Question 1

A shift in demand occurs when

Accepted Answer

A)  the price of that good changes. 
B)  the amount demanded of a good changes at each existing price. 
C)  there is a change in quantity demanded. 
D)  the price changes and the good is a normal good. 
A)  the price of that good changes. 
B)  the amount demanded of a good changes at each existing price. 
C)  there is a change in quantity demanded. 
D)  the price changes and the good is a normal good.

Question 2

When the amount supplied is greater at each price, there is a(n)

Accepted Answer

A)  rightward shift in the supply curve. 
B)  leftward shift in the supply curve. 
C)  upward movement along the supply curve. 
D)  downward movement along the supply curve. 
A)  rightward shift in the supply curve. 
B)  leftward shift in the supply curve. 
C)  upward movement along the supply curve. 
D)  downward movement along the supply curve.

Question 3

When the term "price" is used in the law of demand, price refers to

Accepted Answer

A)  the dollar price of the good. 
B)  the price of the good relative to the price of another good. 
C)  the absolute price of the good. 
D)  the nominal price of the good relative to its nominal price in the previous year. 
A)  the dollar price of the good. 
B)  the price of the good relative to the price of another good. 
C)  the absolute price of the good. 
D)  the nominal price of the good relative to its nominal price in the previous year.

Question 4

The "real" price of a good is known as

Accepted Answer

A)  the absolute price of the good. 
B)  the dollar price of the good since we use dollars in the United States. 
C)  relative price of the good. 
D)  the price actually paid for a good instead of the sticker price. 
A)  the absolute price of the good. 
B)  the dollar price of the good since we use dollars in the United States. 
C)  relative price of the good. 
D)  the price actually paid for a good instead of the sticker price.

Question 5

A supply schedule

Accepted Answer

A)  can be used to generate a supply curve. 
B)  is a table reflecting the inverse relationship between price and quantity supplied. 
C)  shows what happens to quantity supplied when price is held constant. 
D)  all of the above. 
A)  can be used to generate a supply curve. 
B)  is a table reflecting the inverse relationship between price and quantity supplied. 
C)  shows what happens to quantity supplied when price is held constant. 
D)  all of the above.

Question 6

In general, any ceteris paribus determinant of supply that is favorable to production will

Accepted Answer

A)  cause a movement along the supply curve. 
B)  shift the supply curve to the right. 
C)  shift the demand curve to the left. 
D)  shift the supply curve to the left. 
A)  cause a movement along the supply curve. 
B)  shift the supply curve to the right. 
C)  shift the demand curve to the left. 
D)  shift the supply curve to the left.

Question 7

If the price of cotton used in making blue jeans increases, which of the following will occur?

Accepted Answer

A)  There will be a movement along an unchanged supply curve for jeans. 
B)  The supply curve for jeans will shift rightward. 
C)  The supply curve for jeans will shift leftward. 
D)  There will be a rightward shift in the supply curve for jeans, followed by a movement along the supply curve. 
A)  There will be a movement along an unchanged supply curve for jeans. 
B)  The supply curve for jeans will shift rightward. 
C)  The supply curve for jeans will shift leftward. 
D)  There will be a rightward shift in the supply curve for jeans, followed by a movement along the supply curve.

Question 8

Which of the following will cause the demand curve for cable TV services to shift to the left?

Accepted Answer

A)  a rise in the price of cable TV services 
B)  a decrease in average incomes of cable TV subscribers 
C)  an increase in population 
D)  the creation of several hit TV series 
A)  a rise in the price of cable TV services 
B)  a decrease in average incomes of cable TV subscribers 
C)  an increase in population 
D)  the creation of several hit TV series

Question 9

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that

Accepted Answer

A)  at the regular price, there is a surplus of Super Bowl tickets. 
B)  at the regular price, there is a shortage of Super Bowl tickets. 
C)  at the regular price, the quantity of Super Bowl tickets demanded equals the quantity supplied. 
D)  the scalper is making the football fan worse off. 
A)  at the regular price, there is a surplus of Super Bowl tickets. 
B)  at the regular price, there is a shortage of Super Bowl tickets. 
C)  at the regular price, the quantity of Super Bowl tickets demanded equals the quantity supplied. 
D)  the scalper is making the football fan worse off.

Question 10

Suppose that short skirts that were fashionable in the 1990s become unfashionable in the late 2000s. If other factors were held constant, then there would be

Accepted Answer

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

Question 11

Which of the following would most likely be considered complements?

Accepted Answer

A)  butter and margarine 
B)  rental cars and taxis 
C)  plastic wrap and aluminum foil 
D)  tennis rackets and tennis balls 
A)  butter and margarine 
B)  rental cars and taxis 
C)  plastic wrap and aluminum foil 
D)  tennis rackets and tennis balls

Question 12

A decrease in supply will occur when

Accepted Answer

A)  the supply curve shifts downward to the right. 
B)  the supply curve shifts upward to the left. 
C)  the demand curve shifts downward to the left. 
D)  the demand curve shifts upward to the right. 
A)  the supply curve shifts downward to the right. 
B)  the supply curve shifts upward to the left. 
C)  the demand curve shifts downward to the left. 
D)  the demand curve shifts upward to the right.

Question 13

Which of the following best represents the law of demand?

Accepted Answer

A)  As the price of a good decreases, the demand for the good increases. 
B)  As the price of a good increases, the quantity demanded of that good decreases. 
C)  As the demand for a good increases, the price of that good increases. 
D)  As the price of a good decreases, the demand curve for that good shifts to the right. 
A)  As the price of a good decreases, the demand for the good increases. 
B)  As the price of a good increases, the quantity demanded of that good decreases. 
C)  As the demand for a good increases, the price of that good increases. 
D)  As the price of a good decreases, the demand curve for that good shifts to the right.

Question 14

A change in any of the ceteris paribus conditions for demand leads to a

Accepted Answer

A)  a good going from an inferior good to a normal good. 
B)  movement along the demand curve. 
C)  shift of the demand curve. 
D)  change in supply. 
A)  a good going from an inferior good to a normal good. 
B)  movement along the demand curve. 
C)  shift of the demand curve. 
D)  change in supply.

Question 15

The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2. What is the relative price of bread to butter?

Accepted Answer

A)  1.39 
B)  0.6 
C)  0.72 
D)  0.50 
A)  1.39 
B)  0.6 
C)  0.72 
D)  0.50

Question 16

The law of demand shows that there is

Accepted Answer

A)  an inverse relationship between price and profit. 
B)  an inverse relationship between price and resource cost. 
C)  an inverse relationship between price and quantity demanded. 
D)  a direct relationship between price and quantity demanded. 
A)  an inverse relationship between price and profit. 
B)  an inverse relationship between price and resource cost. 
C)  an inverse relationship between price and quantity demanded. 
D)  a direct relationship between price and quantity demanded.

Question 17

Mary decreases her consumption of Good X after the price of Good Y decreased. For Mary

Accepted Answer

A)  Good X and Good Y are substitutes. 
B)  Good X and Good Y are complements. 
C)  Good X is an inferior good. 
D)  Good Y is an inferior good. 
A)  Good X and Good Y are substitutes. 
B)  Good X and Good Y are complements. 
C)  Good X is an inferior good. 
D)  Good Y is an inferior good.

Question 18

When there is an excess quantity supplied,

Accepted Answer

A)  the market is in equilibrium. 
B)  quantity demanded is greater than quantity supplied. 
C)  quantity demanded is less than quantity supplied. 
D)  prices will remain stable. 
A)  the market is in equilibrium. 
B)  quantity demanded is greater than quantity supplied. 
C)  quantity demanded is less than quantity supplied. 
D)  prices will remain stable.

Question 19

If more buyers came into the market for a good, we would expect to see the market demand curve

Accepted Answer

A)  shift inward and to the left. 
B)  remain unchanged since none of the determinants of individual demand changed. 
C)  shift outward and to the right. 
D)  reflect a positive relationship between price and quantity demanded. 
A)  shift inward and to the left. 
B)  remain unchanged since none of the determinants of individual demand changed. 
C)  shift outward and to the right. 
D)  reflect a positive relationship between price and quantity demanded.

Question 20

When there is an excess quantity supplied in the market,

Accepted Answer

A)  the price of the product will increase, causing a decrease in demand and an increase in supply. 
B)  the price of the product will increase, causing a decrease in quantity demanded and an increase in supply. 
C)  the price of the product will decrease, causing an increase in quantity demanded and a decrease in quantity supplied. 
D)  the price will increase, causing a decrease in demand and an increase in quantity supplied. 
A)  the price of the product will increase, causing a decrease in demand and an increase in supply. 
B)  the price of the product will increase, causing a decrease in quantity demanded and an increase in supply. 
C)  the price of the product will decrease, causing an increase in quantity demanded and a decrease in quantity supplied. 
D)  the price will increase, causing a decrease in demand and an increase in quantity supplied.

Exam 3: Demand and Supply

A shift in demand occurs when

When the amount supplied is greater at each price, there is a(n)

When the term "price" is used in the law of demand, price refers to

The "real" price of a good is known as

A supply schedule

In general, any ceteris paribus determinant of supply that is favorable to production will

If the price of cotton used in making blue jeans increases, which of the following will occur?

Which of the following will cause the demand curve for cable TV services to shift to the left?

If a scalper for the Super Bowl is able to charge $10,000 for a front-row seat, this suggests that

Suppose that short skirts that were fashionable in the 1990s become unfashionable in the late 2000s. If other factors were held constant, then there would be

Which of the following would most likely be considered complements?

A decrease in supply will occur when

Which of the following best represents the law of demand?

A change in any of the ceteris paribus conditions for demand leads to a

The price of bread in terms of gallons of milk per loaf is 0.6 and the price a gallon of milk in terms of pounds of butter per gallon is 1.2. What is the relative price of bread to butter?

The law of demand shows that there is

Mary decreases her consumption of Good X after the price of Good Y decreased. For Mary

When there is an excess quantity supplied,

If more buyers came into the market for a good, we would expect to see the market demand curve

When there is an excess quantity supplied in the market,

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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