Question 1

Which of the following always results in an increase in equilibrium price and quantity?

Accepted Answer

A)  an increase in supply and a decrease in demand 
B)  an increase in demand with no change in supply 
C)  an increase in supply with no change in demand 
D)  all of the above 
A)  an increase in supply and a decrease in demand 
B)  an increase in demand with no change in supply 
C)  an increase in supply with no change in demand 
D)  all of the above

Question 2

Demand and supply curves are drawn assuming ceteris paribus.This means that:

Accepted Answer

A)  economists ignore all assumptions. 
B)  economists don't watch for the fallacy of false cause. 
C)  changes will be proportional. 
D)  all other things besides price and quantity are assumed unchanged. 
A)  economists ignore all assumptions. 
B)  economists don't watch for the fallacy of false cause. 
C)  changes will be proportional. 
D)  all other things besides price and quantity are assumed unchanged.

Question 3

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

Accepted Answer

A)  prices. 
B)  preferences. 
C)  government mandates. 
D)  expectations. 
A)  prices. 
B)  preferences. 
C)  government mandates. 
D)  expectations.

Question 4

An increase in supply is caused by:

Accepted Answer

A)  an increase in resource prices. 
B)  suppliers' expectations of higher prices in the future. 
C)  an increase in the price of a good using the same resources. 
D)  a decrease in the price of a good using the same resources. 
A)  an increase in resource prices. 
B)  suppliers' expectations of higher prices in the future. 
C)  an increase in the price of a good using the same resources. 
D)  a decrease in the price of a good using the same resources.

Question 5

Use the following to answer question(s): Demand and Supply-Determinants
  
-(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events.Suppose a drought destroys one-third of the nation's peanut crop.Which panel best describes how this will affect the market for peanuts?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 6

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer question(s): Demand and Supply Curves
  
-(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

Accepted Answer

A)  $0. 
B)  $5. 
C)  $10. 
D)  $15. 
A)  $0. 
B)  $5. 
C)  $10. 
D)  $15.

Question 8

Use the following to answer question(s): Demand and Supply Shifters
  
-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose half the people in San Diego pack up and move to Colorado Springs.Which panel best describes how this will affect the supply of houses in San Diego?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 9

Use the following to answer question(s): The Market for Music Downloads
  
-(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

Accepted Answer

A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  h to i in Figure (b). 
A)  f to g in Figure (a). 
B)  g to f in Figure (a). 
C)  i to h in Figure (b). 
D)  h to i in Figure (b).

Question 10

Use the following to answer question(s): The Market for Chocolate-Covered Peanuts
  
-(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 80 cents, there is:

Accepted Answer

A)  a surplus of 140 bags per month. 
B)  a shortage of 140 bags per month. 
C)  a surplus of 70 bags per month. 
D)  a shortage of 70 bags per month. 
A)  a surplus of 140 bags per month. 
B)  a shortage of 140 bags per month. 
C)  a surplus of 70 bags per month. 
D)  a shortage of 70 bags per month.

Question 11

Use the following to answer question(s): Demand Shifters and Supply Shifters
  
-(Exhibit: Demand Shifters and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose consumer incomes increase.Which panel best describes how this will affect the market for tuxedoes, a normal good?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 12

The law of demand is illustrated when:

Accepted Answer

A)  an increase in tuition encourages more students to enroll in college because the quality of education has risen. 
B)  an increase in the purchases of personal computers results from lower prices. 
C)  higher oil prices cause oil companies to drill for new sources of oil. 
D)  higher fees for the use of public golf courses force golfers to purchase fewer golf balls. 
A)  an increase in tuition encourages more students to enroll in college because the quality of education has risen. 
B)  an increase in the purchases of personal computers results from lower prices. 
C)  higher oil prices cause oil companies to drill for new sources of oil. 
D)  higher fees for the use of public golf courses force golfers to purchase fewer golf balls.

Question 13

If both the demand for a product and the supply of it decrease, then the equilibrium quantity will ________ and the equilibrium price will ________.

Accepted Answer

A)  increase; either increase, decrease, or remain constant 
B)  decrease; either increase, decrease, or remain constant 
C)  increase; increase 
D)  increase; decrease 
A)  increase; either increase, decrease, or remain constant 
B)  decrease; either increase, decrease, or remain constant 
C)  increase; increase 
D)  increase; decrease

Question 14

Use the following to answer question(s): Demand and Supply-Determinants
  
-(Exhibit: Demand and Supply-Determinants) The exhibit shows how supply and demand might shift in response to specific events.Suppose the technology for producing automotive gasoline improves.Which panel best describes how this will affect the market for automotive gasoline?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 15

Demand and supply are terms that refer to the behavior of people and firms as they interact in markets.

Accepted Answer

A) True 
 B)False

Question 16

An example of a demand shifter is:

Accepted Answer

A)  factor prices. 
B)  technology. 
C)  consumer preferences. 
D)  producer expectations. 
A)  factor prices. 
B)  technology. 
C)  consumer preferences. 
D)  producer expectations.

Question 17

Which of the following will result in an increased price of milk?

Accepted Answer

A)  A shift to the right of the supply curve for milk. 
B)  A shift to the right of the demand curve for milk. 
C)  An increase in the number of milk suppliers. 
D)  A decrease in the number of milk buyers. 
A)  A shift to the right of the supply curve for milk. 
B)  A shift to the right of the demand curve for milk. 
C)  An increase in the number of milk suppliers. 
D)  A decrease in the number of milk buyers.

Question 18

After graduation from college you will receive a substantial increase in your income from a new job.If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):

Accepted Answer

A)  normal good. 
B)  substitute good. 
C)  complementary good. 
D)  inferior good. 
A)  normal good. 
B)  substitute good. 
C)  complementary good. 
D)  inferior good.

Question 19

In the Case in Point on "The Monks of St.Benedict's," the Monks got out of the egg business largely because:

Accepted Answer

A)  there was a large increase in the supply of eggs from other producers. 
B)  of the increase in the price of chicken feed. 
C)  the Pope forbade them from working on Sunday. 
D)  a huge increase in the demand for eggs caused the price of eggs to increase, and their operation was too small to meet the demand. 
A)  there was a large increase in the supply of eggs from other producers. 
B)  of the increase in the price of chicken feed. 
C)  the Pope forbade them from working on Sunday. 
D)  a huge increase in the demand for eggs caused the price of eggs to increase, and their operation was too small to meet the demand.

Question 20

Use the following to answer question(s): Simultaneous Shifts in Demand and Supply
  
-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market for a normal good, the shift in the demand curve may have been a result of:

Accepted Answer

A)  a decrease in the price of a substitute good. 
B)  a decrease in the number of buyers. 
C)  falling incomes. 
D)  consumers' expecting the price to go up. 
A)  a decrease in the price of a substitute good. 
B)  a decrease in the number of buyers. 
C)  falling incomes. 
D)  consumers' expecting the price to go up.

Which of the following always results in an increase in equilibrium price and quantity?

Demand and supply curves are drawn assuming ceteris paribus.This means that:

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

An increase in supply is caused by:

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

Use the following to answer question(s): Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

Use the following to answer question(s): The Market for Music Downloads -(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

Use the following to answer question(s): The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 80 cents, there is:

The law of demand is illustrated when:

If both the demand for a product and the supply of it decrease, then the equilibrium quantity will and the equilibrium price will .

Demand and supply are terms that refer to the behavior of people and firms as they interact in markets.

An example of a demand shifter is:

Which of the following will result in an increased price of milk?

After graduation from college you will receive a substantial increase in your income from a new job.If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):

In the Case in Point on "The Monks of St.Benedict's," the Monks got out of the egg business largely because:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 3: Demand and Supply

Which of the following always results in an increase in equilibrium price and quantity?

Demand and supply curves are drawn assuming ceteris paribus.This means that:

The key signals that send messages to buyers and sellers to buy or not to buy or to sell or not to sell are, all other things unchanged:

An increase in supply is caused by:

A decrease in both supply and demand will lead to a decrease in equilibrium quantity.

Use the following to answer question(s): Demand and Supply Curves -(Exhibit: Demand and Supply Curves) The highest price per unit that buyers would be willing to pay for 250 units is:

Use the following to answer question(s): The Market for Music Downloads -(Exhibit: The Market for Music Downloads) An increase in the wage rate paid to web site technical support employees would result in a change illustrated by the move from:

Use the following to answer question(s): The Market for Chocolate-Covered Peanuts -(Exhibit: The Market for Chocolate-Covered Peanuts) If the price of chocolate-covered peanuts is 80 cents, there is:

The law of demand is illustrated when:

If both the demand for a product and the supply of it decrease, then the equilibrium quantity will ________ and the equilibrium price will ________.

Demand and supply are terms that refer to the behavior of people and firms as they interact in markets.

An example of a demand shifter is:

Which of the following will result in an increased price of milk?

After graduation from college you will receive a substantial increase in your income from a new job.If you decide that you will purchase more T-bone steak and less hamburger, then for you hamburger would be considered a(n):

In the Case in Point on "The Monks of St.Benedict's," the Monks got out of the egg business largely because:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

If both the demand for a product and the supply of it decrease, then the equilibrium quantity will and the equilibrium price will .