Question 1

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

Accepted Answer

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

Question 2

Assuming that professional and college football are substitutes, an increase in the ticket price for professional football, other things being equal, will:

Accepted Answer

A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games. 
A)  increase the demand for college football tickets. 
B)  decrease the demand for college football tickets. 
C)  not change the demand for college football tickets. 
D)  decrease the demand for professional football games.

Question 3

Exhibit 3-7  Demand and supply curves   In Exhibit 3-7, if price happened to currently be $25 in this market, a ____ would result, causing a(n) ____ in price.

Accepted Answer

A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease 
E)  scarcity; stabilization 
A)  shortage; increase 
B)  shortage; decrease 
C)  surplus; increase 
D)  surplus; decrease 
E)  scarcity; stabilization

Question 4

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

Accepted Answer

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

Question 5

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

Accepted Answer

A) True 
 B)False

Question 6

The horizontal summation of individual demand curves gives:

Accepted Answer

A)  a supply curve. 
B)  a Phillips curve. 
C)  a market demand curve. 
D)  the quantity supplied. 
E)  a production function. 
A)  a supply curve. 
B)  a Phillips curve. 
C)  a market demand curve. 
D)  the quantity supplied. 
E)  a production function.

Question 7

Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:

Accepted Answer

A)  cause an upward movement along the demand curve for computers. 
B)  cause a downward movement along the demand curve for computers. 
C)  shift the demand curve for computers to the left. 
D)  shift the demand curve for computers to the right. 
A)  cause an upward movement along the demand curve for computers. 
B)  cause a downward movement along the demand curve for computers. 
C)  shift the demand curve for computers to the left. 
D)  shift the demand curve for computers to the right.

Question 8

A surplus of wheat:

Accepted Answer

A)  is impossible if people are hungry. 
B)  is impossible if the price of wheat is below equilibrium. 
C)  will result when the quantity demanded exceeds the quantity supplied at the current price. 
D)  is unlikely to cause any change in the price of wheat. 
E)  indicates that the problem of scarcity of wheat has been solved. 
A)  is impossible if people are hungry. 
B)  is impossible if the price of wheat is below equilibrium. 
C)  will result when the quantity demanded exceeds the quantity supplied at the current price. 
D)  is unlikely to cause any change in the price of wheat. 
E)  indicates that the problem of scarcity of wheat has been solved.

Question 9

In economics, the term "surplus" means an excess quantity supplied.

Accepted Answer

A) True 
 B)False

Question 10

When there is a surplus of a product in a market the:

Accepted Answer

A)  price will rise. 
B)  price must be above the equilibrium price. 
C)  producers will expand output and sales will rise. 
D)  price must be below the equilibrium price. 
A)  price will rise. 
B)  price must be above the equilibrium price. 
C)  producers will expand output and sales will rise. 
D)  price must be below the equilibrium price.

Question 11

There is news that the price of Tucker's Root Beer will increase significantly next week. If the demand for Tucker's Root Beer reacts only to this factor and shifts to the right, the position of this demand curve has reacted to a change in:

Accepted Answer

A)  tastes. 
B)  income levels. 
C)  the price of other goods. 
D)  the number of buyers. 
E)  expectations. 
A)  tastes. 
B)  income levels. 
C)  the price of other goods. 
D)  the number of buyers. 
E)  expectations.

Question 12

Which of the following pairs is the best example of complements?

Accepted Answer

A)  Coffee and tea. 
B)  DVDs and tapes. 
C)  Hiking boots and athletic shoes. 
D)  Tortillas and salsa. 
A)  Coffee and tea. 
B)  DVDs and tapes. 
C)  Hiking boots and athletic shoes. 
D)  Tortillas and salsa.

Question 13

Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a(n):

Accepted Answer

A)  decrease in the quantity of soup demanded. 
B)  decrease in the demand for soup. 
C)  increase in the quantity of soup demanded. 
D)  increase in the demand for soup. 
A)  decrease in the quantity of soup demanded. 
B)  decrease in the demand for soup. 
C)  increase in the quantity of soup demanded. 
D)  increase in the demand for soup.

Question 14

A good that is jointly consumed with another good is a complementary good.

Accepted Answer

A) True 
 B)False

Question 15

The law of demand is the principle that there is an inverse between the price of a good and the quantity that buyers are willing to purchase in a defined time period, ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 16

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 17

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):

Accepted Answer

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

Question 18

Which of the following is true in ski-towns such as Crested Butte, Colorado and Whistler, British Columbia during the peak winter ski season as compared to the months of May and June?

Accepted Answer

A)  ​ Demand for motel rooms is higher. 
B)  ​Demand for motel rooms is lower. 
C)  ​There is a surplus of motel rooms. 
D)  ​The price of motel rooms will tend to be lower.​ 
A)  ​ Demand for motel rooms is higher. 
B)  ​Demand for motel rooms is lower. 
C)  ​There is a surplus of motel rooms. 
D)  ​The price of motel rooms will tend to be lower.​

Question 19

Exhibit 3-15  Supply and demand curves for good X   In Exhibit 3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires:

Accepted Answer

A)  no change, because an equilibrium already exists. 
B)  the price to fall below $.50 and both the quantity supplied and the quantity demanded to rise. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to rise above $.50, the quantity supplied to rise, and the quantity demanded to fall. 
A)  no change, because an equilibrium already exists. 
B)  the price to fall below $.50 and both the quantity supplied and the quantity demanded to rise. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to rise above $.50, the quantity supplied to rise, and the quantity demanded to fall.

Question 20

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home. When average prices rise to $175,000, she decides that she will put her home on the market. This is an example of:

Accepted Answer

A)  market demand. 
B)  market-day supply. 
C)  an excess supply of homes. 
D)  a positively-sloped supply curve. 
E)  a negatively-sloped supply curve. 
A)  market demand. 
B)  market-day supply. 
C)  an excess supply of homes. 
D)  a positively-sloped supply curve. 
E)  a negatively-sloped supply curve.

Exam 3: Market Demand and Supply

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

Assuming that professional and college football are substitutes, an increase in the ticket price for professional football, other things being equal, will:

Exhibit 3-7 Demand and supply curves In Exhibit 3-7, if price happened to currently be $25 in this market, a ____ would result, causing a(n) ____ in price.

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

Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline.

The horizontal summation of individual demand curves gives:

Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:

A surplus of wheat:

In economics, the term "surplus" means an excess quantity supplied.

When there is a surplus of a product in a market the:

There is news that the price of Tucker's Root Beer will increase significantly next week. If the demand for Tucker's Root Beer reacts only to this factor and shifts to the right, the position of this demand curve has reacted to a change in:

Which of the following pairs is the best example of complements?

Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a(n):

A good that is jointly consumed with another good is a complementary good.

The law of demand is the principle that there is an inverse between the price of a good and the quantity that buyers are willing to purchase in a defined time period, ceteris paribus.

Assuming that shoe repair services are an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):

Which of the following is true in ski-towns such as Crested Butte, Colorado and Whistler, British Columbia during the peak winter ski season as compared to the months of May and June?

Exhibit 3-15 Supply and demand curves for good X In Exhibit 3-15, if the market price of good X is initially $.50, a movement toward equilibrium requires:

Tasha decides that when homes in her neighborhood are selling for $150,000 she will not sell her home. When average prices rise to $175,000, she decides that she will put her home on the market. This is an example of:

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 3-7 Demand and supply curves In Exhibit 3-7, if price happened to currently be $25 in this market, a would result, causing a(n) in price.