Question 1

The location of the product supply curve depends on

Accepted Answer

A)  production technology. 
B)  the number of buyers in the market. 
C)  the tastes of buyers. 
D)  the location of the demand curve. 
A)  production technology. 
B)  the number of buyers in the market. 
C)  the tastes of buyers. 
D)  the location of the demand curve.

Question 2

The demand curve shows the relationship between

Accepted Answer

A)  money income and quantity demanded. 
B)  price and production costs. 
C)  price and quantity demanded. 
D)  consumer tastes and quantity demanded. 
A)  money income and quantity demanded. 
B)  price and production costs. 
C)  price and quantity demanded. 
D)  consumer tastes and quantity demanded.

Question 3

The price of pork may increase as a result of

Accepted Answer

A)  a decrease in the cost of feed for pigs. 
B)  decreased advertising of pork. 
C)  an increase in the cost of producing beef. 
D)  a subsidy to pork producers. 
A)  a decrease in the cost of feed for pigs. 
B)  decreased advertising of pork. 
C)  an increase in the cost of producing beef. 
D)  a subsidy to pork producers.

Question 4

The table below shows the weekly demand for hamburger in a market where there are just three buyers.   If the price of hamburger falls from $5 to $3, then the weekly market quantity demanded will

Accepted Answer

A)  increase from 24 to 52. 
B)  decrease from 52 to 24. 
C)  increase from 120 to 156. 
D)  increase from 29 to 55. 
A)  increase from 24 to 52. 
B)  decrease from 52 to 24. 
C)  increase from 120 to 156. 
D)  increase from 29 to 55.

Question 5

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Accepted Answer

A)  increase in demand. 
B)  increase in supply. 
C)  decrease in demand. 
D)  decrease in supply. 
A)  increase in demand. 
B)  increase in supply. 
C)  decrease in demand. 
D)  decrease in supply.

Question 6

Which of the following statements is true about price ceilings?

Accepted Answer

A)  price ceilings create surpluses for goods but shortages for services. 
B)  Price ceilings cause goods to be rationed by some other means than legally determined market prices. 
C)  Ration coupons are the only way to ration goods when price ceilings are in place. 
D)  All of the other statements are correct. 
A)  price ceilings create surpluses for goods but shortages for services. 
B)  Price ceilings cause goods to be rationed by some other means than legally determined market prices. 
C)  Ration coupons are the only way to ration goods when price ceilings are in place. 
D)  All of the other statements are correct.

Question 7

If price is above the equilibrium level, competition among sellers to reduce the resulting

Accepted Answer

A)  surplus will increase quantity demanded and decrease quantity supplied. 
B)  shortage will decrease quantity demanded and increase quantity supplied. 
C)  surplus will decrease quantity demanded and increase quantity supplied. 
D)  shortage will increase quantity demanded and decrease quantity supplied. 
A)  surplus will increase quantity demanded and decrease quantity supplied. 
B)  shortage will decrease quantity demanded and increase quantity supplied. 
C)  surplus will decrease quantity demanded and increase quantity supplied. 
D)  shortage will increase quantity demanded and decrease quantity supplied.

Question 8

Graphically, the market demand curve is

Accepted Answer

A)  steeper than any individual demand curve that is part of it. 
B)  greater than the sum of the individual demand curves. 
C)  the horizontal sum of individual demand curves. 
D)  the vertical sum of individual demand curves. 
A)  steeper than any individual demand curve that is part of it. 
B)  greater than the sum of the individual demand curves. 
C)  the horizontal sum of individual demand curves. 
D)  the vertical sum of individual demand curves.

Question 9

Digital cameras and memory cards are

Accepted Answer

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

Question 10

If an economy produces its most wanted goods but uses outdated production methods, it is

Accepted Answer

A)  achieving productive efficiency but not allocative efficiency. 
B)  not achieving productive efficiency. 
C)  achieving both productive and allocative efficiency. 
D)  engaged in roundabout production. 
A)  achieving productive efficiency but not allocative efficiency. 
B)  not achieving productive efficiency. 
C)  achieving both productive and allocative efficiency. 
D)  engaged in roundabout production.

Question 11

If Z is an inferior good, an increase in money income will shift the

Accepted Answer

A)  supply curve for Z to the left. 
B)  supply curve for Z to the right. 
C)  demand curve for Z to the left. 
D)  demand curve for Z to the right. 
A)  supply curve for Z to the left. 
B)  supply curve for Z to the right. 
C)  demand curve for Z to the left. 
D)  demand curve for Z to the right.

Question 12

The following are explanations of the Law of Demand, except

Accepted Answer

A)  expectations effect. 
B)  diminishing marginal utility. 
C)  income effect. 
D)  substitution effect. 
A)  expectations effect. 
B)  diminishing marginal utility. 
C)  income effect. 
D)  substitution effect.

Question 13

Other things equal, if the price of a key resource used to produce product X falls, the

Accepted Answer

A)  supply curve of product X will shift to the right. 
B)  demand curve of product X will shift to the right. 
C)  supply curve of product X will shift to the left. 
D)  supply curve of product X will not shift. 
A)  supply curve of product X will shift to the right. 
B)  demand curve of product X will shift to the right. 
C)  supply curve of product X will shift to the left. 
D)  supply curve of product X will not shift.

Question 14

All markets involve the following elements, except

Accepted Answer

A)  demand or buyers. 
B)  face-to-face negotiation. 
C)  prices of goods and services. 
D)  supply or sellers. 
A)  demand or buyers. 
B)  face-to-face negotiation. 
C)  prices of goods and services. 
D)  supply or sellers.

Question 15

Assume that the graphs show a competitive market for the product stated in the question.     Select the graph above that best shows the change in the market for wheat, when the cost of fertilizer decreases.

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  Graph D

Question 16

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. Consumer expectations that the price of X will rise sharply in the future will

Accepted Answer

A)  increase S, increase P, and increase Q. 
B)  increase D, increase P, and increase Q. 
C)  decrease S, increase P, and increase Q. 
D)  increase D, decrease P, and increase Q. 
A)  increase S, increase P, and increase Q. 
B)  increase D, increase P, and increase Q. 
C)  decrease S, increase P, and increase Q. 
D)  increase D, decrease P, and increase Q.

Question 17

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Accepted Answer

A) True 
 B)False

Question 18

Allocative efficiency involves determining

Accepted Answer

A)  which output mix will result in the most rapid rate of economic growth. 
B)  which production possibilities curve reflects the lowest opportunity costs. 
C)  the mix of output that will maximize society's satisfaction. 
D)  the optimal rate of technological progress. 
A)  which output mix will result in the most rapid rate of economic growth. 
B)  which production possibilities curve reflects the lowest opportunity costs. 
C)  the mix of output that will maximize society's satisfaction. 
D)  the optimal rate of technological progress.

Question 19

Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding quantities supplied are 3, 4, 5, 6, and 7 units, respectively. Which of the following would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these prices?

Accepted Answer

A)  improved technology for producing Z 
B)  an increase in the prices of the resources used to make Z 
C)  an increase in the excise tax on product Z 
D)  increases in the incomes of the buyers of Z 
A)  improved technology for producing Z 
B)  an increase in the prices of the resources used to make Z 
C)  an increase in the excise tax on product Z 
D)  increases in the incomes of the buyers of Z

Question 20

Answer the question based on the following supply and demand schedules in units per week for a product.   Refer to the above table. If demand increased by 100 units at each price level and the government set a price ceiling of $40, then there would be

Accepted Answer

A)  a shortage. 
B)  a surplus. 
C)  no shortage or surplus. 
D)  a decrease in supply. 
A)  a shortage. 
B)  a surplus. 
C)  no shortage or surplus. 
D)  a decrease in supply.

Exam 3: Demand, Supply, and Market Equilibrium

The location of the product supply curve depends on

The demand curve shows the relationship between

The price of pork may increase as a result of

The table below shows the weekly demand for hamburger in a market where there are just three buyers. If the price of hamburger falls from $5 to $3, then the weekly market quantity demanded will

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Which of the following statements is true about price ceilings?

If price is above the equilibrium level, competition among sellers to reduce the resulting

Graphically, the market demand curve is

Digital cameras and memory cards are

If an economy produces its most wanted goods but uses outdated production methods, it is

If Z is an inferior good, an increase in money income will shift the

The following are explanations of the Law of Demand, except

Other things equal, if the price of a key resource used to produce product X falls, the

All markets involve the following elements, except

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market for wheat, when the cost of fertilizer decreases.

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Allocative efficiency involves determining

Suppose that at prices of $1, $2, $3, $4, and $5 for product Z, the corresponding quantities supplied are 3, 4, 5, 6, and 7 units, respectively. Which of the following would increase the quantities supplied of Z to, say, 6, 8, 10, 12, and 14 units at these prices?

Answer the question based on the following supply and demand schedules in units per week for a product. Refer to the above table. If demand increased by 100 units at each price level and the government set a price ceiling of $40, then there would be

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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