Question 1

What is the slope of the demand curve?

Accepted Answer

A) It is downward-sloping because when the price of a product falls,consumers are willing and able to buy more. 
B) It is upward-sloping because when the price of a product falls,consumers are willing and able to buy more. 
C) It is upward-sloping because when the price of a product increases,consumers are willing and able to buy more. 
D) It is downward-sloping because higher prices are associated with larger quantities. 
A) It is downward-sloping because when the price of a product falls,consumers are willing and able to buy more. 
B) It is upward-sloping because when the price of a product falls,consumers are willing and able to buy more. 
C) It is upward-sloping because when the price of a product increases,consumers are willing and able to buy more. 
D) It is downward-sloping because higher prices are associated with larger quantities.

Question 2

The following table shows the quantity demanded and quantity supplied of grapefruits (in millions of kilos):
  
-Refer to the table above to answer this question.If factor prices were to rise,causing the supply to change by 12 million kilos,what will be the new equilibrium price and quantity?

Accepted Answer

A) $2.25 and 36 million kilos 
B) $2.75 and 20 million kilos 
C) $2.75 and 44 million kilos 
D) $3.25 and 28 million kilos 
A) $2.25 and 36 million kilos 
B) $2.75 and 20 million kilos 
C) $2.75 and 44 million kilos 
D) $3.25 and 28 million kilos

Question 3

-Refer to the graph above to answer this question.What is the effect if the price is $800?

Accepted Answer

A) There is a surplus of 30. 
B) There is a shortage of 30. 
C) 160 will be purchased. 
D) There is a shortage of 60. 
E) The price will increase. 
A) There is a surplus of 30. 
B) There is a shortage of 30. 
C) 160 will be purchased. 
D) There is a shortage of 60. 
E) The price will increase.

Question 4

What is the correct way to label the axis on a graph which illustrates a demand curve?

Accepted Answer

A) Income on the horizontal axis and price on the vertical axis. 
B) Price on the horizontal axis and income on the vertical axis. 
C) Quantity on horizontal axis and price on the vertical axis. 
D) Price on horizontal axis and quantity on the vertical axis. 
A) Income on the horizontal axis and price on the vertical axis. 
B) Price on the horizontal axis and income on the vertical axis. 
C) Quantity on horizontal axis and price on the vertical axis. 
D) Price on horizontal axis and quantity on the vertical axis.

Question 5

If the price of gasoline goes up,then the demand will go down.Evaluate this statement.

Accepted Answer

All else held constant,if the

Question 6

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 7

What is the term for the substitution of one product for another as a result of a change in their relative prices?

Accepted Answer

A) Income effect. 
B) Substitution effect. 
C) Market effect. 
D) Law of demand. 
A) Income effect. 
B) Substitution effect. 
C) Market effect. 
D) Law of demand.

Question 8

All of the following except one will cause the supply of a product to increase.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 lower. 
D) A decrease in the price of resources. 
E) An improvement in technology. 
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 lower. 
D) A decrease in the price of resources. 
E) An improvement in technology.

Question 9

-Refer to the above graph to answer this question.If the price of the product is $14,how many units would be sold?

Accepted Answer

A) 400 units. 
B) 600 units. 
C) 800 units. 
D) 1,000 units. 
E) Cannot be determined. 
A) 400 units. 
B) 600 units. 
C) 800 units. 
D) 1,000 units. 
E) Cannot be determined.

Question 10

The term "demand" means the quantities that people would like to purchase at various different prices.

Accepted Answer

A) True 
 B)False

Question 11

What is the relationship between computers and printers?

Accepted Answer

A) They are complementary products. 
B) They are competitive products. 
C) They are substitute products. 
D) They are cooperative products. 
E) They are rival products. 
A) They are complementary products. 
B) They are competitive products. 
C) They are substitute products. 
D) They are cooperative products. 
E) They are rival products.

Question 12

What is the distinction between supply and quantity supplied?

Accepted Answer

Supply refers to the whole range of quan

Question 13

What is the effect on a normal product if income increases?

Accepted Answer

A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply. 
A) It will cause an increase in the quantity demanded. 
B) It will cause an increase in demand. 
C) It will cause a decrease in demand. 
D) It will cause an increase in supply. 
E) It will cause a decrease in supply.

Question 14

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

Accepted Answer

A) Ceteris paribus. 
B) Downward sloping demand curves. 
C) Market demand. 
D) Equilibrium price. 
A) Ceteris paribus. 
B) Downward sloping demand curves. 
C) Market demand. 
D) Equilibrium price.

Question 15

Consider the demand and supply schedules above for a limited number of hotels in the downtown business district area of a particular city.
-Refer to the above information to answer this question.What are the equilibrium values of price and quantity?

Accepted Answer

A) $10 million and 6. 
B) $30 million and 6. 
C) $50 million and 6. 
D) $60 million and 6 
E) $80 million and 6. 
A) $10 million and 6. 
B) $30 million and 6. 
C) $50 million and 6. 
D) $60 million and 6 
E) $80 million and 6.

Question 16

What is the substitution effect?

Accepted Answer

A) The effect that a change in income has on the demand for a substitute product. 
B) The sacrifice which has to be made when an additional quantity of one product is purchased. 
C) The substitution of one product for another as a result of a change in their relative prices. 
D) The substitution of a normal product for an inferior product as the result of an increase in income. 
A) The effect that a change in income has on the demand for a substitute product. 
B) The sacrifice which has to be made when an additional quantity of one product is purchased. 
C) The substitution of one product for another as a result of a change in their relative prices. 
D) The substitution of a normal product for an inferior product as the result of an increase in income.

Question 17

If the price of a product is above 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 shortage 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 shortage of the product exists. 
D) None of the choices are correct.

Question 18

-Refer to the above graph to answer this question.How could you describe the movement from point A to point B?

Accepted Answer

A) An increase in demand which leads to a decrease in the equilibrium price and an increase in supply. 
B) An increase in supply which leads to an increase in the equilibrium price and an increase in demand. 
C) An increase in demand which leads to an increase in the equilibrium price and an increase in the quantity supplied. 
D) An increase in supply which leads to an increase in the equilibrium price and an increase in the quantity demanded. 
E) An increase in demand which leads to an increase in supply and an increase in the equilibrium price. 
A) An increase in demand which leads to a decrease in the equilibrium price and an increase in supply. 
B) An increase in supply which leads to an increase in the equilibrium price and an increase in demand. 
C) An increase in demand which leads to an increase in the equilibrium price and an increase in the quantity supplied. 
D) An increase in supply which leads to an increase in the equilibrium price and an increase in the quantity demanded. 
E) An increase in demand which leads to an increase in supply and an increase in the equilibrium price.

Question 19

What is the term for the total demand for a product by all consumers?

Accepted Answer

A) Schedule of wants. 
B) Market Supply. 
C) Product market. 
D) Quota. 
E) Market Demand. 
A) Schedule of wants. 
B) Market Supply. 
C) Product market. 
D) Quota. 
E) Market Demand.

Question 20

The following figure shows the market for grapefruit (in kilos):
  
-Refer to the diagram above to answer this question.If factor prices were to rise,causing the supply to change by 12 kilos,what will be the new equilibrium price and quantity?

Accepted Answer

A) $2.25 and 36 kilos 
B) $2.75 and 20 kilos 
C) $2.75 and 44 kilos 
D) $3.25 and 28 kilos 
A) $2.25 and 36 kilos 
B) $2.75 and 20 kilos 
C) $2.75 and 44 kilos 
D) $3.25 and 28 kilos

What is the slope of the demand curve?

The following table shows the quantity demanded and quantity supplied of grapefruits (in millions of kilos): -Refer to the table above to answer this question.If factor prices were to rise,causing the supply to change by 12 million kilos,what will be the new equilibrium price and quantity?

-Refer to the graph above to answer this question.What is the effect if the price is $800?

What is the correct way to label the axis on a graph which illustrates a demand curve?

If the price of gasoline goes up,then the demand will go down.Evaluate this statement.

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

What is the term for the substitution of one product for another as a result of a change in their relative prices?

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

-Refer to the above graph to answer this question.If the price of the product is $14,how many units would be sold?

The term "demand" means the quantities that people would like to purchase at various different prices.

What is the relationship between computers and printers?

What is the distinction between supply and quantity supplied?

What is the effect on a normal product if income increases?

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

Consider the demand and supply schedules above for a limited number of hotels in the downtown business district area of a particular city. -Refer to the above information to answer this question.What are the equilibrium values of price and quantity?

What is the substitution effect?

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

-Refer to the above graph to answer this question.How could you describe the movement from point A to point B?

What is the term for the total demand for a product by all consumers?

The following figure shows the market for grapefruit (in kilos): -Refer to the diagram above to answer this question.If factor prices were to rise,causing the supply to change by 12 kilos,what will be the new equilibrium price and quantity?

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 slope of the demand curve?

The following table shows the quantity demanded and quantity supplied of grapefruits (in millions of kilos): -Refer to the table above to answer this question.If factor prices were to rise,causing the supply to change by 12 million kilos,what will be the new equilibrium price and quantity?

-Refer to the graph above to answer this question.What is the effect if the price is $800?

What is the correct way to label the axis on a graph which illustrates a demand curve?

If the price of gasoline goes up,then the demand will go down.Evaluate this statement.

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

What is the term for the substitution of one product for another as a result of a change in their relative prices?

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

-Refer to the above graph to answer this question.If the price of the product is $14,how many units would be sold?

The term "demand" means the quantities that people would like to purchase at various different prices.

What is the relationship between computers and printers?

What is the distinction between supply and quantity supplied?

What is the effect on a normal product if income increases?

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

Consider the demand and supply schedules above for a limited number of hotels in the downtown business district area of a particular city. -Refer to the above information to answer this question.What are the equilibrium values of price and quantity?

What is the substitution effect?

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

-Refer to the above graph to answer this question.How could you describe the movement from point A to point B?

What is the term for the total demand for a product by all consumers?

The following figure shows the market for grapefruit (in kilos): -Refer to the diagram above to answer this question.If factor prices were to rise,causing the supply to change by 12 kilos,what will be the new equilibrium price and quantity?

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