Question 1

If the demand for steak (a normal good)shifts to the left,the most likely reason is that:

Accepted Answer

A)  consumer incomes have fallen. 
B)  cattle production has declined. 
C)  the price of steak has risen. 
D)  the price of cattle feed has gone up. 
A)  consumer incomes have fallen. 
B)  cattle production has declined. 
C)  the price of steak has risen. 
D)  the price of cattle feed has gone up. A

Question 2

(Consider This)Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Accepted Answer

A)  law of supply has been violated. 
B)  law of demand has been violated. 
C)  demand for salsa has increased. 
D)  supply of salsa has increased. 
A)  law of supply has been violated. 
B)  law of demand has been violated. 
C)  demand for salsa has increased. 
D)  supply of salsa has increased. D

Question 3

Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

Accepted Answer

A)  reduce the demand for tacos and increase the demand for soda. 
B)  reduce the demand for soda and increase the demand for tacos. 
C)  increase the demand for both soda and tacos. 
D)  reduce the demand for both soda and tacos. 
A)  reduce the demand for tacos and increase the demand for soda. 
B)  reduce the demand for soda and increase the demand for tacos. 
C)  increase the demand for both soda and tacos. 
D)  reduce the demand for both soda and tacos. B

Question 4

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer)would reduce the demand for marijuana.We can conclude that:

Accepted Answer

A)  beer and marijuana are substitute goods. 
B)  beer and marijuana are complementary goods. 
C)  beer is an inferior good. 
D)  marijuana is an inferior good. 
A)  beer and marijuana are substitute goods. 
B)  beer and marijuana are complementary goods. 
C)  beer is an inferior good. 
D)  marijuana is an inferior good.

Question 5

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1)the demand (D)for,or supply (S)of,X; (2)the equilibrium price (P)of X;and (3)the equilibrium quantity (Q)of X. Refer to the given information.If X is an inferior good,a decrease in income will:

Accepted Answer

A)  decrease D,decrease P,and decrease Q. 
B)  decrease D,decrease P,and increase Q. 
C)  increase S,decrease P,and increase Q. 
D)  increase D,increase P,and increase Q. 
A)  decrease D,decrease P,and decrease Q. 
B)  decrease D,decrease P,and increase Q. 
C)  increase S,decrease P,and increase Q. 
D)  increase D,increase P,and increase Q.

Question 6

A demand curve:

Accepted Answer

A)  shows the relationship between price and quantity supplied. 
B)  indicates the quantity demanded at each price in a series of prices. 
C)  graphs as an upsloping line. 
D)  shows the relationship between income and spending. 
A)  shows the relationship between price and quantity supplied. 
B)  indicates the quantity demanded at each price in a series of prices. 
C)  graphs as an upsloping line. 
D)  shows the relationship between income and spending.

Question 7

Productive efficiency refers to:

Accepted Answer

A)  the use of the least-cost method of production. 
B)  the production of the product mix most wanted by society. 
C)  the full employment of all available resources. 
D)  production at some point inside of the production possibilities curve. 
A)  the use of the least-cost method of production. 
B)  the production of the product mix most wanted by society. 
C)  the full employment of all available resources. 
D)  production at some point inside of the production possibilities curve.

Question 8

(Last Word)A market for human organs (rather than the current volunteer-donor system)would be expected to:

Accepted Answer

A)  reduce the price of organs. 
B)  create a surplus of organs. 
C)  reduce the supply of organs. 
D)  eliminate the shortage of organs. 
A)  reduce the price of organs. 
B)  create a surplus of organs. 
C)  reduce the supply of organs. 
D)  eliminate the shortage of organs.

Question 9

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

Accepted Answer

A)  direct;inverse 
B)  inverse;direct 
C)  inverse;inverse 
D)  direct;direct 
A)  direct;inverse 
B)  inverse;direct 
C)  inverse;inverse 
D)  direct;direct

Question 10

(Advanced analysis)Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Refer to the given information.If demand changed from P = 10 - .2Q to P = 7 - .3Q,the new equilibrium quantity is:

Accepted Answer

A)  10. 
B)  20. 
C)  15. 
D)  30. 
A)  10. 
B)  20. 
C)  15. 
D)  30.

Question 11

Answer the question on the basis of the given supply and demand data for wheat: $\begin{array} { c c c } 
\text { Bushels Demanded }&&\text { Bushels Supplied Per }\
\text { Per Month } & \text { Price Per Bushel } & \text { Month } \ 
\hline
45 & \$ 5 & 77 \ 
50 & 4 & 73 \ 
56 & 3 & 68 \ 
61 & 2 & 61 \ 
67 & 1 & 57 
\end{array}$ Refer to the data.If the price in this market was $4:

Accepted Answer

A)  the market would clear;quantity demanded would equal quantity supplied. 
B)  buyers would want to purchase more wheat than is currently being supplied. 
C)  farmers would not be able to sell all their wheat. 
D)  there would be a shortage of wheat. 
A)  the market would clear;quantity demanded would equal quantity supplied. 
B)  buyers would want to purchase more wheat than is currently being supplied. 
C)  farmers would not be able to sell all their wheat. 
D)  there would be a shortage of wheat.

Question 12

An effective ceiling price will:

Accepted Answer

A)  induce new firms to enter the industry. 
B)  result in a product surplus. 
C)  result in a product shortage. 
D)  clear the market. 
A)  induce new firms to enter the industry. 
B)  result in a product surplus. 
C)  result in a product shortage. 
D)  clear the market.

Question 13

(Consider This)Ticket scalping implies that:

Accepted Answer

A)  event sponsors have established ticket prices at above-equilibrium levels. 
B)  an event is not likely to be sold out. 
C)  event sponsors have established ticket prices at below-equilibrium levels. 
D)  the demand for tickets has fallen between the time tickets were originally sold and the event takes place. 
A)  event sponsors have established ticket prices at above-equilibrium levels. 
B)  an event is not likely to be sold out. 
C)  event sponsors have established ticket prices at below-equilibrium levels. 
D)  the demand for tickets has fallen between the time tickets were originally sold and the event takes place.

Question 14

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

Accepted Answer

A)  alter both equilibrium price and quantity. 
B)  alter equilibrium quantity but not equilibrium price. 
C)  alter equilibrium price but not equilibrium quantity. 
D)  have no effect on equilibrium price or quantity. 
A)  alter both equilibrium price and quantity. 
B)  alter equilibrium quantity but not equilibrium price. 
C)  alter equilibrium price but not equilibrium quantity. 
D)  have no effect on equilibrium price or quantity.

Question 15

If two goods are complements:

Accepted Answer

A)  they are consumed independently. 
B)  an increase in the price of one will increase the demand for the other. 
C)  a decrease in the price of one will increase the demand for the other. 
D)  they are necessarily inferior goods. 
A)  they are consumed independently. 
B)  an increase in the price of one will increase the demand for the other. 
C)  a decrease in the price of one will increase the demand for the other. 
D)  they are necessarily inferior goods.

Question 16

(Advanced analysis)Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

Accepted Answer

A)  10. 
B)  20. 
C)  15. 
D)  30. 
A)  10. 
B)  20. 
C)  15. 
D)  30.

Question 17

In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Accepted Answer

A)  an increase in the cost of making donuts. 
B)  an increase in the price of coffee. 
C)  consumers expecting donut prices to fall. 
D)  a change in buyer tastes. 
A)  an increase in the cost of making donuts. 
B)  an increase in the price of coffee. 
C)  consumers expecting donut prices to fall. 
D)  a change in buyer tastes.

Question 18

Consumers buy more of normal goods as their incomes rise.

Accepted Answer

A) True 
 B)False

Question 19

The law of demand states that,other things equal:

Accepted Answer

A)  price and quantity demanded are inversely related. 
B)  the larger the number of buyers in a market,the lower will be product price. 
C)  price and quantity demanded are directly related. 
D)  consumers will buy more of a product at high prices than at low prices. 
A)  price and quantity demanded are inversely related. 
B)  the larger the number of buyers in a market,the lower will be product price. 
C)  price and quantity demanded are directly related. 
D)  consumers will buy more of a product at high prices than at low prices.

Question 20

A price floor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

If the demand for steak (a normal good)shifts to the left,the most likely reason is that:

(Consider This)Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer)would reduce the demand for marijuana.We can conclude that:

A demand curve:

Productive efficiency refers to:

(Last Word)A market for human organs (rather than the current volunteer-donor system)would be expected to:

The relationship between quantity supplied and price is _ and the relationship between quantity demanded and price is _.

Answer the question on the basis of the given supply and demand data for wheat: Bushels Demanded Bushels Supplied Per Per Month Price Per Bushel Month 45 \ 5 77 50 4 73 56 3 68 61 2 61 67 1 57 Refer to the data.If the price in this market was $4:

An effective ceiling price will:

(Consider This)Ticket scalping implies that:

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

If two goods are complements:

(Advanced analysis)Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Consumers buy more of normal goods as their incomes rise.

The law of demand states that,other things equal:

A price floor in a competitive market will result in persistent shortages of a product.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 3: Demand, Supply, and Market Equilibrium

If the demand for steak (a normal good)shifts to the left,the most likely reason is that:

(Consider This)Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer)would reduce the demand for marijuana.We can conclude that:

A demand curve:

Productive efficiency refers to:

(Last Word)A market for human organs (rather than the current volunteer-donor system)would be expected to:

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

Answer the question on the basis of the given supply and demand data for wheat: Bushels Demanded Bushels Supplied Per Per Month Price Per Bushel Month 45 \ 5 77 50 4 73 56 3 68 61 2 61 67 1 57 Refer to the data.If the price in this market was $4:

An effective ceiling price will:

(Consider This)Ticket scalping implies that:

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

If two goods are complements:

(Advanced analysis)Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Consumers buy more of normal goods as their incomes rise.

The law of demand states that,other things equal:

A price floor in a competitive market will result in persistent shortages of a product.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

The relationship between quantity supplied and price is _ and the relationship between quantity demanded and price is _.