Question 1

If the current market price is above the equilibrium price, then:

Accepted Answer

A)  the quantity demanded exceeds the quantity supplied. 
B)  demand will shift to the left. 
C)  the quantity supplied will exceed the quantity demanded. 
D)  the price will have to increase to establish equilibrium. 
A)  the quantity demanded exceeds the quantity supplied. 
B)  demand will shift to the left. 
C)  the quantity supplied will exceed the quantity demanded. 
D)  the price will have to increase to establish equilibrium.

Question 2

A technological improvement in the production of good X causes the:

Accepted Answer

A)  demand curve for X to shift to the right. 
B)  demand curve for X to shift to the left. 
C)  supply curve for X to shift to the right. 
D)  supply curve for X to shift to the left. 
A)  demand curve for X to shift to the right. 
B)  demand curve for X to shift to the left. 
C)  supply curve for X to shift to the right. 
D)  supply curve for X to shift to the left.

Question 3

A demand curve for The Steel Porcupines' concert tickets would show the:

Accepted Answer

A)  number of tickets the box office is willing to sell at various prices. 
B)  number of people who need tickets. 
C)  quality of people who want to buy these concert tickets. 
D)  number of tickets that will be purchased at various prices. 
A)  number of tickets the box office is willing to sell at various prices. 
B)  number of people who need tickets. 
C)  quality of people who want to buy these concert tickets. 
D)  number of tickets that will be purchased at various prices.

Question 4

A movement along the demand curve for automobiles is caused by a change in:

Accepted Answer

A)  the price of automobiles. 
B)  the price of gasoline. 
C)  the price of steel. 
D)  consumers' incomes. 
A)  the price of automobiles. 
B)  the price of gasoline. 
C)  the price of steel. 
D)  consumers' incomes.

Question 5

Exhibit 3-3 Demand curves
 
-Assume that consumers expect the price of gasoline to rise sharply in the future. Which of the graphs in Exhibit 3-3 depicts this effect?

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 6

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 7

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. 
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.

Question 8

"Because of unseasonable cold weather, much of the peach crop has been destroyed." This statement indicates that the:

Accepted Answer

A)  price of peaches will fall. 
B)  quantity of peaches that will be available at any given price has decreased. 
C)  demand for peaches will shift to the left. 
D)  quantity of peaches that will be available at any given price have increased. 
A)  price of peaches will fall. 
B)  quantity of peaches that will be available at any given price has decreased. 
C)  demand for peaches will shift to the left. 
D)  quantity of peaches that will be available at any given price have increased.

Question 9

Which of the following will cause a movement upward along a supply curve?

Accepted Answer

A)  Increases in raw-material costs. 
B)  Increases in labor costs. 
C)  Increases in the cost of machinery. 
D)  Increases in the market price of a good, other things being equal. 
A)  Increases in raw-material costs. 
B)  Increases in labor costs. 
C)  Increases in the cost of machinery. 
D)  Increases in the market price of a good, other things being equal.

Question 10

The negative slope of the demand curve reflects the:

Accepted Answer

A)  positive relationship between price and quantity. 
B)  proportional relationship between price and quantity. 
C)  inverse relationship between price and quantity. 
D)  inverse relationship between income and quantity. 
A)  positive relationship between price and quantity. 
B)  proportional relationship between price and quantity. 
C)  inverse relationship between price and quantity. 
D)  inverse relationship between income and quantity.

Question 11

A decrease in supply means that:

Accepted Answer

A)  the supply curve will shift to the right. 
B)  there is a movement upward and to the right along the supply curve. 
C)  there is a movement down and to the left along the supply curve. 
D)  the quantity supplied at every price will decrease. 
A)  the supply curve will shift to the right. 
B)  there is a movement upward and to the right along the supply curve. 
C)  there is a movement down and to the left along the supply curve. 
D)  the quantity supplied at every price will decrease.

Question 12

The law of demand states that:

Accepted Answer

A)  as the price of a good increases, more units are demanded. 
B)  there is a direct relationship between the price of a good and the quantity of the good produced. 
C)  there is a negative relationship between the price of a good and the quantity of the good demanded. 
D)  there is an increase in the need for a good as the price of the good increases. 
A)  as the price of a good increases, more units are demanded. 
B)  there is a direct relationship between the price of a good and the quantity of the good produced. 
C)  there is a negative relationship between the price of a good and the quantity of the good demanded. 
D)  there is an increase in the need for a good as the price of the good increases.

Question 13

Exhibit 3-3 Demand curves
 
-Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for pork and beans (an inferior good)?

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 14

Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):

Accepted Answer

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

Question 15

We can find the market supply for phones by:

Accepted Answer

A)  adding all of the prices at which sellers are willing to sell phones. 
B)  multiplying the number of sellers by the number of phones each is willing to sell. 
C)  adding the number of phones buyers want to buy at each price level. 
D)  adding the individual supply curves for phones. 
A)  adding all of the prices at which sellers are willing to sell phones. 
B)  multiplying the number of sellers by the number of phones each is willing to sell. 
C)  adding the number of phones buyers want to buy at each price level. 
D)  adding the individual supply curves for phones.

Question 16

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

Accepted Answer

A)  an increase in wages paid to workers. 
B)  higher prices. 
C)  a decrease in the price of a substitute good. 
D)  lower prices. 
A)  an increase in wages paid to workers. 
B)  higher prices. 
C)  a decrease in the price of a substitute good. 
D)  lower prices.

Exam 3: Market Demand and Supply

If the current market price is above the equilibrium price, then:

A technological improvement in the production of good X causes the:

A demand curve for The Steel Porcupines' concert tickets would show the:

A movement along the demand curve for automobiles is caused by a change in:

Exhibit 3-3 Demand curves -Assume that consumers expect the price of gasoline to rise sharply in the future. Which of the graphs in Exhibit 3-3 depicts this effect?

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?

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?

"Because of unseasonable cold weather, much of the peach crop has been destroyed." This statement indicates that the:

Which of the following will cause a movement upward along a supply curve?

The negative slope of the demand curve reflects the:

A decrease in supply means that:

The law of demand states that:

Exhibit 3-3 Demand curves -Which of the graphs in Exhibit 3-3 depicts the effect of an increase in income on the demand for pork and beans (an inferior good)?

Other things being equal, the effect of a decrease in the price of DVDs on the market for DVD players is a(n):

We can find the market supply for phones by:

An increase in the quantity demanded of a good is most often due 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

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?