Question 1

If the price of hot dogs increases, the demand for hot dog buns will

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  shift to the right. 
A)  increase. 
B)  decrease. 
C)  remain constant. 
D)  shift to the right.

Question 2

A movement along a demand curve is

Accepted Answer

A)  a change in demand and can be caused by a change in consumers' income. 
B)  a change in the quantity demanded and is caused by a change in the price of the good. 
C)  a change in the quantity demanded and can be caused by a change in consumers' income. 
D)  a change in demand and is caused by a change in the price of the good. 
A)  a change in demand and can be caused by a change in consumers' income. 
B)  a change in the quantity demanded and is caused by a change in the price of the good. 
C)  a change in the quantity demanded and can be caused by a change in consumers' income. 
D)  a change in demand and is caused by a change in the price of the good.

Question 3

In deriving the demand schedule for a good, economists assume that

Accepted Answer

A)  consumers have equal incomes to allocate among goods. 
B)  a consumer will allocate all of her income to one good. 
C)  all other influences on demand except the product price are held constant. 
D)  reported income changes at each point on the demand schedule. 
A)  consumers have equal incomes to allocate among goods. 
B)  a consumer will allocate all of her income to one good. 
C)  all other influences on demand except the product price are held constant. 
D)  reported income changes at each point on the demand schedule.

Question 4

-Refer to the above table. The market quantity supplied when the price is $6 is

Accepted Answer

A)  0 
B)  5 
C)  10 
D)  20 
A)  0 
B)  5 
C)  10 
D)  20

Question 5

If the price of gasoline rises sharply and the demand for sports utility vehicles falls, then the two goods are

Accepted Answer

A)  complements. 
B)  normal goods. 
C)  substitutes. 
D)  inferior goods. 
A)  complements. 
B)  normal goods. 
C)  substitutes. 
D)  inferior goods.

Question 6

Distinguish between a change in quantity supplied and a change in supply.

Accepted Answer

A change in quantity supplied is a movem

Question 7

Market demand is

Accepted Answer

A)  the total quantities demanded of all consumers of a particular item at given prices. 
B)  a movement along the demand curve in response to the market. 
C)  total equilibrium demand for the market. 
D)  the demand for and supply of a good or service. 
A)  the total quantities demanded of all consumers of a particular item at given prices. 
B)  a movement along the demand curve in response to the market. 
C)  total equilibrium demand for the market. 
D)  the demand for and supply of a good or service.

Question 8

Which of the following will cause the demand curve for beer to shift right?

Accepted Answer

A)  a fall in the price of beer 
B)  a fall in average incomes of beer consumers 
C)  a decline in population 
D)  a successful advertising campaign linking beer consumption to lower cholesterol 
A)  a fall in the price of beer 
B)  a fall in average incomes of beer consumers 
C)  a decline in population 
D)  a successful advertising campaign linking beer consumption to lower cholesterol

Question 9

-Refer to the above figure. At a price of three cents, a(n) ________ of bubble gum will exist in the market.

Accepted Answer

A)  surplus 
B)  shortage 
C)  equilibrium quantity 
D)  excess quantity supplied 
A)  surplus 
B)  shortage 
C)  equilibrium quantity 
D)  excess quantity supplied

Question 10

If there is a surplus,

Accepted Answer

A)  fewer producers want to sell the product because it is too scarce. 
B)  consumers will drive up the price further. 
C)  firms will drive up the price to enhance profits. 
D)  the price will decline to the equilibrium level. 
A)  fewer producers want to sell the product because it is too scarce. 
B)  consumers will drive up the price further. 
C)  firms will drive up the price to enhance profits. 
D)  the price will decline to the equilibrium level.

Question 11

Total market demand can be calculated by

Accepted Answer

A)  horizontally summing individual demand curves at each and every price level. 
B)  vertically summing individual demand curves at each and every income level. 
C)  adding up the largest quantity demanded by each individual. 
D)  looking at the changes in the products' popularity. 
A)  horizontally summing individual demand curves at each and every price level. 
B)  vertically summing individual demand curves at each and every income level. 
C)  adding up the largest quantity demanded by each individual. 
D)  looking at the changes in the products' popularity.

Question 12

Adding the quantities demanded by all consumers at every price will yield

Accepted Answer

A)  the market-clearing price. 
B)  the number of consumers. 
C)  the total substitution effect from a price change. 
D)  the market demand curve. 
A)  the market-clearing price. 
B)  the number of consumers. 
C)  the total substitution effect from a price change. 
D)  the market demand curve.

Question 13

-Using the above table, at a price of $70, there is

Accepted Answer

A)  a surplus of 150 units. 
B)  a shortage of 120 units. 
C)  a surplus of 270 units. 
D)  a shortage of 150 units. 
A)  a surplus of 150 units. 
B)  a shortage of 120 units. 
C)  a surplus of 270 units. 
D)  a shortage of 150 units.

Question 14

The demand curve shows the relationship between quantity demanded and

Accepted Answer

A)  income. 
B)  price. 
C)  supply. 
D)  quantity supplied. 
A)  income. 
B)  price. 
C)  supply. 
D)  quantity supplied.

Question 15

Pam graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other food prices have stayed the same. She notices that she buys less hamburger than she did before. Is she violating the law of demand?

Accepted Answer

A)  Yes, since she is buying less hamburger at a lower price. 
B)  Yes, since she is buying less hamburger in a relatively short period of time and we wouldn't expect her tastes to have changed. 
C)  No, since the law of demand refers to relative price changes and the price of hamburger falling is an absolute price change. 
D)  No, since other things are not held constant, such as her income. 
A)  Yes, since she is buying less hamburger at a lower price. 
B)  Yes, since she is buying less hamburger in a relatively short period of time and we wouldn't expect her tastes to have changed. 
C)  No, since the law of demand refers to relative price changes and the price of hamburger falling is an absolute price change. 
D)  No, since other things are not held constant, such as her income.

Question 16

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

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 17

-Refer to the above figure. Excess quantity demanded 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.

Question 18

When a shortage exists in a market,

Accepted Answer

A)  the market clearing price is above equilibrium and market forces will cause the price to fall. 
B)  the quantity demanded is less than the quantity supplied at the existing price. 
C)  the current price is below the market clearing price and the price will rise. 
D)  the quantity supplied is greater than the quantity demanded at the current price. 
A)  the market clearing price is above equilibrium and market forces will cause the price to fall. 
B)  the quantity demanded is less than the quantity supplied at the existing price. 
C)  the current price is below the market clearing price and the price will rise. 
D)  the quantity supplied is greater than the quantity demanded at the current price.

Question 19

Which of the following will NOT cause market supply to increase?

Accepted Answer

A)  an increase in the number of firms supplying the product in the market 
B)  a change in technology which allows a larger level of production at every price 
C)  an increase in the costs of resources used to produce the product 
D)  a decrease in labor costs 
A)  an increase in the number of firms supplying the product in the market 
B)  a change in technology which allows a larger level of production at every price 
C)  an increase in the costs of resources used to produce the product 
D)  a decrease in labor costs

Question 20

If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises,

Accepted Answer

A)  demand for bottled juice rises. 
B)  demand for bottled juice falls. 
C)  quantity of bottled juice demanded falls. 
D)  quantity of bottled juice demanded rises. 
A)  demand for bottled juice rises. 
B)  demand for bottled juice falls. 
C)  quantity of bottled juice demanded falls. 
D)  quantity of bottled juice demanded rises.

Exam 3: Demand and Supply

If the price of hot dogs increases, the demand for hot dog buns will

A movement along a demand curve is

In deriving the demand schedule for a good, economists assume that

-Refer to the above table. The market quantity supplied when the price is $6 is

If the price of gasoline rises sharply and the demand for sports utility vehicles falls, then the two goods are

Distinguish between a change in quantity supplied and a change in supply.

Market demand is

Which of the following will cause the demand curve for beer to shift right?

-Refer to the above figure. At a price of three cents, a(n) ________ of bubble gum will exist in the market.

If there is a surplus,

Total market demand can be calculated by

Adding the quantities demanded by all consumers at every price will yield

-Using the above table, at a price of $70, there is

The demand curve shows the relationship between quantity demanded and

Pam graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other food prices have stayed the same. She notices that she buys less hamburger than she did before. Is she violating the law of demand?

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

-Refer to the above figure. Excess quantity demanded will exist when

When a shortage exists in a market,

Which of the following will NOT cause market supply to increase?

If a bottled soft drink and bottled juice are substitutes, when the price of the bottled soft drink rises,

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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