Question 1

The law of demand is illustrated by a demand curve that is:

Accepted Answer

A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping. 
A)  horizontal. 
B)  downward-sloping. 
C)  vertical. 
D)  upward-sloping.

Question 2

​
-In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is: ​

Accepted Answer

A)  ​an equilibrium price. 
B)  not an equilibrium price, since there is an excess supply at a price of $5. 
C)  ​not an equilibrium price, since there is an excess demand at a price of $5. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded. 
A)  ​an equilibrium price. 
B)  not an equilibrium price, since there is an excess supply at a price of $5. 
C)  ​not an equilibrium price, since there is an excess demand at a price of $5. 
D)  ​not an equilibrium price, since the rate at which chairs are being supplied is great than the rate at which they are being demanded.

Question 3

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

Accepted Answer

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

Question 4

When economists say the quantity supplied of a product has decreased, they mean the:

Accepted Answer

A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it. 
A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it.

Question 5

The price of a good will rise when:

Accepted Answer

A)  there is a shortage of the good. 
B)  there is a surplus of the good. 
C)  demand for the good decreases. 
D)  the supply of the good increases. 
A)  there is a shortage of the good. 
B)  there is a surplus of the good. 
C)  demand for the good decreases. 
D)  the supply of the good increases.

Question 6

When economists say the quantity supplied of a product has increased, they mean the:

Accepted Answer

A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it. 
A)  supply curve has shifted to the left. 
B)  supply curve has shifted to the right. 
C)  price of the product has risen, and consequently, suppliers are producing more of it. 
D)  price of the product has fallen, and consequently, suppliers are producing less of it.

Question 7

There is a technological advance in the production of digital watches. This will cause:

Accepted Answer

A)  demand to increase. 
B)  supply to increase. 
C)  the price to increase. 
D)  supply to decrease. 
A)  demand to increase. 
B)  supply to increase. 
C)  the price to increase. 
D)  supply to decrease.

Question 8

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. 
A)  Supply decreases. 
B)  Supply increases. 
C)  Demand decreases. 
D)  Demand increases.

Question 9

Which of the following is most likely to shift the demand curve for electricity to the left?

Accepted Answer

A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy. 
A)  consumers becoming more energy conscious. 
B)  an increase in income. 
C)  a decrease in the price of electricity. 
D)  an increase in the price of natural gas, a substitute source of energy.

Question 10

An improvement in a firm's technology that improves productivity results in a(n):

Accepted Answer

A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve. 
A)  leftward shift of the supply curve. 
B)  upward movement along the supply curve. 
C)  willingness to supply a larger quantity than before at any given price. 
D)  downward movement along the supply curve.

Question 11

The law of supply states that:

Accepted Answer

A)  there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. 
B)  there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. 
C)  there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. 
D)  at a lower price, a greater quantity will be supplied. 
A)  there is a negative relationship between the price of a good and the quantity of it purchased by suppliers. 
B)  there is a positive relationship between the price of a good and the quantity that buyers choose to purchase. 
C)  there is a positive relationship between the price of a good and the quantity of it offered for sale by suppliers. 
D)  at a lower price, a greater quantity will be supplied.

Question 12

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Accepted Answer

A)  A rightward shift in the demand curve for orange juice. 
B)  An increase in the quantity demanded for orange juice. 
C)  A leftward shift in the demand curve for orange juice. 
D)  A decrease in the quantity demanded orange juice. 
A)  A rightward shift in the demand curve for orange juice. 
B)  An increase in the quantity demanded for orange juice. 
C)  A leftward shift in the demand curve for orange juice. 
D)  A decrease in the quantity demanded orange juice.

Question 13

Exhibit 3-4 Supply curves
 
In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

Accepted Answer

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

Question 14

​
In Exhibit  3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires:

Accepted Answer

A)  no change, because an equilibrium already exists. 
B)  the price to fall below $.50 and both the quantity supplied and the quantity demanded to rise. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to rise above $.50, the quantity supplied to rise, and the quantity demanded to fall. 
A)  no change, because an equilibrium already exists. 
B)  the price to fall below $.50 and both the quantity supplied and the quantity demanded to rise. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to rise above $.50, the quantity supplied to rise, and the quantity demanded to fall.

Question 15

Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?

Accepted Answer

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

Question 16

Exhibit 3-6 Milk market
    Price per Quart   Quantity Demanded (Quarts per week)   Quantity Supplied (Quarts per week)     0.70   20   180     0.60   60   140     0.50   100   100     0.40   140   60     0.30   180   20    
-In Exhibit 3-6, which of the following is  true  about the milk market?

Accepted Answer

A)  At price 0.60 there is an excess demand of milk. 
B)  At price 0.40 there is an excess supply of milk. 
C)  At price 0.70 there is an excess supply of milk. 
D)  At price 0.50 there is an excess demand of milk. 
A)  At price 0.60 there is an excess demand of milk. 
B)  At price 0.40 there is an excess supply of milk. 
C)  At price 0.70 there is an excess supply of milk. 
D)  At price 0.50 there is an excess demand of milk.

Question 17

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

Accepted Answer

A)  demand at various prices. 
B)  produce at various costs. 
C)  hold back from the market when competition is reduced. 
D)  provide at different prices. 
A)  demand at various prices. 
B)  produce at various costs. 
C)  hold back from the market when competition is reduced. 
D)  provide at different prices.

Question 18

A fall in the price of a good causes an increase in its:

Accepted Answer

A)  quantity demanded. 
B)  demand. 
C)  quantity supplied. 
D)  supply. 
A)  quantity demanded. 
B)  demand. 
C)  quantity supplied. 
D)  supply.

Question 19

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 there is a shortage of video games of 200 units, the current price of video games
Must be:

Accepted Answer

A)  $60. 
B)  $55. 
C)  $40. 
D)  $45. 
A)  $60. 
B)  $55. 
C)  $40. 
D)  $45.

Question 20

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

A)  a decrease in the price of tires 
B)  a decrease in the price of cars 
C)  an increase in consumer income 
D)  an increase in the number of miles people drive per year 
A)  a decrease in the price of tires 
B)  a decrease in the price of cars 
C)  an increase in consumer income 
D)  an increase in the number of miles people drive per year

Price per Quart	Quantity Demanded (Quarts per week)	Quantity Supplied (Quarts per week)
0.70	20	180
0.60	60	140
0.50	100	100
0.40	140	60
0.30	180	20

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

The law of demand is illustrated by a demand curve that is:

​ -In Exhibit 3-16, assume that the market price of chairs is $5 each. This price is: ​

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

When economists say the quantity supplied of a product has decreased, they mean the:

The price of a good will rise when:

When economists say the quantity supplied of a product has increased, they mean the:

There is a technological advance in the production of digital watches. This will cause:

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

Which of the following is most likely to shift the demand curve for electricity to the left?

An improvement in a firm's technology that improves productivity results in a(n):

The law of supply states that:

Other things being equal, the effects of a decrease in the price of orange juice, is represented by which of the following?

Exhibit 3-4 Supply curves In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):

​ In Exhibit 3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires:

Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?

Exhibit 3-6 Milk market Price per Quart Quantity Demanded (Quarts per week) Quantity Supplied (Quarts per week) 0.70 20 180 0.60 60 140 0.50 100 100 0.40 140 60 0.30 180 20 -In Exhibit 3-6, which of the following is true about the milk market?

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

A fall in the price of a good causes an increase in its:

Which of the following is least likely to increase the demand for new tires?

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 3-16, assume that the market price of chairs is $5 each. This price is:

Exhibit 3-4 Supply curves In Exhibit 3-4, a shift in the supply curve from S₁ to S₂ represents a(n):

In Exhibit 3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires:

Exhibit 3-6 Milk market

Price per Quart

Quantity Demanded

(Quarts per week)

Quantity Supplied

(Quarts per week)

0.70

20

180

0.60

60

140

0.50

100

100

0.40

140

60

0.30

180

20

-In Exhibit 3-6, which of the following is true about the milk market?