Question 1

A decrease in demand and an increase in supply results in a(n)

Accepted Answer

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

Question 2

An increase in the number of buyers in the market causes

Accepted Answer

A) a decrease in equilibrium quantity 
B) a decrease in equilibrium price 
C) an increase in demand 
D) a decrease in production 
E) an increase in supply 
A) a decrease in equilibrium quantity 
B) a decrease in equilibrium price 
C) an increase in demand 
D) a decrease in production 
E) an increase in supply

Question 3

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 4

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 5

Which of the following are the best examples of substitute goods?

Accepted Answer

A) personal computers and computer software programs 
B) milk and cookies 
C) Packard Bell and IBM personal computers 
D) hot dogs and mustard 
E) contact lenses and lens cleaning solutions 
A) personal computers and computer software programs 
B) milk and cookies 
C) Packard Bell and IBM personal computers 
D) hot dogs and mustard 
E) contact lenses and lens cleaning solutions

Question 6

When households and businesses interact in product markets resources are

Accepted Answer

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

Question 7

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 8

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 9

A group of buyers and sellers with the potential to trade with each other is known as a(n)

Accepted Answer

A) trading bloc 
B) cartel 
C) market 
D) industry 
E) sector 
A) trading bloc 
B) cartel 
C) market 
D) industry 
E) sector

Question 10

Which of the following would not lead to a shift of the demand curve for apples?

Accepted Answer

A) an increase in the price of oranges 
B) a decrease in incomes for consumers 
C) a decrease in the supply of apples 
D) an increased preference for apples 
E) a decrease in the population 
A) an increase in the price of oranges 
B) a decrease in incomes for consumers 
C) a decrease in the supply of apples 
D) an increased preference for apples 
E) a decrease in the population

Question 11

Which of the following would be the best example of a spot market?

Accepted Answer

A) the market for fine art 
B) the market for bananas 
C) the market for stocks and bonds 
D) the market for baseball cards 
A) the market for fine art 
B) the market for bananas 
C) the market for stocks and bonds 
D) the market for baseball cards

Question 12

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 13

An increase in the population will lead to

Accepted Answer

A) a rightward shift in every individual's demand curve 
B) no shift in the market demand curve 
C) a rightward shift in the market demand curve 
D) a rightward movement along every individual's demand curve 
E) a rightward movement along the market demand curve 
A) a rightward shift in every individual's demand curve 
B) no shift in the market demand curve 
C) a rightward shift in the market demand curve 
D) a rightward movement along every individual's demand curve 
E) a rightward movement along the market demand curve

Question 14

-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 15

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 16

The demand curve for a particular good indicates the various quantities

Accepted Answer

A) demanded at various prices,other things equal 
B) demanded at different income levels,other things equal 
C) actually purchased at various prices,other things equal 
D) actually purchased at different income levels,other things equal 
E) demanded at various prices and income levels,other things equal 
A) demanded at various prices,other things equal 
B) demanded at different income levels,other things equal 
C) actually purchased at various prices,other things equal 
D) actually purchased at different income levels,other things equal 
E) demanded at various prices and income levels,other things equal

Question 17

Economists view shifts of supply and demand as

Accepted Answer

A) unusual events that call for government intervention 
B) unusual events resulting from the failure of the price to fall 
C) normal and frequent events 
D) normal and frequents events that do not affect equilibrium prices 
E) normal and frequent events that result from government intervention 
A) unusual events that call for government intervention 
B) unusual events resulting from the failure of the price to fall 
C) normal and frequent events 
D) normal and frequents events that do not affect equilibrium prices 
E) normal and frequent events that result from government intervention

Question 18

Supply curves are usually assumed to slope upward because

Accepted Answer

A) profits fall as prices rise 
B) a higher price leads to increases in demand 
C) a higher price leads to decreases in demand 
D) a higher price attracts resources from other less valued uses 
E) firms drop out of the market as prices rise 
A) profits fall as prices rise 
B) a higher price leads to increases in demand 
C) a higher price leads to decreases in demand 
D) a higher price attracts resources from other less valued uses 
E) firms drop out of the market as prices rise

Question 19

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 20

In a competitive market,when price is below the equilibrium level,the price will be driven upward due to

Accepted Answer

A) excess supply 
B) government intervention 
C) competition among suppliers 
D) excess demand 
E) technical inefficiency 
A) excess supply 
B) government intervention 
C) competition among suppliers 
D) excess demand 
E) technical inefficiency

A decrease in demand and an increase in supply results in a(n)

An increase in the number of buyers in the market causes

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

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

Which of the following are the best examples of substitute goods?

When households and businesses interact in product markets resources are

The market for General Motors' bonds

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

A group of buyers and sellers with the potential to trade with each other is known as a(n)

Which of the following would not lead to a shift of the demand curve for apples?

Which of the following would be the best example of a spot market?

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

An increase in the population will lead to

-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.

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

The demand curve for a particular good indicates the various quantities

Economists view shifts of supply and demand as

Supply curves are usually assumed to slope upward because

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

In a competitive market,when price is below the equilibrium level,the price will be driven upward due to

What Is Economics

Scarcity, choice, and Economic Systems

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 3: Supply and Demand

A decrease in demand and an increase in supply results in a(n)

An increase in the number of buyers in the market causes

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

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

Which of the following are the best examples of substitute goods?

When households and businesses interact in product markets resources are

The market for General Motors' bonds

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

A group of buyers and sellers with the potential to trade with each other is known as a(n)

Which of the following would not lead to a shift of the demand curve for apples?

Which of the following would be the best example of a spot market?

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

An increase in the population will lead to

-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.

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

The demand curve for a particular good indicates the various quantities

Economists view shifts of supply and demand as

Supply curves are usually assumed to slope upward because

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

In a competitive market,when price is below the equilibrium level,the price will be driven upward due to

What Is Economics

Scarcity, choice, and Economic Systems

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters