Question 1

Ceteris paribus is Latin for

Accepted Answer

A) all is lost. 
B) at equilibrium. 
C) equilibrium is optimal. 
D) holding all other things constant. 
A) all is lost. 
B) at equilibrium. 
C) equilibrium is optimal. 
D) holding all other things constant. D

Question 2

The Law of Diminishing Marginal Utility suggests that

Accepted Answer

A) when you consume more you are less happy. 
B) when you consume more society is less well off. 
C) the more you consume the less extra enjoyment you get out of each additional unit. 
D) when prices are higher you buy more. 
A) when you consume more you are less happy. 
B) when you consume more society is less well off. 
C) the more you consume the less extra enjoyment you get out of each additional unit. 
D) when prices are higher you buy more. C

Question 3

-In Figure 2.1, a "S" for Supply would go in

Accepted Answer

A) Box 2. 
B) Box 4. 
C) Box 5. 
D) Box 6. 
A) Box 2. 
B) Box 4. 
C) Box 5. 
D) Box 6. A

Question 4

Another term for surplus is

Accepted Answer

A) excess supply. 
B) excess demand. 
C) equilibrium supply. 
D) equilibrium demand. 
A) excess supply. 
B) excess demand. 
C) equilibrium supply. 
D) equilibrium demand.

Question 5

An increase in household income for a good that is considered normal would

Accepted Answer

A) move its demand curve to the right. 
B) move its demand curve to the left. 
C) cause a movement along the demand curve to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve to a (lower price, higher quantity)point. 
A) move its demand curve to the right. 
B) move its demand curve to the left. 
C) cause a movement along the demand curve to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve to a (lower price, higher quantity)point.

Question 6

On a supply and demand diagram

Accepted Answer

A) the horizontal axis is labeled price and the vertical axis is labeled quantity per unit time. 
B) the horizontal axis is labeled quantity per unit time and the vertical axis is labeled price. 
C) the horizontal axis is labeled supply and the vertical axis is labeled demand. 
D) the horizontal axis is labeled demand and the vertical axis is labeled supply. 
A) the horizontal axis is labeled price and the vertical axis is labeled quantity per unit time. 
B) the horizontal axis is labeled quantity per unit time and the vertical axis is labeled price. 
C) the horizontal axis is labeled supply and the vertical axis is labeled demand. 
D) the horizontal axis is labeled demand and the vertical axis is labeled supply.

Question 7

In the market for birth control devices, if the number of women of child-bearing age decreases, the

Accepted Answer

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

Question 8

If the price of a bottle of orange juice in the downtown orange juice market is $0.50 per bottle, vendors will happily sell orange juice in the market only if their cost per bottle is

Accepted Answer

A) subsidized by the government. 
B) greater than $0.50. 
C) less than $0.50. 
D) zero. 
A) subsidized by the government. 
B) greater than $0.50. 
C) less than $0.50. 
D) zero.

Question 9

The decrease in the price of a good would

Accepted Answer

A) move its demand curve to the right. 
B) move its demand curve to the left. 
C) cause a movement along the demand curve to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve to a (lower price, higher quantity)point. 
A) move its demand curve to the right. 
B) move its demand curve to the left. 
C) cause a movement along the demand curve to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve to a (lower price, higher quantity)point.

Question 10

Which of the following goods are likely to be considered complements?

Accepted Answer

A) Sprite and 7-Up 
B) Gasoline and diesel fuel 
C) Peanut butter and jelly 
D) Coke and Pepsi 
A) Sprite and 7-Up 
B) Gasoline and diesel fuel 
C) Peanut butter and jelly 
D) Coke and Pepsi

Question 11

An increase in the excise tax imposed upon consumers of gasoline

Accepted Answer

A) increases the demand for gasoline. 
B) decreases the demand for gasoline. 
C) increases the supply of gasoline. 
D) lowers the market price of gasoline. 
A) increases the demand for gasoline. 
B) decreases the demand for gasoline. 
C) increases the supply of gasoline. 
D) lowers the market price of gasoline.

Question 12

If you heard overheard a farmer discussing his planting plans for the upcoming season and he said "The price of corn has gone way up. I know I'll have to put some money into fertilizer on the field where I was going to plant soybeans, but it will be worth it this year." This would be consistent with which justification for an upward sloping supply curve

Accepted Answer

A) increasing marginal cost. 
B) the need for higher prices in one good to motivate a shift in production from another. 
C) the real-balance effect. 
D) diminishing marginal utility. 
A) increasing marginal cost. 
B) the need for higher prices in one good to motivate a shift in production from another. 
C) the real-balance effect. 
D) diminishing marginal utility.

Question 13

If the number of sellers decreases, the

Accepted Answer

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

Question 14

If goods A and B are considered complements, an increase in the price of A would cause

Accepted Answer

A) the demand curve for B to the right. 
B) the demand curve for B to the left. 
C) cause a movement along the demand curve for B to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve for B to a (lower price, higher quantity)point. 
A) the demand curve for B to the right. 
B) the demand curve for B to the left. 
C) cause a movement along the demand curve for B to a (higher price, lower quantity)point. 
D) cause a movement along the demand curve for B to a (lower price, higher quantity)point.

Question 15

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the price of an input in the market for anything?

Accepted Answer

A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figure 4 
A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figure 4

Question 16

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the price of a substitute for a good?

Accepted Answer

A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figure 4 
A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figure 4

Question 17

The amount that firms are willing and able to sell at a particular price during a particular period of time is the

Accepted Answer

A) demand. 
B) supply. 
C) quantity demanded. 
D) quantity supplied. 
A) demand. 
B) supply. 
C) quantity demanded. 
D) quantity supplied.

Question 18

-In Figure 2.1, a "P" for price would go in

Accepted Answer

A) Box 1. 
B) Box 2. 
C) Box 4. 
D) Box 6. 
A) Box 1. 
B) Box 2. 
C) Box 4. 
D) Box 6.

Question 19

-From Table 2.1, and under the most likely scenario where columns A and B are assigned to represent quantity demanded and quantity supplied, which is the equilibrium quantity?

Accepted Answer

A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units 
A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units

Question 20

The relationship between price and quantity supplied, ceteris paribus is

Accepted Answer

A) demand. 
B) supply. 
C) quantity demanded. 
D) equilibrium. 
A) demand. 
B) supply. 
C) quantity demanded. 
D) equilibrium.

Exam 2: Supply and Demand

Ceteris paribus is Latin for

The Law of Diminishing Marginal Utility suggests that

-In Figure 2.1, a "S" for Supply would go in

Another term for surplus is

An increase in household income for a good that is considered normal would

On a supply and demand diagram

In the market for birth control devices, if the number of women of child-bearing age decreases, the

If the price of a bottle of orange juice in the downtown orange juice market is $0.50 per bottle, vendors will happily sell orange juice in the market only if their cost per bottle is

The decrease in the price of a good would

Which of the following goods are likely to be considered complements?

An increase in the excise tax imposed upon consumers of gasoline

If the number of sellers decreases, the

If goods A and B are considered complements, an increase in the price of A would cause

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the price of an input in the market for anything?

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the price of a substitute for a good?

The amount that firms are willing and able to sell at a particular price during a particular period of time is the

-In Figure 2.1, a "P" for price would go in

-From Table 2.1, and under the most likely scenario where columns A and B are assigned to represent quantity demanded and quantity supplied, which is the equilibrium quantity?

The relationship between price and quantity supplied, ceteris paribus is

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