Question 1

Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:

Accepted Answer

A)  increase the demand for potatoes. 
B)  decrease the demand for potatoes. 
C)  increase the demand for steak. 
D)  decrease the demand for steak. 
A)  increase the demand for potatoes. 
B)  decrease the demand for potatoes. 
C)  increase the demand for steak. 
D)  decrease the demand for steak.

Question 2

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

Accepted Answer

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

Question 3

An increase in the demand for a good means that:

Accepted Answer

A)  the demand curve has shifted to the left. 
B)  the good's price has fallen and, as a result, consumers are buying more of the good. 
C)  the good has become scarce. 
D)  consumers are willing to purchase more of the good at each possible price. 
A)  the demand curve has shifted to the left. 
B)  the good's price has fallen and, as a result, consumers are buying more of the good. 
C)  the good has become scarce. 
D)  consumers are willing to purchase more of the good at each possible price.

Question 4

Exhibit 3-9  Demand and supply curves   In Exhibit 3-9, if the market price is $20,

Accepted Answer

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

Question 5

Which of the following will cause the demand curve for a good to shift to the right?

Accepted Answer

A)  Decrease in income for a normal good. 
B)  Increase in the price of a complementary good. 
C)  Decrease in the price of the good. 
D)  Increase in the price of a substitute good. 
E)  Expectation of a future price decline. 
A)  Decrease in income for a normal good. 
B)  Increase in the price of a complementary good. 
C)  Decrease in the price of the good. 
D)  Increase in the price of a substitute good. 
E)  Expectation of a future price decline.

Question 6

A demand curve shows the relationship between:

Accepted Answer

A)  price and quantity demanded. 
B)  the demand and supply schedules. 
C)  demand and supply equilibrium. 
D)  leakages and injections. 
E)  price and technology. 
A)  price and quantity demanded. 
B)  the demand and supply schedules. 
C)  demand and supply equilibrium. 
D)  leakages and injections. 
E)  price and technology.

Question 7

To construct a market supply curve, vertically sum all the prices at various quantities supplied that might prevail in the market.

Accepted Answer

A) True 
 B)False

Question 8

According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 3-8  Demand and supply data for radios   In Exhibit 3-8, if the price of radios was currently $45, there would be an ____ of ____ radios in this market.

Accepted Answer

A)  Excess demand; 700 
B)  Excess demand; 500 
C)  Excess supply; 100 
D)  Excess supply; 600 
E)  Excess demand; 100 
A)  Excess demand; 700 
B)  Excess demand; 500 
C)  Excess supply; 100 
D)  Excess supply; 600 
E)  Excess demand; 100

Question 10

The supply curve for chicken will shift to the right, if production costs increases.

Accepted Answer

A) True 
 B)False

Question 11

The law of demand refers to the:

Accepted Answer

A)  inverse relationship between the price of a good and the willingness of consumers to buy it. 
B)  price increase that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity offered for sale. 
D)  increase in the quantity of a good available when its price increases. 
A)  inverse relationship between the price of a good and the willingness of consumers to buy it. 
B)  price increase that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity offered for sale. 
D)  increase in the quantity of a good available when its price increases.

Question 12

A normal good is a good for which demand increases as:

Accepted Answer

A)  the income of consumers increases. 
B)  its own price increases. 
C)  the price of close substitutes decreases. 
D)  the total number of consumers increases. 
E)  a reflection of changing consumer tastes. 
A)  the income of consumers increases. 
B)  its own price increases. 
C)  the price of close substitutes decreases. 
D)  the total number of consumers increases. 
E)  a reflection of changing consumer tastes.

Question 13

A demand curve for The Steel Porcupines' concert tickets would show the:

Accepted Answer

A)  quality of service that customers demand when they buy a ticket. 
B)  number of people who like to attend the concert. 
C)  number of tickets the promoters are willing to sell at each price. 
D)  number of concert tickets that will be purchased at each price. 
A)  quality of service that customers demand when they buy a ticket. 
B)  number of people who like to attend the concert. 
C)  number of tickets the promoters are willing to sell at each price. 
D)  number of concert tickets that will be purchased at each price.

Question 14

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes up.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would increase the supply of laptop computers?

Accepted Answer

A)  Higher wage rates for the workers that produce laptop computers. 
B)  A technological improvement that lowers the cost of producing laptop computers. 
C)  An increase in the price of computer chips used to produce laptop computers. 
D)  All of the above. 
A)  Higher wage rates for the workers that produce laptop computers. 
B)  A technological improvement that lowers the cost of producing laptop computers. 
C)  An increase in the price of computer chips used to produce laptop computers. 
D)  All of the above.

Question 16

If a vacation in Paris is a normal good, other things being equal, an increase in consumer income will increase the demand for travel to Paris.

Accepted Answer

A) True 
 B)False

Question 17

According to the law of supply:

Accepted Answer

A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises. 
A)  more of a good is desired by consumers as the price falls. 
B)  less of a good is desired by consumers as the price rises. 
C)  more of a good will be offered by suppliers as the price rises. 
D)  less of a good will be offered by suppliers as the price rises.

Question 18

An increase in the supply of the product implies:

Accepted Answer

A)  producers will now charge a higher price for a given quantity of output. 
B)  the supply curve will shift to the left. 
C)  some producers are dropping out of this market. 
D)  producers will now charge a lower price for a given quantity of output. 
E)  the price of this product has increased. 
A)  producers will now charge a higher price for a given quantity of output. 
B)  the supply curve will shift to the left. 
C)  some producers are dropping out of this market. 
D)  producers will now charge a lower price for a given quantity of output. 
E)  the price of this product has increased.

Question 19

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

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

Question 20

Suppose A and B are substitute goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

Accepted Answer

A) True 
 B)False

Exam 3: Market Demand and Supply

Assuming steak and potatoes are complements, other things being equal, an increase in the price of steak, will:

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

An increase in the demand for a good means that:

Exhibit 3-9 Demand and supply curves In Exhibit 3-9, if the market price is $20,

Which of the following will cause the demand curve for a good to shift to the right?

A demand curve shows the relationship between:

To construct a market supply curve, vertically sum all the prices at various quantities supplied that might prevail in the market.

According to the law of demand, if the price of a good increases, other things being equal, the quantity demanded will decrease.

Exhibit 3-8 Demand and supply data for radios In Exhibit 3-8, if the price of radios was currently $45, there would be an ____ of ____ radios in this market.

The supply curve for chicken will shift to the right, if production costs increases.

The law of demand refers to the:

A normal good is a good for which demand increases as:

A demand curve for The Steel Porcupines' concert tickets would show the:

Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes up.

Which of the following would increase the supply of laptop computers?

If a vacation in Paris is a normal good, other things being equal, an increase in consumer income will increase the demand for travel to Paris.

According to the law of supply:

An increase in the supply of the product implies:

Assuming that hamburger is an inferior good, an increase in consumer income, other things being equal, will cause a(n):

Suppose A and B are substitute goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down.

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, if the price of radios was currently $45, there would be an of radios in this market.