Question 1

The horizontal summation of all individual demands at different given prices results in the:

Accepted Answer

A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve. 
A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve.

Question 2

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

Accepted Answer

A)  decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  increase in the supply of automobiles, which is a shift to the left of the supply curve. 
A)  decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  increase in the supply of automobiles, which is a shift to the left of the supply curve.

Question 3

An advance in technology results in:

Accepted Answer

A)  suppliers offering a larger quantity than before at each given price. 
B)  suppliers offering the same quantity as before at a lower price. 
C)  a rightward shift of the supply curve. 
D)  an increase in supply. 
E)  all of the above. 
A)  suppliers offering a larger quantity than before at each given price. 
B)  suppliers offering the same quantity as before at a lower price. 
C)  a rightward shift of the supply curve. 
D)  an increase in supply. 
E)  all of the above.

Question 4

If more people enter medical school, we can expect:

Accepted Answer

A)  the demand for doctors to increase. 
B)  the supply of doctors to increase. 
C)  the demand for doctors to decrease. 
D)  the supply of doctors to decrease. 
E)  no effect on the supply or demand of doctors ⎯ just a movement along the curves. 
A)  the demand for doctors to increase. 
B)  the supply of doctors to increase. 
C)  the demand for doctors to decrease. 
D)  the supply of doctors to decrease. 
E)  no effect on the supply or demand of doctors ⎯ just a movement along the curves.

Question 5

Exhibit 3-2  Demand curves   In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

Accepted Answer

A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good. 
A)  Decrease in price. 
B)  Increase in expected future prices. 
C)  Increase in the price of a complement. 
D)  Decrease in income if it is a normal good.

Question 6

If X and Y are complementary goods, the demand curve for X will shift to the right when the price of Y increases.

Accepted Answer

A) True 
 B)False

Question 7

For a normal good, an increase in consumer income will cause the market demand for the product to:

Accepted Answer

A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve. 
A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve.

Question 8

Exhibit 3-6  Milk market   In Exhibit 3-6, which of the following is true about the milk market?

Accepted Answer

A)  At price 0.60 there is an excess demand of milk. 
B)  At price 0.40 there is an excess supply of milk. 
C)  At price 0.30 there is an excess supply of milk. 
D)  At price 0.50 there is an excess demand of milk. 
E)  At price 0.70 there is an excess supply of milk. 
A)  At price 0.60 there is an excess demand of milk. 
B)  At price 0.40 there is an excess supply of milk. 
C)  At price 0.30 there is an excess supply of milk. 
D)  At price 0.50 there is an excess demand of milk. 
E)  At price 0.70 there is an excess supply of milk.

Question 9

Under the law of supply, any decrease in price will cause ____ in quantity supplied.

Accepted Answer

A)  a decrease 
B)  an increase 
C)  no change 
D)  constant change 
A)  a decrease 
B)  an increase 
C)  no change 
D)  constant change

Question 10

Exhibit 3-9  Demand and supply curves   In Exhibit 3-9, if the market price is $50,

Accepted Answer

A)  this market will be in equilibrium. 
B)  a shortage of 27 units would result. 
C)  the price is below the equilibrium price. 
D)  a surplus of 26 units would result. 
E)  a surplus of 27 units would result. 
A)  this market will be in equilibrium. 
B)  a shortage of 27 units would result. 
C)  the price is below the equilibrium price. 
D)  a surplus of 26 units would result. 
E)  a surplus of 27 units would result.

Question 11

A leftward shift of a supply curve is called a(n):

Accepted Answer

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

Question 12

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus, will be a(n):

Accepted Answer

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

Question 13

Exhibit 3-16  Supply and demand curves for chairs   In Exhibit 3-16, assume that the market price of chairs is $15 each. This price is:

Accepted Answer

A)  an equilibrium price. 
B)  not an equilibrium price, since there is an excess demand at a price of $10. 
C)  an equilibrium price, since suppliers can store inventories in their warehouses. 
D)  not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded. 
A)  an equilibrium price. 
B)  not an equilibrium price, since there is an excess demand at a price of $10. 
C)  an equilibrium price, since suppliers can store inventories in their warehouses. 
D)  not an equilibrium price, since the rate at which chairs are being supplied is greater than the rate at which they are being demanded.

Question 14

Coke and Pepsi are an example of:

Accepted Answer

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

Question 15

An increase in the expected future price of a good will cause the current demand for the good to:

Accepted Answer

A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve. 
A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve.

Question 16

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):

Accepted Answer

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

Question 17

A shortage of product means a(n):

Accepted Answer

A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high. 
A)  excess supply of the product. 
B)  excess demand of the product. 
C)  situation where the quantity demanded is less than the quantity supplied. 
D)  situation where the quantity supplied exceeds the quantity demanded. 
E)  situation where the current market price is too high.

Question 18

Exhibit 3-10  Demand and supply curves   In Exhibit 3-10, which of the following points represents an excess quantity supplied?

Accepted Answer

A)  Point E. 
B)  Point B. 
C)  Point C. 
D)  Point F. 
E)  Point A. 
A)  Point E. 
B)  Point B. 
C)  Point C. 
D)  Point F. 
E)  Point A.

Question 19

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

A)  upward movement along the demand curve for name brand Y. 
B)  downward movement along the demand curve for brand X. 
C)  rightward shift in the demand curve for brand X. 
D)  leftward shift in the demand curve for brand X. 
A)  upward movement along the demand curve for name brand Y. 
B)  downward movement along the demand curve for brand X. 
C)  rightward shift in the demand curve for brand X. 
D)  leftward shift in the demand curve for brand X.

Question 20

If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:

Accepted Answer

A)  a rightward shift of demand for margarine. 
B)  a leftward shift of demand for margarine. 
C)  the quantity demanded for margarine to increase. 
D)  the quantity demanded for margarine to decline. 
E)  a decline in the price of margarine. 
A)  a rightward shift of demand for margarine. 
B)  a leftward shift of demand for margarine. 
C)  the quantity demanded for margarine to increase. 
D)  the quantity demanded for margarine to decline. 
E)  a decline in the price of margarine.

Exam 3: Market Demand and Supply

The horizontal summation of all individual demands at different given prices results in the:

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be a(n):

An advance in technology results in:

If more people enter medical school, we can expect:

Exhibit 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D1 to D2 could have been caused by which of the following?

If X and Y are complementary goods, the demand curve for X will shift to the right when the price of Y increases.

For a normal good, an increase in consumer income will cause the market demand for the product to:

Exhibit 3-6 Milk market In Exhibit 3-6, which of the following is true about the milk market?

Under the law of supply, any decrease in price will cause ____ in quantity supplied.

Exhibit 3-9 Demand and supply curves In Exhibit 3-9, if the market price is $50,

A leftward shift of a supply curve is called a(n):

If consumer incomes go up and cars are a normal good, the effect on the demand for cars ceteris paribus, will be a(n):

Exhibit 3-16 Supply and demand curves for chairs In Exhibit 3-16, assume that the market price of chairs is $15 each. This price is:

Coke and Pepsi are an example of:

An increase in the expected future price of a good will cause the current demand for the good to:

Assume Congress passes a new tax of $2.00 per pack on cigarettes. The effect on the supply curve is a(n):

A shortage of product means a(n):

Exhibit 3-10 Demand and supply curves In Exhibit 3-10, which of the following points represents an excess quantity supplied?

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n):

If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:

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 3-2 Demand curves In Exhibit 3-2, the shift in the demand curve from D₁ to D₂ could have been caused by which of the following?