Question 1

Each of the following would cause an increase in the supply of baseballs EXCEPT

Accepted Answer

A)  an improvement in technology. 
B)  a decrease in the cost of labor used to produce baseballs. 
C)  an expectation that the price of baseballs will rise in the future. 
D)  an increase in the number of baseball producers. 
A)  an improvement in technology. 
B)  a decrease in the cost of labor used to produce baseballs. 
C)  an expectation that the price of baseballs will rise in the future. 
D)  an increase in the number of baseball producers.

Question 2

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

Accepted Answer

A normal good is one for which demand in

Question 3

In economics, the meaning of demand refers to

Accepted Answer

A)  how badly someone wants a good. 
B)  the quantities of a good that people will buy at various prices. 
C)  the quantities of a good that people will sell at various prices. 
D)  the total satisfaction that consuming a good provides people at different prices. 
A)  how badly someone wants a good. 
B)  the quantities of a good that people will buy at various prices. 
C)  the quantities of a good that people will sell at various prices. 
D)  the total satisfaction that consuming a good provides people at different prices.

Question 4

Assuming coffee and cola are substitutes, if the price of coffee rises,

Accepted Answer

A)  there is a movement along the demand curve for cola. 
B)  the demand curve for coffee will shift to the right. 
C)  the demand curve for cola will shift to the right. 
D)  the demand curve for coffee will shift to the left. 
A)  there is a movement along the demand curve for cola. 
B)  the demand curve for coffee will shift to the right. 
C)  the demand curve for cola will shift to the right. 
D)  the demand curve for coffee will shift to the left.

Question 5

Which of the following statements about a supply curve is FALSE?

Accepted Answer

A)  It shows a direct (positive) relationship between price and quantity supplied. 
B)  It shows the quantity supplied at each specific price. 
C)  It typically slopes downward to the right. 
D)  It has a positive slope. 
A)  It shows a direct (positive) relationship between price and quantity supplied. 
B)  It shows the quantity supplied at each specific price. 
C)  It typically slopes downward to the right. 
D)  It has a positive slope.

Question 6

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

Accepted Answer

A)  $55; 80 
B)  $60; 150 
C)  $70; 150 
D)  $150; 150 
A)  $55; 80 
B)  $60; 150 
C)  $70; 150 
D)  $150; 150

Question 7

After the price of music downloads falls, Phil buys fewer CDs and buys a new MP3 player. For Phil,

Accepted Answer

A)  music downloads and CDs are complements, and MP3 players and CDs are substitutes 
B)  music downloads, MP3 players, and CDs are all complements. 
C)  music downloads and CDs are substitutes, and music downloads and MP3 players are complements. 
D)  music downloads, MP3 players, and CDs are all substitutes. 
A)  music downloads and CDs are complements, and MP3 players and CDs are substitutes 
B)  music downloads, MP3 players, and CDs are all complements. 
C)  music downloads and CDs are substitutes, and music downloads and MP3 players are complements. 
D)  music downloads, MP3 players, and CDs are all substitutes.

Question 8

The market clearing price of a good is

Accepted Answer

A)  the price at which there is at least some of the good available for everyone. 
B)  the price at which there is no surplus and no shortage. 
C)  the price that consumers prefer. 
D)  the price that producers prefer. 
A)  the price at which there is at least some of the good available for everyone. 
B)  the price at which there is no surplus and no shortage. 
C)  the price that consumers prefer. 
D)  the price that producers prefer.

Question 9

-According to the above table, at a price of $2 per unit, which of the following would exist?

Accepted Answer

A)  A shortage of 800 units 
B)  A surplus of 800 units 
C)  A shortage of 200 units 
D)  A shortage of 400 units 
A)  A shortage of 800 units 
B)  A surplus of 800 units 
C)  A shortage of 200 units 
D)  A shortage of 400 units

Question 10

-Refer to the above figure. The rightward shift of the curve indicates

Accepted Answer

A)  an increase in demand. 
B)  an increase in supply. 
C)  a change in quantity demanded. 
D)  a change in quantity supplied. 
A)  an increase in demand. 
B)  an increase in supply. 
C)  a change in quantity demanded. 
D)  a change in quantity supplied.

Question 11

Which of the following is an example of the law of supply?

Accepted Answer

A)  The price of gum has increased so producers are making more gum. 
B)  The price of labor has increased and producers decrease supply. 
C)  The amount of a good purchased increases when the price decreases. 
D)  Producers provide less of a good when the price increases. 
A)  The price of gum has increased so producers are making more gum. 
B)  The price of labor has increased and producers decrease supply. 
C)  The amount of a good purchased increases when the price decreases. 
D)  Producers provide less of a good when the price increases.

Question 12

John increases his consumption of Good X and Good Y when his income increases. For John

Accepted Answer

A)  Good X and Good Y are substitute goods. 
B)  Good X and Good Y are complement goods. 
C)  Good X is an inferior good. 
D)  Good X and Y are normal goods 
A)  Good X and Good Y are substitute goods. 
B)  Good X and Good Y are complement goods. 
C)  Good X is an inferior good. 
D)  Good X and Y are normal goods

Question 13

Another name for a surplus 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 14

When income falls,

Accepted Answer

A)  the demand for a normal goods rises. 
B)  the demand for an inferior goods rises. 
C)  there is a movement downward along the demand curve for a normal good. 
D)  there is a movement downward along the demand curve for an inferior good. 
A)  the demand for a normal goods rises. 
B)  the demand for an inferior goods rises. 
C)  there is a movement downward along the demand curve for a normal good. 
D)  there is a movement downward along the demand curve for an inferior good.

Question 15

An increase in demand occurs when

Accepted Answer

A)  we measure price in money price rather than real price. 
B)  we move up the demand curve. 
C)  the demand curve shifts to the right. 
D)  the demand curve shifts to the left. 
A)  we measure price in money price rather than real price. 
B)  we move up the demand curve. 
C)  the demand curve shifts to the right. 
D)  the demand curve shifts to the left.

Question 16

The supply curve has a

Accepted Answer

A)  negative slope. 
B)  positive slope. 
C)  slope equal to -1. 
D)  undefined slope. 
A)  negative slope. 
B)  positive slope. 
C)  slope equal to -1. 
D)  undefined slope.

Question 17

When McDonald's runs a special for hamburgers reducing the price of Big Macs to $0.99 with all other factors held constant

Accepted Answer

A)  there is likely to be an increase in the quantity of Taco Bell's Chalupas demanded assuming Big Macs and Chalupas are substitutes. 
B)  there is likely to be a decrease in demand for Taco Bell's Chalupas assuming Big Macs and Chalupas are substitutes. 
C)  there is likely to be an increase in demand for Taco Bell's Chalupas assuming Big Macs and Chalupas are substitutes. 
D)  there is likely to be an increase in demand for McDonald's Big Macs assuming Big Macs and Chalupas are substitutes. 
A)  there is likely to be an increase in the quantity of Taco Bell's Chalupas demanded assuming Big Macs and Chalupas are substitutes. 
B)  there is likely to be a decrease in demand for Taco Bell's Chalupas assuming Big Macs and Chalupas are substitutes. 
C)  there is likely to be an increase in demand for Taco Bell's Chalupas assuming Big Macs and Chalupas are substitutes. 
D)  there is likely to be an increase in demand for McDonald's Big Macs assuming Big Macs and Chalupas are substitutes.

Question 18

Which of the following causes a decrease in demand for a normal good?

Accepted Answer

A)  Increase in price of a substitute 
B)  Increase in price of a complement 
C)  Increase in price 
D)  Increase in income 
A)  Increase in price of a substitute 
B)  Increase in price of a complement 
C)  Increase in price 
D)  Increase in income

Question 19

Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result,

Accepted Answer

A)  the demand for peanut butter will fall. 
B)  the demand for peanut butter will rise. 
C)  the price of peanut butter will fall. 
D)  a smaller amount of peanut butter will be purchased. 
A)  the demand for peanut butter will fall. 
B)  the demand for peanut butter will rise. 
C)  the price of peanut butter will fall. 
D)  a smaller amount of peanut butter will be purchased.

Question 20

-Refer to the above figure. A shortage will exist when

Accepted Answer

A)  the price is between $0 and $6. 
B)  the price equals $6. 
C)  the price equals $10. 
D)  quantity demanded equals 3. 
A)  the price is between $0 and $6. 
B)  the price equals $6. 
C)  the price equals $10. 
D)  quantity demanded equals 3.

Exam 3: Demand and Supply

Each of the following would cause an increase in the supply of baseballs EXCEPT

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

In economics, the meaning of demand refers to

Assuming coffee and cola are substitutes, if the price of coffee rises,

Which of the following statements about a supply curve is FALSE?

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

After the price of music downloads falls, Phil buys fewer CDs and buys a new MP3 player. For Phil,

The market clearing price of a good is

-According to the above table, at a price of $2 per unit, which of the following would exist?

-Refer to the above figure. The rightward shift of the curve indicates

Which of the following is an example of the law of supply?

John increases his consumption of Good X and Good Y when his income increases. For John

Another name for a surplus is

When income falls,

An increase in demand occurs when

The supply curve has a

When McDonald's runs a special for hamburgers reducing the price of Big Macs to $0.99 with all other factors held constant

Which of the following causes a decrease in demand for a normal good?

Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result,

-Refer to the above figure. A shortage will exist when

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

-Using the above table, the market clearing price is and equilibrium quantity is .