Question 1

Market demand is given as Qd = 95- P.Market supply is given as Qs = 3P + 15.What would result if the market price were $25?

Accepted Answer

A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40 
A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40

Question 2

How do demand and supply for banana cream pie change if the price of bananas increased?

Accepted Answer

A)  Demand decreases,and supply increases. 
B)  Demand does not change,and supply decreases. 
C)  Demand increases,and supply does not change. 
D)  Both demand and supply increase. 
A)  Demand decreases,and supply increases. 
B)  Demand does not change,and supply decreases. 
C)  Demand increases,and supply does not change. 
D)  Both demand and supply increase.

Question 3

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto workers accept lower wages,and automobile insurance becomes more expensive?

Accepted Answer

A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous 
A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous

Question 4

Why do markets move toward equilibrium of supply and demand?

Accepted Answer

A)  because of the actions of buyers and sellers 
B)  because of government regulations placed on market participants 
C)  because of increased competition among sellers 
D)  because of buyers' ability to affect market decisions 
A)  because of the actions of buyers and sellers 
B)  because of government regulations placed on market participants 
C)  because of increased competition among sellers 
D)  because of buyers' ability to affect market decisions

Question 5

Market demand is given as QD = 120 - P.Market supply is given as QS = 4P.If price increases from $60 to $65,what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.9 
C)  1.1 
D)  2.1 
A)  0.1 
B)  0.9 
C)  1.1 
D)  2.1

Question 6

What will happen in the rice market if buyers are expecting higher prices in the near future?

Accepted Answer

A)  Demand increases and supply decreases. 
B)  Both demand and supply increase. 
C)  Demand decreases and supply increases. 
D)  Both demand and supply decrease. 
A)  Demand increases and supply decreases. 
B)  Both demand and supply increase. 
C)  Demand decreases and supply increases. 
D)  Both demand and supply decrease.

Question 7

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $6 to $8,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  0.9 
C)  1.0 
D)  2.0 
A)  0.3 
B)  0.9 
C)  1.0 
D)  2.0

Question 8

Market demand is given as QD = 300 - 3P.Market supply is given as QS = 2P + 100.If price increases from $25 to $30,what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.4 
C)  1.4 
D)  2.3 
A)  0.2 
B)  0.4 
C)  1.4 
D)  2.3

Question 9

Figure 4-4  
-Refer to the Figure 4-4.At a price of $20,which of the following would happen?

Accepted Answer

A)  The price would decrease and the quantity would decrease. 
B)  Both price and quantity would remain unchanged. 
C)  The price would decrease and the quantity would increase. 
D)  The price would increase and the quantity would decrease. 
A)  The price would decrease and the quantity would decrease. 
B)  Both price and quantity would remain unchanged. 
C)  The price would decrease and the quantity would increase. 
D)  The price would increase and the quantity would decrease.

Question 10

What happens in a competitive market?

Accepted Answer

A)  There is only one seller of the product. 
B)  Each seller of the product is free to set the price of his product. 
C)  Each seller attempts to compete with other sellers,causing fewer sellers in the market. 
D)  There are so many buyers and sellers that each has a negligible impact on price. 
A)  There is only one seller of the product. 
B)  Each seller of the product is free to set the price of his product. 
C)  Each seller attempts to compete with other sellers,causing fewer sellers in the market. 
D)  There are so many buyers and sellers that each has a negligible impact on price.

Question 11

Market demand is given as Qd = 70 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $30?

Accepted Answer

A)  a shortage of 30 
B)  a surplus of 40 
C)  a surplus of 30 
D)  a shortage of 40 
A)  a shortage of 30 
B)  a surplus of 40 
C)  a surplus of 30 
D)  a shortage of 40

Question 12

What will a country with an aging population generally experience?

Accepted Answer

A)  no change in either market demand or individual demand for prescription drugs 
B)  a decrease in the market demand for prescription drugs 
C)  an increase in individual demand for prescription drugs,but no change in market demand 
D)  an increase in the market demand for prescription drugs 
A)  no change in either market demand or individual demand for prescription drugs 
B)  a decrease in the market demand for prescription drugs 
C)  an increase in individual demand for prescription drugs,but no change in market demand 
D)  an increase in the market demand for prescription drugs

Question 13

Suppose both demand and supply decrease.How do the equilibrium price and quantity change?

Accepted Answer

A)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 14

Suppose that Carolyn receives a pay increase.What would we expect?

Accepted Answer

A)  Carolyn's demand for normal goods to remain unchanged. 
B)  Carolyn's demand for inferior goods to decrease. 
C)  Carolyn's demand for luxury goods to decrease. 
D)  Carolyn's demand for normal goods to decrease. 
A)  Carolyn's demand for normal goods to remain unchanged. 
B)  Carolyn's demand for inferior goods to decrease. 
C)  Carolyn's demand for luxury goods to decrease. 
D)  Carolyn's demand for normal goods to decrease.

Question 15

Market demand is given as Qd =150 - 3P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $20 and quantity will be 40 
B)  price will be $30and quantity will be 60 
C)  price will be $40 and quantity will be 60 
D)  price will be $30 and quantity will be 20 
A)  price will be $20 and quantity will be 40 
B)  price will be $30and quantity will be 60 
C)  price will be $40 and quantity will be 60 
D)  price will be $30 and quantity will be 20

Question 16

What can be said about economists in general?

Accepted Answer

A)  They do not try to explain people's tastes,but do try to explain what happens when tastes change. 
B)  They must be able to explain people's tastes to explain what happens when tastes change. 
C)  They do not believe that people's tastes determine demand and therefore ignore the subject of tastes. 
D)  They believe that tastes and demand move in opposite directions. 
A)  They do not try to explain people's tastes,but do try to explain what happens when tastes change. 
B)  They must be able to explain people's tastes to explain what happens when tastes change. 
C)  They do not believe that people's tastes determine demand and therefore ignore the subject of tastes. 
D)  They believe that tastes and demand move in opposite directions.

Question 17

If the demand for a product increases,what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 18

Figure 4-2  
-Refer to the Figure 4-2.What would happen at a price of $35?

Accepted Answer

A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall. 
A)  A shortage would exist and the price would tend to fall. 
B)  A shortage would exist and the price would tend to rise. 
C)  A surplus would exist and the price would tend to rise. 
D)  A surplus would exist and the price would tend to fall.

Question 19

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $21 to $23,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  1.0 
C)  3.7 
D)  9.4 
A)  0.3 
B)  1.0 
C)  3.7 
D)  9.4

Question 20

Which of the following would NOT be a determinant of demand?

Accepted Answer

A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good 
A)  the price of related goods 
B)  income 
C)  expectations 
D)  the prices of the inputs used to produce the good

Market demand is given as Qd = 95- P.Market supply is given as Qs = 3P + 15.What would result if the market price were $25?

How do demand and supply for banana cream pie change if the price of bananas increased?

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto workers accept lower wages,and automobile insurance becomes more expensive?

Why do markets move toward equilibrium of supply and demand?

Market demand is given as QD = 120 - P.Market supply is given as QS = 4P.If price increases from $60 to $65,what is the price elasticity of demand?

What will happen in the rice market if buyers are expecting higher prices in the near future?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $6 to $8,what is the price elasticity of demand?

Market demand is given as QD = 300 - 3P.Market supply is given as QS = 2P + 100.If price increases from $25 to $30,what is the price elasticity of demand?

Figure 4-4 -Refer to the Figure 4-4.At a price of $20,which of the following would happen?

What happens in a competitive market?

Market demand is given as Qd = 70 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $30?

What will a country with an aging population generally experience?

Suppose both demand and supply decrease.How do the equilibrium price and quantity change?

Suppose that Carolyn receives a pay increase.What would we expect?

Market demand is given as Qd =150 - 3P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

What can be said about economists in general?

If the demand for a product increases,what would we expect?

Figure 4-2 -Refer to the Figure 4-2.What would happen at a price of $35?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $21 to $23,what is the price elasticity of demand?

Which of the following would NOT be a determinant of demand?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

Market demand is given as Qd = 95- P.Market supply is given as Qs = 3P + 15.What would result if the market price were $25?

How do demand and supply for banana cream pie change if the price of bananas increased?

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto workers accept lower wages,and automobile insurance becomes more expensive?

Why do markets move toward equilibrium of supply and demand?

Market demand is given as QD = 120 - P.Market supply is given as QS = 4P.If price increases from $60 to $65,what is the price elasticity of demand?

What will happen in the rice market if buyers are expecting higher prices in the near future?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $6 to $8,what is the price elasticity of demand?

Market demand is given as QD = 300 - 3P.Market supply is given as QS = 2P + 100.If price increases from $25 to $30,what is the price elasticity of demand?

Figure 4-4 -Refer to the Figure 4-4.At a price of $20,which of the following would happen?

What happens in a competitive market?

Market demand is given as Qd = 70 - 2P.Market supply is given as Qs = P + 10.What would result if the market price were $30?

What will a country with an aging population generally experience?

Suppose both demand and supply decrease.How do the equilibrium price and quantity change?

Suppose that Carolyn receives a pay increase.What would we expect?

Market demand is given as Qd =150 - 3P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

What can be said about economists in general?

If the demand for a product increases,what would we expect?

Figure 4-2 -Refer to the Figure 4-2.What would happen at a price of $35?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $21 to $23,what is the price elasticity of demand?

Which of the following would NOT be a determinant of demand?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters