will result in a(n):

Accepted Answer

A)  leftward shift of the supply curve. 
B)  increase in supply. 
C)  decrease in quantity supplied at any given price. 
D)  an increase in demand. 
A)  leftward shift of the supply curve. 
B)  increase in supply. 
C)  decrease in quantity supplied at any given price. 
D)  an increase in demand.

Question 16

A surplus means a(n):

Accepted Answer

A)  excess demand for the product at the current price. 
B)  situation where the current market price is too low. 
C)  situation where the quantity demanded exceeds the quantity supplied. 
D)  excess supply of the product at the current price. 
A)  excess demand for the product at the current price. 
B)  situation where the current market price is too low. 
C)  situation where the quantity demanded exceeds the quantity supplied. 
D)  excess supply of the product at the current price.

Question 17

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 18

​
-In Exhibit 3-11, in Panel A the movement from point A to point C describes a(n):

Accepted Answer

A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity. 
A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity.

Question 19

Exhibit 3-4 Supply curves
 
In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S1 to S2?

Accepted Answer

A)  Increase in demand. 
B)  Increase in materials cost. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates. 
A)  Increase in demand. 
B)  Increase in materials cost. 
C)  Decrease in the number of suppliers in the market. 
D)  Decrease in wage rates.

Question 20

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase and then decrease. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase and then decrease.

Price	Quantity Demanded of Video Games	Quantity Supplied of Video Games
$75	400	900
70	450	850
65	500	800
60	550	750
55	600	700
50	650	650
45	700	600
40	750	550

Quantity supplied per week (millions of gallons)	Price per gallon
6	$3.00
5	2.50
4	2.00
3	1.50
2	1.00
1	.50

Exam 3: Market Demand and Supply

All of the following apply to the description of a market in equilibrium except:

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

The price of a good will fall if:

Suppose ABC Corporation is willing to sell 100 shirts when the price is $10 and 200 shirts when the price is $15, but XYZ Inc is willing to sell 500 shirts when the price is $10 and 350 shirts when the price is $15. Which of the following statements about the two companies is correct?

The demand schedule for a good shows:

A supply schedule shows the relationship between:

Which of the following corresponds to the definition of the supply curve?

Farmers can choose to produce eggs or milk. If there is an increase in the price of milk then what will be the effect in the egg market?

Which of the following will increase the demand for motorcycles?

Demand curves are negatively sloped when people buy:

Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week (millions of gallons) Price per gallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 As shown in Exhibit 3-5, the price and quantity supplied by sellers of Tucker's Cola have a(n) ____ relationship.

A demand curve:

In general, supply curves slope upward because:

An improvement in a firm's technology that reduces its production costs will result in a(n):

A surplus means a(n):

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

​ -In Exhibit 3-11, in Panel A the movement from point A to point C describes a(n):

Exhibit 3-4 Supply curves In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S1 to S2?

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:

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

Exhibit 3-5 Supply for Tucker's Cola Data

Quantity supplied per week
(millions of gallons)

Price per
gallon

6

$3.00

5

2.50

4

2.00

3

1.50

2

1.00

1

.50

As shown in Exhibit 3-5, the price and quantity supplied by sellers of Tucker's Cola have a(n) ____ relationship.

-In Exhibit 3-11, in Panel A the movement from point A to point C describes a(n):

Exhibit 3-4 Supply curves In Exhibit 3-4, which of the following could have caused the shift in the supply curve from S₁ to S₂?