Question 1

Consider the following:   The relative price of movies this year has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  Not enough information has been given to calculate an answer. 
A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  Not enough information has been given to calculate an answer.

Question 2

Which of the following causes a movement along a supply curve?

Accepted Answer

A)  a change in resource costs 
B)  a change in technology 
C)  a change in the price 
D)  all of the above 
A)  a change in resource costs 
B)  a change in technology 
C)  a change in the price 
D)  all of the above

Question 3

-According to the above table, a surplus exists when

Accepted Answer

A)  the price is $1 per unit. 
B)  the price is $2 per unit. 
C)  the price is $3 per unit. 
D)  the price is greater than $3 per unit. 
A)  the price is $1 per unit. 
B)  the price is $2 per unit. 
C)  the price is $3 per unit. 
D)  the price is greater than $3 per unit.

Question 4

Distinguish between a change in demand and a change in quantity demanded.

Accepted Answer

A change in quantity demanded is caused

Question 5

Which of the following will occur as the price of a good decreases?

Accepted Answer

A)  The demand curve for that good will shift to the left. 
B)  The demand curve for that good will shift to the right. 
C)  The quantity demanded for that good will increase. 
D)  Demand for that good will increase. 
A)  The demand curve for that good will shift to the left. 
B)  The demand curve for that good will shift to the right. 
C)  The quantity demanded for that good will increase. 
D)  Demand for that good will increase.

Question 6

The imposition of a per unit tax on a product

Accepted Answer

A)  will cause the supply curve to shift downward and to the right. 
B)  will cause the supply curve to shift upward and to the left. 
C)  will reduce the quantity supplied of the product. 
D)  will encourage producers to increase the quantity supplied of the product. 
A)  will cause the supply curve to shift downward and to the right. 
B)  will cause the supply curve to shift upward and to the left. 
C)  will reduce the quantity supplied of the product. 
D)  will encourage producers to increase the quantity supplied of the product.

Question 7

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 that good in the law of demand. 
B)  consumers' income. 
C)  consumers' tastes and preferences. 
D)  the number of potential buyers. 
A)  the price of that good in the law of demand. 
B)  consumers' income. 
C)  consumers' tastes and preferences. 
D)  the number of potential buyers.

Question 8

Which of the following is NOT a non-price determinant of demand?

Accepted Answer

A)  the price of the good or service 
B)  tastes and preferences 
C)  expectations of future prices 
D)  prices of related goods and services 
A)  the price of the good or service 
B)  tastes and preferences 
C)  expectations of future prices 
D)  prices of related goods and services

Question 9

Demand is a schedule of

Accepted Answer

A)  how much of a good a person wants. 
B)  how much of a good people will purchase at each different possible price. 
C)  how much of a good people will purchase at each income level. 
D)  each possible price and the amount people will buy when their incomes change. 
A)  how much of a good a person wants. 
B)  how much of a good people will purchase at each different possible price. 
C)  how much of a good people will purchase at each income level. 
D)  each possible price and the amount people will buy when their incomes change.

Question 10

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A)  increased from 0.25 to 0.6. 
B)  decreased from 4.0 to 3.0. 
C)  stayed constant at 0.25. 
D)  stayed constant at 4.0. 
A)  increased from 0.25 to 0.6. 
B)  decreased from 4.0 to 3.0. 
C)  stayed constant at 0.25. 
D)  stayed constant at 4.0.

Question 11

Regarding the law of supply, which of the following statements is correct?

Accepted Answer

A)  As the price of a good or service rises, the quantity supplied will increase. 
B)  As the price of a good or service rises, the quantity supplied will decrease. 
C)  The ceteris paribus assumption does not apply. 
D)  As demand falls, supply rises. 
A)  As the price of a good or service rises, the quantity supplied will increase. 
B)  As the price of a good or service rises, the quantity supplied will decrease. 
C)  The ceteris paribus assumption does not apply. 
D)  As demand falls, supply rises.

Question 12

Market clearing price

Accepted Answer

A)  refers to a movement along the demand curve. 
B)  refers to a supply curve. 
C)  exists at a the point at which quantity demanded equals quantity supplied. 
D)  refers to a surplus. 
A)  refers to a movement along the demand curve. 
B)  refers to a supply curve. 
C)  exists at a the point at which quantity demanded equals quantity supplied. 
D)  refers to a surplus.

Question 13

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

Accepted Answer

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

Question 14

A market is in equilibrium when

Accepted Answer

A)  the quantity demanded equals the quantity supplied at the market clearing price. 
B)  the horizontal axis crosses the vertical axis. 
C)  buyers do not desire for the price to be any lower. 
D)  the equilibrium price is below the market price. 
A)  the quantity demanded equals the quantity supplied at the market clearing price. 
B)  the horizontal axis crosses the vertical axis. 
C)  buyers do not desire for the price to be any lower. 
D)  the equilibrium price is below the market price.

Question 15

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

Accepted Answer

A)  substitute goods. 
B)  capital goods. 
C)  inferior goods. 
D)  complementary goods. 
A)  substitute goods. 
B)  capital goods. 
C)  inferior goods. 
D)  complementary goods.

Question 16

Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then today the gasoline

Accepted Answer

A)  demand curve will shift to the right. 
B)  demand curve will shift to the left. 
C)  supply curve will shift to the right. 
D)  supply curve will shift to the left. 
A)  demand curve will shift to the right. 
B)  demand curve will shift to the left. 
C)  supply curve will shift to the right. 
D)  supply curve will shift to the left.

Question 17

-Using the above table, the market clearing price for this product is

Accepted Answer

A)  $5. 
B)  $4. 
C)  $3. 
D)  $2. 
A)  $5. 
B)  $4. 
C)  $3. 
D)  $2.

Question 18

-According to the above table, at a price of $16 per DVD, there is

Accepted Answer

A)  an equilibrium. 
B)  a surplus of 3000 DVDs. 
C)  a shortage of 3000 DVDs. 
D)  a shortage of 1500 DVDs. 
A)  an equilibrium. 
B)  a surplus of 3000 DVDs. 
C)  a shortage of 3000 DVDs. 
D)  a shortage of 1500 DVDs.

Question 19

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Accepted Answer

A)  0.67. 
B)  1.0. 
C)  0.75. 
D)  1.50. 
A)  0.67. 
B)  1.0. 
C)  0.75. 
D)  1.50.

Question 20

A demand curve for a normal good

Accepted Answer

A)  slopes upward and to the right. 
B)  is constructed based on the assumption that income is rising. 
C)  is constructed based on the assumption that an inverse relationship exists between price and income. 
D)  shows the inverse relationship between price and quantity demanded. 
A)  slopes upward and to the right. 
B)  is constructed based on the assumption that income is rising. 
C)  is constructed based on the assumption that an inverse relationship exists between price and income. 
D)  shows the inverse relationship between price and quantity demanded.

Exam 3: Demand and Supply

Consider the following: The relative price of movies this year has

Which of the following causes a movement along a supply curve?

-According to the above table, a surplus exists when

Distinguish between a change in demand and a change in quantity demanded.

Which of the following will occur as the price of a good decreases?

The imposition of a per unit tax on a product

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

Which of the following is NOT a non-price determinant of demand?

Demand is a schedule of

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Regarding the law of supply, which of the following statements is correct?

Market clearing price

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

A market is in equilibrium when

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then today the gasoline

-Using the above table, the market clearing price for this product is

-According to the above table, at a price of $16 per DVD, there is

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

A demand curve for a normal good

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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