Question 1

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

Accepted Answer

A) True 
 B)False

Question 2

During the winter of 1997-1998,the northeastern United States experienced warmer than usual conditions.The price of home heating oil was less than it was during the previous winter,but people bought less home heating oil.This contradicts the Law of Demand.

Accepted Answer

A) True 
 B)False

Question 3

Consumer groups tend to lobby for

Accepted Answer

A)  price floors. 
B)  price ceilings. 
C)  quantity quotas. 
D)  taxes. 
A)  price floors. 
B)  price ceilings. 
C)  quantity quotas. 
D)  taxes.

Question 4

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Accepted Answer

A)  Joe is not considered part of the demand for Ferraris. 
B)  Joe most likely will not be sold a Ferrari. 
C)  Joe is not considered rational. 
D)  Joe's willingness to pay is not indicative of how much he values the Ferrari. 
A)  Joe is not considered part of the demand for Ferraris. 
B)  Joe most likely will not be sold a Ferrari. 
C)  Joe is not considered rational. 
D)  Joe's willingness to pay is not indicative of how much he values the Ferrari.

Question 5

Which of the following would NOT change demand?

Accepted Answer

A)  the price of the product 
B)  information about the product's health effects 
C)  the income of the consumers 
D)  the price of related products 
A)  the price of the product 
B)  information about the product's health effects 
C)  the income of the consumers 
D)  the price of related products

Question 6

If the price is $5 and the quantity demanded is 100 units,then at a price of $10,the quantity demanded will be

Accepted Answer

A)  less than or equal to 100 units. 
B)  greater than or equal to 100 units. 
C)  less than or equal to 1000 units. 
D)  equal to 100 units. 
A)  less than or equal to 100 units. 
B)  greater than or equal to 100 units. 
C)  less than or equal to 1000 units. 
D)  equal to 100 units.

Question 7

One of the biggest benefits of the Internet auction site eBay

Accepted Answer

A)  is its control over prices. 
B)  is that it increases the supply of products. 
C)  is that it increases the demand for products. 
D)  is that it reduces transaction costs for both sellers and buyers. 
A)  is its control over prices. 
B)  is that it increases the supply of products. 
C)  is that it increases the demand for products. 
D)  is that it reduces transaction costs for both sellers and buyers.

Question 8

At equilibrium,quantity sold equals the quantity bought.This implies that

Accepted Answer

A)  to sell more, producers require more in payment than consumers are willing to pay. 
B)  government regulation is necessary. 
C)  to sell less would require a lower price but would yield greater profit. 
D)  those who don't buy have been treated unfairly. 
A)  to sell more, producers require more in payment than consumers are willing to pay. 
B)  government regulation is necessary. 
C)  to sell less would require a lower price but would yield greater profit. 
D)  those who don't buy have been treated unfairly.

Question 9

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

Accepted Answer

A)  shift the supply of corn to the left. 
B)  shift the supply of corn to the right. 
C)  reduce the production of corn by sliding down the corn supply curve, all else equal. 
D)  increase the production of corn by sliding up the corn supply curve, all else equal. 
A)  shift the supply of corn to the left. 
B)  shift the supply of corn to the right. 
C)  reduce the production of corn by sliding down the corn supply curve, all else equal. 
D)  increase the production of corn by sliding up the corn supply curve, all else equal.

Question 10

Supply curves

Accepted Answer

A)  slope upward. 
B)  slope downward. 
C)  are horizontal. 
D)  can have many shapes. 
A)  slope upward. 
B)  slope downward. 
C)  are horizontal. 
D)  can have many shapes.

Question 11

If two firms produce the same product but have different supply curves,

Accepted Answer

A)  this would indicate that some other variable differs across the two firms. 
B)  this would indicate that all variables are the same across the two firms. 
C)  this would indicate that one or both of the firm's managers are misinformed. 
D)  this would indicate a need for government regulation. 
A)  this would indicate that some other variable differs across the two firms. 
B)  this would indicate that all variables are the same across the two firms. 
C)  this would indicate that one or both of the firm's managers are misinformed. 
D)  this would indicate a need for government regulation.

Question 12

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

Accepted Answer

A)  those who are buying gasoline value it at least $5 per gallon. 
B)  those who are not buying gasoline value it more than $5 per gallon. 
C)  only those who are extremely wealthy are buying gasoline. 
D)  the price of gasoline needs to be regulated by the Federal Government. 
A)  those who are buying gasoline value it at least $5 per gallon. 
B)  those who are not buying gasoline value it more than $5 per gallon. 
C)  only those who are extremely wealthy are buying gasoline. 
D)  the price of gasoline needs to be regulated by the Federal Government.

Question 13

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 14

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

Accepted Answer

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

Question 15

Suppose that firm A obtained a patent for a new medication that cures certain types of cancer.Which assumption of the supply-and-demand model does not hold in this example?

Accepted Answer

A)  Everyone is a price taker. 
B)  Products are homogeneous. 
C)  Trading costs are low. 
D)  Everyone has full information about the price and quality of goods. 
A)  Everyone is a price taker. 
B)  Products are homogeneous. 
C)  Trading costs are low. 
D)  Everyone has full information about the price and quality of goods.

Question 16

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

Accepted Answer

A)  more studying on Saturday and less on Tuesday. 
B)  more studying on Tuesday and less on Saturday. 
C)  the same amount of studying on Tuesday and Saturday. 
D)  no studying on Tuesday or Saturday. 
A)  more studying on Saturday and less on Tuesday. 
B)  more studying on Tuesday and less on Saturday. 
C)  the same amount of studying on Tuesday and Saturday. 
D)  no studying on Tuesday or Saturday.

Question 17

If the demand curve is vertical a rightward shift of the supply curve will lead to

Accepted Answer

A)  an increase in quantity supplied. 
B)  an increase in quantity demanded. 
C)  a decrease in quantity demanded. 
D)  a decrease in price. 
A)  an increase in quantity supplied. 
B)  an increase in quantity demanded. 
C)  a decrease in quantity demanded. 
D)  a decrease in price.

Question 18

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be demanded unless price is less than

Accepted Answer

A)  $0. 
B)  $5. 
C)  $12. 
D)  $14. 
A)  $0. 
B)  $5. 
C)  $12. 
D)  $14.

Question 19

Assuming plasma TVs are a normal good,an increase in consumer incomes will lead to

Accepted Answer

A)  a rightward shift of the demand curve for plasma TVs. 
B)  a movement upward along the demand curve for plasma TVs. 
C)  a rightward shift of the supply curve for plasma TVs. 
D)  no change of the demand curve for plasma TVs. 
A)  a rightward shift of the demand curve for plasma TVs. 
B)  a movement upward along the demand curve for plasma TVs. 
C)  a rightward shift of the supply curve for plasma TVs. 
D)  no change of the demand curve for plasma TVs.

Question 20

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

Accepted Answer

A) True 
 B)False

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

During the winter of 1997-1998,the northeastern United States experienced warmer than usual conditions.The price of home heating oil was less than it was during the previous winter,but people bought less home heating oil.This contradicts the Law of Demand.

Consumer groups tend to lobby for

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Which of the following would NOT change demand?

If the price is $5 and the quantity demanded is 100 units,then at a price of $10,the quantity demanded will be

One of the biggest benefits of the Internet auction site eBay

At equilibrium,quantity sold equals the quantity bought.This implies that

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

Supply curves

If two firms produce the same product but have different supply curves,

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

Government actions can cause a

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

Suppose that firm A obtained a patent for a new medication that cures certain types of cancer.Which assumption of the supply-and-demand model does not hold in this example?

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

If the demand curve is vertical a rightward shift of the supply curve will lead to

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be demanded unless price is less than

Assuming plasma TVs are a normal good,an increase in consumer incomes will lead to

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

Introduction

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 2: Supply and Demand

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

During the winter of 1997-1998,the northeastern United States experienced warmer than usual conditions.The price of home heating oil was less than it was during the previous winter,but people bought less home heating oil.This contradicts the Law of Demand.

Consumer groups tend to lobby for

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Which of the following would NOT change demand?

If the price is $5 and the quantity demanded is 100 units,then at a price of $10,the quantity demanded will be

One of the biggest benefits of the Internet auction site eBay

At equilibrium,quantity sold equals the quantity bought.This implies that

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

Supply curves

If two firms produce the same product but have different supply curves,

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

Government actions can cause a

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

Suppose that firm A obtained a patent for a new medication that cures certain types of cancer.Which assumption of the supply-and-demand model does not hold in this example?

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

If the demand curve is vertical a rightward shift of the supply curve will lead to

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be demanded unless price is less than

Assuming plasma TVs are a normal good,an increase in consumer incomes will lead to

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

Introduction

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters