Question 1

If the demand for a good increases because consumer income increases, the good is a(n):

Accepted Answer

A)  inferior good. 
B)  normal good. 
C)  necessity good. 
D)  luxury good. 
A)  inferior good. 
B)  normal good. 
C)  necessity good. 
D)  luxury good.

Question 2

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 3

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 4

If there is an increase in income, which of the following is true ?

Accepted Answer

A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases. 
A)  The demand for complementary goods decreases. 
B)  The demand for substitute goods decreases. 
C)  The demand for normal goods decreases. 
D)  The demand for normal goods increases. 
E)  The supply for all goods decreases.

Question 5

Exhibit 3-3  Demand curves   Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

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

Two goods that are substitutes are:

Accepted Answer

A)  bacon and eggs. 
B)  camera and film. 
C)  tennis racket and tennis balls. 
D)  movie theater tickets and video rentals. 
E)  coffee and cream. 
A)  bacon and eggs. 
B)  camera and film. 
C)  tennis racket and tennis balls. 
D)  movie theater tickets and video rentals. 
E)  coffee and cream.

Question 7

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

Accepted Answer

A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good. 
A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good.

Question 8

Which of the following would most likely increase the demand for televisions?

Accepted Answer

A)  A decrease in the price of televisions. 
B)  A decline in consumer income. 
C)  A decrease in the price of home stereo systems, a substitute for televisions. 
D)  A decrease in the price of DVD players, a product that is complementary with televisions. 
A)  A decrease in the price of televisions. 
B)  A decline in consumer income. 
C)  A decrease in the price of home stereo systems, a substitute for televisions. 
D)  A decrease in the price of DVD players, a product that is complementary with televisions.

Question 9

When the price of a good is below its equilibrium level, a:

Accepted Answer

A)  shortage puts upward pressure on the price. 
B)  surplus puts downward pressure on the price. 
C)  shortage puts downward pressure on the price. 
D)  surplus puts upward pressure on the price. 
A)  shortage puts upward pressure on the price. 
B)  surplus puts downward pressure on the price. 
C)  shortage puts downward pressure on the price. 
D)  surplus puts upward pressure on the price.

Question 10

Assuming DVDs and DVD players are complements, the effect of an increase in the price of DVD players on the market for DVDs is a(n):

Accepted Answer

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

Question 11

Exhibit 3-6  Milk market  
In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?

Accepted Answer

A)  $0.70 per quart and 200 quarts of milk. 
B)  $0.60 per quart and 100 quarts of milk. 
C)  $0.50 per quart and 100 quarts of milk. 
D)  $0.40 per quart and 60 quarts of milk. 
E)  $0.30 per quart and 20 quarts of milk. 
A)  $0.70 per quart and 200 quarts of milk. 
B)  $0.60 per quart and 100 quarts of milk. 
C)  $0.50 per quart and 100 quarts of milk. 
D)  $0.40 per quart and 60 quarts of milk. 
E)  $0.30 per quart and 20 quarts of milk.

Question 12

The market demand is the:

Accepted Answer

A)  sum of all individual demand curves in a market. 
B)  sum of all individual prices in a market. 
C)  sum of all individual demand curves and supplies in a market. 
D)  vertical sum of all individual demand curves. 
A)  sum of all individual demand curves in a market. 
B)  sum of all individual prices in a market. 
C)  sum of all individual demand curves and supplies in a market. 
D)  vertical sum of all individual demand curves.

Question 13

Which of the following would most likely cause the demand for veggie burgers to increase?

Accepted Answer

A)  A decline in the price of veggie burger. 
B)  An increase in the price of tofu burgers, perceived as a substitute by veggie burger consumers. 
C)  An increase in the price of burger buns. 
D)  A technological innovation that lowers the cost of producing veggie burgers. 
A)  A decline in the price of veggie burger. 
B)  An increase in the price of tofu burgers, perceived as a substitute by veggie burger consumers. 
C)  An increase in the price of burger buns. 
D)  A technological innovation that lowers the cost of producing veggie burgers.

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

A market demand curve:

Accepted Answer

A)  is the sum of the demand curves of all the individuals in a particular market. 
B)  is determined by the demand of those who purchase in quantity. 
C)  is always horizontal. 
D)  cannot be estimated. 
E)  never includes demand by the government. 
A)  is the sum of the demand curves of all the individuals in a particular market. 
B)  is determined by the demand of those who purchase in quantity. 
C)  is always horizontal. 
D)  cannot be estimated. 
E)  never includes demand by the government.

Question 16

Which of the following would cause a shift in the demand curve for a good?

Accepted Answer

A)  An increase in consumers' income. 
B)  A decrease in the number of consumers. 
C)  The expectation that the price of a good will increase in the future. 
D)  All of the above. 
A)  An increase in consumers' income. 
B)  A decrease in the number of consumers. 
C)  The expectation that the price of a good will increase in the future. 
D)  All of the above.

Question 17

According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 18

Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?

Accepted Answer

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

Question 19

Which of the following would lead to an increase in the demand for computer software?

Accepted Answer

A)  A decrease in the price of computer software. 
B)  A decrease in the price of personal computers. 
C)  An decrease in the cost of producing computer software. 
D)  An decrease in personal income. 
A)  A decrease in the price of computer software. 
B)  A decrease in the price of personal computers. 
C)  An decrease in the cost of producing computer software. 
D)  An decrease in personal income.

Question 20

In accordance with the law of supply, both individual and market supply curves are drawn:

Accepted Answer

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

Exam 3: Market Demand and Supply

If the demand for a good increases because consumer income increases, the good is a(n):

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

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

If there is an increase in income, which of the following is true ?

Exhibit 3-3 Demand curves Which of the graphs in Exhibit 3-3 depicts the effect of a decrease in the price of domestic cars on the demand for foreign cars?

Two goods that are substitutes are:

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

Which of the following would most likely increase the demand for televisions?

When the price of a good is below its equilibrium level, a:

Assuming DVDs and DVD players are complements, the effect of an increase in the price of DVD players on the market for DVDs is a(n):

Exhibit 3-6 Milk market In Exhibit 3-6, which of the following are the equilibrium price and equilibrium quantity in the milk market?

The market demand is the:

Which of the following would most likely cause the demand for veggie burgers to increase?

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

A market demand curve:

Which of the following would cause a shift in the demand curve for a good?

According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?

Which of the following would lead to an increase in the demand for computer software?

In accordance with the law of supply, both individual and market supply curves are drawn:

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