Question 1

The supply curve shows the relationship between:

Accepted Answer

A)  price and quantity supplied. 
B)  production costs and the amount demanded. 
C)  total business revenues and quantity supplied. 
D)  physical inputs of resources and the resulting units of output. 
A)  price and quantity supplied. 
B)  production costs and the amount demanded. 
C)  total business revenues and quantity supplied. 
D)  physical inputs of resources and the resulting units of output.

Question 2

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.A reduction in the number of firms producing X will:

Accepted Answer

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

Question 3

A market is in equilibrium:

Accepted Answer

A)  provided there is no surplus of the product. 
B)  at all prices above that shown by the intersection of the supply and demand curves. 
C)  if the amount producers want to sell is equal to the amount consumers want to buy. 
D)  whenever the demand curve is downsloping and the supply curve is upsloping. 
A)  provided there is no surplus of the product. 
B)  at all prices above that shown by the intersection of the supply and demand curves. 
C)  if the amount producers want to sell is equal to the amount consumers want to buy. 
D)  whenever the demand curve is downsloping and the supply curve is upsloping.

Question 4

Which of the following statements is true about productive and allocative efficiency?

Accepted Answer

A)  Realizing allocative efficiency implies that productive efficiency has been realized. 
B)  Productive efficiency can only occur if there is also allocative efficiency. 
C)  Society can achieve either productive efficiency or allocative efficiency,but not both simultaneously. 
D)  Productive efficiency and allocative efficiency can only occur together;neither can occur without the other. 
A)  Realizing allocative efficiency implies that productive efficiency has been realized. 
B)  Productive efficiency can only occur if there is also allocative efficiency. 
C)  Society can achieve either productive efficiency or allocative efficiency,but not both simultaneously. 
D)  Productive efficiency and allocative efficiency can only occur together;neither can occur without the other.

Question 5

Graphically,the market demand curve is:

Accepted Answer

A)  steeper than any individual demand curve that is part of it. 
B)  greater than the sum of the individual demand curves. 
C)  the horizontal sum of individual demand curves. 
D)  the vertical sum of individual demand curves. 
A)  steeper than any individual demand curve that is part of it. 
B)  greater than the sum of the individual demand curves. 
C)  the horizontal sum of individual demand curves. 
D)  the vertical sum of individual demand curves.

Question 6

Which of the following statements is true about price ceilings?

Accepted Answer

A)  Price ceilings cause goods to be rationed. 
B)  Price ceilings cause goods to be rationed by some other means than legally determined market prices. 
C)  Ration coupons are the only way to ration goods when price ceilings are in place. 
D)  All of the other statements are correct. 
A)  Price ceilings cause goods to be rationed. 
B)  Price ceilings cause goods to be rationed by some other means than legally determined market prices. 
C)  Ration coupons are the only way to ration goods when price ceilings are in place. 
D)  All of the other statements are correct.

Question 7

The upward slope of the supply curve reflects the:

Accepted Answer

A)  principle of specialization in production. 
B)  law of supply. 
C)  fact that price and quantity supplied are inversely related. 
D)  law of diminishing marginal utility. 
A)  principle of specialization in production. 
B)  law of supply. 
C)  fact that price and quantity supplied are inversely related. 
D)  law of diminishing marginal utility.

Question 8

The location of the product supply curve depends on the:

Accepted Answer

A)  production technology. 
B)  number of buyers in the market. 
C)  tastes of buyers. 
D)  location of the demand curve. 
A)  production technology. 
B)  number of buyers in the market. 
C)  tastes of buyers. 
D)  location of the demand curve.

Question 9

Toothpaste and toothbrushes are substitute goods.

Accepted Answer

A) True 
 B)False

Question 10

A market:

Accepted Answer

A)  reflects upsloping demand and downsloping supply curves. 
B)  entails the exchange of goods,but not services. 
C)  is an institution that brings together buyers and sellers. 
D)  always requires face-to-face contact between buyer and seller. 
A)  reflects upsloping demand and downsloping supply curves. 
B)  entails the exchange of goods,but not services. 
C)  is an institution that brings together buyers and sellers. 
D)  always requires face-to-face contact between buyer and seller.

Question 11

(Advanced analysis)The equation for the supply curve in the below diagram is approximately:

Accepted Answer

A)  P = 4 + 1/3Q. 
B)  P = 4 + 2Q. 
C)  P = 4 + 3Q. 
D)  P = 4 - 3Q. 
A)  P = 4 + 1/3Q. 
B)  P = 4 + 2Q. 
C)  P = 4 + 3Q. 
D)  P = 4 - 3Q.

Question 12

Price floors and ceiling prices:

Accepted Answer

A)  both cause shortages. 
B)  both cause surpluses. 
C)  cause the supply and demand curves to shift until equilibrium is established. 
D)  interfere with the rationing function of prices. 
A)  both cause shortages. 
B)  both cause surpluses. 
C)  cause the supply and demand curves to shift until equilibrium is established. 
D)  interfere with the rationing function of prices.

Question 13

Other things equal,which of the following might shift the demand curve for gasoline to the left?

Accepted Answer

A)  The discovery of vast new oil reserves in Montana. 
B)  The development of a low-cost electric automobile. 
C)  An increase in the price of train and air transportation. 
D)  A large decline in the price of automobiles. 
A)  The discovery of vast new oil reserves in Montana. 
B)  The development of a low-cost electric automobile. 
C)  An increase in the price of train and air transportation. 
D)  A large decline in the price of automobiles.

Question 14

A government subsidy to the producers of a product:

Accepted Answer

A)  reduces product supply. 
B)  increases product supply. 
C)  reduces product demand. 
D)  increases product demand. 
A)  reduces product supply. 
B)  increases product supply. 
C)  reduces product demand. 
D)  increases product demand.

Question 15

The income and substitution effects account for:

Accepted Answer

A)  the upward-sloping supply curve. 
B)  the downward-sloping demand curve. 
C)  movements along a given supply curve. 
D)  shifts in the demand curve. 
A)  the upward-sloping supply curve. 
B)  the downward-sloping demand curve. 
C)  movements along a given supply curve. 
D)  shifts in the demand curve.

Question 16

A normal good is one:

Accepted Answer

A)  whose amount demanded will increase as its price decreases. 
B)  whose amount demanded will increase as its price increases. 
C)  whose demand curve will shift leftward as incomes rise. 
D)  for which the consumption varies directly with income. 
A)  whose amount demanded will increase as its price decreases. 
B)  whose amount demanded will increase as its price increases. 
C)  whose demand curve will shift leftward as incomes rise. 
D)  for which the consumption varies directly with income.

Question 17

An economist for a bicycle company predicts that,other things equal,a rise in consumer incomes will increase the demand for bicycles.This prediction assumes that:

Accepted Answer

A)  there are many goods that are substitutes for bicycles. 
B)  there are many goods that are complementary to bicycles. 
C)  there are few goods that are substitutes for bicycles. 
D)  bicycles are normal goods. 
A)  there are many goods that are substitutes for bicycles. 
B)  there are many goods that are complementary to bicycles. 
C)  there are few goods that are substitutes for bicycles. 
D)  bicycles are normal goods.

Question 18

A leftward shift of a product supply curve might be caused by:

Accepted Answer

A)  an improvement in the relevant technique of production. 
B)  a decline in the prices of needed inputs. 
C)  an increase in consumer incomes. 
D)  some firms leaving an industry. 
A)  an improvement in the relevant technique of production. 
B)  a decline in the prices of needed inputs. 
C)  an increase in consumer incomes. 
D)  some firms leaving an industry.

Question 19

If the supply of a product decreases and the demand for that product simultaneously increases,then equilibrium:

Accepted Answer

A)  price must rise,but equilibrium quantity may rise,fall,or remain unchanged. 
B)  price must rise and equilibrium quantity must fall. 
C)  price and equilibrium quantity must both increase. 
D)  price and equilibrium quantity must both decline. 
A)  price must rise,but equilibrium quantity may rise,fall,or remain unchanged. 
B)  price must rise and equilibrium quantity must fall. 
C)  price and equilibrium quantity must both increase. 
D)  price and equilibrium quantity must both decline.

Question 20

A government tax per unit of output reduces supply.

Accepted Answer

A) True 
 B)False

The supply curve shows the relationship between:

A market is in equilibrium:

Which of the following statements is true about productive and allocative efficiency?

Graphically,the market demand curve is:

Which of the following statements is true about price ceilings?

The upward slope of the supply curve reflects the:

The location of the product supply curve depends on the:

Toothpaste and toothbrushes are substitute goods.

A market:

(Advanced analysis)The equation for the supply curve in the below diagram is approximately:

Price floors and ceiling prices:

Other things equal,which of the following might shift the demand curve for gasoline to the left?

A government subsidy to the producers of a product:

The income and substitution effects account for:

A normal good is one:

An economist for a bicycle company predicts that,other things equal,a rise in consumer incomes will increase the demand for bicycles.This prediction assumes that:

A leftward shift of a product supply curve might be caused by:

If the supply of a product decreases and the demand for that product simultaneously increases,then equilibrium:

A government tax per unit of output reduces supply.

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

The supply curve shows the relationship between:

A market is in equilibrium:

Which of the following statements is true about productive and allocative efficiency?

Graphically,the market demand curve is:

Which of the following statements is true about price ceilings?

The upward slope of the supply curve reflects the:

The location of the product supply curve depends on the:

Toothpaste and toothbrushes are substitute goods.

A market:

(Advanced analysis)The equation for the supply curve in the below diagram is approximately:

Price floors and ceiling prices:

Other things equal,which of the following might shift the demand curve for gasoline to the left?

A government subsidy to the producers of a product:

The income and substitution effects account for:

A normal good is one:

An economist for a bicycle company predicts that,other things equal,a rise in consumer incomes will increase the demand for bicycles.This prediction assumes that:

A leftward shift of a product supply curve might be caused by:

If the supply of a product decreases and the demand for that product simultaneously increases,then equilibrium:

A government tax per unit of output reduces supply.

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