Question 1

What is the term for the total supply of a product offered by all producers?

Accepted Answer

A) Equilibrium quantity. 
B) Market Supply. 
C) Saturation point. 
D) Aggregate supply. 
A) Equilibrium quantity. 
B) Market Supply. 
C) Saturation point. 
D) Aggregate supply.

Question 2

Briefly explain the six determinants of market supply.

Accepted Answer

The first determinant of supply is the p

Question 3

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 produce the change in demand from D1 to D2,what might have happened to the price of a substitute product like a packet of nuts?

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 4

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 5

What is the most likely reason that your instructor does not have a demand for a top-of-the-line BMW?

Accepted Answer

A) He or she does not wish to own such an expensive car. 
B) He or she does not want to own a German-made car. 
C) He or she would prefer to own no car at all. 
D) He or she cannot afford to own such an expensive car. 
A) He or she does not wish to own such an expensive car. 
B) He or she does not want to own a German-made car. 
C) He or she would prefer to own no car at all. 
D) He or she cannot afford to own such an expensive car.

Question 6

All else held constant,a decrease 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 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

Distinguish between demand and quantity demanded.

Accepted Answer

Demand refers to the whole range of quan

Question 11

What is a normal product?

Accepted Answer

A) It is a product which consumers buy regularly. 
B) It is a product which consumers buy more of as their incomes increase. 
C) It is a product which consumers buy less of as their incomes increase. 
D) It is a product which consumers buy more of as their incomes decrease. 
A) It is a product which consumers buy regularly. 
B) It is a product which consumers buy more of as their incomes increase. 
C) It is a product which consumers buy less of as their incomes increase. 
D) It is a product which consumers buy more of as their incomes decrease.

Question 12

Demonstrate graphically and explain verbally the concept of a shortage.Is price above or below equilibrium?

Accepted Answer

A shortage refers to situations where th

Question 13

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

Accepted Answer

A) Change in the quantity supplied. 
B) Change in the individual supply. 
C) Change in the market supply. 
D) Change in the market demand. 
A) Change in the quantity supplied. 
B) Change in the individual supply. 
C) Change in the market supply. 
D) Change in the market demand.

Question 14

All else held constant,a decrease in supply will lead to a

Accepted Answer

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

Question 15

If the price of a product is below 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 surplus 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 surplus of the product exists. 
D) None of the choices are correct.

Question 16

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 17

-Refer to the graph above to answer this question.What is the effect if the price is $600.

Accepted Answer

A) The quantity demanded is 120. 
B) Price will fall. 
C) The quantity supplied is 120. 
D) The quantity traded is 40. 
A) The quantity demanded is 120. 
B) Price will fall. 
C) The quantity supplied is 120. 
D) The quantity traded is 40.

Question 18

Which of the following is explained by the combination of the substitution effect and the income effect?

Accepted Answer

A) The direct relationship between price and quantity demanded. 
B) The inverse relationship between price and quantity demanded. 
C) Market demand. 
D) Equilibrium price. 
A) The direct relationship between price and quantity demanded. 
B) The inverse relationship between price and quantity demanded. 
C) Market demand. 
D) Equilibrium price.

Question 19

Define demand.

Accepted Answer

Demand refers to the quantitie

Question 20

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.

What is the term for the total supply of a product offered by all producers?

Briefly explain the six determinants of market supply.

What is meant by the term ceteris paribus?

What is the most likely reason that your instructor does not have a demand for a top-of-the-line BMW?

All else held constant,a decrease in demand will lead to a

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

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

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?

Distinguish between demand and quantity demanded.

What is a normal product?

Demonstrate graphically and explain verbally the concept of a shortage.Is price above or below equilibrium?

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

All else held constant,a decrease in supply will lead to a

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

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

-Refer to the graph above to answer this question.What is the effect if the price is $600.

Which of the following is explained by the combination of the substitution effect and the income effect?

Define demand.

What is market demand?

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

What is the term for the total supply of a product offered by all producers?

Briefly explain the six determinants of market supply.

What is meant by the term ceteris paribus?

What is the most likely reason that your instructor does not have a demand for a top-of-the-line BMW?

All else held constant,a decrease in demand will lead to a

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

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

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?

Distinguish between demand and quantity demanded.

What is a normal product?

Demonstrate graphically and explain verbally the concept of a shortage.Is price above or below equilibrium?

What is the term for a change in the amounts that a producer is willing and able to make available as a result of a price change?

All else held constant,a decrease in supply will lead to a

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

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

-Refer to the graph above to answer this question.What is the effect if the price is $600.

Which of the following is explained by the combination of the substitution effect and the income effect?

Define demand.

What is market demand?

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