Question 1

The law of demand says that as the price of a good rises,the quantity demanded of the good tends to fall.

Accepted Answer

A) True 
 B)False

Question 2

The law of supply says that

Accepted Answer

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

Question 3

If prices are free to rise and fall,and supply and demand cross at a positive price,quantity combination,neither excess demand nor excess supply can persist in a market.

Accepted Answer

A) True 
 B)False

Question 4

If steel manufacturers expected that the price of steel was going to rise in the next six months,this would

Accepted Answer

A)  have no change in the competitive market for steel 
B)  lead to a decreased demand for steel 
C)  lead to a decreased supply of steel 
D)  increase the future demand for automobiles 
E)  lead to a decrease in the quantity of steel supplied to the market 
A)  have no change in the competitive market for steel 
B)  lead to a decreased demand for steel 
C)  lead to a decreased supply of steel 
D)  increase the future demand for automobiles 
E)  lead to a decrease in the quantity of steel supplied to the market

Question 5

Of the following,which could cause the demand curve for personal computers to shift to the left?

Accepted Answer

A)  a decrease in the price of personal computers 
B)  an increase in the price of computer software 
C)  a decrease in the price of computer software 
D)  an increase in wealth (assuming personal computers are a normal good) 
E)  expectations of an increase in the price of personal computers in the future 
A)  a decrease in the price of personal computers 
B)  an increase in the price of computer software 
C)  a decrease in the price of computer software 
D)  an increase in wealth (assuming personal computers are a normal good) 
E)  expectations of an increase in the price of personal computers in the future

Question 6

$\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 supply and demand schedules in Figure 3-10,the equilibrium price of a pair of socks is

Accepted Answer

A)  $4 
B)  $8 
C)  $6 
D)  $2 
E)  $10 
A)  $4 
B)  $8 
C)  $6 
D)  $2 
E)  $10

Question 7

Which of the following would cause a leftward shift of the supply curve for computers?

Accepted Answer

A)  an increase in the price of printed circuit boards used to build computers 
B)  a decrease in the price of electricity 
C)  an increase in incomes of consumers 
D)  a decrease in the price of computers 
E)  a decrease in the size of the population 
A)  an increase in the price of printed circuit boards used to build computers 
B)  a decrease in the price of electricity 
C)  an increase in incomes of consumers 
D)  a decrease in the price of computers 
E)  a decrease in the size of the population

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 for socks schedules in Figure 3-10,a price of $10 per pair results in

Accepted Answer

A)  equilibrium 
B)  excess demand of 6 pairs 
C)  excess supply of 14 pairs 
D)  excess supply of 6 pairs 
E)  excess demand of 14 pairs 
A)  equilibrium 
B)  excess demand of 6 pairs 
C)  excess supply of 14 pairs 
D)  excess supply of 6 pairs 
E)  excess demand of 14 pairs

Question 9

Of the following,which is true of the relationship between the quantity of a good supplied and its price?

Accepted Answer

A)  As price increases,the quantity supplied usually decreases. 
B)  As price increases,the quantity supplied usually increases. 
C)  As price increases,supply increases. 
D)  When demand increases,so will supply. 
E)  They always meet at the point of equilibrium in the market. 
A)  As price increases,the quantity supplied usually decreases. 
B)  As price increases,the quantity supplied usually increases. 
C)  As price increases,supply increases. 
D)  When demand increases,so will supply. 
E)  They always meet at the point of equilibrium in the market.

Question 10

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

Accepted Answer

A)  increase in equilibrium 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)  surplus 
E)  decrease in the equilibrium price and quantity 
A)  increase in equilibrium 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)  surplus 
E)  decrease in the equilibrium price and quantity

Question 11

A decrease in demand coupled with a decrease in supply results in a(n)

Accepted Answer

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

Question 12

The market for a particular good is more likely to be local

Accepted Answer

A)  the lower the cost of transporting the good and the greater the ease of communication between buyers and sellers 
B)  the higher the cost of transporting the good and the greater the ease of communication between buyers and sellers 
C)  the lower the cost of transporting the good and the greater the ease of determining the good's quality 
D)  the lower the cost of transporting the good and the more difficult the communication between buyers and sellers 
E)  the higher the cost of transporting the good and the more difficult the communication between buyers and sellers 
A)  the lower the cost of transporting the good and the greater the ease of communication between buyers and sellers 
B)  the higher the cost of transporting the good and the greater the ease of communication between buyers and sellers 
C)  the lower the cost of transporting the good and the greater the ease of determining the good's quality 
D)  the lower the cost of transporting the good and the more difficult the communication between buyers and sellers 
E)  the higher the cost of transporting the good and the more difficult the communication between buyers and sellers

Question 13

According to the law of demand,

Accepted Answer

A)  there is a positive relationship between quantity demanded and price 
B)  as the price rises,demand will shift to the left 
C)  there is a negative relationship between quantity demanded and price 
D)  as the price rises,demand will shift to the right 
E)  as the price rises,consumers will continue to purchase the same quantity of the good 
A)  there is a positive relationship between quantity demanded and price 
B)  as the price rises,demand will shift to the left 
C)  there is a negative relationship between quantity demanded and price 
D)  as the price rises,demand will shift to the right 
E)  as the price rises,consumers will continue to purchase the same quantity of the good

Question 14

The market for General Motors' bonds

Accepted Answer

A)  exists only within the geographical boundaries of the United States 
B)  is not defined by its geographic location 
C)  is at the New York Stock Exchange 
D)  is at the U.S.Treasury 
E)  is in London,England 
A)  exists only within the geographical boundaries of the United States 
B)  is not defined by its geographic location 
C)  is at the New York Stock Exchange 
D)  is at the U.S.Treasury 
E)  is in London,England

Question 15

Which of the following is assumed constant along a given supply curve for pistachio ice cream?

Accepted Answer

A)  the price of pistachios and the price of pistachio ice cream 
B)  the price of pistachio ice cream and the price of alternate flavors of ice cream 
C)  the prices of alternate goods,but not the prices of inputs 
D)  all variables affecting supply other than the productive capacity of the industry 
E)  all variables affecting supply other than the price of pistachio ice cream 
A)  the price of pistachios and the price of pistachio ice cream 
B)  the price of pistachio ice cream and the price of alternate flavors of ice cream 
C)  the prices of alternate goods,but not the prices of inputs 
D)  all variables affecting supply other than the productive capacity of the industry 
E)  all variables affecting supply other than the price of pistachio ice cream

Question 16

If two goods are substitutes,then

Accepted Answer

A)  an increase in the demand for one of them will lead to an increase in demand for the other 
B)  an increase in the demand for one of them will lead to a decrease in demand for the other 
C)  an increase in the supply of one of them will lead to an increase in supply of the other 
D)  an increase in the supply of one of them will lead to a decrease in supply for the other 
E)  they cannot be produced at the same time 
A)  an increase in the demand for one of them will lead to an increase in demand for the other 
B)  an increase in the demand for one of them will lead to a decrease in demand for the other 
C)  an increase in the supply of one of them will lead to an increase in supply of the other 
D)  an increase in the supply of one of them will lead to a decrease in supply for the other 
E)  they cannot be produced at the same time

Question 17

When households and businesses interact in product 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 18

A decrease in the price of a commodity results in a(n)

Accepted Answer

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

Question 19

If the price of jelly (a complement with peanut butter)decreases,both the demand and supply curves of peanut butter will shift rightward.

Accepted Answer

A) True 
 B)False

Question 20

The demand curve for apples slopes downward

Accepted Answer

A)  because supply and demand are equal in equilibrium 
B)  since producers supply more when consumers demand more 
C)  because people are assumed to be basically greedy 
D)  because the law of demand holds in the market for apples 
E)  because apples are preferred to all other goods 
A)  because supply and demand are equal in equilibrium 
B)  since producers supply more when consumers demand more 
C)  because people are assumed to be basically greedy 
D)  because the law of demand holds in the market for apples 
E)  because apples are preferred to all other goods

The law of demand says that as the price of a good rises,the quantity demanded of the good tends to fall.

The law of supply says that

If prices are free to rise and fall,and supply and demand cross at a positive price,quantity combination,neither excess demand nor excess supply can persist in a market.

If steel manufacturers expected that the price of steel was going to rise in the next six months,this would

Of the following,which could cause the demand curve for personal computers to shift to the left?

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

Which of the following would cause a leftward shift of the supply curve for computers?

$\text { Figure } 3-10$ 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 for socks schedules in Figure 3-10,a price of $10 per pair results in

Of the following,which is true of the relationship between the quantity of a good supplied and its price?

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

A decrease in demand coupled with a decrease in supply results in a(n)

The market for a particular good is more likely to be local

According to the law of demand,

The market for General Motors' bonds

Which of the following is assumed constant along a given supply curve for pistachio ice cream?

If two goods are substitutes,then

When households and businesses interact in product markets money

A decrease in the price of a commodity results in a(n)

If the price of jelly (a complement with peanut butter)decreases,both the demand and supply curves of peanut butter will shift rightward.

The demand curve for apples slopes downward

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

The law of demand says that as the price of a good rises,the quantity demanded of the good tends to fall.

The law of supply says that

If prices are free to rise and fall,and supply and demand cross at a positive price,quantity combination,neither excess demand nor excess supply can persist in a market.

If steel manufacturers expected that the price of steel was going to rise in the next six months,this would

Of the following,which could cause the demand curve for personal computers to shift to the left?

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 supply and demand schedules in Figure 3-10,the equilibrium price of a pair of socks is

Which of the following would cause a leftward shift of the supply curve for computers?

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 for socks schedules in Figure 3-10,a price of $10 per pair results in

Of the following,which is true of the relationship between the quantity of a good supplied and its price?

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

A decrease in demand coupled with a decrease in supply results in a(n)

The market for a particular good is more likely to be local

According to the law of demand,

The market for General Motors' bonds

Which of the following is assumed constant along a given supply curve for pistachio ice cream?

If two goods are substitutes,then

When households and businesses interact in product markets money

A decrease in the price of a commodity results in a(n)

If the price of jelly (a complement with peanut butter)decreases,both the demand and supply curves of peanut butter will shift rightward.

The demand curve for apples slopes downward

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 supply and demand schedules in Figure 3-10,the equilibrium price of a pair of socks is

$\text { Figure } 3-10$ 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 for socks schedules in Figure 3-10,a price of $10 per pair results in