Question 1

What is the effect of a decrease in the price of a product?

Accepted Answer

A) It will decrease the demand. 
B) It will increase the demand. 
C) It will decrease the quantity demanded. 
D) It will increase the quantity demanded. 
A) It will decrease the demand. 
B) It will increase the demand. 
C) It will decrease the quantity demanded. 
D) It will increase the quantity demanded.

Question 2

-Refer to the above graph to answer this question.How could you describe the movement from point D to point A?

Accepted Answer

A) A decrease in supply which leads to an increase in the equilibrium price and a decrease in demand. 
B) A decrease in supply which leads to an increase in the equilibrium price and a decrease in quantity demanded. 
C) A decrease in demand which leads to an increase in the equilibrium price and a decrease in the quantity supplied. 
D) A decrease in demand which leads to an increase in the equilibrium price and a decrease in supply. 
E) A decrease in supply which leads to a decrease in the equilibrium price a decrease in demand. 
A) A decrease in supply which leads to an increase in the equilibrium price and a decrease in demand. 
B) A decrease in supply which leads to an increase in the equilibrium price and a decrease in quantity demanded. 
C) A decrease in demand which leads to an increase in the equilibrium price and a decrease in the quantity supplied. 
D) A decrease in demand which leads to an increase in the equilibrium price and a decrease in supply. 
E) A decrease in supply which leads to a decrease in the equilibrium price a decrease in demand.

Question 3

The product is a normal product.
  
-All of the following except one will cause the supply of a product to decrease.Which is the exception?

Accepted Answer

A) A decrease in the price of a substitute in production. 
B) An increase in business taxes. 
C) The expectation of suppliers that the future price of the product will be higher. 
D) An increase in the price of resources. 
E) A decrease in the number of suppliers. 
A) A decrease in the price of a substitute in production. 
B) An increase in business taxes. 
C) The expectation of suppliers that the future price of the product will be higher. 
D) An increase in the price of resources. 
E) A decrease in the number of suppliers.

Question 4

Define demand.

Accepted Answer

Demand refers to the quantitie

Question 5

The product is a normal product.
  
-What will cause the supply of a product to increase?

Accepted Answer

A) An increase in the price of resources. 
B) A decrease in the number of suppliers. 
C) The expectation of producers that the future price will be higher. 
D) An improvement in the technology of producing the product. 
E) An increase in the price of a productively related product. 
A) An increase in the price of resources. 
B) A decrease in the number of suppliers. 
C) The expectation of producers that the future price will be higher. 
D) An improvement in the technology of producing the product. 
E) An increase in the price of a productively related product.

Question 6

Stuff-Crust Pizza is a new pizza introduced by Pizza Hut.What happens to the equilibrium price and equilibrium quantity in each of the following situations?
a.Due to weather conditions,crop yields (including wheat)decreased.
b.The price of beer decreased
c.Domino's Pizza introduced a similar type of pizza that sold for $1 less than the one by Pizza Hut.
d.A recession reduced households' income.
e.A new oven technology reduced the time it takes to bake a pizza.

Accepted Answer

a.A reduction in the supply of wheat rai

Question 7

A decrease in the demand for a product will lead to a decrease in both the price and the quantity traded.

Accepted Answer

A) True 
 B)False

Question 8

-Refer to the information above to answer this question.Assume that the market was at equilibrium and that demand increases by 20 units.What will be the new equilibrium price and quantity?

Accepted Answer

A) Price will rise by $2 and quantity traded will rise by 20 units. 
B) Price will fall by $2 and quantity traded will fall by 20 units. 
C) Price will rise by $1 and quantity traded will rise by 10 units. 
D) Price will fall by $1 and quantity traded will fall by 10 units. 
A) Price will rise by $2 and quantity traded will rise by 20 units. 
B) Price will fall by $2 and quantity traded will fall by 20 units. 
C) Price will rise by $1 and quantity traded will rise by 10 units. 
D) Price will fall by $1 and quantity traded will fall by 10 units.

Question 9

What is the distinction between supply and quantity supplied?

Accepted Answer

Supply refers to the whole range of quan

Question 10

Distinguish between a demand curve and demand schedule.

Accepted Answer

Demand curve is a graphical il

Question 11

-Refer to the graph above to answer this question.All of the following except one could have caused the shift from S1 to S2.Which is the exception?

Accepted Answer

A) A decrease in income. 
B) An increase in the sales tax. 
C) An increase in the price of a substitute in production. 
D) A decrease in the number of suppliers. 
A) A decrease in income. 
B) An increase in the sales tax. 
C) An increase in the price of a substitute in production. 
D) A decrease in the number of suppliers.

Question 12

What is the effect of an increase in the price of a resource?

Accepted Answer

A) It will cause a decrease in the supply of the product. 
B) It will cause an increase in the supply of the product. 
C) It will cause a decrease in the demand for the product. 
D) It will cause an increase in the demand for the product. 
A) It will cause a decrease in the supply of the product. 
B) It will cause an increase in the supply of the product. 
C) It will cause a decrease in the demand for the product. 
D) It will cause an increase in the demand for the product.

Question 13

-What is the effect of an increase in the price of coffee?

Accepted Answer

A) It will lead to an increase in the demand for tea. 
B) It will lead to a decrease in the demand for tea. 
C) It will have no effect on the tea market. 
D) It will increase the demand for coffee. 
A) It will lead to an increase in the demand for tea. 
B) It will lead to a decrease in the demand for tea. 
C) It will have no effect on the tea market. 
D) It will increase the demand for coffee.

Question 14

If the price of a product does not change immediately,which of the following will cause an initial surplus of a product?

Accepted Answer

A) An increase in the demand or an increase in the supply. 
B) A decrease in the demand or a decrease in the supply. 
C) An increase in the demand or a decrease in the supply. 
D) A decrease in the demand or an increase in the supply. 
E) A change in the quantity demanded. 
A) An increase in the demand or an increase in the supply. 
B) A decrease in the demand or a decrease in the supply. 
C) An increase in the demand or a decrease in the supply. 
D) A decrease in the demand or an increase in the supply. 
E) A change in the quantity demanded.

Question 15

Explain how a shortage will be eliminated.

Accepted Answer

A shortage occurs when the quantity dema

Question 16

What will cause the demand for a normal product to increase?

Accepted Answer

A) The expectation by consumers that future prices will be higher. 
B) A decrease in the price of a substitute product. 
C) An increase in the price of a complementary product. 
D) A decrease in income levels. 
E) A decrease in the size of the population. 
A) The expectation by consumers that future prices will be higher. 
B) A decrease in the price of a substitute product. 
C) An increase in the price of a complementary product. 
D) A decrease in income levels. 
E) A decrease in the size of the population.

Question 17

What is the effect on product A of an increase in the price of complementary product B?

Accepted Answer

A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply. 
A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply.

Question 18

What is the term for the total supply of a product offered by all producers?

Accepted Answer

A) Equilibrium quantity. 
B) Market Supply. 
C) Saturation point. 
D) Aggregate supply. 
A) Equilibrium quantity. 
B) Market Supply. 
C) Saturation point. 
D) Aggregate supply.

Question 19

Explain the difference between a normal product and an inferior product.

Accepted Answer

A normal product is one in which the dem

Question 20

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

Accepted Answer

A) Desire. 
B) Supply. 
C) Demand. 
D) Market. 
E) Human wants. 
A) Desire. 
B) Supply. 
C) Demand. 
D) Market. 
E) Human wants.

What is the effect of a decrease in the price of a product?

-Refer to the above graph to answer this question.How could you describe the movement from point D to point A?

The product is a normal product. -All of the following except one will cause the supply of a product to decrease.Which is the exception?

Define demand.

The product is a normal product. -What will cause the supply of a product to increase?

A decrease in the demand for a product will lead to a decrease in both the price and the quantity traded.

-Refer to the information above to answer this question.Assume that the market was at equilibrium and that demand increases by 20 units.What will be the new equilibrium price and quantity?

What is the distinction between supply and quantity supplied?

Distinguish between a demand curve and demand schedule.

-Refer to the graph above to answer this question.All of the following except one could have caused the shift from S1 to S2.Which is the exception?

What is the effect of an increase in the price of a resource?

-What is the effect of an increase in the price of coffee?

If the price of a product does not change immediately,which of the following will cause an initial surplus of a product?

Explain how a shortage will be eliminated.

What will cause the demand for a normal product to increase?

What is the effect on product A of an increase in the price of complementary product B?

What is the term for the total supply of a product offered by all producers?

Explain the difference between a normal product and an inferior product.

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

The Economic Problem

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 2: Demand and Supply: An Introduction

What is the effect of a decrease in the price of a product?

-Refer to the above graph to answer this question.How could you describe the movement from point D to point A?

The product is a normal product. -All of the following except one will cause the supply of a product to decrease.Which is the exception?

Define demand.

The product is a normal product. -What will cause the supply of a product to increase?

A decrease in the demand for a product will lead to a decrease in both the price and the quantity traded.

-Refer to the information above to answer this question.Assume that the market was at equilibrium and that demand increases by 20 units.What will be the new equilibrium price and quantity?

What is the distinction between supply and quantity supplied?

Distinguish between a demand curve and demand schedule.

-Refer to the graph above to answer this question.All of the following except one could have caused the shift from S1 to S2.Which is the exception?

What is the effect of an increase in the price of a resource?

-What is the effect of an increase in the price of coffee?

If the price of a product does not change immediately,which of the following will cause an initial surplus of a product?

Explain how a shortage will be eliminated.

What will cause the demand for a normal product to increase?

What is the effect on product A of an increase in the price of complementary product B?

What is the term for the total supply of a product offered by all producers?

Explain the difference between a normal product and an inferior product.

What is the term for the quantities which consumers are willing and able to buy per period of time at various prices?

The Economic Problem

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters