Question 1

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

Accepted Answer

A)  income of sports fishers. 
B)  price of outboard motors. 
C)  size and number of fish available. 
D)  price of sailing boats. 
A)  income of sports fishers. 
B)  price of outboard motors. 
C)  size and number of fish available. 
D)  price of sailing boats.

Question 2

If the price of product L increases,the demand curve for close-substitute product J will:

Accepted Answer

A)  shift downward toward the horizontal axis. 
B)  shift to the left. 
C)  shift to the right. 
D)  remain unchanged. 
A)  shift downward toward the horizontal axis. 
B)  shift to the left. 
C)  shift to the right. 
D)  remain unchanged.

Question 3

(Consider This)Ticket scalping:

Accepted Answer

A)  imposes economic losses on both buyers and sellers. 
B)  creates economic gains for both buyers and sellers. 
C)  imposes losses on buyers but creates gains for sellers. 
D)  imposes losses on sellers but creates gains for buyers. 
A)  imposes economic losses on both buyers and sellers. 
B)  creates economic gains for both buyers and sellers. 
C)  imposes losses on buyers but creates gains for sellers. 
D)  imposes losses on sellers but creates gains for buyers.

Question 4

A surplus of a product will arise when price is:

Accepted Answer

A)  above equilibrium,with the result that quantity demanded exceeds quantity supplied. 
B)  above equilibrium,with the result that quantity supplied exceeds quantity demanded. 
C)  below equilibrium,with the result that quantity demanded exceeds quantity supplied. 
D)  below equilibrium,with the result that quantity supplied exceeds quantity demanded. 
A)  above equilibrium,with the result that quantity demanded exceeds quantity supplied. 
B)  above equilibrium,with the result that quantity supplied exceeds quantity demanded. 
C)  below equilibrium,with the result that quantity demanded exceeds quantity supplied. 
D)  below equilibrium,with the result that quantity supplied exceeds quantity demanded.

Question 5

If an economy produces its most wanted goods but uses outdated production methods,it is:

Accepted Answer

A)  achieving productive efficiency but not allocative efficiency. 
B)  not achieving productive efficiency. 
C)  achieving both productive and allocative efficiency. 
D)  engaged in roundabout production. 
A)  achieving productive efficiency but not allocative efficiency. 
B)  not achieving productive efficiency. 
C)  achieving both productive and allocative efficiency. 
D)  engaged in roundabout production.

Question 6

The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Accepted Answer

A)  price. 
B)  expectations. 
C)  preferences. 
D)  incomes. 
A)  price. 
B)  expectations. 
C)  preferences. 
D)  incomes.

Question 7

An inferior good is:

Accepted Answer

A)  one whose demand curve will shift rightward as incomes rise. 
B)  one whose price and quantity demanded vary directly. 
C)  one that has not been approved by the Federal Food and Drug Administration. 
D)  not accurately defined by any of these statements. 
A)  one whose demand curve will shift rightward as incomes rise. 
B)  one whose price and quantity demanded vary directly. 
C)  one that has not been approved by the Federal Food and Drug Administration. 
D)  not accurately defined by any of these statements.

Question 8

Suppose an excise tax is imposed on product X.We expect this tax to:

Accepted Answer

A)  increase the demand for complementary good Y and decrease the demand for substitute product Z. 
B)  decrease the demand for complementary good Y and increase the demand for substitute product Z. 
C)  increase the demands for both complementary good Y and substitute product Z. 
D)  decrease the demands for both complementary good Y and substitute product Z. 
A)  increase the demand for complementary good Y and decrease the demand for substitute product Z. 
B)  decrease the demand for complementary good Y and increase the demand for substitute product Z. 
C)  increase the demands for both complementary good Y and substitute product Z. 
D)  decrease the demands for both complementary good Y and substitute product Z.

Question 9

Suppose that corn prices rise significantly.If farmers expect the price of corn to continue rising relative to other crops,then we would expect:

Accepted Answer

A)  the supply of ethanol,a corn-based product,to increase. 
B)  consumer demand for wheat to fall. 
C)  the supply to increase as farmers plant more corn. 
D)  the supply to fall as farmers plant more of other crops. 
A)  the supply of ethanol,a corn-based product,to increase. 
B)  consumer demand for wheat to fall. 
C)  the supply to increase as farmers plant more corn. 
D)  the supply to fall as farmers plant more of other crops.

Question 10

Suppose that at prices of $1,$2,$3,$4,and $5 for product Z,the corresponding quantities supplied are 3,4,5,6,and 7 units,respectively.Which of the following would increase the quantities supplied of Z to,say,6,8,10,12,and 14 units at these prices?

Accepted Answer

A)  Improved technology for producing Z. 
B)  An increase in the prices of the resources used to make Z. 
C)  An increase in the excise tax on product Z. 
D)  Increases in the incomes of the buyers of Z. 
A)  Improved technology for producing Z. 
B)  An increase in the prices of the resources used to make Z. 
C)  An increase in the excise tax on product Z. 
D)  Increases in the incomes of the buyers of Z.

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.Equilibrium price will be:

Accepted Answer

A)  $4. 
B)  $3. 
C)  $2. 
D)  $1. 
A)  $4. 
B)  $3. 
C)  $2. 
D)  $1.

Question 12

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Accepted Answer

A) True 
 B)False

Question 13

Given a downsloping demand curve and an upsloping supply curve for a product,an increase in the price of a substitute good (from the buyer's perspective)will:

Accepted Answer

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

Question 14

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A)  a decline in income if X is an inferior good. 
B)  a decline in the price of Z if X and Z are substitute goods. 
C)  a change in consumer tastes that is unfavorable to X. 
D)  an increase in the price of Y if X and Y are complementary goods. 
A)  a decline in income if X is an inferior good. 
B)  a decline in the price of Z if X and Z are substitute goods. 
C)  a change in consumer tastes that is unfavorable to X. 
D)  an increase in the price of Y if X and Y are complementary goods.

Question 15

With a downsloping demand curve and an upsloping supply curve for a product,placing an excise tax on this product 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 16

One can say with certainty that equilibrium price will decline when supply:

Accepted Answer

A)  and demand both decrease. 
B)  increases and demand decreases. 
C)  decreases and demand increases. 
D)  and demand both increase. 
A)  and demand both decrease. 
B)  increases and demand decreases. 
C)  decreases and demand increases. 
D)  and demand both increase.

Question 17

When an economist says that the demand for a product has increased,this means that:

Accepted Answer

A)  consumers are now willing to purchase more of this product at each possible price. 
B)  the product has become particularly scarce for some reason. 
C)  product price has fallen and,as a consequence,consumers are buying a larger quantity of the product. 
D)  the demand curve has shifted to the left. 
A)  consumers are now willing to purchase more of this product at each possible price. 
B)  the product has become particularly scarce for some reason. 
C)  product price has fallen and,as a consequence,consumers are buying a larger quantity of the product. 
D)  the demand curve has shifted to the left.

Question 18

At the point where the demand and supply curves for a product intersect:

Accepted Answer

A)  the selling price and the buying price need not be equal. 
B)  the market may,or may not,be in equilibrium. 
C)  either a shortage or a surplus of the product might exist,depending on the degree of competition. 
D)  the quantity that consumers want to purchase and the amount producers choose to sell are the same. 
A)  the selling price and the buying price need not be equal. 
B)  the market may,or may not,be in equilibrium. 
C)  either a shortage or a surplus of the product might exist,depending on the degree of competition. 
D)  the quantity that consumers want to purchase and the amount producers choose to sell are the same.

Question 19

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Accepted Answer

A)  An increase in supply. 
B)  An increase in demand. 
C)  A decrease in supply. 
D)  A decrease in demand. 
A)  An increase in supply. 
B)  An increase in demand. 
C)  A decrease in supply. 
D)  A decrease in demand.

Question 20

If we say that a price is too high to clear the market,we mean that:

Accepted Answer

A)  quantity demanded exceeds quantity supplied. 
B)  the equilibrium price is above the current price. 
C)  quantity supplied exceeds quantity demanded. 
D)  the price of the good is likely to rise. 
A)  quantity demanded exceeds quantity supplied. 
B)  the equilibrium price is above the current price. 
C)  quantity supplied exceeds quantity demanded. 
D)  the price of the good is likely to rise.

Exam 3: Demand, Supply, and Market Equilibrium

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

If the price of product L increases,the demand curve for close-substitute product J will:

(Consider This)Ticket scalping:

A surplus of a product will arise when price is:

If an economy produces its most wanted goods but uses outdated production methods,it is:

The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

An inferior good is:

Suppose an excise tax is imposed on product X.We expect this tax to:

Suppose that corn prices rise significantly.If farmers expect the price of corn to continue rising relative to other crops,then we would expect:

Suppose that at prices of $1,$2,$3,$4,and $5 for product Z,the corresponding quantities supplied are 3,4,5,6,and 7 units,respectively.Which of the following would increase the quantities supplied of Z to,say,6,8,10,12,and 14 units at these prices?

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.Equilibrium price will be:

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Given a downsloping demand curve and an upsloping supply curve for a product,an increase in the price of a substitute good (from the buyer's perspective)will:

Assume the demand curve for product X shifts to the right.This might be caused by:

With a downsloping demand curve and an upsloping supply curve for a product,placing an excise tax on this product will:

One can say with certainty that equilibrium price will decline when supply:

When an economist says that the demand for a product has increased,this means that:

At the point where the demand and supply curves for a product intersect:

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

If we say that a price is too high to clear the market,we mean that:

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

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