Question 1

Which of the following is true for the law of supply?

Accepted Answer

A)  Buyers decrease the quantity of a good purchased as price increases. 
B)  Sellers increase the quantity of a good supplied as price increases. 
C)  Price decreases as more units are supplied. 
D)  A decrease in price results from more demand. 
A)  Buyers decrease the quantity of a good purchased as price increases. 
B)  Sellers increase the quantity of a good supplied as price increases. 
C)  Price decreases as more units are supplied. 
D)  A decrease in price results from more demand.

Question 2

Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:

Accepted Answer

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

Question 3

Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:

Accepted Answer

A)  the price of the tickets must be very high or else people would not consider them valuable. 
B)  the price is set below the equilibrium level. 
C)  the Indiana basketball stadium is relatively small. 
D)  everyone who attends the game will enjoy it. 
A)  the price of the tickets must be very high or else people would not consider them valuable. 
B)  the price is set below the equilibrium level. 
C)  the Indiana basketball stadium is relatively small. 
D)  everyone who attends the game will enjoy it.

Question 4

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

Accepted Answer

A)  increase in both demand and supply, where the increase in supply is  relatively bigger. 
B)  decrease in both demand and supply, where the decrease in supply is relatively bigger. 
C)  increase in demand and a decrease in supply, where the decrease in supply is  relatively bigger. 
D)  decrease in demand and increase in supply, where the increase in supply is relatively bigger. 
A)  increase in both demand and supply, where the increase in supply is  relatively bigger. 
B)  decrease in both demand and supply, where the decrease in supply is relatively bigger. 
C)  increase in demand and a decrease in supply, where the decrease in supply is  relatively bigger. 
D)  decrease in demand and increase in supply, where the increase in supply is relatively bigger.

Question 5

Exhibit 3-2 Demand curves
 
In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

Accepted Answer

A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good. 
A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good.

Question 6

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 7

An increase in the quantity supplied of a good is most often due to:

Accepted Answer

A)  lower prices. 
B)  higher prices. 
C)  an increase in the price of a substitute. 
D)  more buyers entering the market. 
A)  lower prices. 
B)  higher prices. 
C)  an increase in the price of a substitute. 
D)  more buyers entering the market.

Question 8

When economists say the supply of a product has decreased, they mean that:

Accepted Answer

A)  the supply curve has shifted to the left. 
B)  the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C)  producers are now willing to sell more of this product at each possible price. 
D)  the supply curve has shifted to the right. 
A)  the supply curve has shifted to the left. 
B)  the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C)  producers are now willing to sell more of this product at each possible price. 
D)  the supply curve has shifted to the right.

Question 9

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   
-In Exhibit 3-8, if there is a surplus of video games of 200 units, the current price of video games must be:

Accepted Answer

A)  $60. 
B)  $50. 
C)  $45. 
D)  $40. 
A)  $60. 
B)  $50. 
C)  $45. 
D)  $40.

Question 10

Which of the following is the least likely to result from an advance in technology?

Accepted Answer

A)  suppliers offering a larger quantity than before at each given price. 
B)  suppliers offering the same quantity as before at a lower price. 
C)  a leftward shift of the supply curve. 
D)  an increase in supply. 
A)  suppliers offering a larger quantity than before at each given price. 
B)  suppliers offering the same quantity as before at a lower price. 
C)  a leftward shift of the supply curve. 
D)  an increase in supply.

Question 11

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

Accepted Answer

A)   increase in demand and an increase in the quantity supplied. 
B)   increase in the quantity demanded and an increase in supply. 
C)  decrease in demand and a decrease in the quantity supplied. 
D)  decrease in the quantity demanded and a decrease in supply. 
A)   increase in demand and an increase in the quantity supplied. 
B)   increase in the quantity demanded and an increase in supply. 
C)  decrease in demand and a decrease in the quantity supplied. 
D)  decrease in the quantity demanded and a decrease in supply.

Question 12

An increase in the number of producers will:

Accepted Answer

A)  increase the market supply, because the price will rise. 
B)  increase the market supply only when market demand increases too. 
C)  increase the market supply, because market supply is the sum of all individual supply curves. 
D)  increase the market supply only if each supplier has an identical supply curve. 
A)  increase the market supply, because the price will rise. 
B)  increase the market supply only when market demand increases too. 
C)  increase the market supply, because market supply is the sum of all individual supply curves. 
D)  increase the market supply only if each supplier has an identical supply curve.

Question 13

Which of the following would not cause a shift in the supply curve for a good?

Accepted Answer

A)  An increase in demand for that good. 
B)  An increase in the cost of labor used to produce that good. 
C)  A change in the cost of raw materials used to produce that good. 
D)  A decrease in the cost of machinery used to produce that good. 
A)  An increase in demand for that good. 
B)  An increase in the cost of labor used to produce that good. 
C)  A change in the cost of raw materials used to produce that good. 
D)  A decrease in the cost of machinery used to produce that good.

Question 14

A supply curve:

Accepted Answer

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

Question 15

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  Demand and Supply Data for Video Games
 
In Exhibit 3-8, if the price of video games was currently $45, there would be an ____________ of ______________ video games in this market.

Accepted Answer

A)  excess demand; 700 
B)  excess demand; 100 
C)  excess supply; 100 
D)  excess supply; 600 
A)  excess demand; 700 
B)  excess demand; 100 
C)  excess supply; 100 
D)  excess supply; 600

Question 16

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

Accepted Answer

A)  the price of an input 
B)  technology 
C)  the number of sellers 
D)  the price of the good supplied 
A)  the price of an input 
B)  technology 
C)  the number of sellers 
D)  the price of the good supplied

Question 17

The law of demand refers to the:

Accepted Answer

A)  inverse relationship between the price of a good and the quantity of a good that people will buy. 
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 quantity of a good that people will buy. 
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 18

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

Accepted Answer

A)  the number of sellers of pickles. 
B)  costs of cucumbers. 
C)  pickling production technology. 
D)  the price of the pickles. 
A)  the number of sellers of pickles. 
B)  costs of cucumbers. 
C)  pickling production technology. 
D)  the price of the pickles.

Question 19

​
In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

Accepted Answer

A)  no change, because an equilibrium already exists. 
B)  the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise. 
A)  no change, because an equilibrium already exists. 
B)  the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise.

Question 20

Which of the following states the definition of supply?

Accepted Answer

A)  More of a good is supplied at a lower price. 
B)  There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C)  There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D)  There is a negative relationship between the price of a good and the quantity offered for sale by suppliers. 
A)  More of a good is supplied at a lower price. 
B)  There is a positive relationship between the price of a good and the quantity that buyers purchase. 
C)  There is a positive relationship between the price of a good and the quantity offered for sale by suppliers. 
D)  There is a negative relationship between the price of a good and the quantity offered for sale by suppliers.

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

Exam 3: Market Demand and Supply

Which of the following is true for the law of supply?

Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:

Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:

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

Exhibit 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

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

An increase in the quantity supplied of a good is most often due to:

When economists say the supply of a product has decreased, they mean that:

Which of the following is the least likely to result from an advance in technology?

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

An increase in the number of producers will:

Which of the following would not cause a shift in the supply curve for a good?

A supply curve:

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

The law of demand refers to the:

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

​ In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:

Which of the following states the definition of supply?

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

Exhibit 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?

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

In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires: