Question 1

An increase in quantity supplied might be caused by an increase in production costs.

Accepted Answer

A) True 
 B)False

Question 2

An improvement in production technology will:

Accepted Answer

A)  increase equilibrium price. 
B)  shift the supply curve to the left. 
C)  shift the supply curve to the right. 
D)  shift the demand curve to the left. 
A)  increase equilibrium price. 
B)  shift the supply curve to the left. 
C)  shift the supply curve to the right. 
D)  shift the demand curve to the left.

Question 3

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

Accepted Answer

A)  higher education is an exception to the law of demand. 
B)  the supply of education provided by GSU has also increased over the 20-year period. 
C)  school-age population,incomes,and preferences for education have changed over the 20-year period. 
D)  GSU's supply curve of education is downsloping. 
A)  higher education is an exception to the law of demand. 
B)  the supply of education provided by GSU has also increased over the 20-year period. 
C)  school-age population,incomes,and preferences for education have changed over the 20-year period. 
D)  GSU's supply curve of education is downsloping.

Question 4

If Z is an inferior good,an increase in money income will shift the:

Accepted Answer

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

Question 5

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

Accepted Answer

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

Question 6

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 the price of a product that is a complement to X will:

Accepted Answer

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

Question 7

The demand curve shows the relationship between:

Accepted Answer

A)  money income and quantity demanded. 
B)  price and production costs. 
C)  price and quantity demanded. 
D)  consumer tastes and quantity demanded. 
A)  money income and quantity demanded. 
B)  price and production costs. 
C)  price and quantity demanded. 
D)  consumer tastes and quantity demanded.

Question 8

An increase in the price of a product will reduce the amount of it purchased because:

Accepted Answer

A)  supply curves are upsloping. 
B)  the higher price means that real incomes have risen. 
C)  consumers will substitute other products for the one whose price has risen. 
D)  consumers substitute relatively high-priced for relatively low-priced products. 
A)  supply curves are upsloping. 
B)  the higher price means that real incomes have risen. 
C)  consumers will substitute other products for the one whose price has risen. 
D)  consumers substitute relatively high-priced for relatively low-priced products.

Question 9

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 improvement in the technology used to produce X will:

Accepted Answer

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

Question 10

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

Accepted Answer

A)  decrease,quantity demanded will decrease,and quantity supplied will increase. 
B)  decrease and quantity demanded and quantity supplied will both decrease. 
C)  increase,quantity demanded will increase,and quantity supplied will decrease. 
D)  increase,quantity demanded will decrease,and quantity supplied will increase. 
A)  decrease,quantity demanded will decrease,and quantity supplied will increase. 
B)  decrease and quantity demanded and quantity supplied will both decrease. 
C)  increase,quantity demanded will increase,and quantity supplied will decrease. 
D)  increase,quantity demanded will decrease,and quantity supplied will increase.

Question 11

In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

Accepted Answer

A)  complementary goods and the higher price for oil increased the demand for natural gas. 
B)  substitute goods and the higher price for oil increased the demand for natural gas. 
C)  complementary goods and the higher price for oil decreased the supply of natural gas. 
D)  substitute goods and the higher price for oil decreased the supply of natural gas. 
A)  complementary goods and the higher price for oil increased the demand for natural gas. 
B)  substitute goods and the higher price for oil increased the demand for natural gas. 
C)  complementary goods and the higher price for oil decreased the supply of natural gas. 
D)  substitute goods and the higher price for oil decreased the supply of natural gas.

Question 12

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Accepted Answer

A) True 
 B)False

Question 13

(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 quantity is:

Accepted Answer

A)  15. 
B)  20. 
C)  24. 
D)  32. 
A)  15. 
B)  20. 
C)  24. 
D)  32.

Question 14

An increase in the quantity demanded means that:

Accepted Answer

A)  given supply,the price of the product can be expected to decline. 
B)  price has declined and consumers therefore want to purchase more of the product. 
C)  the demand curve has shifted to the right. 
D)  the demand curve has shifted to the left. 
A)  given supply,the price of the product can be expected to decline. 
B)  price has declined and consumers therefore want to purchase more of the product. 
C)  the demand curve has shifted to the right. 
D)  the demand curve has shifted to the left.

Question 15

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 the price of a product that is a close substitute for X will:

Accepted Answer

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

Question 16

Producing a good in the least costly way is known as allocative efficiency.

Accepted Answer

A) True 
 B)False

Question 17

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Accepted Answer

A)  a smaller quantity of C will be demanded. 
B)  a larger quantity of C will be demanded. 
C)  the demand for C will increase. 
D)  the demand for C will decrease. 
A)  a smaller quantity of C will be demanded. 
B)  a larger quantity of C will be demanded. 
C)  the demand for C will increase. 
D)  the demand for C will decrease.

Question 18

(Consider This)Ticket scalping refers to:

Accepted Answer

A)  the surplus of tickets that occurs when price is set below equilibrium. 
B)  the shortage of tickets that occurs when price is set above equilibrium. 
C)  pricing tickets so high that an athletic or artistic event will not be sold out. 
D)  reselling a ticket at a price above its original purchase price. 
A)  the surplus of tickets that occurs when price is set below equilibrium. 
B)  the shortage of tickets that occurs when price is set above equilibrium. 
C)  pricing tickets so high that an athletic or artistic event will not be sold out. 
D)  reselling a ticket at a price above its original purchase price.

Question 19

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Accepted Answer

A) True 
 B)False

Question 20

If there is a surplus of a product,its price:

Accepted Answer

A)  is below the equilibrium level. 
B)  is above the equilibrium level. 
C)  will rise in the near future. 
D)  is in equilibrium. 
A)  is below the equilibrium level. 
B)  is above the equilibrium level. 
C)  will rise in the near future. 
D)  is in equilibrium.

An increase in quantity supplied might be caused by an increase in production costs.

An improvement in production technology will:

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

If Z is an inferior good,an increase in money income will shift the:

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

The demand curve shows the relationship between:

An increase in the price of a product will reduce the amount of it purchased because:

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

An increase in the quantity demanded means that:

Producing a good in the least costly way is known as allocative efficiency.

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

(Consider This)Ticket scalping refers to:

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

If there is a surplus of a product,its price:

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

An increase in quantity supplied might be caused by an increase in production costs.

An improvement in production technology will:

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

If Z is an inferior good,an increase in money income will shift the:

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

The demand curve shows the relationship between:

An increase in the price of a product will reduce the amount of it purchased because:

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

An increase in the quantity demanded means that:

Producing a good in the least costly way is known as allocative efficiency.

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

(Consider This)Ticket scalping refers to:

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

If there is a surplus of a product,its price:

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