Question 1

If a subsidy (going to consumers)is created for a good this 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 2

The quantity supplied is the amount firms wish to sell

Accepted Answer

A) at all possible prices during a specified period of time. 
B) at a particular price during a specified period of time. 
C) at a particular price (the timeframe is irrelevant). 
D) at all possible prices (the timeframe is irrelevant). 
A) at all possible prices during a specified period of time. 
B) at a particular price during a specified period of time. 
C) at a particular price (the timeframe is irrelevant). 
D) at all possible prices (the timeframe is irrelevant).

Question 3

If farmers expect the government to increase subsidies on corn grown next year for ethanol production, we should not be surprised to observe

Accepted Answer

A) a decrease in corn production. 
B) a decrease in ethanol production. 
C) a decrease in wheat production. 
D) all of the above. 
A) a decrease in corn production. 
B) a decrease in ethanol production. 
C) a decrease in wheat production. 
D) all of the above.

Question 4

When the expected future price of a good rises,

Accepted Answer

A) sellers increase their willingness to sell. 
B) consumers increase their willingness to buy, or "stock up". 
C) consumers decrease their willingness to buy, or "draw down". 
D) sellers' willingness to sell remains unchanged. 
A) sellers increase their willingness to sell. 
B) consumers increase their willingness to buy, or "stock up". 
C) consumers decrease their willingness to buy, or "draw down". 
D) sellers' willingness to sell remains unchanged.

Question 5

-In Figure 2.1, a "Q*" for equilibrium quantity 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 6

In a market served by vendors who sell both orange juice and bottled water from their carts, an increase in the price of bottled water will tend to

Accepted Answer

A) reduce the supply of bottled water. 
B) increase the supply of bottled water. 
C) reduce the supply of orange juice. 
D) increase the supply of orange juice. 
A) reduce the supply of bottled water. 
B) increase the supply of bottled water. 
C) reduce the supply of orange juice. 
D) increase the supply of orange juice.

Question 7

At the equilibrium price

Accepted Answer

A) the amount buyers wish to purchase equals the amount producers wish to sell. 
B) the amount buyers wish to purchase is greater than the amount producers wish to sell. 
C) the amount buyers wish to purchase is less than the amount producers wish to sell. 
A) the amount buyers wish to purchase equals the amount producers wish to sell. 
B) the amount buyers wish to purchase is greater than the amount producers wish to sell. 
C) the amount buyers wish to purchase is less than the amount producers wish to sell.

Question 8

A surplus exists when

Accepted Answer

A) QD>QS B) QDQS B) QD

Question 9

The reason that the supply curve is upward sloping is

Accepted Answer

A) diminishing marginal costs. 
B) diminishing average costs. 
C) increasing marginal costs. 
D) increasing average costs. 
A) diminishing marginal costs. 
B) diminishing average costs. 
C) increasing marginal costs. 
D) increasing average costs.

Question 10

The increase in the price of a good that is another potential output for another good, would (for the second good)

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 11

If a subsidy (going to producers)on a good is eliminated 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 12

-In Figure 2.1, a "D" for Demand 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.

Question 13

Ebay does not qualify as a market for the good being sold because it is not a specific physical location.

Accepted Answer

A) True 
B) False 
A) True 
B) False

Question 14

Which of the following will impact both supply and demand

Accepted Answer

A) a change in price. 
B) a change in expected future price. 
C) a change in quantity. 
D) a change in income. 
A) a change in price. 
B) a change in expected future price. 
C) a change in quantity. 
D) a change in income.

Question 15

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the number of sellers 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

If the price of a typical good falls, the quantity demanded 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 17

If the supply and demand curves cross at a quantity of 100, then the price necessary to get firms to sell more than that will have to be _______ equilibrium.

Accepted Answer

A) above 
B) at 
C) below 
D) within 10% either way of 
A) above 
B) at 
C) below 
D) within 10% either way of

Question 18

If technology decreases then

Accepted Answer

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

Question 19

A decrease in the degree a good is liked (the increase in the taste for 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 20

If the price is so low that vendors start to run out of bottled orange juice, they might ration their remaining inventory among willing buyers by

Accepted Answer

A) raising the price per bottle. 
B) lowering the price per bottle. 
C) closing early. 
D) creating a shortage. 
A) raising the price per bottle. 
B) lowering the price per bottle. 
C) closing early. 
D) creating a shortage.

Exam 2: Supply and Demand

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

The quantity supplied is the amount firms wish to sell

If farmers expect the government to increase subsidies on corn grown next year for ethanol production, we should not be surprised to observe

When the expected future price of a good rises,

-In Figure 2.1, a "Q*" for equilibrium quantity would go in

In a market served by vendors who sell both orange juice and bottled water from their carts, an increase in the price of bottled water will tend to

At the equilibrium price

A surplus exists when

The reason that the supply curve is upward sloping is

The increase in the price of a good that is another potential output for another good, would (for the second good)

If a subsidy (going to producers)on a good is eliminated this would

-In Figure 2.1, a "D" for Demand would go in

Ebay does not qualify as a market for the good being sold because it is not a specific physical location.

Which of the following will impact both supply and demand

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

If the price of a typical good falls, the quantity demanded for that good will

If the supply and demand curves cross at a quantity of 100, then the price necessary to get firms to sell more than that will have to be _______ equilibrium.

If technology decreases then

A decrease in the degree a good is liked (the increase in the taste for a good)would

If the price is so low that vendors start to run out of bottled orange juice, they might ration their remaining inventory among willing buyers by

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