Question 1

Exhibit 3-15 Supply and demand curves for good X
  
-In Exhibit 3-15,if the market price of good X is initially $1.50,a movement toward equilibrium requires:

Accepted Answer

A)  no change, because an equilibrium already exists. 
B)  the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise. 
A)  no change, because an equilibrium already exists. 
B)  the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. 
C)  the price to remain the same, but the supply curve to shift to the left. 
D)  the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise.

Question 2

Exhibit 3-12 Supply and demand data
  
-In Exhibit 3-12,which of the following occurs at a price of $1.00?

Accepted Answer

A)  A shortage puts a downward pressure on price. 
B)  Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C)  Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D)  The surplus would be so small that there would be only slight upward pressure on price. 
A)  A shortage puts a downward pressure on price. 
B)  Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C)  Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D)  The surplus would be so small that there would be only slight upward pressure on price.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Exhibit 3-8 Demand and supply data for radios
  
-In Exhibit 3-8,if there is a shortage of radios of 200 units,the current price of radios must be:

Accepted Answer

A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40. 
A)  $60. 
B)  $55. 
C)  $50. 
D)  $45. 
E)  $40.

Question 5

Other things being equal,an increase in the price of aspirin will decrease the demand for aspirin.

Accepted Answer

A) True 
 B)False

Question 6

If equilibrium is present in a market:

Accepted Answer

A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded. 
A)  there is either a shortage or a surplus. 
B)  the quantity demanded equals quantity supplied. 
C)  the quantity demanded exceeds quantity supplied. 
D)  the quantity supplied exceeds quantity demanded.

Question 7

Exhibit 3-6 Milk market
  
-In Exhibit 3-6,which of the following are the equilibrium price and equilibrium quantity in the milk market?

Accepted Answer

A)  $0.70 per quart and 200 quarts of milk. 
B)  $0.60 per quart and 100 quarts of milk. 
C)  $0.50 per quart and 100 quarts of milk. 
D)  $0.40 per quart and 60 quarts of milk. 
E)  $0.30 per quart and 20 quarts of milk. 
A)  $0.70 per quart and 200 quarts of milk. 
B)  $0.60 per quart and 100 quarts of milk. 
C)  $0.50 per quart and 100 quarts of milk. 
D)  $0.40 per quart and 60 quarts of milk. 
E)  $0.30 per quart and 20 quarts of milk.

Question 8

If a vacation in Paris is a normal good,other things being equal,an increase in consumer income will increase the demand for travel to Paris.

Accepted Answer

A) True 
 B)False

Question 9

If a shortage exists in a market then:

Accepted Answer

A)  the price is below equilibrium. 
B)  the quantity demanded exceeds the quantity supplied. 
C)  the price will rise in the near future. 
D)  all of the above. 
A)  the price is below equilibrium. 
B)  the quantity demanded exceeds the quantity supplied. 
C)  the price will rise in the near future. 
D)  all of the above.

Question 10

When there is a shortage of a product in a market the:

Accepted Answer

A)  price will fall. 
B)  price must be below the equilibrium price. 
C)  price must be above the equilibrium price. 
D)  producers will reduce output and sales will fall. 
A)  price will fall. 
B)  price must be below the equilibrium price. 
C)  price must be above the equilibrium price. 
D)  producers will reduce output and sales will fall.

Question 11

The equilibrium price is best defined as the price at which:

Accepted Answer

A)  demand is smaller than supply. 
B)  suppliers want to supply more goods. 
C)  demanders want to buy more goods. 
D)  quantity demanded is equal to quantity supplied. 
E)  the quantity demanded increases 
A)  demand is smaller than supply. 
B)  suppliers want to supply more goods. 
C)  demanders want to buy more goods. 
D)  quantity demanded is equal to quantity supplied. 
E)  the quantity demanded increases

Question 12

Exhibit 3-12 Supply and demand data
  
-In Exhibit 3-12 the equilibrium price and quantity in the market are:

Accepted Answer

A)  $1.00, 200. 
B)  $1.50, 400. 
C)  $2.00, 100. 
D)  $1.50, 200. 
A)  $1.00, 200. 
B)  $1.50, 400. 
C)  $2.00, 100. 
D)  $1.50, 200.

Question 13

Surpluses cause prices to rise while shortages cause prices to fall.

Accepted Answer

A) True 
 B)False

Question 14

When quantity supplied equals quantity demanded,there is:

Accepted Answer

A)  disequilibrium. 
B)  excess quantity supplied. 
C)  a market-clearing price (equilibrium price). 
D)  excess quantity demanded. 
E)  a shortage. 
A)  disequilibrium. 
B)  excess quantity supplied. 
C)  a market-clearing price (equilibrium price). 
D)  excess quantity demanded. 
E)  a shortage.

Question 15

Exhibit 3-14 Supply and demand curves
  
-In Exhibit 3-14,assume that the price of compact discs is $5 each.This price is:

Accepted Answer

A)  an equilibrium price. 
B)  not an equilibrium price because there is an excess quantity supplied at a price of $5. 
C)  not an equilibrium price because there is an excess quantity demanded at a price of $5. 
D)  not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded. 
A)  an equilibrium price. 
B)  not an equilibrium price because there is an excess quantity supplied at a price of $5. 
C)  not an equilibrium price because there is an excess quantity demanded at a price of $5. 
D)  not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded.

Question 16

If X and Y are complementary goods,the demand curve for X will shift to the right when the price of Y increases.

Accepted Answer

A) True 
 B)False

Question 17

Surpluses cause prices to fall while shortages cause prices to rise.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 3-11 Demand and supply curves
  
-In Exhibit 3-11,in Panel A the movement from A to C describes a(n):

Accepted Answer

A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity. 
E)  change in supply that dominates a change in demand. 
A)  ambiguous change in price and a decrease in quantity. 
B)  increase in price and an ambiguous change in quantity. 
C)  increase in both price and quantity. 
D)  decrease in both price and quantity. 
E)  change in supply that dominates a change in demand.

Question 19

Exhibit 3-7 Demand and supply curves
  
-In Exhibit 3-7,if price happened to currently be $75 in this market,a ____ would result,causing a(n)____ in price.

Accepted Answer

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

Question 20

Which of the following situations results from a ticket price to a concert set below the equilibrium price?

Accepted Answer

A)  A long line of people wanting to purchase tickets to the concert. 
B)  No line of people wanting to buy tickets to the concert. 
C)  Tickets available at the box office, but no line of people wanting to buy them. 
D)  None of the above. 
A)  A long line of people wanting to purchase tickets to the concert. 
B)  No line of people wanting to buy tickets to the concert. 
C)  Tickets available at the box office, but no line of people wanting to buy them. 
D)  None of the above.

Exam 3: Part 2: Market Demand and Supply

Exhibit 3-15 Supply and demand curves for good X -In Exhibit 3-15,if the market price of good X is initially $1.50,a movement toward equilibrium requires:

Exhibit 3-12 Supply and demand data -In Exhibit 3-12,which of the following occurs at a price of $1.00?

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

Exhibit 3-8 Demand and supply data for radios -In Exhibit 3-8,if there is a shortage of radios of 200 units,the current price of radios must be:

Other things being equal,an increase in the price of aspirin will decrease the demand for aspirin.

If equilibrium is present in a market:

Exhibit 3-6 Milk market -In Exhibit 3-6,which of the following are the equilibrium price and equilibrium quantity in the milk market?

If a vacation in Paris is a normal good,other things being equal,an increase in consumer income will increase the demand for travel to Paris.

If a shortage exists in a market then:

When there is a shortage of a product in a market the:

The equilibrium price is best defined as the price at which:

Exhibit 3-12 Supply and demand data -In Exhibit 3-12 the equilibrium price and quantity in the market are:

Surpluses cause prices to rise while shortages cause prices to fall.

When quantity supplied equals quantity demanded,there is:

Exhibit 3-14 Supply and demand curves -In Exhibit 3-14,assume that the price of compact discs is $5 each.This price is:

If X and Y are complementary goods,the demand curve for X will shift to the right when the price of Y increases.

Surpluses cause prices to fall while shortages cause prices to rise.

Exhibit 3-11 Demand and supply curves -In Exhibit 3-11,in Panel A the movement from A to C describes a(n):

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7,if price happened to currently be $75 in this market,a ____ would result,causing a(n)____ in price.

Which of the following situations results from a ticket price to a concert set below the equilibrium price?

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7,if price happened to currently be $75 in this market,a would result,causing a(n) in price.