Question 1

Markets,viewed from the perspective of the supply and demand model:

Accepted Answer

A)  assume many buyers and many sellers of a standardized product. 
B)  assume market power so that buyers and sellers bargain with one another. 
C)  do not exist in the real-world economy. 
D)  are approximated by markets in which a single seller determines price. 
A)  assume many buyers and many sellers of a standardized product. 
B)  assume market power so that buyers and sellers bargain with one another. 
C)  do not exist in the real-world economy. 
D)  are approximated by markets in which a single seller determines price.

Question 2

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

Accepted Answer

A)  increase the supply of X and decrease the demand for X. 
B)  increase the demand for X and decrease the supply of X. 
C)  increase the quantity supplied of X and decrease the quantity demanded of X. 
D)  decrease the quantity supplied of X and increase the quantity demanded of X. 
A)  increase the supply of X and decrease the demand for X. 
B)  increase the demand for X and decrease the supply of X. 
C)  increase the quantity supplied of X and decrease the quantity demanded of X. 
D)  decrease the quantity supplied of X and increase the quantity demanded of X.

Question 3

An increase in product price will cause:

Accepted Answer

A)  quantity demanded to decrease. 
B)  quantity supplied to decrease. 
C)  quantity demanded to increase. 
D)  the supply curve to shift to the left. 
A)  quantity demanded to decrease. 
B)  quantity supplied to decrease. 
C)  quantity demanded to increase. 
D)  the supply curve to shift to the left.

Question 4

Assuming competitive markets with typical supply and demand curves,which of the following statements is correct?

Accepted Answer

A)  An increase in supply with a decrease in demand will result in an increase in price. 
B)  An increase in supply with no change in demand will result in an increase in price. 
C)  An increase in supply with no change in demand will result in a decline in sales. 
D)  An increase in demand with no change in supply will result in an increase in sales. 
A)  An increase in supply with a decrease in demand will result in an increase in price. 
B)  An increase in supply with no change in demand will result in an increase in price. 
C)  An increase in supply with no change in demand will result in a decline in sales. 
D)  An increase in demand with no change in supply will result in an increase in sales.

Question 5

(Consider This)Ticket scalping is likely to:

Accepted Answer

A)  produce a less interested audience. 
B)  reduce the well-being of ticket sellers. 
C)  reduce the well-being of ticket buyers. 
D)  produce a more interested audience. 
A)  produce a less interested audience. 
B)  reduce the well-being of ticket sellers. 
C)  reduce the well-being of ticket buyers. 
D)  produce a more interested audience.

Question 6

Allocative 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 7

By an "increase in demand," economists mean that:

Accepted Answer

A)  product price has fallen so consumers move down to a new point on the demand curve. 
B)  the quantity demanded at each price in a set of prices is greater. 
C)  the quantity demanded at each price in a set of prices is smaller. 
D)  a leftward shift of the demand curve has occurred. 
A)  product price has fallen so consumers move down to a new point on the demand curve. 
B)  the quantity demanded at each price in a set of prices is greater. 
C)  the quantity demanded at each price in a set of prices is smaller. 
D)  a leftward shift of the demand curve has occurred.

Question 8

A price floor means that:

Accepted Answer

A)  inflation is severe in this particular market. 
B)  sellers are artificially restricting supply to raise price. 
C)  government is imposing a maximum legal price that is typically below the equilibrium price. 
D)  government is imposing a minimum legal price that is typically above the equilibrium price. 
A)  inflation is severe in this particular market. 
B)  sellers are artificially restricting supply to raise price. 
C)  government is imposing a maximum legal price that is typically below the equilibrium price. 
D)  government is imposing a minimum legal price that is typically above the equilibrium price.

Question 9

Economists use the term "demand" to refer to:

Accepted Answer

A)  a particular price-quantity combination on a stable demand curve. 
B)  the total amount spent on a particular commodity over a fixed time period. 
C)  an upsloping line on a graph that relates consumer purchases and product price. 
D)  a schedule of various combinations of market prices and amounts/quantities demanded. 
A)  a particular price-quantity combination on a stable demand curve. 
B)  the total amount spent on a particular commodity over a fixed time period. 
C)  an upsloping line on a graph that relates consumer purchases and product price. 
D)  a schedule of various combinations of market prices and amounts/quantities demanded.

Question 10

There will be a surplus of a product when:

Accepted Answer

A)  price is below the equilibrium level. 
B)  the supply curve is downward sloping and the demand curve is upward sloping. 
C)  the demand and supply curves fail to intersect. 
D)  consumers want to buy less than producers offer for sale. 
A)  price is below the equilibrium level. 
B)  the supply curve is downward sloping and the demand curve is upward sloping. 
C)  the demand and supply curves fail to intersect. 
D)  consumers want to buy less than producers offer for sale.

Question 11

(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.If demand changed from P = 100 - 2Q to P = 130 - Q,the new equilibrium price is:

Accepted Answer

A)  $90. 
B)  $110. 
C)  $96. 
D)  $106. 
A)  $90. 
B)  $110. 
C)  $96. 
D)  $106.

Question 12

Digital cameras and memory cards are:

Accepted Answer

A)  substitute goods. 
B)  complementary goods. 
C)  independent goods. 
D)  inferior goods. 
A)  substitute goods. 
B)  complementary goods. 
C)  independent goods. 
D)  inferior goods.

Question 13

In moving along a demand curve,which of the following is not held constant?

Accepted Answer

A)  The price of the product for which the demand curve is relevant. 
B)  Price expectations. 
C)  Consumer incomes. 
D)  Prices of complementary goods. 
A)  The price of the product for which the demand curve is relevant. 
B)  Price expectations. 
C)  Consumer incomes. 
D)  Prices of complementary goods.

Question 14

Camille's Creations and Julia's Jewels both sell beads in a competitive market.If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price),then we would expect both Camille's and Julia's to:

Accepted Answer

A)  raise their price and reduce their quantity supplied. 
B)  raise their price and increase their quantity supplied. 
C)  lower their price and reduce their quantity supplied. 
D)  lower their price and increase their quantity supplied. 
A)  raise their price and reduce their quantity supplied. 
B)  raise their price and increase their quantity supplied. 
C)  lower their price and reduce their quantity supplied. 
D)  lower their price and increase their quantity supplied.

Question 15

If products C and D are close substitutes,an increase in the price of C will:

Accepted Answer

A)  tend to cause the price of D to fall. 
B)  shift the demand curve of C to the left and the demand curve of D to the right. 
C)  shift the demand curve of D to the right. 
D)  shift the demand curves of both products to the right. 
A)  tend to cause the price of D to fall. 
B)  shift the demand curve of C to the left and the demand curve of D to the right. 
C)  shift the demand curve of D to the right. 
D)  shift the demand curves of both products to the right.

Question 16

In constructing a demand curve for product X:

Accepted Answer

A)  consumer preferences are allowed to vary. 
B)  the prices of other goods are assumed constant. 
C)  money incomes are allowed to vary. 
D)  the supply curve of product X is assumed constant. 
A)  consumer preferences are allowed to vary. 
B)  the prices of other goods are assumed constant. 
C)  money incomes are allowed to vary. 
D)  the supply curve of product X is assumed constant.

Question 17

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.An increase in income,if X is a normal good,will:

Accepted Answer

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

Question 18

When the price of a product falls,the purchasing power of our money income rises and thus permits consumers to purchase more of the product.This statement describes:

Accepted Answer

A)  an inferior good. 
B)  the rationing function of prices. 
C)  the substitution effect. 
D)  the income effect. 
A)  an inferior good. 
B)  the rationing function of prices. 
C)  the substitution effect. 
D)  the income effect.

Question 19

An effective price floor will:

Accepted Answer

A)  force some firms in this industry to go out of business. 
B)  result in a product surplus. 
C)  result in a product shortage. 
D)  clear the market. 
A)  force some firms in this industry to go out of business. 
B)  result in a product surplus. 
C)  result in a product shortage. 
D)  clear the market.

Question 20

If price is above the equilibrium level,competition among sellers to reduce the resulting:

Accepted Answer

A)  surplus will increase quantity demanded and decrease quantity supplied. 
B)  shortage will decrease quantity demanded and increase quantity supplied. 
C)  surplus will decrease quantity demanded and increase quantity supplied. 
D)  shortage will increase quantity demanded and decrease quantity supplied. 
A)  surplus will increase quantity demanded and decrease quantity supplied. 
B)  shortage will decrease quantity demanded and increase quantity supplied. 
C)  surplus will decrease quantity demanded and increase quantity supplied. 
D)  shortage will increase quantity demanded and decrease quantity supplied.

Markets,viewed from the perspective of the supply and demand model:

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

An increase in product price will cause:

Assuming competitive markets with typical supply and demand curves,which of the following statements is correct?

(Consider This)Ticket scalping is likely to:

Allocative efficiency refers to:

By an "increase in demand," economists mean that:

A price floor means that:

Economists use the term "demand" to refer to:

There will be a surplus of a product when:

Digital cameras and memory cards are:

In moving along a demand curve,which of the following is not held constant?

Camille's Creations and Julia's Jewels both sell beads in a competitive market.If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price),then we would expect both Camille's and Julia's to:

If products C and D are close substitutes,an increase in the price of C will:

In constructing a demand curve for product X:

When the price of a product falls,the purchasing power of our money income rises and thus permits consumers to purchase more of the product.This statement describes:

An effective price floor will:

If price is above the equilibrium level,competition among sellers to reduce the resulting:

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

Markets,viewed from the perspective of the supply and demand model:

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

An increase in product price will cause:

Assuming competitive markets with typical supply and demand curves,which of the following statements is correct?

(Consider This)Ticket scalping is likely to:

Allocative efficiency refers to:

By an "increase in demand," economists mean that:

A price floor means that:

Economists use the term "demand" to refer to:

There will be a surplus of a product when:

Digital cameras and memory cards are:

In moving along a demand curve,which of the following is not held constant?

Camille's Creations and Julia's Jewels both sell beads in a competitive market.If at the market price of $5 both are running out of beads to sell (they can't keep up with the quantity demanded at that price),then we would expect both Camille's and Julia's to:

If products C and D are close substitutes,an increase in the price of C will:

In constructing a demand curve for product X:

When the price of a product falls,the purchasing power of our money income rises and thus permits consumers to purchase more of the product.This statement describes:

An effective price floor will:

If price is above the equilibrium level,competition among sellers to reduce the resulting:

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