Question 1

If consumer tastes are changing more in favor of the consumption of a particular good the:

Accepted Answer

A)  market demand curve will shift to the left. 
B)  consumer will move up a given demand curve, decreasing the quantity demanded. 
C)  consumer would move down a given demand curve, decreasing the quantity demanded. 
D)  consumer would move down a given demand curve, increasing the quantity demanded. 
E)  market demand curve would shift to the right. 
A)  market demand curve will shift to the left. 
B)  consumer will move up a given demand curve, decreasing the quantity demanded. 
C)  consumer would move down a given demand curve, decreasing the quantity demanded. 
D)  consumer would move down a given demand curve, increasing the quantity demanded. 
E)  market demand curve would shift to the right.

Question 2

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

Accepted Answer

A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves. 
A)  there is an excess supply of 25,000 units of milk. 
B)  the price of milk will tend to rise to clear the market. 
C)  consumers get the milk they want so market equilibrium exists. 
D)  there is an excess demand of 25,000 units of milk. 
E)  this is the intersection of market supply and demand curves.

Question 3

If there is a surplus in the oil market, then the price of oil will:

Accepted Answer

A)  rise. 
B)  fall. 
C)  remain unchanged. 
D)  react unpredictably. 
A)  rise. 
B)  fall. 
C)  remain unchanged. 
D)  react unpredictably.

Question 4

Which of the following explain better the fact that computers are cheaper now than 10 years ago?

Accepted Answer

A)  c and d. 
B)  c and e. 
C)  The technology used in the production of computers has improved during this period. 
D)  Resources used in the production of computers have become cheaper during this period. 
E)  The demand for computers has increased substantially during this period. 
A)  c and d. 
B)  c and e. 
C)  The technology used in the production of computers has improved during this period. 
D)  Resources used in the production of computers have become cheaper during this period. 
E)  The demand for computers has increased substantially during this period.

Question 5

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

Accepted Answer

The law of demand states that there is a

Question 6

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Accepted Answer

A)  not change; only quantity demanded will change. 
B)  increase, because the goods are substitutes. 
C)  decrease, because the goods are substitutes. 
D)  decrease, because the goods are complements. 
E)  increase, because the goods are complements. 
A)  not change; only quantity demanded will change. 
B)  increase, because the goods are substitutes. 
C)  decrease, because the goods are substitutes. 
D)  decrease, because the goods are complements. 
E)  increase, because the goods are complements.

Question 7

If equilibrium is present in a market:

Accepted Answer

A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded. 
A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded.

Question 8

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

Accepted Answer

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

Question 9

Coffee and tea are:

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  inferior goods. 
D)  unrelated goods. 
E)  nonmarket goods. 
A)  complements. 
B)  substitutes. 
C)  inferior goods. 
D)  unrelated goods. 
E)  nonmarket goods.

Question 10

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Accepted Answer

A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes. 
A)  upward movement along the supply curve for cigarettes. 
B)  rightward shift of the supply curve for cigarettes. 
C)  downward movement along the demand curve for cigarettes. 
D)  leftward shift of the supply curve for cigarettes.

Question 11

Assume that the equilibrium price for a good is $5. If the market price is $10, a:

Accepted Answer

A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5. 
A)  shortage causes the price to decline toward $5. 
B)  surplus causes the price to rise above $10. 
C)  shortage causes the price to rise above $10. 
D)  surplus causes the price to decline toward $5.

Question 12

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 13

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following would most likely not cause market demand for a normal good to decline?

Accepted Answer

A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death. 
A)  An increase in the price of a substitute. 
B)  An increase in the price of a complement. 
C)  A decline in consumer income. 
D)  Consumer expectations that the good will go on sale in the near future. 
E)  An announcement by the Surgeon General that the product contributes to premature death.

Question 15

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

Accepted Answer

A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  An announcement that eating lots of grapefruit causes skin problems. 
D)  A newspaper story reporting that the preference for oranges has skyrocketed. 
E)  An announcement that grapefruit will definitely cost more next week. 
A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  An announcement that eating lots of grapefruit causes skin problems. 
D)  A newspaper story reporting that the preference for oranges has skyrocketed. 
E)  An announcement that grapefruit will definitely cost more next week.

Question 16

When the market price of a product is below the equilibrium price, shortages will result and sellers can be expected to reduce the supply of that product.

Accepted Answer

A) True 
 B)False

Question 17

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

Accepted Answer

A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time. 
E)  larger the supply of the good per period of time. 
A)  greater the quantity demanded per period of time. 
B)  greater the demand for the good per period of time. 
C)  smaller the demand for the good per period of time. 
D)  smaller the quantity demanded per period of time. 
E)  larger the supply of the good per period of time.

Question 18

Exhibit 3-14  Supply and demand curves   In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require:

Accepted Answer

A)  no change, because an equilibrium already exists. 
B)  the price to fall below $15 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 $15, 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 $15 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 $15, the quantity supplied to fall, and the quantity demanded to rise.

Question 19

Seller A, has an upward-sloping supply curve, and is willing to supply 400 units of a commodity at a price of $5 per unit. Seller A is now willing to supply 500 units at a price of $5 per unit. Evidently, seller A has experienced a(n):

Accepted Answer

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

Question 20

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

Accepted Answer

A)  A movement up along the demand curve for computers. 
B)  A movement down along the demand curve for computers. 
C)  A leftward shift in the demand curve for computers. 
D)  A rightward shift in the demand curve for computers. 
A)  A movement up along the demand curve for computers. 
B)  A movement down along the demand curve for computers. 
C)  A leftward shift in the demand curve for computers. 
D)  A rightward shift in the demand curve for computers.

Exam 3: Market Demand and Supply

If consumer tastes are changing more in favor of the consumption of a particular good the:

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000, then:

If there is a surplus in the oil market, then the price of oil will:

Which of the following explain better the fact that computers are cheaper now than 10 years ago?

Distinguish the laws of demand and supply. How are the laws of demand and supply illustrated graphically?

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

If equilibrium is present in a market:

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

Coffee and tea are:

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will fall. This fall in prices can be attributed a(n):

Assume that the equilibrium price for a good is $5. If the market price is $10, a:

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Which of the following would most likely not cause market demand for a normal good to decline?

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

When the market price of a product is below the equilibrium price, shortages will result and sellers can be expected to reduce the supply of that product.

The law of demand says that the lower the price charged for a good, ceteris paribus , the:

Exhibit 3-14 Supply and demand curves In Exhibit 3-14, if the market price of compact discs is initially $15, a movement toward equilibrium would require:

Seller A, has an upward-sloping supply curve, and is willing to supply 400 units of a commodity at a price of $5 per unit. Seller A is now willing to supply 500 units at a price of $5 per unit. Evidently, seller A has experienced a(n):

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

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