Question 1

If the price of ice cream increases substantially (ceteris paribus), the equilibrium quantity of hot fudge sauce, a complement, is likely to:

Accepted Answer

A) increase, and the equilibrium price is likely to decrease. 
B) increase, and the equilibrium price is likely to increase. 
C) decrease, and the equilibrium price is likely to decrease. 
D) decrease, and the equilibrium price is likely to increase. 
E) decrease, while the impact on equilibrium price is uncertain. 
A) increase, and the equilibrium price is likely to decrease. 
B) increase, and the equilibrium price is likely to increase. 
C) decrease, and the equilibrium price is likely to decrease. 
D) decrease, and the equilibrium price is likely to increase. 
E) decrease, while the impact on equilibrium price is uncertain.

Question 2

According to the law of supply, when the price of a good increases we would predict that:

Accepted Answer

A) less will be produced. 
B) less will be consumed. 
C) more will be produced. 
D) more will be consumed. 
A) less will be produced. 
B) less will be consumed. 
C) more will be produced. 
D) more will be consumed.

Question 3

Which of the following groups are likely to determine the demand side of the market?

Accepted Answer

A) Firms that buy inputs 
B) Firms that produce and sell goods 
C) Resource owners who sell their inputs 
D) Workers in a firm 
A) Firms that buy inputs 
B) Firms that produce and sell goods 
C) Resource owners who sell their inputs 
D) Workers in a firm

Question 4

If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that:

Accepted Answer

A) Products X and Y are complements. 
B) Products X and Y are substitutes. 
C) Products X and Y are normal goods. 
D) The price of Product Y will decrease. 
E) Products X and Y are inferior goods. 
A) Products X and Y are complements. 
B) Products X and Y are substitutes. 
C) Products X and Y are normal goods. 
D) The price of Product Y will decrease. 
E) Products X and Y are inferior goods.

Question 5

Whenever the price of Good A increases, the demand for Good B increases as well.Good A and B appear to be:

Accepted Answer

A) complements. 
B) substitutes. 
C) inferior goods. 
D) normal goods. 
E) inverse goods. 
A) complements. 
B) substitutes. 
C) inferior goods. 
D) normal goods. 
E) inverse goods.

Question 6

Figure 3-J  
-Refer to Figure 3-J.The movement from ____ to ____ is consistent with a decrease in the price of cotton (a substitute).

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

Question 7

When the demand and supply of grapes both increase at the same time, we can safely predict that the:

Accepted Answer

A) price of grapes will fall. 
B) price of grapes will rise. 
C) quantity of grapes bought and sold will fall. 
D) quantity of grapes bought and sold will rise. 
A) price of grapes will fall. 
B) price of grapes will rise. 
C) quantity of grapes bought and sold will fall. 
D) quantity of grapes bought and sold will rise.

Question 8

Which of the following is true?

Accepted Answer

A) The market demand curve for a product is the vertical summation of the demand curves of the individuals in the market. 
B) A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
C) According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
D) A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
E) None of the above is true. 
A) The market demand curve for a product is the vertical summation of the demand curves of the individuals in the market. 
B) A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
C) According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
D) A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
E) None of the above is true.

Question 9

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.If D2 and S1 represent the demand and supply schedules in a particular market, the equilibrium price and quantity are ____ and ____, respectively.

Accepted Answer

A) $12; 10 
B) $12; 9 
C) $10; 17 
D) $8; 15 
E) $6; 13 
A) $12; 10 
B) $12; 9 
C) $10; 17 
D) $8; 15 
E) $6; 13

Question 10

"In a surplus scenario, as prices fall, consumers buy more, eliminating the surplus and moving the market back to equilibrium." This statement would be correct if:

Accepted Answer

A) prices rise instead of falling. 
B) it is a shortage scenario. 
C) initial market price is below the equilibrium price. 
D) The statement is correct as written. 
A) prices rise instead of falling. 
B) it is a shortage scenario. 
C) initial market price is below the equilibrium price. 
D) The statement is correct as written.

Question 11

A supply curve illustrates a(n) ____ relationship between ____ and ____.

Accepted Answer

A) direct; price; supply 
B) direct; price; quantity demanded 
C) direct; price; quantity supplied 
D) introverted; price; quantity demanded 
E) inverse; price; quantity supplied 
A) direct; price; supply 
B) direct; price; quantity demanded 
C) direct; price; quantity supplied 
D) introverted; price; quantity demanded 
E) inverse; price; quantity supplied

Question 12

Which of the following is likely to result in a smaller equilibrium quantity exchanged?

Accepted Answer

A) An increase in both demand and supply. 
B) A decrease in both demand and supply. 
C) An increase in demand and a decrease in supply. 
D) A decrease in demand and an increase in supply. 
E) None of the above. 
A) An increase in both demand and supply. 
B) A decrease in both demand and supply. 
C) An increase in demand and a decrease in supply. 
D) A decrease in demand and an increase in supply. 
E) None of the above.

Question 13

Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in

Accepted Answer

A) A leftward shift in the demand for tea. 
B) A downward movement along the demand curve for tea. 
C) A rightward shift in the demand for tea. 
D) An upward movement along the demand curve for tea. 
A) A leftward shift in the demand for tea. 
B) A downward movement along the demand curve for tea. 
C) A rightward shift in the demand for tea. 
D) An upward movement along the demand curve for tea.

Question 14

In an effort to reduce the surplus of dairy products, agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997.How did this influence the market for beef?

Accepted Answer

A) demand increased, leading to higher beef prices 
B) demand decreased, leading to lower beef prices 
C) supply increased, leading to lower beef prices 
D) supply decreased, leading to higher beef prices 
A) demand increased, leading to higher beef prices 
B) demand decreased, leading to lower beef prices 
C) supply increased, leading to lower beef prices 
D) supply decreased, leading to higher beef prices

Question 15

The quantity of a good demanded tends to increase as its price falls because:

Accepted Answer

A) a decrease in price shifts the demand curve to the right. 
B) a decrease in price shifts the demand curve to the left. 
C) a decrease in price shifts the supply curve to the right. 
D) at lower prices, suppliers are willing to supply a greater quantity to the market. 
E) a decrease in price leads consumers to substitute toward this now relatively cheaper product. 
A) a decrease in price shifts the demand curve to the right. 
B) a decrease in price shifts the demand curve to the left. 
C) a decrease in price shifts the supply curve to the right. 
D) at lower prices, suppliers are willing to supply a greater quantity to the market. 
E) a decrease in price leads consumers to substitute toward this now relatively cheaper product.

Question 16

Figure 3-J  
-Refer to Figure 3-J.The movement from ____ to ____ is consistent with technological improvements in wool mills.

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

Question 17

If a product's price increases, quantity:

Accepted Answer

A) supplied increases. 
B) supplied decreases. 
C) supplied does not change, but supply does increase. 
D) demanded increases. 
A) supplied increases. 
B) supplied decreases. 
C) supplied does not change, but supply does increase. 
D) demanded increases.

Question 18

Figure 3-E  
-Refer to Figure 3-E.A change from Point A to Point E represents a(n):

Accepted Answer

A) increase in supply. 
B) decrease in supply. 
C) increase in quantity supplied. 
D) decrease in quantity supplied. 
A) increase in supply. 
B) decrease in supply. 
C) increase in quantity supplied. 
D) decrease in quantity supplied.

Question 19

A surplus exists in the market for Barbie dolls at the prevailing price.The surplus will be eliminated by a price:

Accepted Answer

A) increase, decreasing the supply and increasing the demand. 
B) decrease, decreasing the supply and increasing the demand. 
C) decrease, increasing the quantity supplied and increasing the quantity demanded. 
D) increase, increasing the quantity supplied and increasing the quantity demanded. 
E) decrease, decreasing the quantity supplied and increasing the quantity demanded. 
A) increase, decreasing the supply and increasing the demand. 
B) decrease, decreasing the supply and increasing the demand. 
C) decrease, increasing the quantity supplied and increasing the quantity demanded. 
D) increase, increasing the quantity supplied and increasing the quantity demanded. 
E) decrease, decreasing the quantity supplied and increasing the quantity demanded.

Question 20

If consumers are less willing and able to pay for each level of output than they were previously, then apparently:

Accepted Answer

A) demand has increased. 
B) supply has increased. 
C) demand has decreased. 
D) there has been a movement down along the demand curve. 
E) there has been a movement up along the demand curve. 
A) demand has increased. 
B) supply has increased. 
C) demand has decreased. 
D) there has been a movement down along the demand curve. 
E) there has been a movement up along the demand curve.

If the price of ice cream increases substantially (ceteris paribus), the equilibrium quantity of hot fudge sauce, a complement, is likely to:

According to the law of supply, when the price of a good increases we would predict that:

Which of the following groups are likely to determine the demand side of the market?

If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that:

Whenever the price of Good A increases, the demand for Good B increases as well.Good A and B appear to be:

Figure 3-J -Refer to Figure 3-J.The movement from to is consistent with a decrease in the price of cotton (a substitute).

When the demand and supply of grapes both increase at the same time, we can safely predict that the:

Which of the following is true?

"In a surplus scenario, as prices fall, consumers buy more, eliminating the surplus and moving the market back to equilibrium." This statement would be correct if:

A supply curve illustrates a(n) relationship between and .

Which of the following is likely to result in a smaller equilibrium quantity exchanged?

Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in

In an effort to reduce the surplus of dairy products, agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997.How did this influence the market for beef?

The quantity of a good demanded tends to increase as its price falls because:

Figure 3-J -Refer to Figure 3-J.The movement from to is consistent with technological improvements in wool mills.

If a product's price increases, quantity:

Figure 3-E -Refer to Figure 3-E.A change from Point A to Point E represents a(n):

A surplus exists in the market for Barbie dolls at the prevailing price.The surplus will be eliminated by a price:

If consumers are less willing and able to pay for each level of output than they were previously, then apparently:

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

If the price of ice cream increases substantially (ceteris paribus), the equilibrium quantity of hot fudge sauce, a complement, is likely to:

According to the law of supply, when the price of a good increases we would predict that:

Which of the following groups are likely to determine the demand side of the market?

If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that:

Whenever the price of Good A increases, the demand for Good B increases as well.Good A and B appear to be:

Figure 3-J -Refer to Figure 3-J.The movement from ____ to ____ is consistent with a decrease in the price of cotton (a substitute).

When the demand and supply of grapes both increase at the same time, we can safely predict that the:

Which of the following is true?

"In a surplus scenario, as prices fall, consumers buy more, eliminating the surplus and moving the market back to equilibrium." This statement would be correct if:

A supply curve illustrates a(n) ____ relationship between ____ and ____.

Which of the following is likely to result in a smaller equilibrium quantity exchanged?

Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in

In an effort to reduce the surplus of dairy products, agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997.How did this influence the market for beef?

The quantity of a good demanded tends to increase as its price falls because:

Figure 3-J -Refer to Figure 3-J.The movement from ____ to ____ is consistent with technological improvements in wool mills.

If a product's price increases, quantity:

Figure 3-E -Refer to Figure 3-E.A change from Point A to Point E represents a(n):

A surplus exists in the market for Barbie dolls at the prevailing price.The surplus will be eliminated by a price:

If consumers are less willing and able to pay for each level of output than they were previously, then apparently:

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 decrease in the price of cotton (a substitute).

A supply curve illustrates a(n) relationship between and .

Figure 3-J -Refer to Figure 3-J.The movement from to is consistent with technological improvements in wool mills.