Question 1

Which factor would cause a movement along the demand curve for pizza?

Accepted Answer

A)  an increase in the number of students in town 
B)  a renewed preference for Italian food 
C)  a drop in the price of pizza 
D)  an increase in average income 
A)  an increase in the number of students in town 
B)  a renewed preference for Italian food 
C)  a drop in the price of pizza 
D)  an increase in average income

Question 2

-According to the above figure, the equilibrium price of DVDs is

Accepted Answer

A)  $20. 
B)  $14. 
C)  $10. 
D)  $6. 
A)  $20. 
B)  $14. 
C)  $10. 
D)  $6.

Question 3

-Refer to the above figure for a particular good. The rightward shift of the curve could have been caused by

Accepted Answer

A)  a decrease in the price of an input. 
B)  a decrease in the price of that good. 
C)  an increase in the price of a complementary good. 
D)  an increase in the price of a substitute good. 
A)  a decrease in the price of an input. 
B)  a decrease in the price of that good. 
C)  an increase in the price of a complementary good. 
D)  an increase in the price of a substitute good.

Question 4

A decrease in demand would be represented by

Accepted Answer

A)  the price of a good going up. 
B)  a downward movement along the demand curve. 
C)  an upward movement along the demand curve. 
D)  a shift of the demand curve to the left. 
A)  the price of a good going up. 
B)  a downward movement along the demand curve. 
C)  an upward movement along the demand curve. 
D)  a shift of the demand curve to the left.

Question 5

Which of the following is a determinant of market demand?

Accepted Answer

A)  consumers' expectation of the future relative price of a product 
B)  taxes imposed on firms that sell the product 
C)  cost of inputs used to produce the product 
D)  number of firms that produce the product 
A)  consumers' expectation of the future relative price of a product 
B)  taxes imposed on firms that sell the product 
C)  cost of inputs used to produce the product 
D)  number of firms that produce the product

Question 6

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

Accepted Answer

A)  an increase in the demand for computers 
B)  a decrease in the supply of diskettes 
C)  an increase in the supply of computers 
D)  an increase in the quantity supplied of computers 
A)  an increase in the demand for computers 
B)  a decrease in the supply of diskettes 
C)  an increase in the supply of computers 
D)  an increase in the quantity supplied of computers

Question 7

-If the price of a product increases

Accepted Answer

A)  there is an increase in quantity supplied and a decrease in demand. 
B)  there is an increase in supply and a decrease in quantity demanded. 
C)  there is an increase in supply and a decrease in demand. 
D)  there is an increase in quantity supplied and a decrease in quantity demanded. 
A)  there is an increase in quantity supplied and a decrease in demand. 
B)  there is an increase in supply and a decrease in quantity demanded. 
C)  there is an increase in supply and a decrease in demand. 
D)  there is an increase in quantity supplied and a decrease in quantity demanded.

Question 8

If there is a shortage in a free market, then

Accepted Answer

A)  consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level. 
B)  consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level. 
C)  suppliers will decrease their output to match demand. 
D)  suppliers will accept any price below equilibrium. 
A)  consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level. 
B)  consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level. 
C)  suppliers will decrease their output to match demand. 
D)  suppliers will accept any price below equilibrium.

Question 9

Another term for the equilibrium price is

Accepted Answer

A)  ceteris paribus. 
B)  black market. 
C)  law of demand. 
D)  market clearing price. 
A)  ceteris paribus. 
B)  black market. 
C)  law of demand. 
D)  market clearing price.

Question 10

A movement along a supply curve is induced by a change in

Accepted Answer

A)  input prices. 
B)  taxes and subsidies. 
C)  price expectations. 
D)  the product's own price. 
A)  input prices. 
B)  taxes and subsidies. 
C)  price expectations. 
D)  the product's own price.

Question 11

All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,

Accepted Answer

A)  there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Quarter Pounder and Chalupas are substitutes. 
B)  there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
C)  there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
D)  there is likely to be an increase in demand for McDonald's Quarter Pounder, assuming the Quarter Pounder and Chalupas are substitutes. 
A)  there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Quarter Pounder and Chalupas are substitutes. 
B)  there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
C)  there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. 
D)  there is likely to be an increase in demand for McDonald's Quarter Pounder, assuming the Quarter Pounder and Chalupas are substitutes.

Question 12

Which of the following products are likely to be complementary goods?

Accepted Answer

A)  Coke and Pepsi 
B)  portable MP3 players and batteries 
C)  HD-DVDs and Blu-Ray DVDs 
D)  Domino's pizza and Papa John's pizza 
A)  Coke and Pepsi 
B)  portable MP3 players and batteries 
C)  HD-DVDs and Blu-Ray DVDs 
D)  Domino's pizza and Papa John's pizza

Question 13

Consider the following:   The relative price of hamburgers this year has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  Not enough information has been given to calculate an answer. 
A)  increased. 
B)  decreased. 
C)  stayed the same. 
D)  Not enough information has been given to calculate an answer.

Question 14

The market clearing price is

Accepted Answer

A)  the price which eliminates excess quantity supplied or excess quantity demanded. 
B)  the price which leaves an excess quantity demanded. 
C)  the price which leaves an excess quantity supplied. 
D)  the lowest price at which a positive quantity supplied exists. 
A)  the price which eliminates excess quantity supplied or excess quantity demanded. 
B)  the price which leaves an excess quantity demanded. 
C)  the price which leaves an excess quantity supplied. 
D)  the lowest price at which a positive quantity supplied exists.

Question 15

-Refer to the above figure. Excess quantity supplied will exist when

Accepted Answer

A)  the price is between $0 and $6. 
B)  the price equals $6. 
C)  the price equals $10. 
D)  quantity demanded equals 15. 
A)  the price is between $0 and $6. 
B)  the price equals $6. 
C)  the price equals $10. 
D)  quantity demanded equals 15.

Question 16

Which of the following will cause the demand curve for beer to shift right?

Accepted Answer

A)  a fall in the price of beer 
B)  a fall in average incomes of beer consumers 
C)  a decline in population 
D)  a successful advertising campaign linking beer consumption to lower cholesterol 
A)  a fall in the price of beer 
B)  a fall in average incomes of beer consumers 
C)  a decline in population 
D)  a successful advertising campaign linking beer consumption to lower cholesterol

Question 17

In the long run, the number of firms in an industry may change. If the number of firms increases, then

Accepted Answer

A)  the supply curve will shift outward to the right. 
B)  the demand curve will shift outward to the right. 
C)  the supply curve will shift inward to the left. 
D)  the demand curve will shift inward to the left. 
A)  the supply curve will shift outward to the right. 
B)  the demand curve will shift outward to the right. 
C)  the supply curve will shift inward to the left. 
D)  the demand curve will shift inward to the left.

Question 18

Which of the following is a determinant of supply?

Accepted Answer

A)  tastes and preferences of consumers 
B)  technology 
C)  consumer income 
D)  number of consumers 
A)  tastes and preferences of consumers 
B)  technology 
C)  consumer income 
D)  number of consumers

Question 19

Which one of the following statements is FALSE?

Accepted Answer

A)  There is an inverse (negative) relationship between product price and quantity supplied. 
B)  There is some price at which quantity supplied of a product is zero. 
C)  As product price increases, producers are willing to put more of the good on the market for sale. 
D)  In order to entice producers to offer more of a product on the market for sale, product price must rise. 
A)  There is an inverse (negative) relationship between product price and quantity supplied. 
B)  There is some price at which quantity supplied of a product is zero. 
C)  As product price increases, producers are willing to put more of the good on the market for sale. 
D)  In order to entice producers to offer more of a product on the market for sale, product price must rise.

Question 20

If the price of gasoline rises sharply and the demand for trucks falls, then the two goods are

Accepted Answer

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

Exam 3: Demand and Supply

Which factor would cause a movement along the demand curve for pizza?

-According to the above figure, the equilibrium price of DVDs is

-Refer to the above figure for a particular good. The rightward shift of the curve could have been caused by

A decrease in demand would be represented by

Which of the following is a determinant of market demand?

Which of the following is a likely result of the dramatic decrease in the price of microprocessor chips to computer manufacturers in the last two decades?

-If the price of a product increases

If there is a shortage in a free market, then

Another term for the equilibrium price is

A movement along a supply curve is induced by a change in

All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,

Which of the following products are likely to be complementary goods?

Consider the following: The relative price of hamburgers this year has

The market clearing price is

-Refer to the above figure. Excess quantity supplied will exist when

Which of the following will cause the demand curve for beer to shift right?

In the long run, the number of firms in an industry may change. If the number of firms increases, then

Which of the following is a determinant of supply?

Which one of the following statements is FALSE?

If the price of gasoline rises sharply and the demand for trucks falls, then the two goods are

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