Question 1

Which of the following are complementary goods?

Accepted Answer

A)  sport utility vehicles and gasoline 
B)  butter and margarine 
C)  white wine and red wine 
D)  trucks and sedans 
A)  sport utility vehicles and gasoline 
B)  butter and margarine 
C)  white wine and red wine 
D)  trucks and sedans

Question 2

Total market demand can be calculated by

Accepted Answer

A)  horizontally summing individual demand curves at each and every price level. 
B)  vertically summing individual demand curves at each and every income level. 
C)  adding up the largest quantity demanded by each individual. 
D)  looking at the changes in the products' popularity. 
A)  horizontally summing individual demand curves at each and every price level. 
B)  vertically summing individual demand curves at each and every income level. 
C)  adding up the largest quantity demanded by each individual. 
D)  looking at the changes in the products' popularity.

Question 3

Which of the following statements is consistent with an increase in supply?

Accepted Answer

A)  The price of labor input has increased. 
B)  There has been an advance in technology. 
C)  Consumers' incomes have increased. 
D)  The market price has decreased. 
A)  The price of labor input has increased. 
B)  There has been an advance in technology. 
C)  Consumers' incomes have increased. 
D)  The market price has decreased.

Question 4

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2016, the pay phone costs 50 cents for a call and a first-class stamp costs 47 cents. We know that

Accepted Answer

A)  both the nominal and the relative price of phone calls increased from 1950 to 2016. 
B)  both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2016. 
C)  all prices increased from 1950 to 2016: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. 
D)  both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but we can't tell if the relative prices increased or decreased without more information. 
A)  both the nominal and the relative price of phone calls increased from 1950 to 2016. 
B)  both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but the relative price of stamps increased and the relative price of phone calls decreased from 1950 to 2016. 
C)  all prices increased from 1950 to 2016: Nominal prices of phone calls, first-class stamps, and the relative prices of phone calls and first-class stamps. 
D)  both the nominal prices of phone calls and first-class stamps increased from 1950 to 2016, but we can't tell if the relative prices increased or decreased without more information.

Question 5

Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?

Accepted Answer

A)  income 
B)  tastes and preferences 
C)  Expectations e the future price of a good 
D)  none of the above 
A)  income 
B)  tastes and preferences 
C)  Expectations e the future price of a good 
D)  none of the above

Question 6

If the price of one good goes up and the demand of a related good goes down, the two goods are

Accepted Answer

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

Question 7

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Accepted Answer

A)  the demand for oranges will rise. 
B)  the equilibrium quantity of oranges will rise. 
C)  the amount of oranges available at various prices will decline. 
D)  the price of oranges will fall. 
A)  the demand for oranges will rise. 
B)  the equilibrium quantity of oranges will rise. 
C)  the amount of oranges available at various prices will decline. 
D)  the price of oranges will fall.

Question 8

Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

Accepted Answer

A)  The demand curve shifts to the right. 
B)  The demand curve shifts to the left. 
C)  a leftward movement along the demand curve 
D)  a rightward movement along the demand curve 
A)  The demand curve shifts to the right. 
B)  The demand curve shifts to the left. 
C)  a leftward movement along the demand curve 
D)  a rightward movement along the demand curve

Question 9

-According to the above table, there is an excess quantity demanded of 1500 earbuds at the price

Accepted Answer

A)  $14. 
B)  $12. 
C)  $10. 
D)  $8. 
A)  $14. 
B)  $12. 
C)  $10. 
D)  $8.

Question 10

-When a shortage exists in a market

Accepted Answer

A)  the market clearing price is above equilibrium and market forces will cause the price to fall. 
B)  the quantity demanded is less than the quantity supplied at the existing price. 
C)  the current price is below the market clearing price and the price will rise. 
D)  the quantity supplied is greater than the quantity demanded at the current price. 
A)  the market clearing price is above equilibrium and market forces will cause the price to fall. 
B)  the quantity demanded is less than the quantity supplied at the existing price. 
C)  the current price is below the market clearing price and the price will rise. 
D)  the quantity supplied is greater than the quantity demanded at the current price.

Question 11

Which of the following does NOT cause a rightward shift in the supply curve?

Accepted Answer

A)  a reduction in resource costs 
B)  an increase in technology 
C)  a reduction in the price of the good 
D)  a reduction in the expected future price of the good 
A)  a reduction in resource costs 
B)  an increase in technology 
C)  a reduction in the price of the good 
D)  a reduction in the expected future price of the good

Question 12

The supply curve shows the relationship between the

Accepted Answer

A)  cost of production and the price of the product. 
B)  cost of resources and cost of production. 
C)  price of the product and quantity supplied. 
D)  quantity demanded and the quantity supplied. 
A)  cost of production and the price of the product. 
B)  cost of resources and cost of production. 
C)  price of the product and quantity supplied. 
D)  quantity demanded and the quantity supplied.

Question 13

The price of one product in terms of another commodity is called its

Accepted Answer

A)  relative price. 
B)  money price. 
C)  financial price. 
D)  converse price. 
A)  relative price. 
B)  money price. 
C)  financial price. 
D)  converse price.

Question 14

How does a change in quantity supplied differ from a change in supply?

Accepted Answer

A)  A change in quantity supplied shifts the supply curve; a change in supply is a movement along the curve. 
B)  A change in one of the ceteris paribus conditions affects quantity supplied, not supply. 
C)  A change in the price affects quantity supplied, not supply. 
D)  There is no difference. 
A)  A change in quantity supplied shifts the supply curve; a change in supply is a movement along the curve. 
B)  A change in one of the ceteris paribus conditions affects quantity supplied, not supply. 
C)  A change in the price affects quantity supplied, not supply. 
D)  There is no difference.

Question 15

Of the following, which is the least likely to be an example of substitute goods?

Accepted Answer

A)  beer and pretzels 
B)  margarine and butter 
C)  beef and chicken 
D)  tea and coffee 
A)  beer and pretzels 
B)  margarine and butter 
C)  beef and chicken 
D)  tea and coffee

Question 16

Other things being equal, the relationship between price and quantity supplied is

Accepted Answer

A)  negative. 
B)  constant. 
C)  positive. 
D)  non-existent. 
A)  negative. 
B)  constant. 
C)  positive. 
D)  non-existent.

Question 17

When there is an excess quantity supplied

Accepted Answer

A)  the market is in equilibrium. 
B)  quantity demanded is greater than quantity supplied. 
C)  quantity demanded is less than quantity supplied. 
D)  prices will remain stable. 
A)  the market is in equilibrium. 
B)  quantity demanded is greater than quantity supplied. 
C)  quantity demanded is less than quantity supplied. 
D)  prices will remain stable.

Question 18

The supply curve has a

Accepted Answer

A)  negative slope. 
B)  positive slope. 
C)  slope equal to -1. 
D)  undefined slope. 
A)  negative slope. 
B)  positive slope. 
C)  slope equal to -1. 
D)  undefined slope.

Question 19

According to the law of demand

Accepted Answer

A)  price and quantity demanded move in the same direction. 
B)  price and quantity demanded move in opposite directions. 
C)  ceteris paribus does not apply. 
D)  price and quantity demanded are unrelated. 
A)  price and quantity demanded move in the same direction. 
B)  price and quantity demanded move in opposite directions. 
C)  ceteris paribus does not apply. 
D)  price and quantity demanded are unrelated.

Question 20

-Refer to the above figure. At a price of three cents, a(n) ________ of bubble gum will exist in the market.

Accepted Answer

A)  surplus 
B)  shortage 
C)  equilibrium quantity 
D)  excess quantity supplied 
A)  surplus 
B)  shortage 
C)  equilibrium quantity 
D)  excess quantity supplied

Exam 3: Demand and Supply

Which of the following are complementary goods?

Total market demand can be calculated by

Which of the following statements is consistent with an increase in supply?

The price of a phone call at a pay phone was 5 cents in 1950 and the price of a first-class stamp was 3 cents. In 2016, the pay phone costs 50 cents for a call and a first-class stamp costs 47 cents. We know that

Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?

If the price of one good goes up and the demand of a related good goes down, the two goods are

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?

-According to the above table, there is an excess quantity demanded of 1500 earbuds at the price

-When a shortage exists in a market

Which of the following does NOT cause a rightward shift in the supply curve?

The supply curve shows the relationship between the

The price of one product in terms of another commodity is called its

How does a change in quantity supplied differ from a change in supply?

Of the following, which is the least likely to be an example of substitute goods?

Other things being equal, the relationship between price and quantity supplied is

When there is an excess quantity supplied

The supply curve has a

According to the law of demand

-Refer to the above figure. At a price of three cents, a(n) ________ of bubble gum will exist in the market.

The Nature of Economics

Scarcity and the World of Trade-Offs

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters