Question 1

If an effective ceiling price is placed on hamburgers,then:

Accepted Answer

A)  the quantity demanded will exceed the quantity supplied. 
B)  a black market for hamburgers may evolve. 
C)  consumers may want government to ration hamburgers. 
D)  All of these are likely outcomes. 
A)  the quantity demanded will exceed the quantity supplied. 
B)  a black market for hamburgers may evolve. 
C)  consumers may want government to ration hamburgers. 
D)  All of these are likely outcomes.

Question 2

If X is a normal good,a rise in money income will shift the:

Accepted Answer

A)  supply curve for X to the left. 
B)  supply curve for X to the right. 
C)  demand curve for X to the left. 
D)  demand curve for X to the right. 
A)  supply curve for X to the left. 
B)  supply curve for X to the right. 
C)  demand curve for X to the left. 
D)  demand curve for X to the right.

Question 3

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

Accepted Answer

A)  consumer incomes have declined,and consumers now want to buy less of A at each possible price. 
B)  the price of A has increased and,as a result,consumers want to purchase less of it. 
C)  consumer preferences have changed in favor of A so that they now want to buy more at each possible price. 
D)  the price of A has declined and,as a result,consumers want to purchase more of it. 
A)  consumer incomes have declined,and consumers now want to buy less of A at each possible price. 
B)  the price of A has increased and,as a result,consumers want to purchase less of it. 
C)  consumer preferences have changed in favor of A so that they now want to buy more at each possible price. 
D)  the price of A has declined and,as a result,consumers want to purchase more of it.

Question 4

With a downsloping demand curve and an upsloping supply curve for a product,an increase in consumer income will:

Accepted Answer

A)  increase equilibrium price and quantity if the product is a normal good. 
B)  decrease equilibrium price and quantity if the product is a normal good. 
C)  have no effect on equilibrium price and quantity. 
D)  reduce the quantity demanded but not shift the demand curve. 
A)  increase equilibrium price and quantity if the product is a normal good. 
B)  decrease equilibrium price and quantity if the product is a normal good. 
C)  have no effect on equilibrium price and quantity. 
D)  reduce the quantity demanded but not shift the demand curve.

Question 5

Allocative efficiency involves determining:

Accepted Answer

A)  which output mix will result in the most rapid rate of economic growth. 
B)  which production possibilities curve reflects the lowest opportunity costs. 
C)  the mix of output that will maximize society's satisfaction. 
D)  the optimal rate of technological progress. 
A)  which output mix will result in the most rapid rate of economic growth. 
B)  which production possibilities curve reflects the lowest opportunity costs. 
C)  the mix of output that will maximize society's satisfaction. 
D)  the optimal rate of technological progress.

Question 6

If a legal ceiling price is set above the equilibrium price:

Accepted Answer

A)  a shortage of the product will occur. 
B)  a surplus of the product will occur. 
C)  a black market will evolve. 
D)  neither the equilibrium price nor the equilibrium quantity will be affected. 
A)  a shortage of the product will occur. 
B)  a surplus of the product will occur. 
C)  a black market will evolve. 
D)  neither the equilibrium price nor the equilibrium quantity will be affected.

Question 7

(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 price is:

Accepted Answer

A)  $2. 
B)  $4. 
C)  $6. 
D)  $7. 
A)  $2. 
B)  $4. 
C)  $6. 
D)  $7.

Question 8

A ceiling price in a competitive market will result in persistent surpluses of a product.

Accepted Answer

A) True 
 B)False

Question 9

(Last Word)A market-based system of buying and selling human organs for transplant would:

Accepted Answer

A)  reduce total health care spending. 
B)  create a surplus of organs. 
C)  increase the quantity of organs available for transplant. 
D)  reduce the price of organs. 
A)  reduce total health care spending. 
B)  create a surplus of organs. 
C)  increase the quantity of organs available for transplant. 
D)  reduce the price of organs.

Question 10

Which of the following would most likely increase the demand for gasoline?

Accepted Answer

A)  The expectation by consumers that gasoline prices will be higher in the future. 
B)  The expectation by consumers that gasoline prices will be lower in the future. 
C)  A widespread shift in car ownership from SUVs to hybrid sedans. 
D)  A decrease in the price of public transportation. 
A)  The expectation by consumers that gasoline prices will be higher in the future. 
B)  The expectation by consumers that gasoline prices will be lower in the future. 
C)  A widespread shift in car ownership from SUVs to hybrid sedans. 
D)  A decrease in the price of public transportation.

Question 11

If the demand curve for product B shifts to the right as the price of product A declines,then:

Accepted Answer

A)  both A and B are inferior goods. 
B)  A is a superior good and B is an inferior good. 
C)  A is an inferior good and B is a superior good. 
D)  A and B are complementary goods. 
A)  both A and B are inferior goods. 
B)  A is a superior good and B is an inferior good. 
C)  A is an inferior good and B is a superior good. 
D)  A and B are complementary goods.

Question 12

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Accepted Answer

A)  increase equilibrium price and quantity. 
B)  decrease equilibrium price and quantity. 
C)  decrease equilibrium price and increase equilibrium quantity. 
D)  increase equilibrium price and decrease equilibrium quantity. 
A)  increase equilibrium price and quantity. 
B)  decrease equilibrium price and quantity. 
C)  decrease equilibrium price and increase equilibrium quantity. 
D)  increase equilibrium price and decrease equilibrium quantity.

Question 13

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Accepted Answer

A)  rise,the supply of bread to increase,and the demand for potatoes to increase. 
B)  rise,the supply of bread to decrease,and the demand for potatoes to increase. 
C)  rise,the supply of bread to decrease,and the demand for potatoes to decrease. 
D)  fall,the supply of bread to increase,and the demand for potatoes to increase. 
A)  rise,the supply of bread to increase,and the demand for potatoes to increase. 
B)  rise,the supply of bread to decrease,and the demand for potatoes to increase. 
C)  rise,the supply of bread to decrease,and the demand for potatoes to decrease. 
D)  fall,the supply of bread to increase,and the demand for potatoes to increase.

Question 14

Steve went to his favorite hamburger restaurant with $3,expecting to buy a $2 hamburger and a $1 soda.When he arrived he discovered that hamburgers were on sale for $1 each,so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by:

Accepted Answer

A)  the substitution effect. 
B)  the income effect. 
C)  the price effect. 
D)  a rightward shift in the demand curve for hamburgers. 
A)  the substitution effect. 
B)  the income effect. 
C)  the price effect. 
D)  a rightward shift in the demand curve for hamburgers.

Question 15

The law of supply indicates that,other things equal:

Accepted Answer

A)  producers will offer more of a product at high prices than at low prices. 
B)  the product supply curve is downsloping. 
C)  consumers will purchase less of a good at high prices than at low prices. 
D)  producers will offer more of a product at low prices than at high prices. 
A)  producers will offer more of a product at high prices than at low prices. 
B)  the product supply curve is downsloping. 
C)  consumers will purchase less of a good at high prices than at low prices. 
D)  producers will offer more of a product at low prices than at high prices.

Question 16

When the price of a product increases,a consumer is able to buy less of it with a given money income.This describes the:

Accepted Answer

A)  cost effect. 
B)  inflationary effect. 
C)  income effect. 
D)  substitution effect. 
A)  cost effect. 
B)  inflationary effect. 
C)  income effect. 
D)  substitution effect.

Question 17

If consumer incomes increase,the demand for product X:

Accepted Answer

A)  will necessarily remain unchanged. 
B)  may shift either to the right or left. 
C)  will necessarily shift to the right. 
D)  will necessarily shift to the left. 
A)  will necessarily remain unchanged. 
B)  may shift either to the right or left. 
C)  will necessarily shift to the right. 
D)  will necessarily shift to the left.

Question 18

(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.The equilibrium price for X is:

Accepted Answer

A)  $2. 
B)  $4. 
C)  $6. 
D)  $7. 
A)  $2. 
B)  $4. 
C)  $6. 
D)  $7.

Question 19

Blu-ray players and Blu-ray discs are:

Accepted Answer

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

Question 20

"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Accepted Answer

A)  In neither statement. 
B)  In the second statement. 
C)  In the first statement. 
D)  In both statements. 
A)  In neither statement. 
B)  In the second statement. 
C)  In the first statement. 
D)  In both statements.

If an effective ceiling price is placed on hamburgers,then:

If X is a normal good,a rise in money income will shift the:

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

With a downsloping demand curve and an upsloping supply curve for a product,an increase in consumer income will:

Allocative efficiency involves determining:

If a legal ceiling price is set above the equilibrium price:

A ceiling price in a competitive market will result in persistent surpluses of a product.

(Last Word)A market-based system of buying and selling human organs for transplant would:

Which of the following would most likely increase the demand for gasoline?

If the demand curve for product B shifts to the right as the price of product A declines,then:

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Steve went to his favorite hamburger restaurant with $3,expecting to buy a $2 hamburger and a $1 soda.When he arrived he discovered that hamburgers were on sale for $1 each,so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by:

The law of supply indicates that,other things equal:

When the price of a product increases,a consumer is able to buy less of it with a given money income.This describes the:

If consumer incomes increase,the demand for product X:

(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.The equilibrium price for X is:

Blu-ray players and Blu-ray discs are:

"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

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 an effective ceiling price is placed on hamburgers,then:

If X is a normal good,a rise in money income will shift the:

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

With a downsloping demand curve and an upsloping supply curve for a product,an increase in consumer income will:

Allocative efficiency involves determining:

If a legal ceiling price is set above the equilibrium price:

A ceiling price in a competitive market will result in persistent surpluses of a product.

(Last Word)A market-based system of buying and selling human organs for transplant would:

Which of the following would most likely increase the demand for gasoline?

If the demand curve for product B shifts to the right as the price of product A declines,then:

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Steve went to his favorite hamburger restaurant with $3,expecting to buy a $2 hamburger and a $1 soda.When he arrived he discovered that hamburgers were on sale for $1 each,so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by:

The law of supply indicates that,other things equal:

When the price of a product increases,a consumer is able to buy less of it with a given money income.This describes the:

If consumer incomes increase,the demand for product X:

(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.The equilibrium price for X is:

Blu-ray players and Blu-ray discs are:

"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

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