Question 1

A shift in the demand curve will occur when

Accepted Answer

A)  supply shifts. 
B)  the price of an input used to produce the good changes. 
C)  consumers' income changes. 
D)  the price of the product changes. 
A)  supply shifts. 
B)  the price of an input used to produce the good changes. 
C)  consumers' income changes. 
D)  the price of the product changes. C

Question 2

A demand curve is a graphical representation of

Accepted Answer

A)  consumer tastes. 
B)  national income. 
C)  the demand schedule. 
D)  relative prices. 
A)  consumer tastes. 
B)  national income. 
C)  the demand schedule. 
D)  relative prices. C

Question 3

The quantity supplied of a particular good is the amount of the good that

Accepted Answer

A)  households are willing to consume at each particular price. 
B)  firms will actually end up buying at a particular price during a given time period. 
C)  firms are willing to sell at each price during a particular time period. 
D)  households want firms to sell at each price during a particular time period. 
A)  households are willing to consume at each particular price. 
B)  firms will actually end up buying at a particular price during a given time period. 
C)  firms are willing to sell at each price during a particular time period. 
D)  households want firms to sell at each price during a particular time period. C

Question 4

A shift in the demand curve to the right represents

Accepted Answer

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

Question 5

-According to the above table, there is an excess quantity demanded of 1500 DVDs at the price

Accepted Answer

A)  $14. 
B)  $12. 
C)  $10. 
D)  $8. 
A)  $14. 
B)  $12. 
C)  $10. 
D)  $8.

Question 6

A demand schedule provides

Accepted Answer

A)  the quantities of a good people are willing to sell every year. 
B)  the amount of a good a person wants to sell during a given time period. 
C)  the alternative quantities demanded for a given time period at different possible prices. 
D)  the amount of a good a person wants at different times of the day. 
A)  the quantities of a good people are willing to sell every year. 
B)  the amount of a good a person wants to sell during a given time period. 
C)  the alternative quantities demanded for a given time period at different possible prices. 
D)  the amount of a good a person wants at different times of the day.

Question 7

Which of the following will cause a movement along the demand curve for shoes?

Accepted Answer

A)  An increase in the price of socks 
B)  An increase in income 
C)  An increase in the price of shoes 
D)  All of the above 
A)  An increase in the price of socks 
B)  An increase in income 
C)  An increase in the price of shoes 
D)  All of the above

Question 8

All of the following will affect the position of the demand curve EXCEPT

Accepted Answer

A)  income. 
B)  taste and preference. 
C)  changes in expectations of future relative prices. 
D)  prices of resources used to produce the product. 
A)  income. 
B)  taste and preference. 
C)  changes in expectations of future relative prices. 
D)  prices of resources used to produce the product.

Question 9

Which one of the following statements is true?

Accepted Answer

A)  If the money price of a good increases, its relative price necessarily increases. 
B)  If the money price of a good increases, its relative price necessarily decreases. 
C)  The relative price of a good refers to the opportunity cost of purchasing it. 
D)  Rational consumers always ignore the monetary price of a good when deciding whether to buy it. 
A)  If the money price of a good increases, its relative price necessarily increases. 
B)  If the money price of a good increases, its relative price necessarily decreases. 
C)  The relative price of a good refers to the opportunity cost of purchasing it. 
D)  Rational consumers always ignore the monetary price of a good when deciding whether to buy it.

Question 10

-Refer to the above figure. Which of the following statements is true?

Accepted Answer

A)  Panel A shows a decrease in demand and Panel B shows an increase in demand. 
B)  Both Panels A and B show an increase in demand. 
C)  Panel A shows a change in demand and Panel B shows a change in quantity demanded. 
D)  Panel A shows a change in quantity demanded and Panel B shows a change in demand. 
A)  Panel A shows a decrease in demand and Panel B shows an increase in demand. 
B)  Both Panels A and B show an increase in demand. 
C)  Panel A shows a change in demand and Panel B shows a change in quantity demanded. 
D)  Panel A shows a change in quantity demanded and Panel B shows a change in demand.

Question 11

Which of the following would cause a change in the quantity demanded of a product?

Accepted Answer

A)  a higher price 
B)  a higher income 
C)  expectations of future price increases 
D)  All of the above are correct. 
A)  a higher price 
B)  a higher income 
C)  expectations of future price increases 
D)  All of the above are correct.

Question 12

If the price of oil rises, producers of oil will

Accepted Answer

A)  increase the quantity of oil supplied. 
B)  supply less oil. 
C)  leave the amount of oil supplied unchanged. 
D)  cut the price. 
A)  increase the quantity of oil supplied. 
B)  supply less oil. 
C)  leave the amount of oil supplied unchanged. 
D)  cut the price.

Question 13

-According to the above figure, a shortage is shown between which two points?

Accepted Answer

A)  A and E 
B)  C and B 
C)  A and B 
D)  E and F 
A)  A and E 
B)  C and B 
C)  A and B 
D)  E and F

Question 14

If two goods are substitutes, then

Accepted Answer

A)  an increase in the price of one causes the demand for the other to fall. 
B)  there is an inverse relationship between changes in the price of one good and changes in the demand for the other. 
C)  if the price of one good falls, the demand for the other good falls also. 
D)  changes in the quantity demanded of one good will not affect the demand for the other. 
A)  an increase in the price of one causes the demand for the other to fall. 
B)  there is an inverse relationship between changes in the price of one good and changes in the demand for the other. 
C)  if the price of one good falls, the demand for the other good falls also. 
D)  changes in the quantity demanded of one good will not affect the demand for the other.

Question 15

-Refer to the above figure. At a price of $10, excess quantity supplied equals

Accepted Answer

A)  0. 
B)  12. 
C)  15. 
D)  infinity. 
A)  0. 
B)  12. 
C)  15. 
D)  infinity.

Question 16

The law of demand states that there is

Accepted Answer

A)  an inverse relationship between income and quantity demanded, ceteris paribus. 
B)  a direct relationship between income and quantity demanded, ceteris paribus. 
C)  no relationship between taste and quantity demanded, ceteris paribus. 
D)  an inverse relationship between price and quantity demanded, ceteris paribus. 
A)  an inverse relationship between income and quantity demanded, ceteris paribus. 
B)  a direct relationship between income and quantity demanded, ceteris paribus. 
C)  no relationship between taste and quantity demanded, ceteris paribus. 
D)  an inverse relationship between price and quantity demanded, ceteris paribus.

Question 17

Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes

Accepted Answer

A)  a movement up the supply curve resulting in both a higher equilibrium price and quantity. 
B)  a rightward shift of the supply curve so that more is offered at each price. 
C)  no movement of the supply curve, but a fall in price and a decrease in quantity supplied. 
D)  a leftward shift of the supply curve so that less is offered for sale at each price. 
A)  a movement up the supply curve resulting in both a higher equilibrium price and quantity. 
B)  a rightward shift of the supply curve so that more is offered at each price. 
C)  no movement of the supply curve, but a fall in price and a decrease in quantity supplied. 
D)  a leftward shift of the supply curve so that less is offered for sale at each price.

Question 18

If the price of a product increases,

Accepted Answer

A)  there is an increase in quantity supplied and a decrease in demand. 
B)  there is an increase in supply and a decrease in quantity demanded. 
C)  there is an increase in supply and a decrease in demand. 
D)  there is an increase in quantity supplied and a decrease in quantity demanded. 
A)  there is an increase in quantity supplied and a decrease in demand. 
B)  there is an increase in supply and a decrease in quantity demanded. 
C)  there is an increase in supply and a decrease in demand. 
D)  there is an increase in quantity supplied and a decrease in quantity demanded.

Question 19

Which one of the following would cause an increase in the supply of cardboard?

Accepted Answer

A)  a decrease in the demand for cardboard 
B)  an increase in the price of cardboard 
C)  an increase in taxes applied to cardboard producers 
D)  an improvement in the technology used to produce cardboard 
A)  a decrease in the demand for cardboard 
B)  an increase in the price of cardboard 
C)  an increase in taxes applied to cardboard producers 
D)  an improvement in the technology used to produce cardboard

Question 20

When there is a shortage, I. there is a tendency for price to increase.
II) there is an excess quantity demanded.

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Exam 3: Demand and Supply

A shift in the demand curve will occur when

A demand curve is a graphical representation of

The quantity supplied of a particular good is the amount of the good that

A shift in the demand curve to the right represents

-According to the above table, there is an excess quantity demanded of 1500 DVDs at the price

A demand schedule provides

Which of the following will cause a movement along the demand curve for shoes?

All of the following will affect the position of the demand curve EXCEPT

Which one of the following statements is true?

-Refer to the above figure. Which of the following statements is true?

Which of the following would cause a change in the quantity demanded of a product?

If the price of oil rises, producers of oil will

-According to the above figure, a shortage is shown between which two points?

If two goods are substitutes, then

-Refer to the above figure. At a price of $10, excess quantity supplied equals

The law of demand states that there is

Any improvement in overall production technology that permits more output to be produced with the same level of inputs causes

If the price of a product increases,

Which one of the following would cause an increase in the supply of cardboard?

When there is a shortage, I. there is a tendency for price to increase. II) there is an excess quantity demanded.

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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