Question 1

-In the above figure, when the price of Good B increases, the result can be shown by

Accepted Answer

A)  the movement from D1 to D2 in Graph A. 
B)  the movement from D2 to D1 in Graph A. 
C)  the movement along D0 from P1 to P2. 
D)  the movement along D0 from P2 to P1. 
A)  the movement from D1 to D2 in Graph A. 
B)  the movement from D2 to D1 in Graph A. 
C)  the movement along D0 from P1 to P2. 
D)  the movement along D0 from P2 to P1.

Question 2

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Accepted Answer

A)  the demand for oranges will rise. 
B)  the equilibrium quantity of oranges will rise. 
C)  the amount of oranges available at various prices will decline. 
D)  the price of oranges will fall. 
A)  the demand for oranges will rise. 
B)  the equilibrium quantity of oranges will rise. 
C)  the amount of oranges available at various prices will decline. 
D)  the price of oranges will fall.

Question 3

An increase in price will lead to an increase in quantity supplied. This statement is

Accepted Answer

A)  the law of supply. 
B)  the law of demand. 
C)  untrue always. 
D)  a normative statement. 
A)  the law of supply. 
B)  the law of demand. 
C)  untrue always. 
D)  a normative statement.

Question 4

Another name for a shortage is

Accepted Answer

A)  excess quantity supplied. 
B)  excess quantity demanded. 
C)  equilibrium. 
D)  market clearing. 
A)  excess quantity supplied. 
B)  excess quantity demanded. 
C)  equilibrium. 
D)  market clearing.

Question 5

The concept of "demand" in economics refers to

Accepted Answer

A)  the different quantities of a good or service people will buy at different possible prices. 
B)  the different types of goods and services that people of different income levels want to buy. 
C)  how changes in the prices of all goods affect people's buying behavior. 
D)  changes in people's consumption behavior over time. 
A)  the different quantities of a good or service people will buy at different possible prices. 
B)  the different types of goods and services that people of different income levels want to buy. 
C)  how changes in the prices of all goods affect people's buying behavior. 
D)  changes in people's consumption behavior over time.

Question 6

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

Accepted Answer

A)  the number of iTunes music downloads would increase. 
B)  there would be no change in the demand for iTunes music downloads. 
C)  the number of iTunes music downloads would decrease. 
D)  iTunes music supply would change but demand would not. 
A)  the number of iTunes music downloads would increase. 
B)  there would be no change in the demand for iTunes music downloads. 
C)  the number of iTunes music downloads would decrease. 
D)  iTunes music supply would change but demand would not.

Question 7

-In the above figure, an increase in income is best demonstrated by a

Accepted Answer

A)  shift of D1 to D2 in Graph A, if good A is a normal good. 
B)  shift of D2 to D1 in Graph A, if good A is a normal good. 
C)  movement along D0 from P1 to P2 in Graph B. 
D)  movement along D0 from P2 to P1 in Graph B. 
A)  shift of D1 to D2 in Graph A, if good A is a normal good. 
B)  shift of D2 to D1 in Graph A, if good A is a normal good. 
C)  movement along D0 from P1 to P2 in Graph B. 
D)  movement along D0 from P2 to P1 in Graph B.

Question 8

State the law of supply and explain it.

Accepted Answer

The law of supply indicates the direct o

Question 9

A change in quantity demanded

Accepted Answer

A)  is a shift of the demand curve. 
B)  is a movement along the demand curve. 
C)  can be either a shift or a movement along the demand curve. 
D)  is caused when there is a change in a ceteris paribus factor. 
A)  is a shift of the demand curve. 
B)  is a movement along the demand curve. 
C)  can be either a shift or a movement along the demand curve. 
D)  is caused when there is a change in a ceteris paribus factor.

Question 10

A decrease in quantity demanded of a good is caused by

Accepted Answer

A)  a decrease in income. 
B)  a decrease in the price of a substitute. 
C)  an increase in the price of the good. 
D)  a change of tastes. 
A)  a decrease in income. 
B)  a decrease in the price of a substitute. 
C)  an increase in the price of the good. 
D)  a change of tastes.

Question 11

A given supply curve illustrates

Accepted Answer

A)  the relationship between price and quantity supplied. 
B)  the effect of a change in resource costs on quantity supplied. 
C)  the effect of a change in technology on quantity supplied. 
D)  the relationship between expected future prices and quantity supplied. 
A)  the relationship between price and quantity supplied. 
B)  the effect of a change in resource costs on quantity supplied. 
C)  the effect of a change in technology on quantity supplied. 
D)  the relationship between expected future prices and quantity supplied.

Question 12

An increase in demand is represented by a

Accepted Answer

A)  shift of the demand curve to the left. 
B)  shift of the demand curve to the right. 
C)  movement down the demand curve. 
D)  movement up the demand curve. 
A)  shift of the demand curve to the left. 
B)  shift of the demand curve to the right. 
C)  movement down the demand curve. 
D)  movement up the demand curve.

Question 13

All of the following are non-price determinants of demand EXCEPT

Accepted Answer

A)  price of related goods. 
B)  price of raw materials used in production of the good. 
C)  income. 
D)  number of consumers. 
A)  price of related goods. 
B)  price of raw materials used in production of the good. 
C)  income. 
D)  number of consumers.

Question 14

Suppose it is discovered that consumption of butter leads to a longer life. This information would lead to

Accepted Answer

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

Question 15

-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

Accepted Answer

A)  Good A and Good B are substitutes. 
B)  Good A and Good B are complements. 
C)  Good A is a normal good but Good B is an inferior good. 
D)  Good A and Good B are unrelated. 
A)  Good A and Good B are substitutes. 
B)  Good A and Good B are complements. 
C)  Good A is a normal good but Good B is an inferior good. 
D)  Good A and Good B are unrelated.

Question 16

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

Accepted Answer

A)  33 
B)  25 
C)  22 
D)  8 
A)  33 
B)  25 
C)  22 
D)  8

Question 17

The relative price of a good is that price

Accepted Answer

A)  expressed in today's dollars. 
B)  expressed in constant 2012 dollars. 
C)  expressed in terms of the price of another good. 
D)  that is equal to the equilibrium price. 
A)  expressed in today's dollars. 
B)  expressed in constant 2012 dollars. 
C)  expressed in terms of the price of another good. 
D)  that is equal to the equilibrium price.

Question 18

When the price of a good falls, there will be

Accepted Answer

A)  an outward shift in the good's demand curve. 
B)  both an outward shift in the good's demand curve and a movement along the good's demand curve. 
C)  a movement along the good's demand curve. 
D)  no change in quantity demanded. 
A)  an outward shift in the good's demand curve. 
B)  both an outward shift in the good's demand curve and a movement along the good's demand curve. 
C)  a movement along the good's demand curve. 
D)  no change in quantity demanded.

Question 19

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

Accepted Answer

A)  substitute goods. 
B)  complementary goods. 
C)  inferior goods. 
D)  satisfying the law of supply. 
A)  substitute goods. 
B)  complementary goods. 
C)  inferior goods. 
D)  satisfying the law of supply.

Question 20

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

Accepted Answer

A)  the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B)  the quantity demanded of both to fall. 
C)  the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D)  the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase. 
A)  the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall. 
B)  the quantity demanded of both to fall. 
C)  the demand for the new textbook to increase while the demand for the used textbook to decrease. 
D)  the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

Exam 3: Demand and Supply

-In the above figure, when the price of Good B increases, the result can be shown by

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

An increase in price will lead to an increase in quantity supplied. This statement is

Another name for a shortage is

The concept of "demand" in economics refers to

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

-In the above figure, an increase in income is best demonstrated by a

State the law of supply and explain it.

A change in quantity demanded

A decrease in quantity demanded of a good is caused by

A given supply curve illustrates

An increase in demand is represented by a

All of the following are non-price determinants of demand EXCEPT

Suppose it is discovered that consumption of butter leads to a longer life. This information would lead to

-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

The relative price of a good is that price

When the price of a good falls, there will be

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

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

Filters

-In the above figure, the demand curve for Good A shifts from D₁ to D₂ in Graph A when the price of Good B changes from P₁ to P₂ in Graph B. We can conclude that