Question 1

Surpluses cause prices to rise while shortages cause prices to fall.

Accepted Answer

A) True 
 B)False

Question 2

A movement along a demand curve is called a change in:

Accepted Answer

A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population. 
A)  income. 
B)  quantity demanded. 
C)  demand. 
D)  tastes. 
E)  population.

Question 3

Which of the following can bring about a change in the quantity demanded?

Accepted Answer

A)  Change in supply. 
B)  Change in quality. 
C)  Change in income. 
D)  Change in product price. 
E)  Change in taste. 
A)  Change in supply. 
B)  Change in quality. 
C)  Change in income. 
D)  Change in product price. 
E)  Change in taste.

Question 4

A leftward shift in the demand curve is called:

Accepted Answer

A)  ​a decrease in demand. 
B)  ​a decrease in output. 
C)  ​an increase in demand. 
D)  ​an increase in income. 
A)  ​a decrease in demand. 
B)  ​a decrease in output. 
C)  ​an increase in demand. 
D)  ​an increase in income.

Question 5

Higher milk prices reduce the demand for milk.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 3-8  Demand and supply data for radios   Exhibit 3-8 presents supply and demand data for the radio market. If the price of radios was currently $70, there would be an ____ of ____ radios in this market.

Accepted Answer

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

Question 7

The most important characteristic of the equilibrium price is that it:

Accepted Answer

A)  guarantees that producers earn profit. 
B)  clears the market. 
C)  increases the quantity demanded. 
D)  decreases the quantity demanded. 
A)  guarantees that producers earn profit. 
B)  clears the market. 
C)  increases the quantity demanded. 
D)  decreases the quantity demanded.

Question 8

In economic terms, to say that there has been an increase in demand for a product means that:

Accepted Answer

A)  the demand curve has shifted to the left. 
B)  the product's price has fallen and as a result consumers are buying a larger quantity of the product. 
C)  the product has become scarce for some reason. 
D)  consumers are now willing to purchase more of the product at each possible price. 
A)  the demand curve has shifted to the left. 
B)  the product's price has fallen and as a result consumers are buying a larger quantity of the product. 
C)  the product has become scarce for some reason. 
D)  consumers are now willing to purchase more of the product at each possible price.

Question 9

When firms advertise their products, they are attempting to:

Accepted Answer

A)  shift the supply curve of the product to the right. 
B)  shift the supply curve of the product to the left. 
C)  shift the demand for the product to the right. 
D)  shift the demand for the product to the left. 
E)  create a surplus of the product. 
A)  shift the supply curve of the product to the right. 
B)  shift the supply curve of the product to the left. 
C)  shift the demand for the product to the right. 
D)  shift the demand for the product to the left. 
E)  create a surplus of the product.

Question 10

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 11

Two goods, X and Y, are complementary goods if the demand for X:

Accepted Answer

A)  increases when the price of Y increases. 
B)  increases when income increases. 
C)  decreases when the price of Y increases. 
D)  increases as the price of its substitute good increases. 
E)  decreases as the price of its substitute good decreases. 
A)  increases when the price of Y increases. 
B)  increases when income increases. 
C)  decreases when the price of Y increases. 
D)  increases as the price of its substitute good increases. 
E)  decreases as the price of its substitute good decreases.

Question 12

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 13

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

Accepted Answer

A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  increase in quantity supplied at any given price. 
D)  all of the above are true. 
A)  rightward shift of the supply curve. 
B)  increase in supply. 
C)  increase in quantity supplied at any given price. 
D)  all of the above are true.

Question 14

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

Accepted Answer

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

Question 15

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

Question 16

Exhibit 3-8  Demand and supply data for radios  
In Exhibit 3-8, if there is a surplus of radios of 200 units, the current price of radios must be;

Accepted Answer

A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40. 
A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40.

Question 17

If two goods are substitutes in consumption, a(n):

Accepted Answer

A)  decrease in the price of one product will cause an increase in the demand for the other product. 
B)  decrease in the price of one product will cause a decrease in the demand for the other product. 
C)  increase in the price of one product will cause an increase in the supply of the other product. 
D)  increase in the price of one product will cause a decrease in the supply of the other product. 
E)  increase in the price of one product will cause a decrease in the demand for the other product. 
A)  decrease in the price of one product will cause an increase in the demand for the other product. 
B)  decrease in the price of one product will cause a decrease in the demand for the other product. 
C)  increase in the price of one product will cause an increase in the supply of the other product. 
D)  increase in the price of one product will cause a decrease in the supply of the other product. 
E)  increase in the price of one product will cause a decrease in the demand for the other product.

Question 18

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

Accepted Answer

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

Question 19

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 20

Complementary goods are goods:

Accepted Answer

A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related. 
A)  that are consumed jointly. 
B)  that are consumed one in place of the other. 
C)  for which demand increases when the price of its complementary goods increases. 
D)  for which demand decreases when the price of its complementary goods decreases. 
E)  that are inversely related.

Exam 3: Market Demand and Supply

Surpluses cause prices to rise while shortages cause prices to fall.

A movement along a demand curve is called a change in:

Which of the following can bring about a change in the quantity demanded?

A leftward shift in the demand curve is called:

Higher milk prices reduce the demand for milk.

Exhibit 3-8 Demand and supply data for radios Exhibit 3-8 presents supply and demand data for the radio market. If the price of radios was currently $70, there would be an ____ of ____ radios in this market.

The most important characteristic of the equilibrium price is that it:

In economic terms, to say that there has been an increase in demand for a product means that:

When firms advertise their products, they are attempting to:

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

Two goods, X and Y, are complementary goods if the demand for X:

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

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

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

The negative slope of the demand curve reflects the:

Exhibit 3-8 Demand and supply data for radios In Exhibit 3-8, if there is a surplus of radios of 200 units, the current price of radios must be;

If two goods are substitutes in consumption, a(n):

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

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

Complementary goods are goods:

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

Exhibit 3-8 Demand and supply data for radios Exhibit 3-8 presents supply and demand data for the radio market. If the price of radios was currently $70, there would be an of radios in this market.