Question 1

If oranges were found to cure cancer

Accepted Answer

A)  the equilibrium price of apples would likely fall. 
B)  the equilibrium price of oranges would likely increase in the near term. 
C)  the equilibrium quantity of oranges would likely increase. 
D)  All of the above. 
A)  the equilibrium price of apples would likely fall. 
B)  the equilibrium price of oranges would likely increase in the near term. 
C)  the equilibrium quantity of oranges would likely increase. 
D)  All of the above.

Question 2

-The above figure shows a graph of the market for pizzas in a large town.What are the equilibrium price and quantity?

Accepted Answer

A)  p = 8, Q = 60 
B)  p = 7, Q = 40 
C)  p = 7, Q = 70 
D)  p = 10, Q = 40 
A)  p = 8, Q = 60 
B)  p = 7, Q = 40 
C)  p = 7, Q = 70 
D)  p = 10, Q = 40

Question 3

A price ceiling that is set below the equilibrium price

Accepted Answer

A)  causes suppliers to lose money. 
B)  creates a shortage. 
C)  is non-binding. 
D)  creates a surplus. 
A)  causes suppliers to lose money. 
B)  creates a shortage. 
C)  is non-binding. 
D)  creates a surplus.

Question 4

If price is initially above the equilibrium level

Accepted Answer

A)  the supply curve will shift rightward. 
B)  the supply curve will shift leftward. 
C)  excess supply exists. 
D)  all firms can sell as much as they want. 
A)  the supply curve will shift rightward. 
B)  the supply curve will shift leftward. 
C)  excess supply exists. 
D)  all firms can sell as much as they want.

Question 5

If the price of automobiles were to increase substantially,the demand curve for automobiles would most likely

Accepted Answer

A)  shift rightward. 
B)  shift leftward. 
C)  remain unchanged. 
D)  become steeper. 
A)  shift rightward. 
B)  shift leftward. 
C)  remain unchanged. 
D)  become steeper.

Question 6

If the demand for eBook readers increases and the supply of eBook readers increases,then

Accepted Answer

A)  it is clear that prices will increase, the change in the quantity of eBook readers sold is ambiguous. 
B)  it is clear that prices will decrease, the change in the quantity of eBook readers sold is ambiguous. 
C)  it is clear that quantity sold will increase, the change in the price of eBook readers is ambiguous. 
D)  it is clear that quantity sold will decrease, the change in the price of eBook readers is ambiguous. 
A)  it is clear that prices will increase, the change in the quantity of eBook readers sold is ambiguous. 
B)  it is clear that prices will decrease, the change in the quantity of eBook readers sold is ambiguous. 
C)  it is clear that quantity sold will increase, the change in the price of eBook readers is ambiguous. 
D)  it is clear that quantity sold will decrease, the change in the price of eBook readers is ambiguous.

Question 7

The law of demand

Accepted Answer

A)  was passed by the 102nd U.S. Congress. 
B)  is a natural law, much like the law of gravity. 
C)  is considered a "law" in economics because of the overwhelming empirical evidence that supports its logic. 
D)  is considered a "law" in economics in order to force economic models to operate fully. 
A)  was passed by the 102nd U.S. Congress. 
B)  is a natural law, much like the law of gravity. 
C)  is considered a "law" in economics because of the overwhelming empirical evidence that supports its logic. 
D)  is considered a "law" in economics in order to force economic models to operate fully.

Question 8

According to Adam Smith's invisible hand

Accepted Answer

A)  markets need the government to intervene. 
B)  forces are constantly pushing markets out of equilibrium 
C)  people coordinate their activities, resulting in equilibrium in the market. 
D)  there is an invisible glove that restricts what markets can do. 
A)  markets need the government to intervene. 
B)  forces are constantly pushing markets out of equilibrium 
C)  people coordinate their activities, resulting in equilibrium in the market. 
D)  there is an invisible glove that restricts what markets can do.

Question 9

When there is a binding price ceiling

Accepted Answer

A)  there is no equilibrium. 
B)  the quantity demanded does not equal the quantity supplied. 
C)  all potential customers are happy because they can buy the good at a lower price. 
D)  producers move production to another country. 
A)  there is no equilibrium. 
B)  the quantity demanded does not equal the quantity supplied. 
C)  all potential customers are happy because they can buy the good at a lower price. 
D)  producers move production to another country.

Question 10

Which of the following is NOT a characteristic of perfectly competitive markets?

Accepted Answer

A)  Buying the product requires you to hire a lawyer to write a contract. 
B)  All market participants are price-takers. 
C)  You are the only buyer of the product. 
D)  All products are identical. 
A)  Buying the product requires you to hire a lawyer to write a contract. 
B)  All market participants are price-takers. 
C)  You are the only buyer of the product. 
D)  All products are identical.

Question 11

It is appropriate to use the supply-and demand-model if,in a market

Accepted Answer

A)  everyone is a price taker with full information about the price and quality of the good. 
B)  firms sell identical products. 
C)  costs of trading are low. 
D)  All of the above. 
A)  everyone is a price taker with full information about the price and quality of the good. 
B)  firms sell identical products. 
C)  costs of trading are low. 
D)  All of the above.

Question 12

During a severe winter,the price of home heating oil is expected to be more than it would be during a normal winter.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the price of pork will lead to

Accepted Answer

A)  a movement up along the demand curve. 
B)  a movement down along the demand curve. 
C)  a rightward shift of the demand curve. 
D)  a leftward shift of the demand curve. 
A)  a movement up along the demand curve. 
B)  a movement down along the demand curve. 
C)  a rightward shift of the demand curve. 
D)  a leftward shift of the demand curve.

Question 14

Government actions can cause a

Accepted Answer

A)  shift in the supply curve. 
B)  shift in the demand curve. 
C)  reaction from firms in other countries. 
D)  All of the above. 
A)  shift in the supply curve. 
B)  shift in the demand curve. 
C)  reaction from firms in other countries. 
D)  All of the above.

Question 15

If a yet-to-be released video game receives a positive review in a popular gaming magazine,what happens to the demand curve for the video game?

Accepted Answer

A)  The demand curve is expected to shift to the right. 
B)  The demand curve is expected to shift to the left. 
C)  The demand curve is not expected to change. 
D)  For those who read the review, demand shifts to the left. For those who don't read the review, demand shifts to the right. 
A)  The demand curve is expected to shift to the right. 
B)  The demand curve is expected to shift to the left. 
C)  The demand curve is not expected to change. 
D)  For those who read the review, demand shifts to the left. For those who don't read the review, demand shifts to the right.

Question 16

Suppose the following information is known about a market:
1.Sellers will not sell at all below a price of $2.
2.At a price of $10,any given seller will sell 10 units.
3.There are 100 identical sellers in the market.
Assuming a linear supply curve,use this information to derive the market supply curve.

Accepted Answer

First,Q = 100q since all firms are ident

Question 17

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Accepted Answer

In all cases,total expenditure equals 10

Question 18

-The above figure shows the market for apples.If a consumer group convinces the government to set a maximum price of $2 per pound,then

Accepted Answer

A)  300 pounds of apples will be sold at $2. 
B)  no apples will be supplied. 
C)  no apples will be demanded. 
D)  None of the above. 
A)  300 pounds of apples will be sold at $2. 
B)  no apples will be supplied. 
C)  no apples will be demanded. 
D)  None of the above.

Question 19

If the government institutes a specific tax for a good

Accepted Answer

A)  the producer simply passes the entire tax on to the consumer. 
B)  the producer must absorb the entire tax. 
C)  the producer can generally only pass part of the tax onto the consumer. 
D)  the equilibrium price drops. 
A)  the producer simply passes the entire tax on to the consumer. 
B)  the producer must absorb the entire tax. 
C)  the producer can generally only pass part of the tax onto the consumer. 
D)  the equilibrium price drops.

Question 20

An increase in the price of oil will

Accepted Answer

A)  shift the supply curve of oil to the left. 
B)  shift the supply curve of oil to the right. 
C)  leave the supply curve of oil unchanged. 
D)  Not enough information to answer the question. 
A)  shift the supply curve of oil to the left. 
B)  shift the supply curve of oil to the right. 
C)  leave the supply curve of oil unchanged. 
D)  Not enough information to answer the question.

If oranges were found to cure cancer

-The above figure shows a graph of the market for pizzas in a large town.What are the equilibrium price and quantity?

A price ceiling that is set below the equilibrium price

If price is initially above the equilibrium level

If the price of automobiles were to increase substantially,the demand curve for automobiles would most likely

If the demand for eBook readers increases and the supply of eBook readers increases,then

The law of demand

According to Adam Smith's invisible hand

When there is a binding price ceiling

Which of the following is NOT a characteristic of perfectly competitive markets?

It is appropriate to use the supply-and demand-model if,in a market

During a severe winter,the price of home heating oil is expected to be more than it would be during a normal winter.

An increase in the price of pork will lead to

Government actions can cause a

If a yet-to-be released video game receives a positive review in a popular gaming magazine,what happens to the demand curve for the video game?

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

-The above figure shows the market for apples.If a consumer group convinces the government to set a maximum price of $2 per pound,then

If the government institutes a specific tax for a good

An increase in the price of oil will

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters

Exam 2: Supply and Demand

If oranges were found to cure cancer

-The above figure shows a graph of the market for pizzas in a large town.What are the equilibrium price and quantity?

A price ceiling that is set below the equilibrium price

If price is initially above the equilibrium level

If the price of automobiles were to increase substantially,the demand curve for automobiles would most likely

If the demand for eBook readers increases and the supply of eBook readers increases,then

The law of demand

According to Adam Smith's invisible hand

When there is a binding price ceiling

Which of the following is NOT a characteristic of perfectly competitive markets?

It is appropriate to use the supply-and demand-model if,in a market

During a severe winter,the price of home heating oil is expected to be more than it would be during a normal winter.

An increase in the price of pork will lead to

Government actions can cause a

If a yet-to-be released video game receives a positive review in a popular gaming magazine,what happens to the demand curve for the video game?

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

-The above figure shows the market for apples.If a consumer group convinces the government to set a maximum price of $2 per pound,then

If the government institutes a specific tax for a good

An increase in the price of oil will

Introduction

Empirical Methods for Demand Analysis

Consumer Choice

Production

Costs

Firm Organization and Market Structure

Competitive Firms and Markets

Monopoly

Pricing With Market Power

Oligopoly and Monopolistic Competition

Game Theory and Business Strategy

Strategies Over Time

Managerial Decision-Making Under Uncertainty

Asymmetric Information

Government and Business

Global Business

Filters