Question 1

Which of the following is a result of the greater availability of electronic communication?

Accepted Answer

A) There is more emphasis on personal service in the market. 
B) Markets are becoming smaller. 
C) Markets are becoming inefficient. 
D) Markets are becoming more efficient. 
A) There is more emphasis on personal service in the market. 
B) Markets are becoming smaller. 
C) Markets are becoming inefficient. 
D) Markets are becoming more efficient.

Question 2

Distinguish between the substitution effect and substitute products.

Accepted Answer

The substitution effect is the substitut

Question 3

What is the effect on an inferior product if income increases?

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 4

What is the effect of an improvement in technology?

Accepted Answer

A) It will cause a increase in the quantity supplied. 
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 a increase in the quantity supplied. 
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 5

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if demand increased by 60?

Accepted Answer

A) $1,600 and 120. 
B) $1,400 and 140. 
C) $1,200 and 160. 
D) $1,000 and 140. 
E) $1,000 and 180. 
A) $1,600 and 120. 
B) $1,400 and 140. 
C) $1,200 and 160. 
D) $1,000 and 140. 
E) $1,000 and 180.

Question 6

Which of the following is not a result of the greater availability of electronic communication?

Accepted Answer

A) Buyers have access to more information. 
B) The sellers markets are expanding. 
C) Supply chain bottlenecks are increasing. 
D) The need to stockpile inventory is diminishing. 
A) Buyers have access to more information. 
B) The sellers markets are expanding. 
C) Supply chain bottlenecks are increasing. 
D) The need to stockpile inventory is diminishing.

Question 7

What is the term for those products which consumers see as interchangeable (one for the other)?

Accepted Answer

A) Normal products. 
B) Complementary products. 
C) Substitute products. 
D) Inferior products. 
A) Normal products. 
B) Complementary products. 
C) Substitute products. 
D) Inferior products.

Question 8

-Refer to the above graph to answer this question.What could cause the movement from point B to point C?

Accepted Answer

A) An increase in the demand. 
B) A decrease in the price. 
C) A decrease in prices of resources. 
D) An increase in the price of a substitute product. 
E) An increase in the price of a complementary product. 
A) An increase in the demand. 
B) A decrease in the price. 
C) A decrease in prices of resources. 
D) An increase in the price of a substitute product. 
E) An increase in the price of a complementary product.

Question 9

All of the following except one will cause the demand for a normal product to increase.Which is the exception?

Accepted Answer

A) The expectation by consumers that the future price will be higher. 
B) The fear of consumers of a future strike in the industry. 
C) An increase in the price of a complementary product. 
D) An increase in the price of a substitute product. 
E) An increase in consumer incomes. 
A) The expectation by consumers that the future price will be higher. 
B) The fear of consumers of a future strike in the industry. 
C) An increase in the price of a complementary product. 
D) An increase in the price of a substitute product. 
E) An increase in consumer incomes.

Question 10

-Refer to the above graph to answer this question.What are the implications if the price of this product is $8?

Accepted Answer

A) The price would be above equilibrium. 
B) There would be a shortage of 300 units. 
C) There would be a shortage of 600 units. 
D) There would be a surplus of 300 units. 
E) There would be a surplus of 600 units. 
A) The price would be above equilibrium. 
B) There would be a shortage of 300 units. 
C) There would be a shortage of 600 units. 
D) There would be a surplus of 300 units. 
E) There would be a surplus of 600 units.

Question 11

Briefly explain the five determinants of market demand.

Accepted Answer

The first determinant of market demand i

Question 12

What is meant by the term ceteris paribus?

Accepted Answer

A) A downward-sloping demand curve. 
B) Other things being equal. 
C) All things vary. 
D) Prices remain constant. 
A) A downward-sloping demand curve. 
B) Other things being equal. 
C) All things vary. 
D) Prices remain constant.

Question 13

Which of the following factors will shift the demand curve to the left?

Accepted Answer

A) An increase in the price of a substitute product. 
B) A decrease in the price of a complementary product. 
C) An increase in income if the product is an inferior product. 
D) The expectation that future prices of the product will be higher. 
A) An increase in the price of a substitute product. 
B) A decrease in the price of a complementary product. 
C) An increase in income if the product is an inferior product. 
D) The expectation that future prices of the product will be higher.

Question 14

-Refer to the graph above to answer this question.What is the effect if the price is $1,000.

Accepted Answer

A) There is neither a shortage nor a surplus. 
B) Price will rise. 
C) Price will fall. 
D) The quantity traded is 100. 
A) There is neither a shortage nor a surplus. 
B) Price will rise. 
C) Price will fall. 
D) The quantity traded is 100.

Question 15

Which of the following could cause an increase in the supply of wheat?

Accepted Answer

A) A decrease in the price of oats. 
B) An imposition of a sales tax on wheat. 
C) An increase in the price of fertilizer. 
D) Producers expect the price of wheat to increase. 
A) A decrease in the price of oats. 
B) An imposition of a sales tax on wheat. 
C) An increase in the price of fertilizer. 
D) Producers expect the price of wheat to increase.

Question 16

Distinguish between demand and quantity demanded.

Accepted Answer

Demand refers to the whole range of quan

Question 17

What is market supply?

Accepted Answer

A) The total supply of a product demanded by all consumers. 
B) The total quantity sold in a market. 
C) The total supply of a product offered by all producers. 
D) The surplus over and above the market demand. 
A) The total supply of a product demanded by all consumers. 
B) The total quantity sold in a market. 
C) The total supply of a product offered by all producers. 
D) The surplus over and above the market demand.

Question 18

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

Accepted Answer

A) A price of $1,000 and quantity traded of 120. 
B) A price of $1,000 and quantity traded of 160. 
C) A price of $1,200 and quantity traded of 160. 
D) A price of $1,400 and quantity traded of 160. 
E) A price of $1,400 and quantity traded of 240. 
A) A price of $1,000 and quantity traded of 120. 
B) A price of $1,000 and quantity traded of 160. 
C) A price of $1,200 and quantity traded of 160. 
D) A price of $1,400 and quantity traded of 160. 
E) A price of $1,400 and quantity traded of 240.

Question 19

If the price of a product is above equilibrium,which of the following statements is true?

Accepted Answer

A) The quantity demanded will exceed the quantity supplied. 
B) The quantity supplied will exceed the quantity demanded. 
C) A shortage of the product exists. 
D) None of the choices are correct. 
A) The quantity demanded will exceed the quantity supplied. 
B) The quantity supplied will exceed the quantity demanded. 
C) A shortage of the product exists. 
D) None of the choices are correct.

Question 20

The following figure shows the market for grapefruit (in kilos):
  
-Refer to the diagram above to answer this question.If buyers think that the price of grapefruits is going to rise,causing the demand to change by 6 kilos,what will be the new equilibrium price and quantity?

Accepted Answer

A) $2.50 and 28 kilos 
B) $2.75 and 26 kilos 
C) $2.50 and 26 kilos 
D) $3.00 and 36 kilos 
A) $2.50 and 28 kilos 
B) $2.75 and 26 kilos 
C) $2.50 and 26 kilos 
D) $3.00 and 36 kilos

Which of the following is a result of the greater availability of electronic communication?

Distinguish between the substitution effect and substitute products.

What is the effect on an inferior product if income increases?

What is the effect of an improvement in technology?

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if demand increased by 60?

Which of the following is not a result of the greater availability of electronic communication?

What is the term for those products which consumers see as interchangeable (one for the other)?

-Refer to the above graph to answer this question.What could cause the movement from point B to point C?

All of the following except one will cause the demand for a normal product to increase.Which is the exception?

-Refer to the above graph to answer this question.What are the implications if the price of this product is $8?

Briefly explain the five determinants of market demand.

What is meant by the term ceteris paribus?

Which of the following factors will shift the demand curve to the left?

-Refer to the graph above to answer this question.What is the effect if the price is $1,000.

Which of the following could cause an increase in the supply of wheat?

Distinguish between demand and quantity demanded.

What is market supply?

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

If the price of a product is above equilibrium,which of the following statements is true?

The following figure shows the market for grapefruit (in kilos): -Refer to the diagram above to answer this question.If buyers think that the price of grapefruits is going to rise,causing the demand to change by 6 kilos,what will be the new equilibrium price and quantity?

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

Which of the following is a result of the greater availability of electronic communication?

Distinguish between the substitution effect and substitute products.

What is the effect on an inferior product if income increases?

What is the effect of an improvement in technology?

-Refer to the graph above to answer this question.What would be the new equilibrium price and quantity if demand increased by 60?

Which of the following is not a result of the greater availability of electronic communication?

What is the term for those products which consumers see as interchangeable (one for the other)?

-Refer to the above graph to answer this question.What could cause the movement from point B to point C?

All of the following except one will cause the demand for a normal product to increase.Which is the exception?

-Refer to the above graph to answer this question.What are the implications if the price of this product is $8?

Briefly explain the five determinants of market demand.

What is meant by the term ceteris paribus?

Which of the following factors will shift the demand curve to the left?

-Refer to the graph above to answer this question.What is the effect if the price is $1,000.

Which of the following could cause an increase in the supply of wheat?

Distinguish between demand and quantity demanded.

What is market supply?

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?

If the price of a product is above equilibrium,which of the following statements is true?

The following figure shows the market for grapefruit (in kilos): -Refer to the diagram above to answer this question.If buyers think that the price of grapefruits is going to rise,causing the demand to change by 6 kilos,what will be the new equilibrium price and quantity?

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