Question 1

The development of a low-cost synthetic fuel is expected to cause a decrease in the price of oil.

Accepted Answer

A) True 
 B)False

Question 2

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-Other things remaining unchanged, which of the following is most likely to cause an increase in the demand for personal computers?

Accepted Answer

A) A reduction in the price of personal computers 
B) An increase in the supply of personal computers 
C) An increase in the cost of computer printing ink 
D) An increase in the number of computer manufacturers 
E) A requirement by universities that all students buy personal computers 
A) A reduction in the price of personal computers 
B) An increase in the supply of personal computers 
C) An increase in the cost of computer printing ink 
D) An increase in the number of computer manufacturers 
E) A requirement by universities that all students buy personal computers

Question 3

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
  
-The downward slope of the demand curve is attributed to:

Accepted Answer

A) the inverse relationship between price and quantity demanded. 
B) the direct relationship between income and quantity demanded. 
C) the direct relationship between price and quantity demanded. 
D) the inverse relationship between income and quantity demanded. 
E) the direct relationship between consumer preferences and quantity demanded. 
A) the inverse relationship between price and quantity demanded. 
B) the direct relationship between income and quantity demanded. 
C) the direct relationship between price and quantity demanded. 
D) the inverse relationship between income and quantity demanded. 
E) the direct relationship between consumer preferences and quantity demanded.

Question 4

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-The change in the quantity demanded of any good is always caused by:

Accepted Answer

A) a change in consumers' preferences for that good. 
B) a change in the general income levels of the consumers who buy that good. 
C) an increase or decrease in the population. 
D) a change in the price of that good. 
E) a change in the price of substitute goods. 
A) a change in consumers' preferences for that good. 
B) a change in the general income levels of the consumers who buy that good. 
C) an increase or decrease in the population. 
D) a change in the price of that good. 
E) a change in the price of substitute goods.

Question 5

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
  
-According to the law of demand, if the price of movie rentals decreases, ceteris paribus,:

Accepted Answer

A) the demand for movie rentals would increase. 
B) the quantity demanded of movie rentals would decrease. 
C) the quantity demanded of movie rentals would increase. 
D) the demand for movie rentals would decrease. 
E) the quantity demanded of movie rentals would not change. 
A) the demand for movie rentals would increase. 
B) the quantity demanded of movie rentals would decrease. 
C) the quantity demanded of movie rentals would increase. 
D) the demand for movie rentals would decrease. 
E) the quantity demanded of movie rentals would not change.

Question 6

When the price ceiling on eggs is lifted, there is a shortage of eggs in the market.

Accepted Answer

A) True 
 B)False

Question 7

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6
  
-The removal of a price ceiling in a market results in:

Accepted Answer

A) an increase in the market price. 
B) a shortage in the market. 
C) over-production of the commodity and a surplus. 
D) a fall in the market price. 
E) abnormal profits for producers. 
A) an increase in the market price. 
B) a shortage in the market. 
C) over-production of the commodity and a surplus. 
D) a fall in the market price. 
E) abnormal profits for producers.

Question 8

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.Table 3.3
  
-Refer to Table 3.3. Which of the following would occur in the market for bread if the market price exceeded the equilibrium price by $1?

Accepted Answer

A) The quantity of bread demanded in the market would increase. 
B) The bread market would face a surplus of 36 loaves of bread. 
C) The supply of bread in the market would increase. 
D) The bread market would face a shortage of 72 loaves of bread. 
E) The demand for bread in the market would decrease. 
A) The quantity of bread demanded in the market would increase. 
B) The bread market would face a surplus of 36 loaves of bread. 
C) The supply of bread in the market would increase. 
D) The bread market would face a shortage of 72 loaves of bread. 
E) The demand for bread in the market would decrease.

Question 9

A price floor is the minimum price that consumers have to pay for a particular product.

Accepted Answer

A) True 
 B)False

Question 10

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6
  
-Without money, no transaction can occur.

Accepted Answer

A) True 
 B)False

Question 11

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
  
-The exchange of goods and services directly without money is called:

Accepted Answer

A) creative destruction. 
B) barter. 
C) arbitration. 
D) currency trade. 
E) illegal trade. 
A) creative destruction. 
B) barter. 
C) arbitration. 
D) currency trade. 
E) illegal trade.

Question 12

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-If an increase in the price of good X causes the demand curve for product Y to shift to the right, then X and Y are most likely to be which of the following?

Accepted Answer

A) Shoes and laces 
B) Tennis balls and tennis rackets 
C) Turkey and chicken 
D) Knives and forks 
E) DVD players and DVDs 
A) Shoes and laces 
B) Tennis balls and tennis rackets 
C) Turkey and chicken 
D) Knives and forks 
E) DVD players and DVDs

Question 13

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
  
-Identify the correct statement.

Accepted Answer

A) Demand is the total quantity of a product that people are willing, even if unable, to purchase at a given price. 
B) Demand for a product is the same as the quantity demanded of a product. 
C) Demand represents the different quantities of a good or service that provides consumers the same amount of utility. 
D) Demand is the quantity of a product that people are willing and able to purchase at different prices. 
E) Demand is the quantity of a product that producers are willing to produce at a particular price. 
A) Demand is the total quantity of a product that people are willing, even if unable, to purchase at a given price. 
B) Demand for a product is the same as the quantity demanded of a product. 
C) Demand represents the different quantities of a good or service that provides consumers the same amount of utility. 
D) Demand is the quantity of a product that people are willing and able to purchase at different prices. 
E) Demand is the quantity of a product that producers are willing to produce at a particular price.

Question 14

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-Refer to Table 3.1. Calculate the market demand at prices $5, $4, $3, $2, and $1 respectively.

Accepted Answer

A) Market demand is 30, 40, 50, 60, and 70 
B) Market demand is 30, 60, 90, 120, and 150 
C) Market demand is 30, 50, 70, 90, and 1,100 
D) Market demand is 10, 30, 40, 50, and 70 
E) Market demand is 10, 20, 30, 40, and 50 
A) Market demand is 30, 40, 50, 60, and 70 
B) Market demand is 30, 60, 90, 120, and 150 
C) Market demand is 30, 50, 70, 90, and 1,100 
D) Market demand is 10, 30, 40, 50, and 70 
E) Market demand is 10, 20, 30, 40, and 50

Question 15

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
  
-Which of the following statements is not true about a market system?

Accepted Answer

A) The market system provides an incentive to consumers to acquire purchasing ability. 
B) The market system magnifies the problem of scarcity of goods and services. 
C) The market system provides an incentive for allocating resources. 
D) The market system provides an incentive to improve the quality of goods produced. 
E) The market system provides everything everyone wants to consume. 
A) The market system provides an incentive to consumers to acquire purchasing ability. 
B) The market system magnifies the problem of scarcity of goods and services. 
C) The market system provides an incentive for allocating resources. 
D) The market system provides an incentive to improve the quality of goods produced. 
E) The market system provides everything everyone wants to consume.

Question 16

The figure given below shows the demand and supply curves in the market for coffee. SS1U1B11S1U1B0 and DS1U1B11S1U1B0 are the original demand and supply curves.Figure 3.5
​
  
-Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?

Accepted Answer

A) An increase in the income of a coffee buyer. 
B) A decrease in the price of coffee. 
C) A drought in Colombia, a major coffee producer, that affects the coffee harvest. 
D) A decrease in the price of non-dairy creamers that are consumed along with coffee. 
E) An increase in the price of tea, assumed to be a substitute for coffee. 
A) An increase in the income of a coffee buyer. 
B) A decrease in the price of coffee. 
C) A drought in Colombia, a major coffee producer, that affects the coffee harvest. 
D) A decrease in the price of non-dairy creamers that are consumed along with coffee. 
E) An increase in the price of tea, assumed to be a substitute for coffee.

Question 17

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-Which of the following is true of the law of supply?

Accepted Answer

A) The law of supply is the sole determinant of market prices. 
B) The law of supply states that as the price of a good rises, the quantity supplied rises. 
C) The law of supply holds good only in the long-run. 
D) The law of supply is valid only in a market system of allocation. 
E) The law of supply asserts that as the cost of producing a good rises, the quantity supplied rises. 
A) The law of supply is the sole determinant of market prices. 
B) The law of supply states that as the price of a good rises, the quantity supplied rises. 
C) The law of supply holds good only in the long-run. 
D) The law of supply is valid only in a market system of allocation. 
E) The law of supply asserts that as the cost of producing a good rises, the quantity supplied rises.

Question 18

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1
  
-Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:

Accepted Answer

A) directly related to the price of a Morphy Richards coffee maker. 
B) directly related to the price of milk and cream. 
C) directly related to the prices of inputs used in the production of Braun coffee makers. 
D) directly related to changes in the technology used in producing coffee makers. 
E) directly related to the price of a Braun coffee maker. 
A) directly related to the price of a Morphy Richards coffee maker. 
B) directly related to the price of milk and cream. 
C) directly related to the prices of inputs used in the production of Braun coffee makers. 
D) directly related to changes in the technology used in producing coffee makers. 
E) directly related to the price of a Braun coffee maker.

Question 19

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market.Table 3.5
  
-In a market where the price is restricted by price floors or price ceilings,

Accepted Answer

A) all sellers will be able to sell everything they produce. 
B) surpluses and shortages will exist. 
C) all buyers will get what they want. 
D) disequilibrium will automatically correct itself. 
E) surpluses and shortages will put pressure on the price to move to its equilibrium. 
A) all sellers will be able to sell everything they produce. 
B) surpluses and shortages will exist. 
C) all buyers will get what they want. 
D) disequilibrium will automatically correct itself. 
E) surpluses and shortages will put pressure on the price to move to its equilibrium.

Question 20

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.Table 3.3
  
-According to Table 3.3, equilibrium in the market for bread occurs at the price of:

Accepted Answer

A) $2 per unit 
B) $3 per unit 
C) $4 per unit 
D) $4.5 per unit 
E) $1.5 per unit 
A) $2 per unit 
B) $3 per unit 
C) $4 per unit 
D) $4.5 per unit 
E) $1.5 per unit

Exam 3: Markets and the Price System

The development of a low-cost synthetic fuel is expected to cause a decrease in the price of oil.

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -Other things remaining unchanged, which of the following is most likely to cause an increase in the demand for personal computers?

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -The downward slope of the demand curve is attributed to:

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -The change in the quantity demanded of any good is always caused by:

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -According to the law of demand, if the price of movie rentals decreases, ceteris paribus,:

When the price ceiling on eggs is lifted, there is a shortage of eggs in the market.

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6 -The removal of a price ceiling in a market results in:

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.Table 3.3 -Refer to Table 3.3. Which of the following would occur in the market for bread if the market price exceeded the equilibrium price by $1?

A price floor is the minimum price that consumers have to pay for a particular product.

The below figure shows the demand and supply curves in the market for gasoline. The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively.Figure 3.6 -Without money, no transaction can occur.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -The exchange of goods and services directly without money is called:

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -If an increase in the price of good X causes the demand curve for product Y to shift to the right, then X and Y are most likely to be which of the following?

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Identify the correct statement.

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -Refer to Table 3.1. Calculate the market demand at prices $5, $4, $3, $2, and $1 respectively.

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4 -Which of the following statements is not true about a market system?

The figure given below shows the demand and supply curves in the market for coffee. S1 and D1 are the original demand and supply curves.Figure 3.5 ​ -Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -Which of the following is true of the law of supply?

The table given below reports the quantity demanded of a good by individuals 1, 2, and 3 at different prices.Table 3.1 -Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market.Table 3.5 -In a market where the price is restricted by price floors or price ceilings,

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices.Table 3.3 -According to Table 3.3, equilibrium in the market for bread occurs at the price of:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Aggregate Economy

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure given below shows the demand and supply curves in the market for coffee. S₁ and D₁ are the original demand and supply curves.Figure 3.5 -Based on Figure 3.5, which of the following conditions would most likely move the point of equilibrium from A to B?