Question 1

A change in supply cannot be caused by a change in:

Accepted Answer

A)  resource prices. 
B)  technology. 
C)  prices of other goods. 
D)  the price of the good itself. 
E)  the number of suppliers. 
A)  resource prices. 
B)  technology. 
C)  prices of other goods. 
D)  the price of the good itself. 
E)  the number of suppliers.

Question 2

Exhibit 3-15  Supply and demand curves for good X   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 3

If tofu is a normal good, an increase in income will:

Accepted Answer

A)  cause tofu to sell at a lower price. 
B)  increase the production of tofu. 
C)  shift the demand curve for tofu to the left. 
D)  shift the demand curve for tofu to the right. 
E)  rotate the supply curve in a clockwise manner. 
A)  cause tofu to sell at a lower price. 
B)  increase the production of tofu. 
C)  shift the demand curve for tofu to the left. 
D)  shift the demand curve for tofu to the right. 
E)  rotate the supply curve in a clockwise manner.

Question 4

Exhibit 3-8  Demand and supply data for radios   In Exhibit 3-8, at any market price of radios above $50, a(n) ____ would result, causing price to ____.

Accepted Answer

A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
E)  shortage; rise 
A)  excess demand; rise 
B)  excess supply; rise 
C)  excess demand; fall 
D)  excess supply; fall 
E)  shortage; rise

Question 5

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 6

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 7

Exhibit 3-15  Supply and demand curves for good X   In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are:

Accepted Answer

A)  $0.50, 250. 
B)  $2.00, 300. 
C)  $2.00, 100. 
D)  $1.00, 200. 
A)  $0.50, 250. 
B)  $2.00, 300. 
C)  $2.00, 100. 
D)  $1.00, 200.

Question 8

Which of the following will not cause a change in demand for crackers?

Accepted Answer

A)  A change in consumers' income. 
B)  A change in the price of crackers. 
C)  A change in the price of cheese. 
D)  A change in the number of cracker-eaters. 
E)  A change in consumers' tastes for crackers. 
A)  A change in consumers' income. 
B)  A change in the price of crackers. 
C)  A change in the price of cheese. 
D)  A change in the number of cracker-eaters. 
E)  A change in consumers' tastes for crackers.

Question 9

Exhibit 3-10  Demand and supply curves   In Exhibit 3-10, which of the following is true about this graph?

Accepted Answer

A)  When the price is $4, there is an excess supply. 
B)  When the price is $8, there is an excess demand. 
C)  When the price is $4, excess supply is greater than excess demand. 
D)  When the price is $8, excess demand is greater than excess supply. 
E)  When the price is $6, there is no excess demand or excess supply. 
A)  When the price is $4, there is an excess supply. 
B)  When the price is $8, there is an excess demand. 
C)  When the price is $4, excess supply is greater than excess demand. 
D)  When the price is $8, excess demand is greater than excess supply. 
E)  When the price is $6, there is no excess demand or excess supply.

Question 10

A shortage occurs when the quantity demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 11

If people buy less chewing gum at every price when their incomes fall, then:

Accepted Answer

A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand. 
A)  chewing gum is a normal good. 
B)  the demand for chewing gum is positively sloped. 
C)  demand for chewing gum has increased. 
D)  the price of chewing gum has increased. 
E)  there has been a decrease in population that changed demand.

Question 12

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

Accepted Answer

A)  normal goods. 
B)  complementary goods. 
C)  substitute goods. 
D)  equilibrium goods. 
E)  market-day goods. 
A)  normal goods. 
B)  complementary goods. 
C)  substitute goods. 
D)  equilibrium goods. 
E)  market-day goods.

Question 13

A change in demand cannot be caused by a change in:

Accepted Answer

A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself. 
A)  tastes. 
B)  population. 
C)  the prices of other goods. 
D)  expectations of future prices. 
E)  the price of the good itself.

Question 14

Consumers buy less of a good as its price increases because:

Accepted Answer

A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer. 
A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer.

Question 15

Exhibit 3-14  Supply and demand curves   In Exhibit 3-14, assume that the price of compact discs is $5 each. This price is:

Accepted Answer

A)  an equilibrium price. 
B)  not an equilibrium price because there is an excess quantity supplied at a price of $5. 
C)  not an equilibrium price because there is an excess quantity demanded at a price of $5. 
D)  not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded. 
A)  an equilibrium price. 
B)  not an equilibrium price because there is an excess quantity supplied at a price of $5. 
C)  not an equilibrium price because there is an excess quantity demanded at a price of $5. 
D)  not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded.

Question 16

Which of the following events would increase the supply of tomatoes?

Accepted Answer

A)  The introduction of mechanized tomato pickers, which raises the cost of production. 
B)  An increase in wages for the tomato pickers. 
C)  A decrease in the cost of fertilizers for the tomato plants. 
D)  Unseasonably hot, dry weather in the tomato-growing regions of the nation. 
E)  A decrease in the price of pasta products. 
A)  The introduction of mechanized tomato pickers, which raises the cost of production. 
B)  An increase in wages for the tomato pickers. 
C)  A decrease in the cost of fertilizers for the tomato plants. 
D)  Unseasonably hot, dry weather in the tomato-growing regions of the nation. 
E)  A decrease in the price of pasta products.

Question 17

Exhibit 3-8  Demand and supply data for radios   In Exhibit 3-8, the equilibrium market price in this radio market would be:

Accepted Answer

A)  $65 
B)  $60 
C)  $55 
D)  $50 
E)  $45 
A)  $65 
B)  $60 
C)  $55 
D)  $50 
E)  $45

Question 18

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 19

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

Accepted Answer

A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity. 
E)  change in supply that dominates a change in demand. 
A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity. 
E)  change in supply that dominates a change in demand.

Question 20

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

Exam 3: Market Demand and Supply

A change in supply cannot be caused by a change in:

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

If tofu is a normal good, an increase in income will:

Exhibit 3-8 Demand and supply data for radios In Exhibit 3-8, at any market price of radios above $50, a(n) ____ would result, causing price to ____.

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

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price.

Exhibit 3-15 Supply and demand curves for good X In the market shown in Exhibit 3-15, the equilibrium price and quantity of good X are:

Which of the following will not cause a change in demand for crackers?

Exhibit 3-10 Demand and supply curves In Exhibit 3-10, which of the following is true about this graph?

A shortage occurs when the quantity demanded exceeds the quantity supplied.

If people buy less chewing gum at every price when their incomes fall, then:

If a decrease in price of good X causes the demand curve for good Y to increase, then these two goods are:

A change in demand cannot be caused by a change in:

Consumers buy less of a good as its price increases because:

Exhibit 3-14 Supply and demand curves In Exhibit 3-14, assume that the price of compact discs is $5 each. This price is:

Which of the following events would increase the supply of tomatoes?

Exhibit 3-8 Demand and supply data for radios In Exhibit 3-8, the equilibrium market price in this radio market would be:

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)?

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

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

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 In Exhibit 3-8, at any market price of radios above $50, a(n) would result, causing price to .

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