Question 1

If the price of one good goes up and the demand of a related good goes down, the two goods are

Accepted Answer

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

Question 2

The relationship between a change in the price of a complementary good and demand for another complementary good is

Accepted Answer

A)  positive. 
B)  negative. 
C)  inconclusive. 
D)  zero. 
A)  positive. 
B)  negative. 
C)  inconclusive. 
D)  zero.

Question 3

If bagels and croissants are substitute goods, which of the following is likely to occur if the price of bagels has decreased?

Accepted Answer

A)  The demand curve for bagels shifts to the right. 
B)  A leftward movement along the bagel demand curve. 
C)  The demand curve for croissants shifts to the right. 
D)  The demand curve for croissants shifts to the left. 
A)  The demand curve for bagels shifts to the right. 
B)  A leftward movement along the bagel demand curve. 
C)  The demand curve for croissants shifts to the right. 
D)  The demand curve for croissants shifts to the left.

Question 4

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase

Question 5

Fashion trends are a nonprice determinant for demand because

Accepted Answer

A)  they cause a movement along the demand curve. 
B)  they influence people's tastes and preferences in clothing. 
C)  they change the supply of accessories. 
D)  they do not affect demand. 
A)  they cause a movement along the demand curve. 
B)  they influence people's tastes and preferences in clothing. 
C)  they change the supply of accessories. 
D)  they do not affect demand.

Question 6

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

Accepted Answer

A)  An increase in the price of magnetic optical disks is followed by a reduction in the amount of magnetic optical disks purchased. 
B)  An increase in the price of tablets is followed by an increase in the sale of tablets. 
C)  A decrease in the price of milk has no effect on the amount of milk consumed. 
D)  The amount of smartphones sold increases while the price of smartphones is constant. 
A)  An increase in the price of magnetic optical disks is followed by a reduction in the amount of magnetic optical disks purchased. 
B)  An increase in the price of tablets is followed by an increase in the sale of tablets. 
C)  A decrease in the price of milk has no effect on the amount of milk consumed. 
D)  The amount of smartphones sold increases while the price of smartphones is constant.

Question 7

If the government imposes a per-unit tax on sales of an industry's product, then we would expect

Accepted Answer

A)  the supply curve in that industry would shift to the left. 
B)  the supply curve in that industry would shift to the right. 
C)  the demand curve for that industry would shift to the right. 
D)  the demand curve for that industry would shift to the left. 
A)  the supply curve in that industry would shift to the left. 
B)  the supply curve in that industry would shift to the right. 
C)  the demand curve for that industry would shift to the right. 
D)  the demand curve for that industry would shift to the left.

Question 8

-Refer to the above figure. Excess quantity supplied 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 15. 
A)  the price is between $0 and $6. 
B)  the price equals $6. 
C)  the price equals $10. 
D)  quantity demanded equals 15.

Question 9

Two goods are substitutes when

Accepted Answer

A)  an increase in the price of one reduces the demand for the other. 
B)  an increase in the price of one raises the demand for the other. 
C)  the two goods are used together. 
D)  the two goods have the same price. 
A)  an increase in the price of one reduces the demand for the other. 
B)  an increase in the price of one raises the demand for the other. 
C)  the two goods are used together. 
D)  the two goods have the same price.

Question 10

Suppose all prices increase by 10 percent in the year while the total sales of HDTVs remain constant. This is

Accepted Answer

A)  a violation of the law of demand since fewer HDTVs should be purchased at a higher price. 
B)  a violation of the law of demand since more HDTVs should have been purchased with higher incomes. 
C)  not a violation of the law of demand since the relative price of HDTVs did not change. 
D)  not a violation of the law of demand since the law of demand does not apply to expensive goods like HDTVs. 
A)  a violation of the law of demand since fewer HDTVs should be purchased at a higher price. 
B)  a violation of the law of demand since more HDTVs should have been purchased with higher incomes. 
C)  not a violation of the law of demand since the relative price of HDTVs did not change. 
D)  not a violation of the law of demand since the law of demand does not apply to expensive goods like HDTVs.

Question 11

An indirect or inverse relationship between price and quantity demanded is

Accepted Answer

A)  the market clearing price. 
B)  a change in demand. 
C)  a supply curve. 
D)  a demand curve. 
A)  the market clearing price. 
B)  a change in demand. 
C)  a supply curve. 
D)  a demand curve.

Question 12

Which factor would cause a movement along the demand curve for pizza?

Accepted Answer

A)  an increase in the number of students in town 
B)  a renewed preference for Italian food 
C)  a drop in the price of pizza 
D)  an increase in average income 
A)  an increase in the number of students in town 
B)  a renewed preference for Italian food 
C)  a drop in the price of pizza 
D)  an increase in average income

Question 13

The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?

Accepted Answer

A)  It increased by 5 percent. 
B)  It increased, but we can't tell by how much without more information. 
C)  It decreased by 5 percent. 
D)  It decreased, but we can't tell by how much without more information. 
A)  It increased by 5 percent. 
B)  It increased, but we can't tell by how much without more information. 
C)  It decreased by 5 percent. 
D)  It decreased, but we can't tell by how much without more information.

Question 14

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is true?

Accepted Answer

A)  If a good's price goes down, then demand for the good will decrease. 
B)  If a good's price goes down, then quantity demanded will increase. 
C)  If demand increases, then the demand curve will shift to the left. 
D)  If price rises and quantity demanded decreases, then the demand curve will shift to the left. 
A)  If a good's price goes down, then demand for the good will decrease. 
B)  If a good's price goes down, then quantity demanded will increase. 
C)  If demand increases, then the demand curve will shift to the left. 
D)  If price rises and quantity demanded decreases, then the demand curve will shift to the left.

Question 15

Mary increases 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 16

-Given the market data for good X in the above table, an equilibrium quantity is established at

Accepted Answer

A)  90 units. 
B)  60 units. 
C)  30 units. 
D)  120 units. 
A)  90 units. 
B)  60 units. 
C)  30 units. 
D)  120 units.

Question 17

The price of one product in terms of another commodity is called its

Accepted Answer

A)  relative price. 
B)  money price. 
C)  financial price. 
D)  converse price. 
A)  relative price. 
B)  money price. 
C)  financial price. 
D)  converse price.

Question 18

Which of the following represents the law of supply?

Accepted Answer

A)  An increase in the price of a good causes an increase in the supply of that good. 
B)  An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C)  An increase in the price of a good causes an increase in the quantity supplied of that good. 
D)  all of the above 
A)  An increase in the price of a good causes an increase in the supply of that good. 
B)  An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C)  An increase in the price of a good causes an increase in the quantity supplied of that good. 
D)  all of the above

Question 19

An inferior good is one for which

Accepted Answer

A)  demand increases as income increases. 
B)  demand decreases as income increases. 
C)  the demand curve is vertical. 
D)  the demand curve slopes up. 
A)  demand increases as income increases. 
B)  demand decreases as income increases. 
C)  the demand curve is vertical. 
D)  the demand curve slopes up.

Question 20

Graphically, a market demand curve is found by

Accepted Answer

A)  taking the average of all prices that people are willing to pay. 
B)  summing the quantities demanded by all individuals at each price. 
C)  summing the prices each consumer would pay for each quantity. 
D)  taking the average of the individual demand curves. 
A)  taking the average of all prices that people are willing to pay. 
B)  summing the quantities demanded by all individuals at each price. 
C)  summing the prices each consumer would pay for each quantity. 
D)  taking the average of the individual demand curves.

Exam 3: Demand and Supply

If the price of one good goes up and the demand of a related good goes down, the two goods are

The relationship between a change in the price of a complementary good and demand for another complementary good is

If bagels and croissants are substitute goods, which of the following is likely to occur if the price of bagels has decreased?

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Fashion trends are a nonprice determinant for demand because

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

If the government imposes a per-unit tax on sales of an industry's product, then we would expect

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

Two goods are substitutes when

Suppose all prices increase by 10 percent in the year while the total sales of HDTVs remain constant. This is

An indirect or inverse relationship between price and quantity demanded is

Which factor would cause a movement along the demand curve for pizza?

The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is true?

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

-Given the market data for good X in the above table, an equilibrium quantity is established at

The price of one product in terms of another commodity is called its

Which of the following represents the law of supply?

An inferior good is one for which

Graphically, a market demand curve is found by

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

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .