Question 1

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Accepted Answer

A) an increase in price and an increase in quantity exchanged. 
B) no change in price and an increase in quantity exchanged. 
C) a decrease in price and a decrease in quantity exchanged. 
D) no change in price and a decrease in quantity exchanged. 
E) no change in price, and an indeterminate change in quantity exchanged. 
A) an increase in price and an increase in quantity exchanged. 
B) no change in price and an increase in quantity exchanged. 
C) a decrease in price and a decrease in quantity exchanged. 
D) no change in price and a decrease in quantity exchanged. 
E) no change in price, and an indeterminate change in quantity exchanged. E

Question 2

Table 3-D
Use the following information about demand and supply schedules to answer the question.
 $$\begin{array} { l c c c } 
\text { Price } & \mathbf { D } _ { 1 } & \mathbf { D } _ { \mathbf { 2 } } & \boldsymbol { I } _ { \mathbf { 1 } } \
\$ 12 & 5 & 9 & 19 \
\$ 10 & 8 & 12 & 17 \
\$ 8 & 11 & 15 & 15 \
\$ 6 & 13 & 18 & 13 \
\$ 4 & 16 & 21 & 11 \
\$ 2 & 18 & 24 & 9
\end{array}$$
-Refer to Table 3-D.Suppose the supply schedule for Good A changes from S1 to S2 because the price of Good B increases.We can say that:

Accepted Answer

A) Goods A and B are likely substitutes in production. 
B) Goods A and B are likely complements in consumption. 
C) Goods A and B are likely substitutes in consumption. 
D) Good B is not related to Good A. 
A) Goods A and B are likely substitutes in production. 
B) Goods A and B are likely complements in consumption. 
C) Goods A and B are likely substitutes in consumption. 
D) Good B is not related to Good A. A

Question 3

Figure 3-J  
-Refer to Figure 3-J.The movement from ____ to ____ is consistent with a successful advertising campaign that claims wool keeps you warm.

Accepted Answer

A) Point A; Point B 
B) Point A; Point F 
C) Point A; Point D 
D) Point A; Point H 
E) Point A; Point I 
A) Point A; Point B 
B) Point A; Point F 
C) Point A; Point D 
D) Point A; Point H 
E) Point A; Point I B

Question 4

If the price of music downloads decreases, which of the following is most likely to occur?

Accepted Answer

A) Quantity demanded will decrease. 
B) Quantity demanded will increase. 
C) Demand will increase. 
D) Demand will decrease. 
A) Quantity demanded will decrease. 
B) Quantity demanded will increase. 
C) Demand will increase. 
D) Demand will decrease.

Question 5

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Accepted Answer

A) the quantity demanded at that price. 
B) the quantity supplied minus the quantity demanded. 
C) the quantity supplied at that price. 
D) (quantity demanded plus quantity supplied)/2. 
A) the quantity demanded at that price. 
B) the quantity supplied minus the quantity demanded. 
C) the quantity supplied at that price. 
D) (quantity demanded plus quantity supplied)/2.

Question 6

Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____.

Accepted Answer

A) rose; fell 
B) rose; rose 
C) fell; fell 
D) fell; rose 
A) rose; fell 
B) rose; rose 
C) fell; fell 
D) fell; rose

Question 7

If the prices of productive substitute goods decreased and productive technology improved at the same time, as a result:

Accepted Answer

A) prices would rise. 
B) prices would fall. 
C) larger quantities to be exchanged. 
D) smaller quantities to be exchanged. 
E) prices to fall and larger quantities to be exchanged. 
A) prices would rise. 
B) prices would fall. 
C) larger quantities to be exchanged. 
D) smaller quantities to be exchanged. 
E) prices to fall and larger quantities to be exchanged.

Question 8

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to:

Accepted Answer

A) raise the world price of gold to pay for the new machinery. 
B) lower the world price of gold because any given amount can now be produced more cheaply. 
C) raise the world price of gold because miners' wages must double as their productivity doubles. 
D) lower the world price of gold only if new mining companies are not allowed to enter the industry. 
A) raise the world price of gold to pay for the new machinery. 
B) lower the world price of gold because any given amount can now be produced more cheaply. 
C) raise the world price of gold because miners' wages must double as their productivity doubles. 
D) lower the world price of gold only if new mining companies are not allowed to enter the industry.

Question 9

Identify the scenario that will cause the supply curve to shift to the left.

Accepted Answer

A) Producer expects now that the price will be lower later 
B) Price decreases for a substitute in production 
C) Input price increases 
D) Increase in number of suppliers 
A) Producer expects now that the price will be lower later 
B) Price decreases for a substitute in production 
C) Input price increases 
D) Increase in number of suppliers

Question 10

A downward-sloping demand curve shows:

Accepted Answer

A) the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B) the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C) the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D) the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
E) how supply varies with demand. 
A) the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B) the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C) the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D) the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
E) how supply varies with demand.

Question 11

Each point on the supply curve shows the:

Accepted Answer

A) amount that people want to buy at that price. 
B) quantity supplied at that price. 
C) productive capacity of an individual producer. 
D) the amount producers want to sell to buyers of different income levels. 
A) amount that people want to buy at that price. 
B) quantity supplied at that price. 
C) productive capacity of an individual producer. 
D) the amount producers want to sell to buyers of different income levels.

Question 12

The quantity of hamburger that households are willing to purchase is predicted to rise if there is:

Accepted Answer

A) a fall in the price of hot dogs 
B) a fall in the price of hamburger buns 
C) a rise in the price of onion rings 
D) a rise in the price of catsup 
A) a fall in the price of hot dogs 
B) a fall in the price of hamburger buns 
C) a rise in the price of onion rings 
D) a rise in the price of catsup

Question 13

If consumers expected the price of a good to increase in the near future and the price of a complement good decreased at the same time, as a result:

Accepted Answer

A) prices would rise. 
B) prices would fall. 
C) larger quantities to be exchanged. 
D) smaller quantities to be exchanged. 
E) both prices and quantities exchanged would increase. 
A) prices would rise. 
B) prices would fall. 
C) larger quantities to be exchanged. 
D) smaller quantities to be exchanged. 
E) both prices and quantities exchanged would increase.

Question 14

Figure 3-B  
-Refer to Figure 3-B.Two donut chains in your town are battling for customers.The manager of the Yum Yum Donut Shop, facing demand curve D1, has changed donut prices from P0 to P1.As a result, customers:

Accepted Answer

A) increase purchases at Yum Yum to Q1. 
B) decrease purchases at Yum Yum to Q0. 
C) buy the same quantity of Yum Yum donuts as before the price change. 
D) decrease demand to D0. 
A) increase purchases at Yum Yum to Q1. 
B) decrease purchases at Yum Yum to Q0. 
C) buy the same quantity of Yum Yum donuts as before the price change. 
D) decrease demand to D0.

Question 15

If the price of ice cream increases and the quantity demanded decreases, economists would describe this as:

Accepted Answer

A) a change in demand. 
B) a change in quantity demanded. 
C) a change in consumer income. 
D) a change in one of the variables that shift demand. 
E) an inferior good. 
A) a change in demand. 
B) a change in quantity demanded. 
C) a change in consumer income. 
D) a change in one of the variables that shift demand. 
E) an inferior good.

Question 16

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Accepted Answer

A) an increase in price and an increase in quantity exchanged. 
B) no change in price and an increase in quantity exchanged. 
C) a decrease in price and a decrease in quantity exchanged. 
D) no change in price and a decrease in quantity exchanged. 
E) no change in price, and an indeterminate change in quantity exchanged. 
A) an increase in price and an increase in quantity exchanged. 
B) no change in price and an increase in quantity exchanged. 
C) a decrease in price and a decrease in quantity exchanged. 
D) no change in price and a decrease in quantity exchanged. 
E) no change in price, and an indeterminate change in quantity exchanged.

Question 17

Which of the following would not cause an increase in demand for tennis balls?

Accepted Answer

A) a reduction in the price of tennis racquets 
B) a decrease in the price of tennis balls 
C) an unusually sunny fall and winter 
D) an increase in the popularity of tennis 
A) a reduction in the price of tennis racquets 
B) a decrease in the price of tennis balls 
C) an unusually sunny fall and winter 
D) an increase in the popularity of tennis

Question 18

If there is a surplus, ____ will be frustrated by their inability to exchange at the current price, and they will compete the prices ____ as a result.

Accepted Answer

A) buyers; up. 
B) buyers; down. 
C) sellers; up. 
D) sellers; down. 
A) buyers; up. 
B) buyers; down. 
C) sellers; up. 
D) sellers; down.

Question 19

Table 3-D
Use the following information about demand and supply schedules to answer the question.
 $$\begin{array} { l c c c } 
\text { Price } & \mathbf { D } _ { 1 } & \mathbf { D } _ { \mathbf { 2 } } & \boldsymbol { I } _ { \mathbf { 1 } } \
\$ 12 & 5 & 9 & 19 \
\$ 10 & 8 & 12 & 17 \
\$ 8 & 11 & 15 & 15 \
\$ 6 & 13 & 18 & 13 \
\$ 4 & 16 & 21 & 11 \
\$ 2 & 18 & 24 & 9
\end{array}$$
-Refer to Table 3-D.Suppose the demand schedule for Good A changes from D1 to D2 because the price of a related good, Good B, decreases.We can say:

Accepted Answer

A) that Good B is likely a complement to Good A. 
B) that Good B is likely a substitute for Good A. 
C) that Good B is likely inferior to Good A. 
D) that Good B is not related to Good A. 
A) that Good B is likely a complement to Good A. 
B) that Good B is likely a substitute for Good A. 
C) that Good B is likely inferior to Good A. 
D) that Good B is not related to Good A.

Question 20

Figure 3-G
The diagram below represents the market for butter.  
-Refer to Figure 3-G.At a market price of $4, there exists a:

Accepted Answer

A) shortage equal to 4,000 pounds of butter. 
B) surplus equal to 4,000 pounds of butter. 
C) shortage equal to 7,000 pounds of butter. 
D) surplus equal to 7,000 pounds of butter. 
E) market equilibrium. 
A) shortage equal to 4,000 pounds of butter. 
B) surplus equal to 4,000 pounds of butter. 
C) shortage equal to 7,000 pounds of butter. 
D) surplus equal to 7,000 pounds of butter. 
E) market equilibrium.

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Figure 3-J -Refer to Figure 3-J.The movement from to is consistent with a successful advertising campaign that claims wool keeps you warm.

If the price of music downloads decreases, which of the following is most likely to occur?

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A and the quantity sold .

If the prices of productive substitute goods decreased and productive technology improved at the same time, as a result:

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to:

Identify the scenario that will cause the supply curve to shift to the left.

A downward-sloping demand curve shows:

Each point on the supply curve shows the:

The quantity of hamburger that households are willing to purchase is predicted to rise if there is:

If consumers expected the price of a good to increase in the near future and the price of a complement good decreased at the same time, as a result:

Figure 3-B -Refer to Figure 3-B.Two donut chains in your town are battling for customers.The manager of the Yum Yum Donut Shop, facing demand curve D₁, has changed donut prices from P₀ to P₁.As a result, customers:

If the price of ice cream increases and the quantity demanded decreases, economists would describe this as:

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Which of the following would not cause an increase in demand for tennis balls?

If there is a surplus, will be frustrated by their inability to exchange at the current price, and they will compete the prices as a result.

Figure 3-G The diagram below represents the market for butter. -Refer to Figure 3-G.At a market price of $4, there exists a:

The Role and Method of Economics

The Economic Way of Thinking

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

Exam 3: Supply and Demand

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Figure 3-J -Refer to Figure 3-J.The movement from ____ to ____ is consistent with a successful advertising campaign that claims wool keeps you warm.

If the price of music downloads decreases, which of the following is most likely to occur?

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____.

If the prices of productive substitute goods decreased and productive technology improved at the same time, as a result:

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to:

Identify the scenario that will cause the supply curve to shift to the left.

A downward-sloping demand curve shows:

Each point on the supply curve shows the:

The quantity of hamburger that households are willing to purchase is predicted to rise if there is:

If consumers expected the price of a good to increase in the near future and the price of a complement good decreased at the same time, as a result:

Figure 3-B -Refer to Figure 3-B.Two donut chains in your town are battling for customers.The manager of the Yum Yum Donut Shop, facing demand curve D1, has changed donut prices from P0 to P1.As a result, customers:

If the price of ice cream increases and the quantity demanded decreases, economists would describe this as:

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:

Which of the following would not cause an increase in demand for tennis balls?

If there is a surplus, ____ will be frustrated by their inability to exchange at the current price, and they will compete the prices ____ as a result.

Figure 3-G The diagram below represents the market for butter. -Refer to Figure 3-G.At a market price of $4, there exists a:

The Role and Method of Economics

The Economic Way of Thinking

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Economic Growth

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

Figure 3-J -Refer to Figure 3-J.The movement from to is consistent with a successful advertising campaign that claims wool keeps you warm.

Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A and the quantity sold .

Figure 3-B -Refer to Figure 3-B.Two donut chains in your town are battling for customers.The manager of the Yum Yum Donut Shop, facing demand curve D₁, has changed donut prices from P₀ to P₁.As a result, customers:

If there is a surplus, will be frustrated by their inability to exchange at the current price, and they will compete the prices as a result.