Question 1

Assuming that bus travel is an inferior good,a decrease in consumer income,other things being equal,will cause:

Accepted Answer

A) a downward movement along the demand curve for bus travel. 
B) no change in the demand curve for bus travel. 
C) an upward movement along the demand curve for air travel. 
D) a rightward shift in the demand curve for bus travel. 
A) a downward movement along the demand curve for bus travel. 
B) no change in the demand curve for bus travel. 
C) an upward movement along the demand curve for air travel. 
D) a rightward shift in the demand curve for bus travel.

Question 2

If goods X and Y are complements,then a reduction in the price of good X decreases the demand for good Y.

Accepted Answer

A) True 
 B)False

Question 3

The distinction between changes in quantity demanded and changes in demand
Exhibit 3-2 Demand curves
  
-Which of the graphs in Exhibit 3-2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Accepted Answer

A)  Graph A. 
B)  Graph B 
C)  Graph C. 
D)  Graph D. 
A)  Graph A. 
B)  Graph B 
C)  Graph C. 
D)  Graph D.

Question 4

Other things being equal,the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

Accepted Answer

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

Question 5

A decrease in the demand for peanut butter,a normal good,can be caused by a/an:

Accepted Answer

A) decrease in consumer income. 
B) increase in the price of jams and preserves. 
C) decrease in the price of bread. 
D) drought in Queensland that destroyed 30 per cent of the peanut crop. 
E) decrease in the price of sliced ham. 
A) decrease in consumer income. 
B) increase in the price of jams and preserves. 
C) decrease in the price of bread. 
D) drought in Queensland that destroyed 30 per cent of the peanut crop. 
E) decrease in the price of sliced ham.

Question 6

Exhibit 3-5 Demand and supply data for radios
  
-In Exhibit 3-5,at any market price of radios below $55,a/an _____ would result,causing the price to _____.

Accepted Answer

A) excess demand; rise 
B) excess supply; rise 
C) excess demand; fall 
D) excess supply; fall 
E) shortage; rise 
A) excess demand; rise 
B) excess supply; rise 
C) excess demand; fall 
D) excess supply; fall 
E) shortage; rise

Question 7

The relationship between price and quantity demanded:

Accepted Answer

A) can only be presented in a tabular form. 
B) is always illustrated by a graph. 
C) can be represented either numerically or graphically. 
D) must be presented using a graph. 
A) can only be presented in a tabular form. 
B) is always illustrated by a graph. 
C) can be represented either numerically or graphically. 
D) must be presented using a graph.

Question 8

If physical fitness becomes fashionable,what will happen in the market for sport outfits?

Accepted Answer

A) Demand will increase. 
B) Quantity demanded will increase. 
C) Demand will decrease. 
D) Quantity demanded will decrease. 
E) Supply will decrease. 
A) Demand will increase. 
B) Quantity demanded will increase. 
C) Demand will decrease. 
D) Quantity demanded will decrease. 
E) Supply will decrease.

Question 9

If the price of hot dogs increases,what will happen in the market for potato chips,a complementary good?

Accepted Answer

A) Demand will increase. 
B) Quantity demanded will increase. 
C) Demand will decrease. 
D) Quantity demanded will decrease. 
E) Supply will decrease. 
A) Demand will increase. 
B) Quantity demanded will increase. 
C) Demand will decrease. 
D) Quantity demanded will decrease. 
E) Supply will decrease.

Question 10

Assume that the equilibrium price for a good is $5.If the market price is $10,a:

Accepted Answer

A) shortage causes the price to decline towards $5. 
B) surplus causes the price to rise above $10. 
C) shortage causes the price to rise above $10. 
D) surplus causes the price to decline towards $5. 
A) shortage causes the price to decline towards $5. 
B) surplus causes the price to rise above $10. 
C) shortage causes the price to rise above $10. 
D) surplus causes the price to decline towards $5.

Question 11

A change in the price of a good always results from a change in:

Accepted Answer

A) income. 
B) tastes. 
C) quantity demanded. 
D) both income and tastes. 
E) the price of other goods. 
A) income. 
B) tastes. 
C) quantity demanded. 
D) both income and tastes. 
E) the price of other goods.

Question 12

Exhibit 3-4 Demand and supply curves
  
-In Exhibit 3-4,if price happened to currently be $25 in this market,a _____ would result,causing a/an _____ in price.

Accepted Answer

A) shortage; increase 
B) surplus; decrease 
C) surplus; increase 
D) shortage; decrease 
E) market clearing; change 
A) shortage; increase 
B) surplus; decrease 
C) surplus; increase 
D) shortage; decrease 
E) market clearing; change

Question 13

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 14

Equilibrium occurs:

Accepted Answer

A) at any price for which quantity demanded is less than the quantity supplied. 
B) at the highest possible price the seller can offer the product. 
C) at the lowest price consumers are willing to pay. 
D) at any price for which demand is equal to supply. 
A) at any price for which quantity demanded is less than the quantity supplied. 
B) at the highest possible price the seller can offer the product. 
C) at the lowest price consumers are willing to pay. 
D) at any price for which demand is equal to supply.

Question 15

Consumer sovereignty means:

Accepted Answer

A) sellers are able to sell the product of their choice. 
B) supply follows the demand. 
C) less freedom of consumers to make their own choices. 
D) less regulation from the government. 
A) sellers are able to sell the product of their choice. 
B) supply follows the demand. 
C) less freedom of consumers to make their own choices. 
D) less regulation from the government.

Question 16

Innisfail banana farmers said that they lost up to 15 per cent of crop because of wild weather.This indicates that the:

Accepted Answer

A) price of bananas will fall. 
B) quantity of bananas that will be available at any given price has decreased. 
C) demand for bananas will shift to the left. 
D) quantity of bananas that will be available at any given price have increased. 
A) price of bananas will fall. 
B) quantity of bananas that will be available at any given price has decreased. 
C) demand for bananas will shift to the left. 
D) quantity of bananas that will be available at any given price have increased.

Question 17

If the price is lower that the equilibrium price,which of the following will occur?

Accepted Answer

A) The price will remain low. 
B) The price will reduce even more. 
C) The price will raise to the equilibrium price. 
D) Demand will shift. 
A) The price will remain low. 
B) The price will reduce even more. 
C) The price will raise to the equilibrium price. 
D) Demand will shift.

Question 18

An increase in supply is reflected as a rightward (outward)shift of the supply curve and is caused by an increase in price.

Accepted Answer

A) True 
 B)False

Question 19

If X is a normal good,an increase in consumers' income will result in an increase in the demand for good X.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true about the market equilibrium?

Accepted Answer

A) As the price increases, the quantity demanded and the quantity supplied increases. 
B) As the price increases, the quantity demanded and the quantity supplied decreases. 
C) As the price increases, the quantity demanded increases and the quantity supplied decreases. 
D) As the price increases, the quantity demanded decreases and the quantity supplied increases. 
E) As the price increases, neither the quantity demanded nor quantity supplied change. 
A) As the price increases, the quantity demanded and the quantity supplied increases. 
B) As the price increases, the quantity demanded and the quantity supplied decreases. 
C) As the price increases, the quantity demanded increases and the quantity supplied decreases. 
D) As the price increases, the quantity demanded decreases and the quantity supplied increases. 
E) As the price increases, neither the quantity demanded nor quantity supplied change.

Assuming that bus travel is an inferior good,a decrease in consumer income,other things being equal,will cause:

If goods X and Y are complements,then a reduction in the price of good X decreases the demand for good Y.

The distinction between changes in quantity demanded and changes in demand Exhibit 3-2 Demand curves -Which of the graphs in Exhibit 3-2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Other things being equal,the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

A decrease in the demand for peanut butter,a normal good,can be caused by a/an:

Exhibit 3-5 Demand and supply data for radios -In Exhibit 3-5,at any market price of radios below $55,a/an _ would result,causing the price to _.

The relationship between price and quantity demanded:

If physical fitness becomes fashionable,what will happen in the market for sport outfits?

If the price of hot dogs increases,what will happen in the market for potato chips,a complementary good?

Assume that the equilibrium price for a good is $5.If the market price is $10,a:

A change in the price of a good always results from a change in:

Exhibit 3-4 Demand and supply curves -In Exhibit 3-4,if price happened to currently be $25 in this market,a _ would result,causing a/an _ in price.

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.

Equilibrium occurs:

Consumer sovereignty means:

Innisfail banana farmers said that they lost up to 15 per cent of crop because of wild weather.This indicates that the:

If the price is lower that the equilibrium price,which of the following will occur?

An increase in supply is reflected as a rightward (outward)shift of the supply curve and is caused by an increase in price.

If X is a normal good,an increase in consumers' income will result in an increase in the demand for good X.

Which of the following is true about the market equilibrium?

Thinking like an economist

Production possibilities and opportunity cost

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exam 3: Market demand and supply

Assuming that bus travel is an inferior good,a decrease in consumer income,other things being equal,will cause:

If goods X and Y are complements,then a reduction in the price of good X decreases the demand for good Y.

The distinction between changes in quantity demanded and changes in demand Exhibit 3-2 Demand curves -Which of the graphs in Exhibit 3-2 depicts the effect of new information about healing properties of honey on the demand curve for sugar?

Other things being equal,the effect of a decrease in the price of compact discs on the market for compact disc players is a/an:

A decrease in the demand for peanut butter,a normal good,can be caused by a/an:

Exhibit 3-5 Demand and supply data for radios -In Exhibit 3-5,at any market price of radios below $55,a/an _____ would result,causing the price to _____.

The relationship between price and quantity demanded:

If physical fitness becomes fashionable,what will happen in the market for sport outfits?

If the price of hot dogs increases,what will happen in the market for potato chips,a complementary good?

Assume that the equilibrium price for a good is $5.If the market price is $10,a:

A change in the price of a good always results from a change in:

Exhibit 3-4 Demand and supply curves -In Exhibit 3-4,if price happened to currently be $25 in this market,a _____ would result,causing a/an _____ in price.

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.

Equilibrium occurs:

Consumer sovereignty means:

Innisfail banana farmers said that they lost up to 15 per cent of crop because of wild weather.This indicates that the:

If the price is lower that the equilibrium price,which of the following will occur?

An increase in supply is reflected as a rightward (outward)shift of the supply curve and is caused by an increase in price.

If X is a normal good,an increase in consumers' income will result in an increase in the demand for good X.

Which of the following is true about the market equilibrium?

Thinking like an economist

Production possibilities and opportunity cost

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopoly

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters

Exhibit 3-5 Demand and supply data for radios -In Exhibit 3-5,at any market price of radios below $55,a/an _ would result,causing the price to _.

Exhibit 3-4 Demand and supply curves -In Exhibit 3-4,if price happened to currently be $25 in this market,a _ would result,causing a/an _ in price.