Question 1

A demand curve is a graphical representation of

Accepted Answer

A)  consumer tastes. 
B)  national income. 
C)  the demand schedule. 
D)  relative prices. 
A)  consumer tastes. 
B)  national income. 
C)  the demand schedule. 
D)  relative prices.

Question 2

An expected future increase in the price of bananas may

Accepted Answer

A)  increase the demand for bananas now. 
B)  decrease the demand for bananas now. 
C)  increase the supply of bananas now. 
D)  make bananas an inferior good. 
A)  increase the demand for bananas now. 
B)  decrease the demand for bananas now. 
C)  increase the supply of bananas now. 
D)  make bananas an inferior good.

Question 3

Sugar and coffee are complements. When the price of coffee decreases, the demand for sugar

Accepted Answer

A)  will fall. 
B)  remains constant. 
C)  will shift outward. 
D)  will shift inward. 
A)  will fall. 
B)  remains constant. 
C)  will shift outward. 
D)  will shift inward.

Question 4

Which of the following will cause a movement along the supply curve for oil?

Accepted Answer

A)  new technology to drill oil from existing oil wells 
B)  an increase in the price of oil 
C)  an increase in the number of oil producers 
D)  government tax on oil producers in Texas 
A)  new technology to drill oil from existing oil wells 
B)  an increase in the price of oil 
C)  an increase in the number of oil producers 
D)  government tax on oil producers in Texas

Question 5

Four points on a demand schedule are given: $12, 2 units; $10, 3 unit; $15, 5 units; and $2, 4 units. Which combination is inconsistent with the law of demand?

Accepted Answer

A)  $12 and 2 units 
B)  $10 and 3 unit 
C)  $15 and 5 units 
D)  $2 and 4 units 
A)  $12 and 2 units 
B)  $10 and 3 unit 
C)  $15 and 5 units 
D)  $2 and 4 units

Question 6

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

Accepted Answer

A)  an increase in airfares to Hawaii 
B)  a decrease in airfares to Hawaii 
C)  an upward movement along the demand curve for stays in Hawaiian hotel rooms 
D)  a downward movement along the demand curve for stays in Hawaiian hotel rooms 
A)  an increase in airfares to Hawaii 
B)  a decrease in airfares to Hawaii 
C)  an upward movement along the demand curve for stays in Hawaiian hotel rooms 
D)  a downward movement along the demand curve for stays in Hawaiian hotel rooms

Question 7

-According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be

Accepted Answer

A)  a shortage of 30 million gallons. 
B)  a surplus of 30 million gallons. 
C)  a shortage of 20 million gallons. 
D)  a surplus of 50 million gallons. 
A)  a shortage of 30 million gallons. 
B)  a surplus of 30 million gallons. 
C)  a shortage of 20 million gallons. 
D)  a surplus of 50 million gallons.

Question 8

Market supply is obtained by

Accepted Answer

A)  summing the amount demanded by individual consumers at various prices. 
B)  summing the amount supplied by individual producers at various prices. 
C)  the law of supply. 
D)  observing how the supply curve shifts. 
A)  summing the amount demanded by individual consumers at various prices. 
B)  summing the amount supplied by individual producers at various prices. 
C)  the law of supply. 
D)  observing how the supply curve shifts.

Question 9

A per-unit government tax on producers of a good tends to

Accepted Answer

A)  reduce the supply of the good. 
B)  increase the supply of the good. 
C)  cause an upward movement along the supply curve. 
D)  not have any effect on the good's supply. 
A)  reduce the supply of the good. 
B)  increase the supply of the good. 
C)  cause an upward movement along the supply curve. 
D)  not have any effect on the good's supply.

Question 10

A movement along a demand curve is

Accepted Answer

A)  a change in demand and can be caused by a change in consumers' income. 
B)  a change in the quantity demanded and is caused by a change in the price of the good. 
C)  a change in the quantity demanded and can be caused by a change in consumers' income. 
D)  a change in demand and is caused by a change in the price of the good. 
A)  a change in demand and can be caused by a change in consumers' income. 
B)  a change in the quantity demanded and is caused by a change in the price of the good. 
C)  a change in the quantity demanded and can be caused by a change in consumers' income. 
D)  a change in demand and is caused by a change in the price of the good.

Question 11

If the price of margarine falls, the demand for butter will

Accepted Answer

A)  remain unchanged. 
B)  increase. 
C)  decrease. 
D)  rise at first and then fall. 
A)  remain unchanged. 
B)  increase. 
C)  decrease. 
D)  rise at first and then fall.

Question 12

The price of a smartphone increased from $250 to $400 while the price of a smartphone app increased from $1 to $2. The relative price of smartphones in terms of smartphone apps

Accepted Answer

A)  increased from 175 to 350. 
B)  decreased from 250 to 200. 
C)  increased from 0.003 to 0.05. 
D)  decreased from 0.35 to 0.2. 
A)  increased from 175 to 350. 
B)  decreased from 250 to 200. 
C)  increased from 0.003 to 0.05. 
D)  decreased from 0.35 to 0.2.

Question 13

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

Accepted Answer

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

Question 14

Suppose Good A is a normal good. Which of the following will increase the demand for Good A?

Accepted Answer

A)  an increase in the price of its substitutes 
B)  a lower expected future relative price of A 
C)  an increase in the price of its complements 
D)  a decrease in income 
A)  an increase in the price of its substitutes 
B)  a lower expected future relative price of A 
C)  an increase in the price of its complements 
D)  a decrease in income

Question 15

The money price of a good is that price

Accepted Answer

A)  expressed in constant 2017 dollars. 
B)  expressed in purchasing power against a common item like bread. 
C)  expressed in today's dollars. 
D)  that would clear the market. 
A)  expressed in constant 2017 dollars. 
B)  expressed in purchasing power against a common item like bread. 
C)  expressed in today's dollars. 
D)  that would clear the market.

Question 16

The price of a first-class stamp in 1957 was 3 cents, and it is 47 cents in 2016. From this we know that

Accepted Answer

A)  both the relative and the absolute price of first-class stamps increased from 1957 to 2016. 
B)  the money price of first-class stamps increased from 1957 to 2016 but the absolute price of first-class stamps stayed constant. 
C)  the money price of first-class stamps increased from 1957 to 2016 and the relative price of first-class stamps decreased. 
D)  the money price of first-class stamps increased from 1957 to 2016, but we can't tell if the relative price of first-class stamps increased or decreased without more information. 
A)  both the relative and the absolute price of first-class stamps increased from 1957 to 2016. 
B)  the money price of first-class stamps increased from 1957 to 2016 but the absolute price of first-class stamps stayed constant. 
C)  the money price of first-class stamps increased from 1957 to 2016 and the relative price of first-class stamps decreased. 
D)  the money price of first-class stamps increased from 1957 to 2016, but we can't tell if the relative price of first-class stamps increased or decreased without more information.

Question 17

-Refer to the above table. The market quantity supplied when the price is $6 is

Accepted Answer

A)  0. 
B)  5. 
C)  10. 
D)  20. 
A)  0. 
B)  5. 
C)  10. 
D)  20.

Question 18

-In the above figure, an increase in income is best demonstrated by a

Accepted Answer

A)  shift of D1 to D2 in Graph A, if good A is a normal good. 
B)  shift of D2 to D1 in Graph A, if good A is a normal good. 
C)  movement along D0 from P1 to P2 in Graph B. 
D)  movement along D0 from P2 to P1 in Graph B. 
A)  shift of D1 to D2 in Graph A, if good A is a normal good. 
B)  shift of D2 to D1 in Graph A, if good A is a normal good. 
C)  movement along D0 from P1 to P2 in Graph B. 
D)  movement along D0 from P2 to P1 in Graph B.

Question 19

The absolute price of a good is its

Accepted Answer

A)  relative price. 
B)  money price. 
C)  subjective price. 
D)  projected price. 
A)  relative price. 
B)  money price. 
C)  subjective price. 
D)  projected price.

Question 20

The price of a commodity in terms of another commodity is

Accepted Answer

A)  the law of demand. 
B)  a substitute. 
C)  the money price. 
D)  the relative price. 
A)  the law of demand. 
B)  a substitute. 
C)  the money price. 
D)  the relative price.

Exam 3: Demand and Supply

A demand curve is a graphical representation of

An expected future increase in the price of bananas may

Sugar and coffee are complements. When the price of coffee decreases, the demand for sugar

Which of the following will cause a movement along the supply curve for oil?

Four points on a demand schedule are given: $12, 2 units; $10, 3 unit; $15, 5 units; and $2, 4 units. Which combination is inconsistent with the law of demand?

Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?

-According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be

Market supply is obtained by

A per-unit government tax on producers of a good tends to

A movement along a demand curve is

If the price of margarine falls, the demand for butter will

The price of a smartphone increased from $250 to $400 while the price of a smartphone app increased from $1 to $2. The relative price of smartphones in terms of smartphone apps

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

Suppose Good A is a normal good. Which of the following will increase the demand for Good A?

The money price of a good is that price

The price of a first-class stamp in 1957 was 3 cents, and it is 47 cents in 2016. From this we know that

-Refer to the above table. The market quantity supplied when the price is $6 is

-In the above figure, an increase in income is best demonstrated by a

The absolute price of a good is its

The price of a commodity in terms of another commodity is

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

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