Question 1

Money exchanges are more efficient than barter because:

Accepted Answer

A)  money exchanges do not require a double coincidence of wants. 
B)  the government guarantees the value of money. 
C)  money usually has an intrinsic value. 
D)  money is backed by a physical commodity. 
E)  opportunity costs are higher with barter trades. 
A)  money exchanges do not require a double coincidence of wants. 
B)  the government guarantees the value of money. 
C)  money usually has an intrinsic value. 
D)  money is backed by a physical commodity. 
E)  opportunity costs are higher with barter trades.

Question 2

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively. ?Figure 3.6
  
-Assume that the market for gasoline in Figure 3.6 is in equilibrium. What is the most likely consequence of a government-imposed price ceiling at $10 per unit?

Accepted Answer

A)  The profit made by gasoline producers will increase. 
B)  The demand for gasoline will decrease. 
C)  The quantity of gasoline supplied to the market will decrease. 
D)  There will be a surplus of gasoline in the market. 
E)  The demand curve for gasoline will shift to the right. 
A)  The profit made by gasoline producers will increase. 
B)  The demand for gasoline will decrease. 
C)  The quantity of gasoline supplied to the market will decrease. 
D)  There will be a surplus of gasoline in the market. 
E)  The demand curve for gasoline will shift to the right.

Question 3

Which of the following will cause an inward shift in the demand for steaks at a restaurant?

Accepted Answer

A)  A report by the American Medical Association states that the consumption of steak reduces the risk of cardiovascular disease 
B)  A 50 percent reduction in the price of steaks 
C)  A double-digit increase in the price of chicken 
D)  A recession leading to a significant fall in the income levels of consumers 
E)  The expectation that the price of steaks will double within two months 
A)  A report by the American Medical Association states that the consumption of steak reduces the risk of cardiovascular disease 
B)  A 50 percent reduction in the price of steaks 
C)  A double-digit increase in the price of chicken 
D)  A recession leading to a significant fall in the income levels of consumers 
E)  The expectation that the price of steaks will double within two months

Question 4

According to the law of demand, if the price of a netbook decreases, ceteris paribus, the demand for netbooks would increase.

Accepted Answer

A) True 
 B)False

Question 5

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.?
  
-According to Table 3.3, equilibrium in the market for bread occurs at the price of:

Accepted Answer

A)  $2 per unit 
B)  $3 per unit 
C)  $4 per unit 
D)  $4.5 per unit 
E)  $1.5 per unit 
A)  $2 per unit 
B)  $3 per unit 
C)  $4 per unit 
D)  $4.5 per unit 
E)  $1.5 per unit

Question 6

A rightward shift of a market supply curve might be caused by:

Accepted Answer

A)  the entry of new firms in the industry. 
B)  an increase in the wages of labor employed in the industry. 
C)  an increase in the price of the final product. 
D)  a decrease in the income of consumers. 
E)  an increase in the supply of a substitute good. 
A)  the entry of new firms in the industry. 
B)  an increase in the wages of labor employed in the industry. 
C)  an increase in the price of the final product. 
D)  a decrease in the income of consumers. 
E)  an increase in the supply of a substitute good.

Question 7

Which of the following statements is not true about a market system?

Accepted Answer

A)  The market system provides an incentive to consumers to acquire purchasing ability. 
B)  The market system magnifies the problem of scarcity of goods and services. 
C)  The market system provides an incentive for allocating resources. 
D)  The market system provides an incentive to improve the quality of goods produced. 
E)  The market system provides everything everyone wants to consume. 
A)  The market system provides an incentive to consumers to acquire purchasing ability. 
B)  The market system magnifies the problem of scarcity of goods and services. 
C)  The market system provides an incentive for allocating resources. 
D)  The market system provides an incentive to improve the quality of goods produced. 
E)  The market system provides everything everyone wants to consume.

Question 8

Every Friday night Elizabeth either goes bowling or goes to the movies. Because the price of bowling went up, Elizabeth now sees more movies. Elizabeth's behavior would be best described as a change in which determinant of demand?

Accepted Answer

A)  Price of complementary goods 
B)  Expectations 
C)  Income 
D)  Number of buyers 
E)  Price of substitute goods 
A)  Price of complementary goods 
B)  Expectations 
C)  Income 
D)  Number of buyers 
E)  Price of substitute goods

Question 9

The downward slope of the demand curve is attributed to:

Accepted Answer

A)  the inverse relationship between price and quantity demanded. 
B)  the direct relationship between income and quantity demanded. 
C)  the direct relationship between price and quantity demanded. 
D)  the inverse relationship between income and quantity demanded. 
E)  the direct relationship between consumer preferences and quantity demanded. 
A)  the inverse relationship between price and quantity demanded. 
B)  the direct relationship between income and quantity demanded. 
C)  the direct relationship between price and quantity demanded. 
D)  the inverse relationship between income and quantity demanded. 
E)  the direct relationship between consumer preferences and quantity demanded.

Question 10

Which of the following is true of the law of supply?

Accepted Answer

A)  The law of supply is the sole determinant of market prices. 
B)  The law of supply states that as the price of a good rises, the quantity supplied rises. 
C)  The law of supply holds good only in the long-run. 
D)  The law of supply is valid only in a market system of allocation. 
E)  The law of supply asserts that as the cost of producing a good rises, the quantity supplied rises. 
A)  The law of supply is the sole determinant of market prices. 
B)  The law of supply states that as the price of a good rises, the quantity supplied rises. 
C)  The law of supply holds good only in the long-run. 
D)  The law of supply is valid only in a market system of allocation. 
E)  The law of supply asserts that as the cost of producing a good rises, the quantity supplied rises.

Question 11

The change in the quantity demanded of any good is always caused by:

Accepted Answer

A)  a change in consumers' preferences for that good. 
B)  a change in the general income levels of the consumers who buy that good. 
C)  an increase or decrease in the population. 
D)  a change in the price of that good. 
E)  a change in the price of substitute goods. 
A)  a change in consumers' preferences for that good. 
B)  a change in the general income levels of the consumers who buy that good. 
C)  an increase or decrease in the population. 
D)  a change in the price of that good. 
E)  a change in the price of substitute goods.

Question 12

It is absolutely necessary for at least one trader to have money for barter exchange to take place.

Accepted Answer

A) True 
 B)False

Question 13

Most markets involve the use of money for transactions because:

Accepted Answer

A)  goods and services can be exchanged more easily with money than without it. 
B)  goods and services cannot be exchanged without money. 
C)  using money requires a double coincidence of wants. 
D)  the transaction costs of using money are very high. 
E)  the value of money remains same across countries over time. 
A)  goods and services can be exchanged more easily with money than without it. 
B)  goods and services cannot be exchanged without money. 
C)  using money requires a double coincidence of wants. 
D)  the transaction costs of using money are very high. 
E)  the value of money remains same across countries over time.

Question 14

The market supply curve for any product:

Accepted Answer

A)  always depends on the market demand for that product. 
B)  depends on the general income level of the consumers in the market. 
C)  is a summation of individual firms' supply curves. 
D)  equals the total revenue generated through sale of the commodity. 
E)  is affected by the prices of related products. 
A)  always depends on the market demand for that product. 
B)  depends on the general income level of the consumers in the market. 
C)  is a summation of individual firms' supply curves. 
D)  equals the total revenue generated through sale of the commodity. 
E)  is affected by the prices of related products.

Question 15

According to the law of supply, if the price of calculators decrease, the supply of calculators will decrease, everything else held constant.

Accepted Answer

A) True 
 B)False

Question 16

Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:

Accepted Answer

A)  directly related to the price of a Morphy Richards coffee maker. 
B)  directly related to the price of milk and cream. 
C)  directly related to the prices of inputs used in the production of Braun coffee makers. 
D)  directly related to changes in the technology used in producing coffee makers. 
E)  directly related to the price of a Braun coffee maker. 
A)  directly related to the price of a Morphy Richards coffee maker. 
B)  directly related to the price of milk and cream. 
C)  directly related to the prices of inputs used in the production of Braun coffee makers. 
D)  directly related to changes in the technology used in producing coffee makers. 
E)  directly related to the price of a Braun coffee maker.

Question 17

The figure given below shows the demand and supply curves in the market for coffee. S₁ and D₁ are the original demand and supply curves.Figure 3.5
  
-Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?

Accepted Answer

A)  An increase in the income of a coffee buyer. 
B)  A decrease in the price of coffee. 
C)  A drought in Colombia, a major coffee producer, that affects the coffee harvest. 
D)  A decrease in the price of non-dairy creamers that are consumed along with coffee. 
E)  An increase in the price of tea, assumed to be a substitute for coffee. 
A)  An increase in the income of a coffee buyer. 
B)  A decrease in the price of coffee. 
C)  A drought in Colombia, a major coffee producer, that affects the coffee harvest. 
D)  A decrease in the price of non-dairy creamers that are consumed along with coffee. 
E)  An increase in the price of tea, assumed to be a substitute for coffee.

Question 18

Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:

Accepted Answer

A)  inferior goods. 
B)  substitute goods. 
C)  Giffen goods. 
D)  public goods. 
E)  complementary goods. 
A)  inferior goods. 
B)  substitute goods. 
C)  Giffen goods. 
D)  public goods. 
E)  complementary goods.

Question 19

The demand schedule is a price list for a fixed basket of consumer goods following a particular format.

Accepted Answer

A) True 
 B)False

Question 20

In the figure given below, D₁ and S₁ are the original demand and supply curves.Figure 3.1
  
-Refer to Figure 3.1. Given D₁, if supply moves from S₁ to S₂ it implies:

Accepted Answer

A)  quantity supplied has increased. 
B)  demand will decrease from B to A. 
C)  a surplus will exist equal to AB. 
D)  supply has decreased, and equilibrium price and equilibrium quantity will move to G and B respectively. 
E)  supply has decreased, and equilibrium price and equilibrium quantity will move to E and A respectively. 
A)  quantity supplied has increased. 
B)  demand will decrease from B to A. 
C)  a surplus will exist equal to AB. 
D)  supply has decreased, and equilibrium price and equilibrium quantity will move to G and B respectively. 
E)  supply has decreased, and equilibrium price and equilibrium quantity will move to E and A respectively.

Money exchanges are more efficient than barter because:

Which of the following will cause an inward shift in the demand for steaks at a restaurant?

According to the law of demand, if the price of a netbook decreases, ceteris paribus, the demand for netbooks would increase.

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.? -According to Table 3.3, equilibrium in the market for bread occurs at the price of:

A rightward shift of a market supply curve might be caused by:

Which of the following statements is not true about a market system?

Every Friday night Elizabeth either goes bowling or goes to the movies. Because the price of bowling went up, Elizabeth now sees more movies. Elizabeth's behavior would be best described as a change in which determinant of demand?

The downward slope of the demand curve is attributed to:

Which of the following is true of the law of supply?

The change in the quantity demanded of any good is always caused by:

It is absolutely necessary for at least one trader to have money for barter exchange to take place.

Most markets involve the use of money for transactions because:

The market supply curve for any product:

According to the law of supply, if the price of calculators decrease, the supply of calculators will decrease, everything else held constant.

Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:

The figure given below shows the demand and supply curves in the market for coffee. S₁ and D₁ are the original demand and supply curves.Figure 3.5 -Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?

Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:

The demand schedule is a price list for a fixed basket of consumer goods following a particular format.

In the figure given below, D₁ and S₁ are the original demand and supply curves.Figure 3.1 -Refer to Figure 3.1. Given D₁, if supply moves from S₁ to S₂ it implies:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchapterange Rates and Financial Links Between Countries

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Exam 3: The Market and Price System

Money exchanges are more efficient than barter because:

Which of the following will cause an inward shift in the demand for steaks at a restaurant?

According to the law of demand, if the price of a netbook decreases, ceteris paribus, the demand for netbooks would increase.

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.? -According to Table 3.3, equilibrium in the market for bread occurs at the price of:

A rightward shift of a market supply curve might be caused by:

Which of the following statements is not true about a market system?

Every Friday night Elizabeth either goes bowling or goes to the movies. Because the price of bowling went up, Elizabeth now sees more movies. Elizabeth's behavior would be best described as a change in which determinant of demand?

The downward slope of the demand curve is attributed to:

Which of the following is true of the law of supply?

The change in the quantity demanded of any good is always caused by:

It is absolutely necessary for at least one trader to have money for barter exchange to take place.

Most markets involve the use of money for transactions because:

The market supply curve for any product:

According to the law of supply, if the price of calculators decrease, the supply of calculators will decrease, everything else held constant.

Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:

The figure given below shows the demand and supply curves in the market for coffee. S₁ and D₁ are the original demand and supply curves.Figure 3.5 -Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?

Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:

The demand schedule is a price list for a fixed basket of consumer goods following a particular format.

In the figure given below, D₁ and S₁ are the original demand and supply curves.Figure 3.1 -Refer to Figure 3.1. Given D₁, if supply moves from S₁ to S₂ it implies:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchapterange Rates and Financial Links Between Countries

Filters