Question 1

Which of the following statements is consistent with an increase in supply?

Accepted Answer

A)  The price of labor input has increased. 
B)  There has been an advance in technology. 
C)  Consumers' incomes have increased. 
D)  The market price has decreased. 
A)  The price of labor input has increased. 
B)  There has been an advance in technology. 
C)  Consumers' incomes have increased. 
D)  The market price has decreased.

Question 2

-Refer to the above table. What is the market quantity demanded at a price of $8?

Accepted Answer

A)  5 
B)  15 
C)  35 
D)  44 
A)  5 
B)  15 
C)  35 
D)  44

Question 3

Another term for the equilibrium price is

Accepted Answer

A)  excess demand. 
B)  nominal price. 
C)  law of demand. 
D)  market clearing price. 
A)  excess demand. 
B)  nominal price. 
C)  law of demand. 
D)  market clearing price.

Question 4

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Accepted Answer

A)  An increase in the demand for computers. 
B)  A decrease in the supply of diskettes. 
C)  An increase in the supply of computers. 
D)  An increase in the quantity supplied of computers. 
A)  An increase in the demand for computers. 
B)  A decrease in the supply of diskettes. 
C)  An increase in the supply of computers. 
D)  An increase in the quantity supplied of computers.

Question 5

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

Accepted Answer

A)  an increase in airfares to Hawaii 
B)  a decrease in airfares to Hawaii 
C)  an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D)  a downward movement along the demand curve for stays in Hawaiian hotel rooms. 
A)  an increase in airfares to Hawaii 
B)  a decrease in airfares to Hawaii 
C)  an upward movement along the demand curve for stays in Hawaiian hotel rooms. 
D)  a downward movement along the demand curve for stays in Hawaiian hotel rooms.

Question 6

The market supply curve is found by

Accepted Answer

A)  plotting the supply curves of individual firms. 
B)  plotting and summing up the supply curves of individual firms. 
C)  plotting the supply curves of individual consumers. 
D)  taking the supply curve of the representative firm. 
A)  plotting the supply curves of individual firms. 
B)  plotting and summing up the supply curves of individual firms. 
C)  plotting the supply curves of individual consumers. 
D)  taking the supply curve of the representative firm.

Question 7

The law of demand states that

Accepted Answer

A)  consumers will exhaust their incomes as they purchase goods and services at given absolute prices. 
B)  the quantity demanded of a good is higher at a lower relative price than at a higher relative price. 
C)  there is a direct positive relationship between relative price and quantity demanded. 
D)  if the price of a good increases both relatively and absolutely, there will be no change in quantity demanded. 
A)  consumers will exhaust their incomes as they purchase goods and services at given absolute prices. 
B)  the quantity demanded of a good is higher at a lower relative price than at a higher relative price. 
C)  there is a direct positive relationship between relative price and quantity demanded. 
D)  if the price of a good increases both relatively and absolutely, there will be no change in quantity demanded.

Question 8

Which of the following does NOT cause a shift in demand?

Accepted Answer

A)  Change in income 
B)  Change in tastes 
C)  Change in the price of the good 
D)  Change in the price of a related good 
A)  Change in income 
B)  Change in tastes 
C)  Change in the price of the good 
D)  Change in the price of a related good

Question 9

Which of the following is a non-price determinant of demand?

Accepted Answer

A)  income 
B)  tastes and preferences 
C)  prices of related goods and services 
D)  All of the above are correct. 
A)  income 
B)  tastes and preferences 
C)  prices of related goods and services 
D)  All of the above are correct.

Question 10

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Accepted Answer

A)  the price of the good itself. 
B)  the price of related goods. 
C)  incomes. 
D)  tastes. 
A)  the price of the good itself. 
B)  the price of related goods. 
C)  incomes. 
D)  tastes.

Question 11

A fundamental principle in demand analysis is that a change in price leads to

Accepted Answer

A)  a movement along the demand curve. 
B)  a rightward shift of the demand curve. 
C)  a leftward shift of the demand curve. 
D)  a complementary movement on the supply curve. 
A)  a movement along the demand curve. 
B)  a rightward shift of the demand curve. 
C)  a leftward shift of the demand curve. 
D)  a complementary movement on the supply curve.

Question 12

Suppliers will provide more of a good when

Accepted Answer

A)  the market price increases. 
B)  the good is a normal good. 
C)  resource prices increase. 
D)  there is a decrease in demand. 
A)  the market price increases. 
B)  the good is a normal good. 
C)  resource prices increase. 
D)  there is a decrease in demand.

Question 13

Suppose the price of cement goes up in the United States. What happens in the market for new homes?

Accepted Answer

A)  Supply shifts upward and to the left. 
B)  Demand shifts left. 
C)  Supply shifts downward and to the right. 
D)  Demand shifts to the right. 
A)  Supply shifts upward and to the left. 
B)  Demand shifts left. 
C)  Supply shifts downward and to the right. 
D)  Demand shifts to the right.

Question 14

Ceteris paribus, as the price of a good or service increases,

Accepted Answer

A)  people will buy more of it. 
B)  people will buy less of it. 
C)  people will want less of it. 
D)  people will want more of it. 
A)  people will buy more of it. 
B)  people will buy less of it. 
C)  people will want less of it. 
D)  people will want more of it.

Question 15

A schedule of how much of a good people will purchase for a range of possible prices during a specified time period, other things constant, is the definition of

Accepted Answer

A)  supply. 
B)  demand. 
C)  a purchasing contract. 
D)  an economic market. 
A)  supply. 
B)  demand. 
C)  a purchasing contract. 
D)  an economic market.

Question 16

When the price of a complement (cream) decreases, the demand for the related good (coffee)

Accepted Answer

A)  will fall. 
B)  remains constant. 
C)  will shift outward. 
D)  will shift inward. 
A)  will fall. 
B)  remains constant. 
C)  will shift outward. 
D)  will shift inward.

Question 17

-Using the above table, at a price of $5 there will be a

Accepted Answer

A)  shortage of 20 units. 
B)  shortage of 10 units. 
C)  surplus of 20 units. 
D)  surplus of 10 units. 
A)  shortage of 20 units. 
B)  shortage of 10 units. 
C)  surplus of 20 units. 
D)  surplus of 10 units.

Question 18

The law of demand is based on the observation that

Accepted Answer

A)  people buy less of a product when the product becomes less fashionable. 
B)  people buy more of a product when the price falls. 
C)  people are indifferent to price changes. 
D)  stores go out of business if they lower prices. 
A)  people buy less of a product when the product becomes less fashionable. 
B)  people buy more of a product when the price falls. 
C)  people are indifferent to price changes. 
D)  stores go out of business if they lower prices.

Question 19

Market supply is obtained by

Accepted Answer

A)  summing the amount demanded by individual consumers at various prices. 
B)  summing the amount supplied by individual producers at various prices. 
C)  the law of supply. 
D)  observing how the supply curve shifts. 
A)  summing the amount demanded by individual consumers at various prices. 
B)  summing the amount supplied by individual producers at various prices. 
C)  the law of supply. 
D)  observing how the supply curve shifts.

Question 20

Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3, Qd = 100; at P = $5, Qd = 75; and when P = $7, Qd = 50. This year the village population has increased by 25%. What impact is this most likely to have?

Accepted Answer

A)  Each individual's demand for DVD rentals will increase. 
B)  Each individual's demand curve for DVD rentals will shift to the left. 
C)  The market demand curve for DVD rentals shifts left. 
D)  The market demand for DVD rentals increases. 
A)  Each individual's demand for DVD rentals will increase. 
B)  Each individual's demand curve for DVD rentals will shift to the left. 
C)  The market demand curve for DVD rentals shifts left. 
D)  The market demand for DVD rentals increases.

Exam 3: Demand and Supply

Which of the following statements is consistent with an increase in supply?

-Refer to the above table. What is the market quantity demanded at a price of $8?

Another term for the equilibrium price is

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

The market supply curve is found by

The law of demand states that

Which of the following does NOT cause a shift in demand?

Which of the following is a non-price determinant of demand?

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

A fundamental principle in demand analysis is that a change in price leads to

Suppliers will provide more of a good when

Suppose the price of cement goes up in the United States. What happens in the market for new homes?

Ceteris paribus, as the price of a good or service increases,

A schedule of how much of a good people will purchase for a range of possible prices during a specified time period, other things constant, is the definition of

When the price of a complement (cream) decreases, the demand for the related good (coffee)

-Using the above table, at a price of $5 there will be a

The law of demand is based on the observation that

Market supply is obtained by

Here's what we know about last year's weekly demand for 2-night DVD rentals in the Village of Harmony: When P = $3, Qd = 100; at P = $5, Qd = 75; and when P = $7, Qd = 50. This year the village population has increased by 25%. What impact is this most likely to have?

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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