Question 1

If automobiles are like most goods and the price of automobiles rises,then holding all else constant,the

Accepted Answer

A)  demand for automobiles will rise 
B)  quantity demanded of automobiles will fall 
C)  demand for automobiles will fall 
D)  quantity demanded of automobiles will rise 
E)  supply of automobiles will fall 
A)  demand for automobiles will rise 
B)  quantity demanded of automobiles will fall 
C)  demand for automobiles will fall 
D)  quantity demanded of automobiles will rise 
E)  supply of automobiles will fall

Question 2

The supply and demand model

Accepted Answer

A)  tries to include as many realistic details as possible in order to provide insights into real-world competitive markets 
B)  uses simplifying assumptions while still providing insights into real-world competitive markets 
C)  uses simplifying assumptions that severely limit its usefulness in practice 
D)  is too complicated to be useful in practice 
E)  is unable to explain price movements in most real-world competitive markets 
A)  tries to include as many realistic details as possible in order to provide insights into real-world competitive markets 
B)  uses simplifying assumptions while still providing insights into real-world competitive markets 
C)  uses simplifying assumptions that severely limit its usefulness in practice 
D)  is too complicated to be useful in practice 
E)  is unable to explain price movements in most real-world competitive markets

Question 3

All else constant,if butter and margarine are substitute goods,then as the price of butter rises,

Accepted Answer

A)  the demand for margarine will fall 
B)  the quantity of butter demanded will fall 
C)  the demand for butter will fall 
D)  the demand for butter will rise 
E)  butter and margarine will become complementary goods,provided that butter is a normal good 
A)  the demand for margarine will fall 
B)  the quantity of butter demanded will fall 
C)  the demand for butter will fall 
D)  the demand for butter will rise 
E)  butter and margarine will become complementary goods,provided that butter is a normal good

Question 4

If buyers' tastes and preferences shift in favor of a good,the result is

Accepted Answer

A)  an increase in quantity demanded 
B)  an increase in demand 
C)  an increase in quantity demanded and an increase in supply 
D)  a decline in supply 
E)  an increase in supply 
A)  an increase in quantity demanded 
B)  an increase in demand 
C)  an increase in quantity demanded and an increase in supply 
D)  a decline in supply 
E)  an increase in supply

Question 5

Given the demand curve for laptop computers,if the government began to encourage households to own a computer by providing a subsidy to each family that buys one,

Accepted Answer

A)  both the equilibrium price and quantity of laptops will increase 
B)  both the equilibrium price and quantity of laptops will decrease 
C)  the equilibrium price of laptops will increase but the equilibrium quantity will decrease 
D)  the equilibrium price of laptops will decrease but the equilibrium quantity will increase 
E)  subsidies to households have no effect on either the supply or demand 
A)  both the equilibrium price and quantity of laptops will increase 
B)  both the equilibrium price and quantity of laptops will decrease 
C)  the equilibrium price of laptops will increase but the equilibrium quantity will decrease 
D)  the equilibrium price of laptops will decrease but the equilibrium quantity will increase 
E)  subsidies to households have no effect on either the supply or demand

Question 6

The term quantity demanded

Accepted Answer

A)  can refer to either an individual or all buyers in a market 
B)  only refers to all buyers in a specific market 
C)  only refers to individual buyers in a market 
D)  refers to how many units of a good a buyer would be willing and able to purchase at a series of prices 
E)  determines price when it intersects with the supply curve 
A)  can refer to either an individual or all buyers in a market 
B)  only refers to all buyers in a specific market 
C)  only refers to individual buyers in a market 
D)  refers to how many units of a good a buyer would be willing and able to purchase at a series of prices 
E)  determines price when it intersects with the supply curve

Question 7

-Consider the market represented by Figure 3-9.If the price of the good is currently $50.00,the price will

Accepted Answer

A)  fall,causing the quantity demanded to fall 
B)  fall,causing the quantity supplied to fall 
C)  rise,causing the demand curve to shift to the right 
D)  rise,causing the supply curve to shift to the left 
E)  fall,causing the supply curve to shift to the right 
A)  fall,causing the quantity demanded to fall 
B)  fall,causing the quantity supplied to fall 
C)  rise,causing the demand curve to shift to the right 
D)  rise,causing the supply curve to shift to the left 
E)  fall,causing the supply curve to shift to the right

Question 8

An increase in equilibrium price and a decrease in equilibrium quantity could be caused by a(n)

Accepted Answer

A)  increase in resource prices 
B)  increase in demand 
C)  increase in supply 
D)  favorable shift in tastes and preferences 
E)  improvement in production technology 
A)  increase in resource prices 
B)  increase in demand 
C)  increase in supply 
D)  favorable shift in tastes and preferences 
E)  improvement in production technology

Question 9

If the supply of coffee falls due to bad weather conditions in coffee-exporting countries,then the

Accepted Answer

A)  price and quantity will rise 
B)  price and quantity will fall 
C)  price will fall and quantity will rise 
D)  price will rise and quantity will fall 
E)  quantity will fall,but price may rise or fall 
A)  price and quantity will rise 
B)  price and quantity will fall 
C)  price will fall and quantity will rise 
D)  price will rise and quantity will fall 
E)  quantity will fall,but price may rise or fall

Question 10

When a market is in equilibrium,

Accepted Answer

A)  quantity demanded equals quantity supplied 
B)  quantity demanded exceeds quantity supplied 
C)  the demand curve is identical to the supply curve 
D)  the economy must be at a point along the production possibilities frontier 
E)  the law of demand is equivalent to the law of supply 
A)  quantity demanded equals quantity supplied 
B)  quantity demanded exceeds quantity supplied 
C)  the demand curve is identical to the supply curve 
D)  the economy must be at a point along the production possibilities frontier 
E)  the law of demand is equivalent to the law of supply

Question 11

When households and businesses interact in resource markets money

Accepted Answer

A)  is not exchanged 
B)  is flowing toward businesses 
C)  is flowing toward households 
D)  is not used at all 
E)  is flowing to both businesses and households 
A)  is not exchanged 
B)  is flowing toward businesses 
C)  is flowing toward households 
D)  is not used at all 
E)  is flowing to both businesses and households

Question 12

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

Accepted Answer

A) True 
 B)False

Question 13

If a good is a normal good then

Accepted Answer

A)  other things equal,no consumer will buy it 
B)  a rise in income or wealth will increase the amount of the good that consumers will purchase 
C)  a decline in income will increase the amount of it that consumers will purchase 
D)  abnormal goods are never substituted for it 
E)  normal consumers will always demand it 
A)  other things equal,no consumer will buy it 
B)  a rise in income or wealth will increase the amount of the good that consumers will purchase 
C)  a decline in income will increase the amount of it that consumers will purchase 
D)  abnormal goods are never substituted for it 
E)  normal consumers will always demand it

Question 14

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

Accepted Answer

A)  the demand curve will shift to D₂ 
B)  equilibrium will move to point B on demand curve D₁ 
C)  equilibrium 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 D₃ 
A)  the demand curve will shift to D₂ 
B)  equilibrium will move to point B on demand curve D₁ 
C)  equilibrium 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 D₃

Question 15

If an increase in a person's income causes that person to buy more apples,then apples are

Accepted Answer

A)  neutral with respect to price 
B)  complements 
C)  inferior goods 
D)  normal goods 
E)  substitute goods 
A)  neutral with respect to price 
B)  complements 
C)  inferior goods 
D)  normal goods 
E)  substitute goods

Question 16

Which of the following sets of goods are most likely to be complementary goods?

Accepted Answer

A)  shoes and pizza 
B)  automobiles and computers 
C)  baseballs and baseball gloves 
D)  football tickets and baseball tickets 
E)  Dell and Gateway computers 
A)  shoes and pizza 
B)  automobiles and computers 
C)  baseballs and baseball gloves 
D)  football tickets and baseball tickets 
E)  Dell and Gateway computers

Question 17

If the price of new automobiles rises in the U.S.market while prices remain unchanged in foreign markets,

Accepted Answer

A)  foreign firms will want to export fewer automobiles to the United States 
B)  foreign firms will want to export more automobiles to the United States 
C)  foreign firms will not change their exports to the United States since it is a different market 
D)  U.S.firms will want to export more automobiles to foreign markets 
E)  U.S.firms will not change their exports to foreign markets unless foreign prices also change 
A)  foreign firms will want to export fewer automobiles to the United States 
B)  foreign firms will want to export more automobiles to the United States 
C)  foreign firms will not change their exports to the United States since it is a different market 
D)  U.S.firms will want to export more automobiles to foreign markets 
E)  U.S.firms will not change their exports to foreign markets unless foreign prices also change

Question 18

Defining a market involves deciding how to view

Accepted Answer

A)  equilibrium supply and demand 
B)  normative economic analysis 
C)  the thing being traded,the decision makers,and the trading environment 
D)  suppliers,demanders,shortages,and surpluses 
E)  excess demand and excess supply 
A)  equilibrium supply and demand 
B)  normative economic analysis 
C)  the thing being traded,the decision makers,and the trading environment 
D)  suppliers,demanders,shortages,and surpluses 
E)  excess demand and excess supply

Question 19

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

Accepted Answer

A)  the law of demand applies to most markets 
B)  supply curves usually slope downward 
C)  demand curves usually slope downward 
D)  supply curves usually slope upward 
E)  technical inefficiency would not exist in the long run 
A)  the law of demand applies to most markets 
B)  supply curves usually slope downward 
C)  demand curves usually slope downward 
D)  supply curves usually slope upward 
E)  technical inefficiency would not exist in the long run

Question 20

When demand increases,

Accepted Answer

A)  consumers are willing and able to purchase more of the good at every price 
B)  consumers are willing and able to purchase less of the good at every price 
C)  there is a movement to the right along the demand curve 
D)  this is referred to as a change in quantity demanded 
E)  the price will tend to fall 
A)  consumers are willing and able to purchase more of the good at every price 
B)  consumers are willing and able to purchase less of the good at every price 
C)  there is a movement to the right along the demand curve 
D)  this is referred to as a change in quantity demanded 
E)  the price will tend to fall

If automobiles are like most goods and the price of automobiles rises,then holding all else constant,the

The supply and demand model

All else constant,if butter and margarine are substitute goods,then as the price of butter rises,

If buyers' tastes and preferences shift in favor of a good,the result is

Given the demand curve for laptop computers,if the government began to encourage households to own a computer by providing a subsidy to each family that buys one,

The term quantity demanded

-Consider the market represented by Figure 3-9.If the price of the good is currently $50.00,the price will

An increase in equilibrium price and a decrease in equilibrium quantity could be caused by a(n)

If the supply of coffee falls due to bad weather conditions in coffee-exporting countries,then the

When a market is in equilibrium,

When households and businesses interact in resource markets money

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

If a good is a normal good then

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

If an increase in a person's income causes that person to buy more apples,then apples are

Which of the following sets of goods are most likely to be complementary goods?

If the price of new automobiles rises in the U.S.market while prices remain unchanged in foreign markets,

Defining a market involves deciding how to view

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

When demand increases,

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 automobiles are like most goods and the price of automobiles rises,then holding all else constant,the

The supply and demand model

All else constant,if butter and margarine are substitute goods,then as the price of butter rises,

If buyers' tastes and preferences shift in favor of a good,the result is

Given the demand curve for laptop computers,if the government began to encourage households to own a computer by providing a subsidy to each family that buys one,

The term quantity demanded

-Consider the market represented by Figure 3-9.If the price of the good is currently $50.00,the price will

An increase in equilibrium price and a decrease in equilibrium quantity could be caused by a(n)

If the supply of coffee falls due to bad weather conditions in coffee-exporting countries,then the

When a market is in equilibrium,

When households and businesses interact in resource markets money

If the price of leather (an input for leather shoes)increases,the equilibrium price of leather shoes will increase and the equilibrium quantity of leather shoes will decrease.

If a good is a normal good then

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

If an increase in a person's income causes that person to buy more apples,then apples are

Which of the following sets of goods are most likely to be complementary goods?

If the price of new automobiles rises in the U.S.market while prices remain unchanged in foreign markets,

Defining a market involves deciding how to view

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

When demand increases,

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