Question 1

Plastic and steel are substitutes in the production of automobiles.If steel prices go up, all other things unchanged:

Accepted Answer

A)  the equilibrium price of plastic will fall. 
B)  the demand curve for plastic will shift to the left. 
C)  the demand curve for plastic will shift to the right. 
D)  the equilibrium quantity of plastic demanded will increase and the equilibrium price will fall. 
A)  the equilibrium price of plastic will fall. 
B)  the demand curve for plastic will shift to the left. 
C)  the demand curve for plastic will shift to the right. 
D)  the equilibrium quantity of plastic demanded will increase and the equilibrium price will fall.

Question 2

Use the following to answer question(s): Demand and Supply of Gasoline
  
-(Exhibit: Demand and Supply of Gasoline) What might cause the supply curve to shift from S₂ back to the initial supply curve S₁?

Accepted Answer

A)  The Organization of Petroleum Exporting Countries (OPE
C)  restricts the production of crude oil. 
B)  The Organization of Petroleum Exporting Countries (OPE
C)  increases the production of crude oil. 
C)  Americans want to buy more gas. 
D)  Technology in the refinement of gasoline greatly improves. 
A)  The Organization of Petroleum Exporting Countries (OPE
C)  restricts the production of crude oil. 
B)  The Organization of Petroleum Exporting Countries (OPE
C)  increases the production of crude oil. 
C)  Americans want to buy more gas. 
D)  Technology in the refinement of gasoline greatly improves.

Question 3

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:

Accepted Answer

A)  demand shifters. 
B)  supply prices. 
C)  market realities. 
D)  supply shifters. 
A)  demand shifters. 
B)  supply prices. 
C)  market realities. 
D)  supply shifters.

Question 4

Which of the following would not change the demand for automobiles?

Accepted Answer

A)  a change in the price of gasoline 
B)  a change in the cost of steel 
C)  a change in the price of motorcycles 
D)  a change in tastes 
A)  a change in the price of gasoline 
B)  a change in the cost of steel 
C)  a change in the price of motorcycles 
D)  a change in tastes

Question 5

Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:

Accepted Answer

A)  an increase in the demand for potatoes. 
B)  an increase in the quantity of potatoes demanded. 
C)  a decrease in the demand for potatoes. 
D)  no change in the demand for potatoes. 
A)  an increase in the demand for potatoes. 
B)  an increase in the quantity of potatoes demanded. 
C)  a decrease in the demand for potatoes. 
D)  no change in the demand for potatoes.

Question 6

The demand curve for on-demand videos has shifted to the right.What could have caused it?

Accepted Answer

A)  A fall in the price of on-demand videos. 
B)  An increase in the price of on-demand videos. 
C)  An increase in the supply of on-demand videos. 
D)  An increase in the income of buyers. 
A)  A fall in the price of on-demand videos. 
B)  An increase in the price of on-demand videos. 
C)  An increase in the supply of on-demand videos. 
D)  An increase in the income of buyers.

Question 7

An increase in supply is caused by:

Accepted Answer

A)  an increase in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of higher prices in the future. 
D)  an advancement in the technology for producing the good. 
A)  an increase in resource prices. 
B)  a decrease in the number of sellers in the market. 
C)  suppliers' expectations of higher prices in the future. 
D)  an advancement in the technology for producing the good.

Question 8

Use the following to answer question(s): Demand and Supply of Wheat
  
-(Exhibit: Demand and Supply of Wheat) What are the equilibrium price and quantity in this wheat market?

Accepted Answer

A)  $6 and 6,000 bushels 
B)  $4 and 2,000 bushels 
C)  $4 and 10,000 bushels 
D)  $8 and 12,000 bushels 
A)  $6 and 6,000 bushels 
B)  $4 and 2,000 bushels 
C)  $4 and 10,000 bushels 
D)  $8 and 12,000 bushels

Question 9

Use the following to answer question(s): The Determinants of Demand and Supply
  
-(Exhibit: The Determinants of Demand and Supply) The exhibit shows how supply and demand might shift in response to specific events.Suppose scientists discover that eating a tomato a day prevents aging.Which panel best describes how this will affect the market for tomatoes?

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 10

What is the difference between a shortage and scarcity?

Accepted Answer

A)  Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level. 
B)  Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages. 
C)  A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case. 
D)  There is no distinction between the two.They are the same thing. 
A)  Scarcity will always exist because choices must be made, but a shortage will only exist if the price is kept below the equilibrium level. 
B)  Scarcity is a result of two or more alternative uses and will always exist, and quantities of supply and demand adjusting to flexible prices will create shortages. 
C)  A surplus will exist when a good is scarce; a shortage merely implies that there isn't as much of something as people would like, which is nearly always the case. 
D)  There is no distinction between the two.They are the same thing.

Question 11

Which would not cause the supply curve to shift?

Accepted Answer

A)  a change in technology 
B)  a change in factor costs 
C)  a change in the price of the good 
D)  a change in the prices of related goods 
A)  a change in technology 
B)  a change in factor costs 
C)  a change in the price of the good 
D)  a change in the prices of related goods

Question 12

Use the following to answer question(s): Demand and Supply of Gasoline
  
-(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S₁ and D, any price lower than _____________ will create pressure for the price to ________ .

Accepted Answer

A)  $2.00; fall 
B)  $2.50; rise 
C)  $3.00; rise 
D)  none of the above are true 
A)  $2.00; fall 
B)  $2.50; rise 
C)  $3.00; rise 
D)  none of the above are true

Question 13

In the Case in Point on campus parking, the implication was that existing prices for parking spaces on university campuses are generally:

Accepted Answer

A)  too high. 
B)  too low. 
C)  about right. 
D)  unconscionable. 
A)  too high. 
B)  too low. 
C)  about right. 
D)  unconscionable.

Question 14

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 40 cents, the price will:

Accepted Answer

A)  remain unchanged. 
B)  fall to 30 cents. 
C)  rise to 50 cents. 
D)  rise to 60 cents. 
A)  remain unchanged. 
B)  fall to 30 cents. 
C)  rise to 50 cents. 
D)  rise to 60 cents.

Question 15

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

Accepted Answer

A)  fall. 
B)  stay the same. 
C)  rise. 
D)  change only if demand and/or supply change. 
A)  fall. 
B)  stay the same. 
C)  rise. 
D)  change only if demand and/or supply change.

Question 16

According to the textbook, demand and supply determine prices, and prices allocate scarce resources in the economy.

Accepted Answer

A) True 
 B)False

Question 17

An increase in both supply and demand must increase both equilibrium price and quantity.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true?

Accepted Answer

A)  If demand decreases, equilibrium price increases. 
B)  If demand increases, equilibrium price decreases. 
C)  If demand decreases, the demand curve shifts to the left. 
D)  If demand decreases, the demand curve shifts to the right. 
A)  If demand decreases, equilibrium price increases. 
B)  If demand increases, equilibrium price decreases. 
C)  If demand decreases, the demand curve shifts to the left. 
D)  If demand decreases, the demand curve shifts to the right.

Question 19

Which statement best illustrates complementary goods?

Accepted Answer

A)  The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls. 
B)  The price of Apple Macintosh computers declines so your economics instructor sells his or her IBM personal computer and buys a Macintosh. 
C)  After receiving a promotion and a hefty year-end bonus from the college, your economics instructor decides to stop buying denim jeans and switches to clothing befitting his or her loftier position on the faculty. 
D)  Fearing that the price of pipe tobacco will rise next year, your economics professor goes to his local tobacconist and purchases an ample supply to last for several years. 
A)  The price of tennis rackets declines so your economics instructor decides to take tennis lessons and purchases several cans of new tennis balls. 
B)  The price of Apple Macintosh computers declines so your economics instructor sells his or her IBM personal computer and buys a Macintosh. 
C)  After receiving a promotion and a hefty year-end bonus from the college, your economics instructor decides to stop buying denim jeans and switches to clothing befitting his or her loftier position on the faculty. 
D)  Fearing that the price of pipe tobacco will rise next year, your economics professor goes to his local tobacconist and purchases an ample supply to last for several years.

Question 20

Assume a market initially exhibits a shortage.Assuming that both prices and quantities are flexible, which of the following will be true after the market adjusts to equilibrium?

Accepted Answer

A)  Price is lower. 
B)  Quantity demanded is greater. 
C)  Quantity supplied is more. 
D)  Quantity supplied will be reduced. 
A)  Price is lower. 
B)  Quantity demanded is greater. 
C)  Quantity supplied is more. 
D)  Quantity supplied will be reduced.

Plastic and steel are substitutes in the production of automobiles.If steel prices go up, all other things unchanged:

Use the following to answer question(s): Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) What might cause the supply curve to shift from S₂ back to the initial supply curve S₁?

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:

Which of the following would not change the demand for automobiles?

Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:

The demand curve for on-demand videos has shifted to the right.What could have caused it?

An increase in supply is caused by:

Use the following to answer question(s): Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) What are the equilibrium price and quantity in this wheat market?

What is the difference between a shortage and scarcity?

Which would not cause the supply curve to shift?

Use the following to answer question(s): Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S₁ and D, any price lower than _____ will create pressure for the price to .

In the Case in Point on campus parking, the implication was that existing prices for parking spaces on university campuses are generally:

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 40 cents, the price will:

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

According to the textbook, demand and supply determine prices, and prices allocate scarce resources in the economy.

An increase in both supply and demand must increase both equilibrium price and quantity.

Which of the following is true?

Which statement best illustrates complementary goods?

Assume a market initially exhibits a shortage.Assuming that both prices and quantities are flexible, which of the following will be true after the market adjusts to equilibrium?

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

Plastic and steel are substitutes in the production of automobiles.If steel prices go up, all other things unchanged:

Use the following to answer question(s): Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) What might cause the supply curve to shift from S₂ back to the initial supply curve S₁?

In the textbook, the prices of the factors of production, returns from alternative activities, technology, seller expectations regarding future prices, and the number of sellers are called:

Which of the following would not change the demand for automobiles?

Given that meat and potatoes are complementary goods, if the price of meat decreases substantially, there would be:

The demand curve for on-demand videos has shifted to the right.What could have caused it?

An increase in supply is caused by:

Use the following to answer question(s): Demand and Supply of Wheat -(Exhibit: Demand and Supply of Wheat) What are the equilibrium price and quantity in this wheat market?

What is the difference between a shortage and scarcity?

Which would not cause the supply curve to shift?

Use the following to answer question(s): Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S₁ and D, any price lower than _____________ will create pressure for the price to ________ .

In the Case in Point on campus parking, the implication was that existing prices for parking spaces on university campuses are generally:

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 40 cents, the price will:

In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:

According to the textbook, demand and supply determine prices, and prices allocate scarce resources in the economy.

An increase in both supply and demand must increase both equilibrium price and quantity.

Which of the following is true?

Which statement best illustrates complementary goods?

Assume a market initially exhibits a shortage.Assuming that both prices and quantities are flexible, which of the following will be true after the market adjusts to equilibrium?

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

Use the following to answer question(s): Demand and Supply of Gasoline -(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S₁ and D, any price lower than _____ will create pressure for the price to .