Question 1

An increase in the subsidy paid to producers of tobacco

Accepted Answer

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

Question 2

If supply increases and the price doesn't change, there will be a

Accepted Answer

A) surplus. 
B) both a shortage and a surplus. 
C) shortage. 
D) neither a shortage nor a surplus. 
A) surplus. 
B) both a shortage and a surplus. 
C) shortage. 
D) neither a shortage nor a surplus.

Question 3

Market quantity demanded measures the amount of the product that people in the market want to buy

Accepted Answer

A) if the government subsidizes their purchase. 
B) if the sellers in the market force them to buy. 
C) per person. 
D) per unit time, such as a day or week. 
A) if the government subsidizes their purchase. 
B) if the sellers in the market force them to buy. 
C) per person. 
D) per unit time, such as a day or week.

Question 4

If two goods are considered substitutes and the price of one increases, the other good's

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 5

The supply curve slopes upward because producers' cost per unit eventually

Accepted Answer

A) decreases as more units are sold. 
B) remains unchanged as more units are sold. 
C) increases as more units are sold. 
D) will be subsidized by the government. 
A) decreases as more units are sold. 
B) remains unchanged as more units are sold. 
C) increases as more units are sold. 
D) will be subsidized by the government.

Question 6

A per unit tax or percentage tax on a good or service that must be paid by consumers of that good is

Accepted Answer

A) a subsidy. 
B) taxation without representation. 
C) a gift tax. 
D) an excise tax. 
A) a subsidy. 
B) taxation without representation. 
C) a gift tax. 
D) an excise tax.

Question 7

If supply decreases and the price doesn't change, there will be a

Accepted Answer

A) surplus. 
B) both a shortage and a surplus. 
C) shortage. 
D) neither a shortage nor a surplus. 
A) surplus. 
B) both a shortage and a surplus. 
C) shortage. 
D) neither a shortage nor a surplus.

Question 8

Since teachers are an input in the production of education, when teacher salaries increase

Accepted Answer

A) the supply of education decreases. 
B) the supply of education increases. 
C) the demand for education decreases. 
D) the demand for teachers increases. 
A) the supply of education decreases. 
B) the supply of education increases. 
C) the demand for education decreases. 
D) the demand for teachers increases.

Question 9

If goods A and B are considered substitutes, a decrease 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 10

-Of the collection of supply and demand diagrams in Figure 2.2, which one(s)could show the result of a decrease in income?

Accepted Answer

A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figures 1 and 2 
A) Figure 1 
B) Figure 2 
C) Figure 3 
D) Figures 1 and 2

Question 11

If goods A and B are considered substitutes, 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 12

The condition where firms do not want to sell as many as consumers want to buy is called

Accepted Answer

A) a shortage. 
B) a surplus. 
C) an equilibrium. 
D) a market collapse. 
A) a shortage. 
B) a surplus. 
C) an equilibrium. 
D) a market collapse.

Question 13

If a firm has two production alternatives and the price of one increases this will cause the other good's

Accepted Answer

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

Question 14

A decrease in household income for a good that is considered inferior 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 15

The quintessential example of complementary goods would be

Accepted Answer

A) steak for someone who liked beef. 
B) the switching of Granny Smith for Golden Delicious apples. 
C) Ramen Noodles for a poor college student. 
D) peanut butter and jelly for a young boy or girl. 
A) steak for someone who liked beef. 
B) the switching of Granny Smith for Golden Delicious apples. 
C) Ramen Noodles for a poor college student. 
D) peanut butter and jelly for a young boy or girl.

Question 16

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

Accepted Answer

A) Box 1. 
B) Box 2. 
C) Box 3. 
D) Box 4. 
A) Box 1. 
B) Box 2. 
C) Box 3. 
D) Box 4.

Question 17

If the price of a typical good rises, the quantity supplied for that good will

Accepted Answer

A) decrease. 
B) increase. 
C) remain the same. 
D) automatically increase to infinity. 
A) decrease. 
B) increase. 
C) remain the same. 
D) automatically increase to infinity.

Question 18

If a subsidy (going to producers)is created for a good this would

Accepted Answer

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

Question 19

Another term for shortage 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 20

-From Table 2.3, at the price of $2 there is a

Accepted Answer

A) shortage of 2. 
B) neither a shortage nor a surplus. 
C) shortage of 4. 
D) surplus of 4. 
A) shortage of 2. 
B) neither a shortage nor a surplus. 
C) shortage of 4. 
D) surplus of 4.

Exam 2: Supply and Demand

An increase in the subsidy paid to producers of tobacco

If supply increases and the price doesn't change, there will be a

Market quantity demanded measures the amount of the product that people in the market want to buy

If two goods are considered substitutes and the price of one increases, the other good's

The supply curve slopes upward because producers' cost per unit eventually

A per unit tax or percentage tax on a good or service that must be paid by consumers of that good is

If supply decreases and the price doesn't change, there will be a

Since teachers are an input in the production of education, when teacher salaries increase

If goods A and B are considered substitutes, a decrease in the price of A would cause

-Of the collection of supply and demand diagrams in Figure 2.2, which one(s)could show the result of a decrease in income?

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

The condition where firms do not want to sell as many as consumers want to buy is called

If a firm has two production alternatives and the price of one increases this will cause the other good's

A decrease in household income for a good that is considered inferior would

The quintessential example of complementary goods would be

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

If the price of a typical good rises, the quantity supplied for that good will

If a subsidy (going to producers)is created for a good this would

Another term for shortage is

-From Table 2.3, at the price of $2 there is a

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