Question 1

Which of the following will not cause a shift in the demand curve for a good?

Accepted Answer

A)  Income. 
B)  Taste. 
C)  The price of the good itself. 
D)  The prices of other related goods. 
A)  Income. 
B)  Taste. 
C)  The price of the good itself. 
D)  The prices of other related goods.

Question 2

The invisible hand is most consistent with:

Accepted Answer

A)  The use of price ceilings. 
B)  Government failure. 
C)  The market mechanism without government interference. 
D)  A market surplus. 
A)  The use of price ceilings. 
B)  Government failure. 
C)  The market mechanism without government interference. 
D)  A market surplus.

Question 3

According to the law of demand,a change in _______ causes a movement along the demand curve.

Accepted Answer

A)  Buyers' expectations 
B)  The number of buyers 
C)  The price of the good 
D)  The price of other related goods 
A)  Buyers' expectations 
B)  The number of buyers 
C)  The price of the good 
D)  The price of other related goods

Question 4

Ceteris paribus means:

Accepted Answer

A)  Holding everything else constant. 
B)  Allowing the free market to decide,not government. 
C)  Changing prices to see how demand (or supply)shifts. 
D)  Allowing the government to decide,not the market. 
A)  Holding everything else constant. 
B)  Allowing the free market to decide,not government. 
C)  Changing prices to see how demand (or supply)shifts. 
D)  Allowing the government to decide,not the market.

Question 5

Figure 3.2:  
-In Figure 3.2,at a price of $10 there is a:

Accepted Answer

A)  Shortage of 10 units. 
B)  Shortage of 20 units. 
C)  Surplus of 20 units. 
D)  Surplus of 10 units. 
A)  Shortage of 10 units. 
B)  Shortage of 20 units. 
C)  Surplus of 20 units. 
D)  Surplus of 10 units.

Question 6

Which of the following events would cause a rightward shift in the supply curve for automobiles?

Accepted Answer

A)  An improvement in the technology used to produce automobiles. 
B)  An increase in the cost of labor for automobile producers. 
C)  An increase in taxes for automobile producers. 
D)  A decrease in the number of sellers. 
A)  An improvement in the technology used to produce automobiles. 
B)  An increase in the cost of labor for automobile producers. 
C)  An increase in taxes for automobile producers. 
D)  A decrease in the number of sellers.

Question 7

Consumers:

Accepted Answer

A)  Provide dollars to the product market. 
B)  Receive dollars from the product market. 
C)  Provide dollars to the factor market. 
D)  Receive goods and services from the factor market. 
A)  Provide dollars to the product market. 
B)  Receive dollars from the product market. 
C)  Provide dollars to the factor market. 
D)  Receive goods and services from the factor market.

Question 8

A market in which finished goods and services are exchanged is a:

Accepted Answer

A)  Financial market. 
B)  Intermediate-goods market. 
C)  Factor market. 
D)  Product market. 
A)  Financial market. 
B)  Intermediate-goods market. 
C)  Factor market. 
D)  Product market.

Question 9

Which of the following will not shift the demand curve for natural gas?

Accepted Answer

A)  A change in consumer income. 
B)  A change in consumer expectations. 
C)  A change in the weather and heating requirements. 
D)  A change in the technology used to produce natural gas. 
A)  A change in consumer income. 
B)  A change in consumer expectations. 
C)  A change in the weather and heating requirements. 
D)  A change in the technology used to produce natural gas.

Question 10

According to the law of supply,there is an inverse relationship between price and quantity supplied.

Accepted Answer

A) True 
 B)False

Question 11

Economists make a distinction between changes in quantity demanded and changes in demand:

Accepted Answer

A)  Because the supply curve shifts whenever there is a change in demand. 
B)  Because the demand curve shifts whenever there is a change in quantity demanded. 
C)  To distinguish a movement along a demand curve from a shift of the demand curve. 
D)  To distinguish a surplus from a shortage. 
A)  Because the supply curve shifts whenever there is a change in demand. 
B)  Because the demand curve shifts whenever there is a change in quantity demanded. 
C)  To distinguish a movement along a demand curve from a shift of the demand curve. 
D)  To distinguish a surplus from a shortage.

Question 12

Ceteris paribus,which of the following will cause the supply of milk shakes to increase?

Accepted Answer

A)  Consumer incomes increase. 
B)  A new diet craze suggests that people can consume milk shakes and lose weight. 
C)  The cost of milk,a key ingredient,decreases. 
D)  The wages paid to those who work on dairy farms increases. 
A)  Consumer incomes increase. 
B)  A new diet craze suggests that people can consume milk shakes and lose weight. 
C)  The cost of milk,a key ingredient,decreases. 
D)  The wages paid to those who work on dairy farms increases.

Question 13

Which of the following situations is sufficient to represent current demand for a car?

Accepted Answer

A)  You have plenty of money to buy it,but you can't decide if you want a motorcycle or a car. 
B)  You have enough money to buy it,and you are willing to spend the money on the car. 
C)  You've decided you want a car,and you can possibly borrow the money from a bank. 
D)  You want to buy a motorcycle and a car,and you'll have enough money for both in two years. 
A)  You have plenty of money to buy it,but you can't decide if you want a motorcycle or a car. 
B)  You have enough money to buy it,and you are willing to spend the money on the car. 
C)  You've decided you want a car,and you can possibly borrow the money from a bank. 
D)  You want to buy a motorcycle and a car,and you'll have enough money for both in two years.

Question 14

A policy of laissez faire relies on the invisible hand to determine prices for goods and services.

Accepted Answer

A) True 
 B)False

Question 15

A market shortage occurs when:

Accepted Answer

A)  The quantity demanded is less than the quantity supplied at a given price. 
B)  The market price is below equilibrium. 
C)  Sellers produce a lot of the product and consumers like it a lot. 
D)  A new product is introduced at the equilibrium price. 
A)  The quantity demanded is less than the quantity supplied at a given price. 
B)  The market price is below equilibrium. 
C)  Sellers produce a lot of the product and consumers like it a lot. 
D)  A new product is introduced at the equilibrium price.

Question 16

Producers do not participate in the factor market.

Accepted Answer

A) True 
 B)False

Question 17

The demand schedule and demand curve remain unchanged only so long as the underlying determinants of demand remain constant.

Accepted Answer

A) True 
 B)False

Question 18

Figure 3.2:  
-In Figure 3.2,the highest price at which buyers are willing and able to purchase 5 units is:

Accepted Answer

A)  $20. 
B)  $30. 
C)  $40. 
D)  $50. 
A)  $20. 
B)  $30. 
C)  $40. 
D)  $50.

Question 19

The doctrine of laissez-faire:

Accepted Answer

A)  Promotes central planning by the government. 
B)  Explains the inefficiencies of the market system. 
C)  Supports nonintervention by government in the market mechanism. 
D)  Promotes massive government regulation of markets. 
A)  Promotes central planning by the government. 
B)  Explains the inefficiencies of the market system. 
C)  Supports nonintervention by government in the market mechanism. 
D)  Promotes massive government regulation of markets.

Question 20

The quantity of a good demanded in a given time period increases as the price falls,which is known as:

Accepted Answer

A)  Say's Law. 
B)  The law of ceteris paribus. 
C)  The law of demand. 
D)  The opportunity cost. 
A)  Say's Law. 
B)  The law of ceteris paribus. 
C)  The law of demand. 
D)  The opportunity cost.

Which of the following will not cause a shift in the demand curve for a good?

The invisible hand is most consistent with:

According to the law of demand,a change in _______ causes a movement along the demand curve.

Ceteris paribus means:

Figure 3.2: -In Figure 3.2,at a price of $10 there is a:

Which of the following events would cause a rightward shift in the supply curve for automobiles?

Consumers:

A market in which finished goods and services are exchanged is a:

Which of the following will not shift the demand curve for natural gas?

According to the law of supply,there is an inverse relationship between price and quantity supplied.

Economists make a distinction between changes in quantity demanded and changes in demand:

Ceteris paribus,which of the following will cause the supply of milk shakes to increase?

Which of the following situations is sufficient to represent current demand for a car?

A policy of laissez faire relies on the invisible hand to determine prices for goods and services.

A market shortage occurs when:

Producers do not participate in the factor market.

The demand schedule and demand curve remain unchanged only so long as the underlying determinants of demand remain constant.

Figure 3.2: -In Figure 3.2,the highest price at which buyers are willing and able to purchase 5 units is:

The doctrine of laissez-faire:

The quantity of a good demanded in a given time period increases as the price falls,which is known as:

The Challenge of Economics

The US Economy

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 3: Supply and Demand

Which of the following will not cause a shift in the demand curve for a good?

The invisible hand is most consistent with:

According to the law of demand,a change in _______ causes a movement along the demand curve.

Ceteris paribus means:

Figure 3.2: -In Figure 3.2,at a price of $10 there is a:

Which of the following events would cause a rightward shift in the supply curve for automobiles?

Consumers:

A market in which finished goods and services are exchanged is a:

Which of the following will not shift the demand curve for natural gas?

According to the law of supply,there is an inverse relationship between price and quantity supplied.

Economists make a distinction between changes in quantity demanded and changes in demand:

Ceteris paribus,which of the following will cause the supply of milk shakes to increase?

Which of the following situations is sufficient to represent current demand for a car?

A policy of laissez faire relies on the invisible hand to determine prices for goods and services.

A market shortage occurs when:

Producers do not participate in the factor market.

The demand schedule and demand curve remain unchanged only so long as the underlying determinants of demand remain constant.

Figure 3.2: -In Figure 3.2,the highest price at which buyers are willing and able to purchase 5 units is:

The doctrine of laissez-faire:

The quantity of a good demanded in a given time period increases as the price falls,which is known as:

The Challenge of Economics

The US Economy

Consumer Demand

Supply Decisions

Competition

Monopoly

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters