Question 1

If two goods are substitutes,then a(n)

Accepted Answer

A)  increase in the demand for one of them will cause its price to fall 
B)  increase the supply of one of them will cause its price to rise 
C)  increase in the price of one of them will cause the demand for the other to increase 
D)  increase in the price of one of them will cause the supply of the other to increase 
E)  decrease in the price of one of them will cause the demand for the other to increase 
A)  increase in the demand for one of them will cause its price to fall 
B)  increase the supply of one of them will cause its price to rise 
C)  increase in the price of one of them will cause the demand for the other to increase 
D)  increase in the price of one of them will cause the supply of the other to increase 
E)  decrease in the price of one of them will cause the demand for the other to increase

Question 2

-In Figure 3-8,using the supply and demand curves denoted S₁ and D₁,respectively,the equilibrium price and quantity are

Accepted Answer

A)  $100 and 50,000 
B)  $100 and 100,000 
C)  $120 and 50,000 
D)  $120 and 75,000 
E)  $120 and 100,000 
A)  $100 and 50,000 
B)  $100 and 100,000 
C)  $120 and 50,000 
D)  $120 and 75,000 
E)  $120 and 100,000

Question 3

An increase in quantity supplied can be caused by a(n)

Accepted Answer

A)  decrease in quantity demanded 
B)  rise in resource input prices 
C)  increase in price 
D)  decrease in the number of firms in the market 
E)  tax levied on the producer 
A)  decrease in quantity demanded 
B)  rise in resource input prices 
C)  increase in price 
D)  decrease in the number of firms in the market 
E)  tax levied on the producer

Question 4

The quantity supplied of a good

Accepted Answer

A)  is the amount that sellers would provide if the firms faced no constraints 
B)  is the amount that sellers would provide if input prices were zero 
C)  must match the amount actually purchased in the market 
D)  is a fixed amount unaffected by the sellers' circumstances 
E)  is subject to the constraints imposed by technology and input prices 
A)  is the amount that sellers would provide if the firms faced no constraints 
B)  is the amount that sellers would provide if input prices were zero 
C)  must match the amount actually purchased in the market 
D)  is a fixed amount unaffected by the sellers' circumstances 
E)  is subject to the constraints imposed by technology and input prices

Question 5

The economic model of demand

Accepted Answer

A)  explains the consequences of a change in buyers' tastes,but not the causes 
B)  explains the causes of a change in buyers' tastes,but not the consequences 
C)  explains both the causes and consequences of a change in buyers' tastes 
D)  explains neither the causes nor the consequences of a change in buyers' tastes 
E)  ignores buyers' tastes because they are too unstable to include in the model 
A)  explains the consequences of a change in buyers' tastes,but not the causes 
B)  explains the causes of a change in buyers' tastes,but not the consequences 
C)  explains both the causes and consequences of a change in buyers' tastes 
D)  explains neither the causes nor the consequences of a change in buyers' tastes 
E)  ignores buyers' tastes because they are too unstable to include in the model

Question 6

The law of supply states that the quantity supplied of a good and

Accepted Answer

A)  the price of a key input are inversely related 
B)  its price are inversely related 
C)  the price of a key input are positively related 
D)  its price are positively related 
E)  the price of an alternate good are positively related 
A)  the price of a key input are inversely related 
B)  its price are inversely related 
C)  the price of a key input are positively related 
D)  its price are positively related 
E)  the price of an alternate good are positively related

Question 7

An increase in demand coupled with an increase in supply results in a(n)

Accepted Answer

A)  increase in price and an ambiguous effect on equilibrium quantity 
B)  increase in equilibrium quantity and a decrease in equilibrium price 
C)  decrease in equilibrium quantity and an ambiguous effect on equilibrium price 
D)  increase in economic rent 
E)  ambiguous effect on equilibrium price and an increase in equilibrium quantity 
A)  increase in price and an ambiguous effect on equilibrium quantity 
B)  increase in equilibrium quantity and a decrease in equilibrium price 
C)  decrease in equilibrium quantity and an ambiguous effect on equilibrium price 
D)  increase in economic rent 
E)  ambiguous effect on equilibrium price and an increase in equilibrium quantity

Question 8

$\text { Figure } 3-10$$$\begin{array} { | c c c | }

\hline  \begin{array} { c } 
\text { Price } \
\text { Per Pair }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 2 & 18 & 3 \
\$ 4 & 14 & 4 \
\$ 6 & 10 & 5 \
\$ 8 & 6 & 6 \
\$ 10 & 2 & 8 \
\hline
\end{array}$$
-In the supply and demand schedules in Figure 3-10,the equilibrium quantity of socks is

Accepted Answer

A)  15 pairs 
B)  10 pairs 
C)  13 pairs 
D)  6 pairs 
E)  1 pair 
A)  15 pairs 
B)  10 pairs 
C)  13 pairs 
D)  6 pairs 
E)  1 pair

Question 9

What do supply and demand curves have in common?

Accepted Answer

A)  They both usually slope upward. 
B)  They both show a relationship between quantity and price. 
C)  They both usually slope downward. 
D)  They can both shift in response to changes in income or wealth. 
E)  Neither of them is influenced by the size of the population. 
A)  They both usually slope upward. 
B)  They both show a relationship between quantity and price. 
C)  They both usually slope downward. 
D)  They can both shift in response to changes in income or wealth. 
E)  Neither of them is influenced by the size of the population.

Question 10

-Which of the following could explain a movement from point F to point G in Figure 3-2? Assume that the good represented is an inferior good.

Accepted Answer

A)  all of the following are correct 
B)  an increase in buyers' incomes 
C)  a decrease in the expected future price of the good 
D)  an increase in the price of the good 
E)  an increase in the price of a complement 
A)  all of the following are correct 
B)  an increase in buyers' incomes 
C)  a decrease in the expected future price of the good 
D)  an increase in the price of the good 
E)  an increase in the price of a complement

Question 11

Which of the following statements is correct?

Accepted Answer

A)  The demand curve typically slopes upward;the supply curve typically slopes downward. 
B)  The demand curve typically slopes downward;the supply curve typically slopes upward. 
C)  Both the demand and supply curves typically slope downward. 
D)  Both the demand and supply curve typically slope upward. 
E)  The demand curve is typically vertical;the supply curve is typically horizontal. 
A)  The demand curve typically slopes upward;the supply curve typically slopes downward. 
B)  The demand curve typically slopes downward;the supply curve typically slopes upward. 
C)  Both the demand and supply curves typically slope downward. 
D)  Both the demand and supply curve typically slope upward. 
E)  The demand curve is typically vertical;the supply curve is typically horizontal.

Question 12

If there is an increase in the demand for automobiles,and at the same time auto workers receive a substantial raise,what will happen to equilibrium price and quantity in the automobile market?

Accepted Answer

A)  Price and quantity will rise. 
B)  Price and quantity will fall. 
C)  Price will rise;quantity will fall. 
D)  Quantity will rise;price change cannot be determined. 
E)  Price will rise;quantity change cannot be determined. 
A)  Price and quantity will rise. 
B)  Price and quantity will fall. 
C)  Price will rise;quantity will fall. 
D)  Quantity will rise;price change cannot be determined. 
E)  Price will rise;quantity change cannot be determined.

Question 13

-In Figure 3-5,a movement from point G to point H would represent

Accepted Answer

A)  a change in demand 
B)  the impact of a decrease in the price of a substitute good 
C)  higher prices for the inputs used to produce this product 
D)  a change in demand plus a change in quantity demanded 
E)  a change in quantity demanded 
A)  a change in demand 
B)  the impact of a decrease in the price of a substitute good 
C)  higher prices for the inputs used to produce this product 
D)  a change in demand plus a change in quantity demanded 
E)  a change in quantity demanded

Question 14

Complementary goods

Accepted Answer

A)  are usually used in conjunction with each other 
B)  are usually used in place of one another 
C)  do not adhere to the law of demand 
D)  are goods whose demand rises as incomes rise 
E)  are goods whose demand falls as wealth falls 
A)  are usually used in conjunction with each other 
B)  are usually used in place of one another 
C)  do not adhere to the law of demand 
D)  are goods whose demand rises as incomes rise 
E)  are goods whose demand falls as wealth falls

Question 15

Characterizing a market involves

Accepted Answer

A)  counting the number of demanders and measuring their quantity demanded 
B)  counting the number of suppliers and measuring their costs 
C)  equating the number of suppliers and the number of demanders 
D)  deciding which market best suits the problem being analyzed 
E)  deciding how to increase the degree of competition 
A)  counting the number of demanders and measuring their quantity demanded 
B)  counting the number of suppliers and measuring their costs 
C)  equating the number of suppliers and the number of demanders 
D)  deciding which market best suits the problem being analyzed 
E)  deciding how to increase the degree of competition

Question 16

If Greg uses a special glue to make model planes that he sells and the price of his model planes increases,then one would expect that the equilibrium price of the special glue would _______ and the equilibrium quantity would _________.

Accepted Answer

A)  increase;decrease 
B)  decrease;increase 
C)  increase;increase 
D)  decrease;decrease 
E)  increase;indeterminant 
A)  increase;decrease 
B)  decrease;increase 
C)  increase;increase 
D)  decrease;decrease 
E)  increase;indeterminant

Question 17

The most likely reason that oil prices spiked during 2007-2008 was because

Accepted Answer

A)  suppliers drastically cut back on production 
B)  speculators heavily invested in the futures market 
C)  there was an increase in demand due to an increase in usage 
D)  there was an increase in demand as buyers began to hoard oil for future use 
E)  suppliers increased their production to match the increase in demand 
A)  suppliers drastically cut back on production 
B)  speculators heavily invested in the futures market 
C)  there was an increase in demand due to an increase in usage 
D)  there was an increase in demand as buyers began to hoard oil for future use 
E)  suppliers increased their production to match the increase in demand

Question 18

"Supply curves are upward sloping" is a graphical way of saying

Accepted Answer

A)  supply equals demand 
B)  price and quantity supplied are inversely related 
C)  price and quantity demanded are directly related 
D)  price and quantity supplied are directly related 
E)  price and quantity demanded are inversely related 
A)  supply equals demand 
B)  price and quantity supplied are inversely related 
C)  price and quantity demanded are directly related 
D)  price and quantity supplied are directly related 
E)  price and quantity demanded are inversely related

Question 19

Figure 3-7
  
-Suppose that initially the market for DVDs is at point A on demand curve D₂ in Figure 3-7.If the price of DVD players increases,

Accepted Answer

A)  the demand curve will shift to D₃ 
B)  the market will move to point B on demand curve D₁ 
C)  the market will move to point C on demand curve D₁ 
D)  there will be no change from point A 
E)  the demand curve will shift to D₂ 
A)  the demand curve will shift to D₃ 
B)  the market will move to point B on demand curve D₁ 
C)  the market will move to point C on demand curve D₁ 
D)  there will be no change from point A 
E)  the demand curve will shift to D₂

Question 20

$$\begin{array} { | c c } 
\hline & \text { Fieure 3-1 } \
\hline \text { Price } & \text { Quantity } \
\text { per CD } & \text { Demanded } \
\hline \$ 10 & 5 . [ \text { Millian } \
\$ 11 & 3.5 \text { Millian } \
\$ 12 & 2.8 \text { Millian } \
\$ 13 & 2.3 \text { Millian } \
\$ 14 & \text { 2.[ Millian } \
\hline
\end{array}$$
-Figure 3-1 shows the market demand schedule for compact disks.If the price per disk rises from $10 to $12,the

Accepted Answer

A)  demand will decrease by 2.2 million disks 
B)  quantity demanded will decrease by 2.2 million disks 
C)  supply will rise by 2.8 million disks 
D)  quantity demanded will decrease by 3.5 million disks 
E)  demand curve will shift to the left 
A)  demand will decrease by 2.2 million disks 
B)  quantity demanded will decrease by 2.2 million disks 
C)  supply will rise by 2.8 million disks 
D)  quantity demanded will decrease by 3.5 million disks 
E)  demand curve will shift to the left

If two goods are substitutes,then a(n)

-In Figure 3-8,using the supply and demand curves denoted S₁ and D₁,respectively,the equilibrium price and quantity are

An increase in quantity supplied can be caused by a(n)

The quantity supplied of a good

The economic model of demand

The law of supply states that the quantity supplied of a good and

An increase in demand coupled with an increase in supply results in a(n)

$\text { Figure } 3-10$ Price Per Pair Quantity Demanded Quantity Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -In the supply and demand schedules in Figure 3-10,the equilibrium quantity of socks is

What do supply and demand curves have in common?

-Which of the following could explain a movement from point F to point G in Figure 3-2? Assume that the good represented is an inferior good.

Which of the following statements is correct?

If there is an increase in the demand for automobiles,and at the same time auto workers receive a substantial raise,what will happen to equilibrium price and quantity in the automobile market?

-In Figure 3-5,a movement from point G to point H would represent

Complementary goods

Characterizing a market involves

If Greg uses a special glue to make model planes that he sells and the price of his model planes increases,then one would expect that the equilibrium price of the special glue would _ and the equilibrium quantity would ___.

The most likely reason that oil prices spiked during 2007-2008 was because

"Supply curves are upward sloping" is a graphical way of saying

Figure 3-7 -Suppose that initially the market for DVDs is at point A on demand curve D₂ in Figure 3-7.If the price of DVD players increases,

Fieure 3-1 Price Quantity per CD Demanded \ 10 5.[ Millian \ 11 3.5 Millian \ 12 2.8 Millian \ 13 2.3 Millian \ 14 2.[ Millian -Figure 3-1 shows the market demand schedule for compact disks.If the price per disk rises from $10 to $12,the

What is Economics?

Scarcity, Choice, and Economic Systems

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 3: Supply and Demand

If two goods are substitutes,then a(n)

-In Figure 3-8,using the supply and demand curves denoted S₁ and D₁,respectively,the equilibrium price and quantity are

An increase in quantity supplied can be caused by a(n)

The quantity supplied of a good

The economic model of demand

The law of supply states that the quantity supplied of a good and

An increase in demand coupled with an increase in supply results in a(n)

Figure 3−10\text { Figure } 3-10 Figure 3−10 Price Per Pair Quantity Demanded Quantity Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -In the supply and demand schedules in Figure 3-10,the equilibrium quantity of socks is

What do supply and demand curves have in common?

-Which of the following could explain a movement from point F to point G in Figure 3-2? Assume that the good represented is an inferior good.

Which of the following statements is correct?

If there is an increase in the demand for automobiles,and at the same time auto workers receive a substantial raise,what will happen to equilibrium price and quantity in the automobile market?

-In Figure 3-5,a movement from point G to point H would represent

Complementary goods

Characterizing a market involves

If Greg uses a special glue to make model planes that he sells and the price of his model planes increases,then one would expect that the equilibrium price of the special glue would _______ and the equilibrium quantity would _________.

The most likely reason that oil prices spiked during 2007-2008 was because

"Supply curves are upward sloping" is a graphical way of saying

Figure 3-7 -Suppose that initially the market for DVDs is at point A on demand curve D₂ in Figure 3-7.If the price of DVD players increases,

Fieure 3-1 Price Quantity per CD Demanded \ 10 5.[ Millian \ 11 3.5 Millian \ 12 2.8 Millian \ 13 2.3 Millian \ 14 2.[ Millian -Figure 3-1 shows the market demand schedule for compact disks.If the price per disk rises from $10 to $12,the

What is Economics?

Scarcity, Choice, and Economic Systems

Working With Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

$\text { Figure } 3-10$ Price Per Pair Quantity Demanded Quantity Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -In the supply and demand schedules in Figure 3-10,the equilibrium quantity of socks is

If Greg uses a special glue to make model planes that he sells and the price of his model planes increases,then one would expect that the equilibrium price of the special glue would _ and the equilibrium quantity would ___.