Question 1

Graphically,what is the effect of a decrease in the price of a product?

Accepted Answer

A) A leftward movement on the supply curve. 
B) A rightward movement on the supply curve. 
C) A leftward shift in the supply curve. 
D) A rightward shift in the supply curve. 
A) A leftward movement on the supply curve. 
B) A rightward movement on the supply curve. 
C) A leftward shift in the supply curve. 
D) A rightward shift in the supply curve.

Question 2

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month).
  
-Refer to Table 2.11 to answer this question.What are the values of equilibrium price and quantity traded?

Accepted Answer

A) $3 and 52. 
B) $3 and 62. 
C) $4 and 58. 
D) $4.50 and 56. 
E) They cannot be determined from the data. 
A) $3 and 52. 
B) $3 and 62. 
C) $4 and 58. 
D) $4.50 and 56. 
E) They cannot be determined from the data.

Question 3

All else held constant,an increase in demand will lead to a

Accepted Answer

A) decrease in price and increase in quantity supplied. 
B) increase in price and increase in quantity supplied. 
C) increase in price and decrease in quantity supplied. 
D) decrease in price and decrease in quantity supplied. 
A) decrease in price and increase in quantity supplied. 
B) increase in price and increase in quantity supplied. 
C) increase in price and decrease in quantity supplied. 
D) decrease in price and decrease in quantity supplied.

Question 4

A rightward shift in the supply curve for a product could be caused by all of the following except one.Which is the exception?

Accepted Answer

A) The expectation of suppliers that the future price of the product will increase 
B) A decrease in the price of a productive resource used in its manufacture 
C) A decrease in the price of a product that is a substitute in production 
D) A technological improvement in manufacturing methods for the product 
A) The expectation of suppliers that the future price of the product will increase 
B) A decrease in the price of a productive resource used in its manufacture 
C) A decrease in the price of a product that is a substitute in production 
D) A technological improvement in manufacturing methods for the product

Question 5

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

Accepted Answer

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

Question 6

Which of the following factors will lead to a decrease in the demand for apple juice (Apple juice is considered to be a normal good):

Accepted Answer

A) An increase in the price of apple juice. 
B) An increase in the price of apples. 
C) The expectation by consumers that the price of apple juice is likely to decrease. 
D) A decrease in consumers' average income. 
E) An increase in the price of orange juice. 
A) An increase in the price of apple juice. 
B) An increase in the price of apples. 
C) The expectation by consumers that the price of apple juice is likely to decrease. 
D) A decrease in consumers' average income. 
E) An increase in the price of orange juice.

Question 7

Which of the following pairs of products are substitutes?

Accepted Answer

A) Grapes and wine. 
B) Grapes and beer. 
C) Grapefruit juice and beer. 
D) Grapefruits and wine. 
E) Grapes and grapefruits. 
A) Grapes and wine. 
B) Grapes and beer. 
C) Grapefruit juice and beer. 
D) Grapefruits and wine. 
E) Grapes and grapefruits.

Question 8

What is market demand?

Accepted Answer

A) The substitution of one product for another as a result of a change in their relative prices. 
B) The total demand for a product by all consumers. 
C) An increase or decrease in prices based on the quantity demanded of a product. 
D) The desire to purchase cheaper competing products rather than relatively more expensive products. 
A) The substitution of one product for another as a result of a change in their relative prices. 
B) The total demand for a product by all consumers. 
C) An increase or decrease in prices based on the quantity demanded of a product. 
D) The desire to purchase cheaper competing products rather than relatively more expensive products.

Question 9

-Refer to the above graph to answer this question.What are the implications if the price of this product is $14?

Accepted Answer

A) The price would be below equilibrium. 
B) There would be a shortage of 600 units. 
C) There would be a shortage of 1,200 units. 
D) There would be a surplus of 600 units. 
E) There would be a surplus of 1,200 units. 
A) The price would be below equilibrium. 
B) There would be a shortage of 600 units. 
C) There would be a shortage of 1,200 units. 
D) There would be a surplus of 600 units. 
E) There would be a surplus of 1,200 units.

Question 10

An increase in incomes will lead to a decrease in the demand for an inferior product.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in supply causes the price to fall and the quantity traded to increase.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) An increase in the supply. 
B) An increase in the price. 
C) An increase 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 supply. 
B) An increase in the price. 
C) An increase 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 13

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

Accepted Answer

A) An increase in supply. 
B) A decrease in supply. 
C) An increase in the quantity supplied. 
D) A decrease in the quantity supplied. 
A) An increase in supply. 
B) A decrease in supply. 
C) An increase in the quantity supplied. 
D) A decrease in the quantity supplied.

Question 14

-Refer to the information above to answer this question.Assume that there is a shortage of 40 units.What does this mean?

Accepted Answer

A) Price will fall. 
B) Price must be $8. 
C) The quantity traded is 40. 
D) Buyers would be willing to pay an additional $4 per unit for the quantity being traded. 
A) Price will fall. 
B) Price must be $8. 
C) The quantity traded is 40. 
D) Buyers would be willing to pay an additional $4 per unit for the quantity being traded.

Question 15

The following table shows the demand and supply of bottles of premium olive oil for Country ABC.
   a)What are values of equilibrium price and quantity?
b)Suppose the price of premium olive oil is $6 per bottle,would there be a shortage or surplus? How much?

Accepted Answer

a)Equilibrium price is $4 and

Question 16

"If the price of pineapples changes,demand will also change." Evaluate this statement.

Accepted Answer

If the price of pineapple chan

Question 17

A change in the price of a product has no effect on the demand for that same product.

Accepted Answer

A) True 
 B)False

Question 18

What is true of complementary products?

Accepted Answer

A) When the price of one increases,the quantity purchased of the other decreases. 
B) When the price of one increases,the quantity purchased of the other increases. 
C) When the price of one decreases,the quantity purchased of the other decreases. 
D) They are products which compete with one another. 
A) When the price of one increases,the quantity purchased of the other decreases. 
B) When the price of one increases,the quantity purchased of the other increases. 
C) When the price of one decreases,the quantity purchased of the other decreases. 
D) They are products which compete with one another.

Question 19

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

Accepted Answer

A) A decrease in the demand. 
B) An increase in the price. 
C) An increase 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) A decrease in the demand. 
B) An increase in the price. 
C) An increase 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 20

What is the relationship between pizzas and hamburgers?

Accepted Answer

A) They are complementary products. 
B) They are substitute products. 
C) They are customary products. 
D) They are cooperative products. 
E) They are unrelated products. 
A) They are complementary products. 
B) They are substitute products. 
C) They are customary products. 
D) They are cooperative products. 
E) They are unrelated products.

Graphically,what is the effect of a decrease in the price of a product?

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month). -Refer to Table 2.11 to answer this question.What are the values of equilibrium price and quantity traded?

All else held constant,an increase in demand will lead to a

A rightward shift in the supply curve for a product could be caused by all of the following except one.Which is the exception?

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

Which of the following factors will lead to a decrease in the demand for apple juice (Apple juice is considered to be a normal good):

Which of the following pairs of products are substitutes?

What is market demand?

-Refer to the above graph to answer this question.What are the implications if the price of this product is $14?

An increase in incomes will lead to a decrease in the demand for an inferior product.

A decrease in supply causes the price to fall and the quantity traded to increase.

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

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

-Refer to the information above to answer this question.Assume that there is a shortage of 40 units.What does this mean?

The following table shows the demand and supply of bottles of premium olive oil for Country ABC. a)What are values of equilibrium price and quantity? b)Suppose the price of premium olive oil is $6 per bottle,would there be a shortage or surplus? How much?

"If the price of pineapples changes,demand will also change." Evaluate this statement.

A change in the price of a product has no effect on the demand for that same product.

What is true of complementary products?

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

What is the relationship between pizzas and hamburgers?

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

Graphically,what is the effect of a decrease in the price of a product?

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month). -Refer to Table 2.11 to answer this question.What are the values of equilibrium price and quantity traded?

All else held constant,an increase in demand will lead to a

A rightward shift in the supply curve for a product could be caused by all of the following except one.Which is the exception?

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

Which of the following factors will lead to a decrease in the demand for apple juice (Apple juice is considered to be a normal good):

Which of the following pairs of products are substitutes?

What is market demand?

-Refer to the above graph to answer this question.What are the implications if the price of this product is $14?

An increase in incomes will lead to a decrease in the demand for an inferior product.

A decrease in supply causes the price to fall and the quantity traded to increase.

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

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

-Refer to the information above to answer this question.Assume that there is a shortage of 40 units.What does this mean?

The following table shows the demand and supply of bottles of premium olive oil for Country ABC. a)What are values of equilibrium price and quantity? b)Suppose the price of premium olive oil is $6 per bottle,would there be a shortage or surplus? How much?

"If the price of pineapples changes,demand will also change." Evaluate this statement.

A change in the price of a product has no effect on the demand for that same product.

What is true of complementary products?

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

What is the relationship between pizzas and hamburgers?

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