Question 1

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

Accepted Answer

A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded. 
A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded.

Question 2

Table 3-C
 $$\begin{array} { | c | c | c | } 
\hline \text { PRICE music downloads } & \begin{array} { c } 
\text { QUANTITY DEMANDED } \
\text { music downloads }
\end{array} & \begin{array} { c } 
\text { QUANTITY SUPPLIED } \
\text { music downloads }
\end{array} \
\hline \text { \$2.00 } & 1,000,000 \text { urits } & 5,500,000 \text { urits } \
\hline 1.80 & 2,000,000 \text { units } & 5,00,000 \text { units } \
\hline 1.60 & 3,000,000 \text { units } & 4,50,000 \text { units } \
\hline 1.40 & 4,000,000 \text { units } & 4,000,000 \text { units } \
\hline 1.20 & 5,000,000 \text { units } & 3,500,000 \text { units } \
\hline 1.00 & 6,000,000 \text { units } & 3,000,000 \text { units } \
\hline 0.80 & 7,000,000 \text { units } & 2,500,000 \text { units } \
\hline 0.65 & 8,000,000 \text { units } & 2,000,000 \text { units } \
\hline 0.40 & 9,000,000 \text { units } & 1,500,000 \text { units } \
\hline 0.20 & 10,000,000 \text { units } & 1,000,000 \text { units } \
\hline
\end{array}$$
-Refer to Table 3-C.At $1.80 there is a ____ of ____ downloads.

Accepted Answer

A) shortage; 3,000,000 
B) shortage; 7,000,000 
C) surplus; 7,000,000 
D) surplus; 3,000,000 
E) None of the above are correct. 
A) shortage; 3,000,000 
B) shortage; 7,000,000 
C) surplus; 7,000,000 
D) surplus; 3,000,000 
E) None of the above are correct.

Question 3

If there is a shortage of a good, we would expect that as a result

Accepted Answer

A) fewer resources will be allocated to the production of the good. 
B) the price of the product will rise. 
C) the price of the product will fall. 
D) the supply curve will shift left and the demand curve will shift right, eliminating the shortage. 
E) the supply curve will shift right and the demand curve will shift left, eliminating the shortage. 
A) fewer resources will be allocated to the production of the good. 
B) the price of the product will rise. 
C) the price of the product will fall. 
D) the supply curve will shift left and the demand curve will shift right, eliminating the shortage. 
E) the supply curve will shift right and the demand curve will shift left, eliminating the shortage.

Question 4

Figure 3-H  
-Refer to Figure 3-H.A movement from D1 to D2 could occur if:

Accepted Answer

A) there is a decrease in the income of consumers and submarine sandwiches are inferior goods. 
B) there is an increase in the income of consumers and submarine sandwiches are inferior goods. 
C) the wages of submarine sandwich makers decrease. 
D) the price of bread, used to make submarine sandwiches, increases. 
E) the price of submarine sandwiches falls, leading to a shift of the demand curve to the left. 
A) there is a decrease in the income of consumers and submarine sandwiches are inferior goods. 
B) there is an increase in the income of consumers and submarine sandwiches are inferior goods. 
C) the wages of submarine sandwich makers decrease. 
D) the price of bread, used to make submarine sandwiches, increases. 
E) the price of submarine sandwiches falls, leading to a shift of the demand curve to the left.

Question 5

Andy views beer and pizza as complements to one another.If the price of pizza decreases, economists would expect:

Accepted Answer

A) Andy's demand for pizza to increase. 
B) Andy's demand for pizza to decrease. 
C) Andy's quantity of pizza demanded to decrease. 
D) Andy's demand for beer to increase. 
E) Andy's demand for beer to decrease. 
A) Andy's demand for pizza to increase. 
B) Andy's demand for pizza to decrease. 
C) Andy's quantity of pizza demanded to decrease. 
D) Andy's demand for beer to increase. 
E) Andy's demand for beer to decrease.

Question 6

Figure 3-F  
-Refer to Figure 3-F.A supply shift from S0 to S1 can be best explained by:

Accepted Answer

A) decrease in input prices. 
B) price decreases for a substitute in production. 
C) rise in taxes. 
D) a technological advance. 
A) decrease in input prices. 
B) price decreases for a substitute in production. 
C) rise in taxes. 
D) a technological advance.

Question 7

If there is a decrease in the price of PS3 gaming systems, what would we expect to happen in the market for a substitute like the wii gaming system?

Accepted Answer

A) a decrease in quantity demanded only 
B) an increase in quantity demanded only 
C) a decrease in demand 
D) an increase in demand 
A) a decrease in quantity demanded only 
B) an increase in quantity demanded only 
C) a decrease in demand 
D) an increase in demand

Question 8

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

Accepted Answer

A) the demand curve, as consumers try to economize because of the shortage. 
B) the demand curve and a rightward shift of the supply curve. 
C) the supply curve. 
D) the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. 
A) the demand curve, as consumers try to economize because of the shortage. 
B) the demand curve and a rightward shift of the supply curve. 
C) the supply curve. 
D) the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

Question 9

The market supply schedule reflects the total quantity:

Accepted Answer

A) supplied at market price. 
B) supplied by all of the producers at the equilibrium price. 
C) supplied at each price by all of the producers. 
D) the vertical summation of the supply curves for individual firms. 
A) supplied at market price. 
B) supplied by all of the producers at the equilibrium price. 
C) supplied at each price by all of the producers. 
D) the vertical summation of the supply curves for individual firms.

Question 10

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit.That change would be described as:

Accepted Answer

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

Question 11

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 S2 represent the demand and supply schedules in a particular market, the equilibrium price and quantity are ____ and ____, respectively.

Accepted Answer

A) $12; 12 
B) $10; 12 
C) $8; 15 
D) $6; 18 
E) None of the answers are correct. 
A) $12; 12 
B) $10; 12 
C) $8; 15 
D) $6; 18 
E) None of the answers are correct.

Question 12

Are markets always in equilibrium?

Accepted Answer

A) Yes, they are always at the equilibrium point, or very close to it. 
B) Yes, because very few things tend to alter supply and demand. 
C) No, but if there is no outside interference, they tend to move toward equilibrium. 
D) No, they never "settle down" into a stable price and quantity. 
E) It is uncertain; economic theory has no answer to this question. 
A) Yes, they are always at the equilibrium point, or very close to it. 
B) Yes, because very few things tend to alter supply and demand. 
C) No, but if there is no outside interference, they tend to move toward equilibrium. 
D) No, they never "settle down" into a stable price and quantity. 
E) It is uncertain; economic theory has no answer to this question.

Question 13

Which of the following is false?

Accepted Answer

A) If demand decreases and supply increases, the equilibrium price will rise. 
B) If supply decreases and demand remains the same, the equilibrium price will rise. 
C) if supply increases and demand decreases, the equilibrium price will fall. 
D) if demand increases and supply decreases, the equilibrium price will rise. 
A) If demand decreases and supply increases, the equilibrium price will rise. 
B) If supply decreases and demand remains the same, the equilibrium price will rise. 
C) if supply increases and demand decreases, the equilibrium price will fall. 
D) if demand increases and supply decreases, the equilibrium price will rise.

Question 14

We can be sure that the equilibrium price will fall when:

Accepted Answer

A) supply and demand both increase. 
B) supply and demand both decrease. 
C) supply increases and demand decreases. 
D) supply decreases and demand increases. 
A) supply and demand both increase. 
B) supply and demand both decrease. 
C) supply increases and demand decreases. 
D) supply decreases and demand increases.

Question 15

Suppose vans and sport utility vehicles are viewed by consumers to be substitutes.A safety report is released that contends that sport utility vehicles are prone to roll over during crashes.At the same time, the price of steel (used to produce motor vehicles) increases.The net effect of these two incidents on the market for sport utility vehicles is a(n):

Accepted Answer

A) decrease in price and an increase in equilibrium quantity. 
B) decrease in price and a decrease in equilibrium quantity. 
C) increase in price and a decrease in equilibrium quantity. 
D) indeterminate change in price and a decrease in equilibrium quantity. 
E) decrease in price and an indeterminate change in equilibrium quantity. 
A) decrease in price and an increase in equilibrium quantity. 
B) decrease in price and a decrease in equilibrium quantity. 
C) increase in price and a decrease in equilibrium quantity. 
D) indeterminate change in price and a decrease in equilibrium quantity. 
E) decrease in price and an indeterminate change in equilibrium quantity.

Question 16

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week Antonio's supplier of pepperoni informed him of a 25% increase in price.Which variable determining the position of the supply curve has changed and what effect does it have on supply?

Accepted Answer

A) future expectations; supply decreases 
B) future expectations; supply increases 
C) input prices; supply decreases 
D) input prices; supply increases 
E) technology; supply increases 
A) future expectations; supply decreases 
B) future expectations; supply increases 
C) input prices; supply decreases 
D) input prices; supply increases 
E) technology; supply increases

Question 17

All of the following are likely to shift the demand for grapefruit to the left except:

Accepted Answer

A) a decrease in the price of oranges 
B) a decrease in average household incomes 
C) a rise in the price of grapefruit 
D) the introduction and promotion of a processed breakfast drink. 
A) a decrease in the price of oranges 
B) a decrease in average household incomes 
C) a rise in the price of grapefruit 
D) the introduction and promotion of a processed breakfast drink.

Question 18

If market demand decreases and market supply increases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.

Accepted Answer

A) indeterminate; decrease 
B) indeterminate; increase 
C) decrease; indeterminate 
D) increase; indeterminate 
A) indeterminate; decrease 
B) indeterminate; increase 
C) decrease; indeterminate 
D) increase; indeterminate

Question 19

If we observe both an increase in the price of flour and in the number of units sold, this could be explained by:

Accepted Answer

A) an increase in the demand for flour. 
B) a decrease in the demand for flour. 
C) a decrease in the supply of flour. 
D) an increase in the supply of flour. 
A) an increase in the demand for flour. 
B) a decrease in the demand for flour. 
C) a decrease in the supply of flour. 
D) an increase in the supply of flour.

Question 20

Figure 3-H  
-Refer to Figure 3-H.The movement from ____ is consistent with an increase in supply.

Accepted Answer

A) Point B to Point D 
B) Point D to Point B 
C) Point D to Point C 
D) Point C to Point D 
E) None of the above are correct. 
A) Point B to Point D 
B) Point D to Point B 
C) Point D to Point C 
D) Point C to Point D 
E) None of the above are correct.

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

If there is a shortage of a good, we would expect that as a result

Figure 3-H -Refer to Figure 3-H.A movement from D₁ to D₂ could occur if:

Andy views beer and pizza as complements to one another.If the price of pizza decreases, economists would expect:

Figure 3-F -Refer to Figure 3-F.A supply shift from S0 to S1 can be best explained by:

If there is a decrease in the price of PS3 gaming systems, what would we expect to happen in the market for a substitute like the wii gaming system?

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

The market supply schedule reflects the total quantity:

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit.That change would be described as:

Are markets always in equilibrium?

Which of the following is false?

We can be sure that the equilibrium price will fall when:

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week Antonio's supplier of pepperoni informed him of a 25% increase in price.Which variable determining the position of the supply curve has changed and what effect does it have on supply?

All of the following are likely to shift the demand for grapefruit to the left except:

If market demand decreases and market supply increases, then equilibrium quantity will (be) and equilibrium price will (be) .

If we observe both an increase in the price of flour and in the number of units sold, this could be explained by:

Figure 3-H -Refer to Figure 3-H.The movement from ____ is consistent with an increase in supply.

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

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

If there is a shortage of a good, we would expect that as a result

Figure 3-H -Refer to Figure 3-H.A movement from D1 to D2 could occur if:

Andy views beer and pizza as complements to one another.If the price of pizza decreases, economists would expect:

Figure 3-F -Refer to Figure 3-F.A supply shift from S0 to S1 can be best explained by:

If there is a decrease in the price of PS3 gaming systems, what would we expect to happen in the market for a substitute like the wii gaming system?

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

The market supply schedule reflects the total quantity:

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit.That change would be described as:

Are markets always in equilibrium?

Which of the following is false?

We can be sure that the equilibrium price will fall when:

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week Antonio's supplier of pepperoni informed him of a 25% increase in price.Which variable determining the position of the supply curve has changed and what effect does it have on supply?

All of the following are likely to shift the demand for grapefruit to the left except:

If market demand decreases and market supply increases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.

If we observe both an increase in the price of flour and in the number of units sold, this could be explained by:

Figure 3-H -Refer to Figure 3-H.The movement from ____ is consistent with an increase in supply.

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-H -Refer to Figure 3-H.A movement from D₁ to D₂ could occur if:

If market demand decreases and market supply increases, then equilibrium quantity will (be) and equilibrium price will (be) .