Question 1

The scalping of tickets for an event is a sign that the stated price on the ticket is:

Accepted Answer

A)  Equal to the quantity demanded 
B)  Equal to the market clearing price 
C)  Below the market clearing price 
D)  Above the market clearing price 
A)  Equal to the quantity demanded 
B)  Equal to the market clearing price 
C)  Below the market clearing price 
D)  Above the market clearing price

Question 2

Which of the following would cause a leftward shift in the supply curve for car washes?

Accepted Answer

A)  An increase in the number of cars in the city 
B)  A decrease in taxes on car washes 
C)  An increase in the price of car washing equipment 
D)  A decrease in the price of water 
A)  An increase in the number of cars in the city 
B)  A decrease in taxes on car washes 
C)  An increase in the price of car washing equipment 
D)  A decrease in the price of water

Question 3

An "increase in the quantity supplied" suggests a:

Accepted Answer

A)  Rightward shift of the supply curve 
B)  Movement down along the supply curve 
C)  Movement up along the supply curve 
D)  Leftward shift of the supply curve 
A)  Rightward shift of the supply curve 
B)  Movement down along the supply curve 
C)  Movement up along the supply curve 
D)  Leftward shift of the supply curve

Question 4

An increase in demand for oil along with a simultaneous increase in supply of oil will:

Accepted Answer

A)  Decrease price and increase quantity 
B)  Increase price and decrease quantity 
C)  Increase quantity, but whether it increases price depends on how much each curve shifts 
D)  Increase price, but whether it increases quantity depends on how much each curve shifts 
A)  Decrease price and increase quantity 
B)  Increase price and decrease quantity 
C)  Increase quantity, but whether it increases price depends on how much each curve shifts 
D)  Increase price, but whether it increases quantity depends on how much each curve shifts

Question 5

Refer to the above table. In this competitive market, the price and quantity will settle at:

Accepted Answer

A)  $10 and 2,000 units 
B)  $15 and 1,600 units 
C)  $20 and 900 units 
D)  $25 and 1,200 units 
A)  $10 and 2,000 units 
B)  $15 and 1,600 units 
C)  $20 and 900 units 
D)  $25 and 1,200 units

Question 6

In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease.

Accepted Answer

A) True 
 B)False

Question 7

If we observe the price of a good in a competitive market rising, then we can conclude that there had been a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 8

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event.   Refer to the above graph for the event-ticket market. A scalpers' market will exist if the event organizers set the official ticket price at:

Accepted Answer

A)  $50 
B)  $20 
C)  $40 
D)  $60 
A)  $50 
B)  $20 
C)  $40 
D)  $60

Question 9

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:

Accepted Answer

A)  Inferior goods 
B)  Direct goods 
C)  Average goods 
D)  Normal goods 
A)  Inferior goods 
B)  Direct goods 
C)  Average goods 
D)  Normal goods

Question 10

Refer to the above table. At a price of $15 per unit, which of the following would exist?

Accepted Answer

A)  A shortage of 1,600 units 
B)  A surplus of 1,000 units 
C)  A shortage of 1,000 units 
D)  A surplus of 600 units 
A)  A shortage of 1,600 units 
B)  A surplus of 1,000 units 
C)  A shortage of 1,000 units 
D)  A surplus of 600 units

Question 11

Which statement is true about supply?

Accepted Answer

A)  There is an inverse relationship between price and quantity supplied 
B)  Supply refers to the amount of inventory that sellers have in their warehouses 
C)  As price decreases, producers are willing to put more of the good on the market for sale 
D)  To entice producers to offer more of a good on the market for sale, price must rise 
A)  There is an inverse relationship between price and quantity supplied 
B)  Supply refers to the amount of inventory that sellers have in their warehouses 
C)  As price decreases, producers are willing to put more of the good on the market for sale 
D)  To entice producers to offer more of a good on the market for sale, price must rise

Question 12

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the above graph. A decrease in supply would best be reflected by a change from:

Accepted Answer

A)  Point 2 to point 1 
B)  Point 5 to point 1 
C)  Point 5 to point 2 
D)  Point 3 to point 6 
A)  Point 2 to point 1 
B)  Point 5 to point 1 
C)  Point 5 to point 2 
D)  Point 3 to point 6

Question 14

Use the following graph of the demand for coffee:   Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

Accepted Answer

A)  A decrease in the cost of producing coffee 
B)  A scientific report stating that coffee improves memory 
C)  A decrease in the prices of cream and sugar 
D)  A decrease in the price of tea 
A)  A decrease in the cost of producing coffee 
B)  A scientific report stating that coffee improves memory 
C)  A decrease in the prices of cream and sugar 
D)  A decrease in the price of tea

Question 15

If a competitive market were allowed and developed for human organs, then the price for organs would:

Accepted Answer

A)  Increase and the quantity of organs available would decrease 
B)  Decrease and the quantity of organs available would increase 
C)  Increase and the quantity of organs available would increase 
D)  Decrease and the quantity of organs available would decrease 
A)  Increase and the quantity of organs available would decrease 
B)  Decrease and the quantity of organs available would increase 
C)  Increase and the quantity of organs available would increase 
D)  Decrease and the quantity of organs available would decrease

Question 16

A higher price reduces the quantity demanded for a product because:

Accepted Answer

A)  The purchasing power of individuals increases 
B)  The financial assets of individuals increase 
C)  Individuals will buy more of the product and less of its substitutes 
D)  Individuals can afford less of the product and will switch to substitutes 
A)  The purchasing power of individuals increases 
B)  The financial assets of individuals increase 
C)  Individuals will buy more of the product and less of its substitutes 
D)  Individuals can afford less of the product and will switch to substitutes

Question 17

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Accepted Answer

A)  The increase in demand was greater than the decrease in supply 
B)  The decrease in demand was greater than the decrease in supply 
C)  The increase in supply was greater than the decrease in demand 
D)  The decrease in supply was greater than the increase in demand 
A)  The increase in demand was greater than the decrease in supply 
B)  The decrease in demand was greater than the decrease in supply 
C)  The increase in supply was greater than the decrease in demand 
D)  The decrease in supply was greater than the increase in demand

Question 18

The law of demand states that if price increases, other things being equal, the demand for the product will decrease.

Accepted Answer

A) True 
 B)False

Question 19

A television station reports that the price of coffee has increased but the quantity traded in the market has decreased. This situation would be caused by a(n):

Accepted Answer

A)  Increase in demand 
B)  Increase in supply 
C)  Decrease in demand 
D)  Decrease in supply 
A)  Increase in demand 
B)  Increase in supply 
C)  Decrease in demand 
D)  Decrease in supply

Question 20

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain:

Accepted Answer

A)  Productive efficiency 
B)  Allocative efficiency 
C)  Minimum opportunity costs 
D)  Maximum process and revenues 
A)  Productive efficiency 
B)  Allocative efficiency 
C)  Minimum opportunity costs 
D)  Maximum process and revenues

Exam 3: Demand, Supply, and Market Equilibrium

The scalping of tickets for an event is a sign that the stated price on the ticket is:

Which of the following would cause a leftward shift in the supply curve for car washes?

An "increase in the quantity supplied" suggests a:

An increase in demand for oil along with a simultaneous increase in supply of oil will:

Refer to the above table. In this competitive market, the price and quantity will settle at:

In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease.

If we observe the price of a good in a competitive market rising, then we can conclude that there had been a shortage in the market.

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event. Refer to the above graph for the event-ticket market. A scalpers' market will exist if the event organizers set the official ticket price at:

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:

Refer to the above table. At a price of $15 per unit, which of the following would exist?

Which statement is true about supply?

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Refer to the above graph. A decrease in supply would best be reflected by a change from:

Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

If a competitive market were allowed and developed for human organs, then the price for organs would:

A higher price reduces the quantity demanded for a product because:

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

The law of demand states that if price increases, other things being equal, the demand for the product will decrease.

A television station reports that the price of coffee has increased but the quantity traded in the market has decreased. This situation would be caused by a(n):

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain:

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters

Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D₁ to D₃?