Question 1

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 2

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 3

Distinguish between the substitution effect and substitute products.

Accepted Answer

The substitution effect is the substitut

Question 4

The product is a normal product.
  
-Refer to the graph above to answer this question.All of the following except one could have caused the shift from D1 to D2.Which is the exception?

Accepted Answer

A) An increase in income. 
B) An increase in the price of a substitute good. 
C) An increase in the price of a complement good. 
D) Growth in the size of the market. 
A) An increase in income. 
B) An increase in the price of a substitute good. 
C) An increase in the price of a complement good. 
D) Growth in the size of the market.

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

An increase in business taxes causes the supply curve to shift left.

Accepted Answer

A) True 
 B)False

Question 7

If the price of a product does not change immediately,which of the following will cause an initial shortage 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 supplied. 
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 supplied.

Question 8

How will the demand and supply of a product be affected if both producers and consumers expect the future price of a product will be higher than at present?

Accepted Answer

A) It will cause an increase in demand but a decrease in supply. 
B) It will cause an increase in both the demand and supply. 
C) It will cause a decrease in both the demand and supply. 
D) It will cause an increase in supply but will have no effect on demand. 
E) It will cause an increase in supply but a decrease in demand. 
A) It will cause an increase in demand but a decrease in supply. 
B) It will cause an increase in both the demand and supply. 
C) It will cause a decrease in both the demand and supply. 
D) It will cause an increase in supply but will have no effect on demand. 
E) It will cause an increase in supply but a decrease in demand.

Question 9

Which of the following pairs of products are complements?

Accepted Answer

A) Automobiles and steel. 
B) Steel and oil. 
C) Bread and flour. 
D) Cameras and films. 
E) Flour and wheat. 
A) Automobiles and steel. 
B) Steel and oil. 
C) Bread and flour. 
D) Cameras and films. 
E) Flour and wheat.

Question 10

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.

Question 11

The following table shows the initial weekly demand (D1)and the new demand (D2)for packets of pretzels (a bar snack):
  
-Refer to the information above to answer this question.In order to have produced the change in demand from D1 to D2,what might have happened to the price of a complementary product like beer?

Accepted Answer

A) It has not changed,but people must be buying less. 
B) It has not changed,but people must be buying more. 
C) It has decreased. 
D) It has increased. 
A) It has not changed,but people must be buying less. 
B) It has not changed,but people must be buying more. 
C) It has decreased. 
D) It has increased.

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 term for a table showing the various quantities supplied per period of time at different prices?

Accepted Answer

A) Demand schedule. 
B) Price schedule. 
C) Supply schedule. 
D) Market supply. 
A) Demand schedule. 
B) Price schedule. 
C) Supply schedule. 
D) Market supply.

Question 14

What is the effect on income if there is a decrease in the price of a product?

Accepted Answer

A) It will increase consumers' real income while leaving their actual income unchanged. 
B) It will increase consumers' actual income while leaving their real income unchanged. 
C) It will decrease demand. 
D) It will have no effect on income. 
A) It will increase consumers' real income while leaving their actual income unchanged. 
B) It will increase consumers' actual income while leaving their real income unchanged. 
C) It will decrease demand. 
D) It will have no effect on income.

Question 15

-Refer to the above graph to answer this question.What is the maximum price the quantity sold at a price of $8 could have been sold for?

Accepted Answer

A) $8. 
B) $10. 
C) $12. 
D) $14. 
E) Cannot be determined. 
A) $8. 
B) $10. 
C) $12. 
D) $14. 
E) Cannot be determined.

Question 16

What will a surplus of a product lead to?

Accepted Answer

A) A reduction in supply. 
B) A reduction in price. 
C) An increase in price. 
D) An increase in supply. 
A) A reduction in supply. 
B) A reduction in price. 
C) An increase in price. 
D) An increase in supply.

Question 17

What is the equilibrium price?

Accepted Answer

A) The price at which there is no surplus,but there may be a shortage. 
B) The price at which there is no shortage,but there may be a surplus. 
C) The price at which everyone is able to buy the quantities they desire. 
D) The price at which the quantity demanded equals the quantity supplied. 
E) The price that both buyers and sellers agree is fair. 
A) The price at which there is no surplus,but there may be a shortage. 
B) The price at which there is no shortage,but there may be a surplus. 
C) The price at which everyone is able to buy the quantities they desire. 
D) The price at which the quantity demanded equals the quantity supplied. 
E) The price that both buyers and sellers agree is fair.

Question 18

-Refer to the above information to answer this question.If both demand and supply increase by 40 units,what will be the new values of equilibrium price and quantity?

Accepted Answer

A) $40 and 140. 
B) $50 and 140. 
C) $60 and 100. 
D) $60 and 140. 
E) The price will be $50 but equilibrium is not possible. 
A) $40 and 140. 
B) $50 and 140. 
C) $60 and 100. 
D) $60 and 140. 
E) The price will be $50 but equilibrium is not possible.

Question 19

-Refer to the graph above to answer this question.What is the effect if the price is $1,200.

Accepted Answer

A) The quantity demanded is 120. 
B) Price will rise. 
C) The quantity supplied is 160. 
D) The quantity traded is 120. 
A) The quantity demanded is 120. 
B) Price will rise. 
C) The quantity supplied is 160. 
D) The quantity traded is 120.

Question 20

-Refer to the above graph to answer this question.If the price of the product is $8,how many units would be sold?

Accepted Answer

A) 400 units. 
B) 500 units. 
C) 600 units. 
D) 800 units. 
E) Cannot be determined. 
A) 400 units. 
B) 500 units. 
C) 600 units. 
D) 800 units. 
E) Cannot be determined.

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

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

Distinguish between the substitution effect and substitute products.

The product is a normal product. -Refer to the graph above to answer this question.All of the following except one could have caused the shift from D1 to D2.Which is the exception?

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

An increase in business taxes causes the supply curve to shift left.

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

How will the demand and supply of a product be affected if both producers and consumers expect the future price of a product will be higher than at present?

Which of the following pairs of products are complements?

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

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

What is the term for a table showing the various quantities supplied per period of time at different prices?

What is the effect on income if there is a decrease in the price of a product?

-Refer to the above graph to answer this question.What is the maximum price the quantity sold at a price of $8 could have been sold for?

What will a surplus of a product lead to?

What is the equilibrium price?

-Refer to the above information to answer this question.If both demand and supply increase by 40 units,what will be the new values of equilibrium price and quantity?

-Refer to the graph above to answer this question.What is the effect if the price is $1,200.

-Refer to the above graph to answer this question.If the price of the product is $8,how many units would be sold?

The Economic Problem

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 2: Demand and Supply: an Introduction

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

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

Distinguish between the substitution effect and substitute products.

The product is a normal product. -Refer to the graph above to answer this question.All of the following except one could have caused the shift from D1 to D2.Which is the exception?

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

An increase in business taxes causes the supply curve to shift left.

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

How will the demand and supply of a product be affected if both producers and consumers expect the future price of a product will be higher than at present?

Which of the following pairs of products are complements?

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

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

What is the term for a table showing the various quantities supplied per period of time at different prices?

What is the effect on income if there is a decrease in the price of a product?

-Refer to the above graph to answer this question.What is the maximum price the quantity sold at a price of $8 could have been sold for?

What will a surplus of a product lead to?

What is the equilibrium price?

-Refer to the above information to answer this question.If both demand and supply increase by 40 units,what will be the new values of equilibrium price and quantity?

-Refer to the graph above to answer this question.What is the effect if the price is $1,200.

-Refer to the above graph to answer this question.If the price of the product is $8,how many units would be sold?

The Economic Problem

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters