Question 1

We can find the market demand for pears by:

Accepted Answer

A)  adding up all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding up the number of pears that producers are willing to sell. 
D)  multiplying the number of pears by the price of pears. 
E)  adding up all the individual demand curves for pears. 
A)  adding up all the prices people are willing to pay for pears. 
B)  multiplying the number of people times the price of pears. 
C)  adding up the number of pears that producers are willing to sell. 
D)  multiplying the number of pears by the price of pears. 
E)  adding up all the individual demand curves for pears.

Question 2

A reduction in production costs will result in a(n):

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 producers to supply the same quantity at a lower price. 
E)  all of the above. 
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 producers to supply the same quantity at a lower price. 
E)  all of the above.

Question 3

Which of the following will not cause a shift in the demand curve for good X?

Accepted Answer

A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income. 
A)  A change in the price of a complementary good. 
B)  A change in the price of good X. 
C)  A change in consumer tastes and preferences for good X. 
D)  An increase in consumer income.

Question 4

The development of new technology typically:

Accepted Answer

A)  shifts the supply curve to the right. 
B)  reduces profits. 
C)  results in a downward movement along a supply curve. 
D)  increases costs of production. 
E)  shifts the demand curve to the right. 
A)  shifts the supply curve to the right. 
B)  reduces profits. 
C)  results in a downward movement along a supply curve. 
D)  increases costs of production. 
E)  shifts the demand curve to the right.

Question 5

Travel by bus and pawn-shop services would be expected to be examples of:

Accepted Answer

A)  normal goods. 
B)  inferior goods. 
C)  substitute goods. 
D)  complementary goods. 
A)  normal goods. 
B)  inferior goods. 
C)  substitute goods. 
D)  complementary goods.

Question 6

An increase in demand:

Accepted Answer

A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve. 
A)  results in a leftward shift of the demand curve. 
B)  could be caused by a decrease in the price of the good. 
C)  could be caused by an increase in the price of a substitute good. 
D)  is shown as movement down along a demand curve.

Question 7

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. 
E)  the demand curve for good Y to shift to the left. 
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. 
E)  the demand curve for good Y to shift to the left.

Question 8

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

Accepted Answer

A)  The number of sellers. 
B)  Resource prices. 
C)  Consumer income. 
D)  Prices of other goods that firms could produce. 
A)  The number of sellers. 
B)  Resource prices. 
C)  Consumer income. 
D)  Prices of other goods that firms could produce.

Question 9

Which of the following will not shift the demand curve for televisions?

Accepted Answer

A)  An increase in the price of televisions. 
B)  An increase in consumer income. 
C)  An increase in the price of radios (a substitute). 
D)  An increase in the price of cable service (a complement). 
A)  An increase in the price of televisions. 
B)  An increase in consumer income. 
C)  An increase in the price of radios (a substitute). 
D)  An increase in the price of cable service (a complement).

Question 10

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Accepted Answer

A)  Consumer income. 
B)  The prices of other goods. 
C)  Consumer tastes and preferences. 
D)  All of the above. 
A)  Consumer income. 
B)  The prices of other goods. 
C)  Consumer tastes and preferences. 
D)  All of the above.

Question 11

Assuming that travel from New York to Los Angeles is a normal good, a decrease in consumer income, other things being equal, will:

Accepted Answer

A)  decrease the quantity demanded of travel to Los Angeles. 
B)  increase the demand for travel to Los Angeles. 
C)  decrease the demand for travel to Los Angeles. 
D)  increase the quantity of travel to Los Angeles demanded. 
A)  decrease the quantity demanded of travel to Los Angeles. 
B)  increase the demand for travel to Los Angeles. 
C)  decrease the demand for travel to Los Angeles. 
D)  increase the quantity of travel to Los Angeles demanded.

Question 12

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 13

If consumer incomes go up and Harley Davidson motorcycles are a normal good, the effect on the demand for motorcycles, ceteris paribus, will be a(n):

Accepted Answer

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

Question 14

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 15

If X is a normal good, a rise in consumer income will shift the:

Accepted Answer

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

Question 16

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

Question 17

Exhibit 3-11  Demand and supply curves   In Exhibit 3-11, in Panel A the movement from A to 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. 
E)  decrease in the quantity demanded and an increase 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. 
E)  decrease in the quantity demanded and an increase in supply.

Question 18

A technological improvement in producing good A would be a shift in the:

Accepted Answer

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

Question 19

Demand curves slope downward to the right.

Accepted Answer

A) True 
 B)False

Question 20

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. 
E)  No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased. 
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. 
E)  No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased.

Exam 3: Market Demand and Supply

We can find the market demand for pears by:

A reduction in production costs will result in a(n):

Which of the following will not cause a shift in the demand curve for good X?

The development of new technology typically:

Travel by bus and pawn-shop services would be expected to be examples of:

An increase in demand:

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

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

Which of the following will not shift the demand curve for televisions?

The "other things being equal" clause in the law of demand does not allow which of the following factors to change?

Assuming that travel from New York to Los Angeles is a normal good, a decrease in consumer income, other things being equal, will:

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?

If consumer incomes go up and Harley Davidson motorcycles are a normal good, the effect on the demand for motorcycles, ceteris paribus, will be a(n):

The law of demand states that:

If X is a normal good, a rise in consumer income will shift the:

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

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

A technological improvement in producing good A would be a shift in the:

Demand curves slope downward to the right.

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?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters