Question 1

-According to the above figure, a shortage is shown between which two points?

Accepted Answer

A)  A and E 
B)  C and B 
C)  A and B 
D)  E and F 
A)  A and E 
B)  C and B 
C)  A and B 
D)  E and F

Question 2

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?

Accepted Answer

A)  If a good's price goes down, then demand for the good will decrease. 
B)  If a good's price goes down, then quantity demanded will increase. 
C)  If demand increases, then the demand curve will shift to the left. 
D)  If price rises and quantity demanded decreases, then the demand curve will shift to the left. 
A)  If a good's price goes down, then demand for the good will decrease. 
B)  If a good's price goes down, then quantity demanded will increase. 
C)  If demand increases, then the demand curve will shift to the left. 
D)  If price rises and quantity demanded decreases, then the demand curve will shift to the left.

Question 3

A shift in the demand curve will occur when

Accepted Answer

A)  supply shifts. 
B)  the price of an input used to produce the good changes. 
C)  consumers' income changes. 
D)  the price of the product changes. 
A)  supply shifts. 
B)  the price of an input used to produce the good changes. 
C)  consumers' income changes. 
D)  the price of the product changes.

Question 4

In order to increase the supply of a good, producers must

Accepted Answer

A)  convince consumers to reduce the quantity demanded. 
B)  see an increase in quantity supplied by competitors. 
C)  reduce their per-unit costs of producing the good. 
D)  cut back on labor to reduce production costs. 
A)  convince consumers to reduce the quantity demanded. 
B)  see an increase in quantity supplied by competitors. 
C)  reduce their per-unit costs of producing the good. 
D)  cut back on labor to reduce production costs.

Question 5

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Accepted Answer

A)  the price of the good itself. 
B)  the price of related goods. 
C)  incomes. 
D)  tastes. 
A)  the price of the good itself. 
B)  the price of related goods. 
C)  incomes. 
D)  tastes.

Question 6

Market demand is

Accepted Answer

A)  the total quantities demanded of all consumers of a particular item at given prices. 
B)  a movement along the demand curve in response to the market. 
C)  total equilibrium demand for the market. 
D)  the demand for and supply of a good or service. 
A)  the total quantities demanded of all consumers of a particular item at given prices. 
B)  a movement along the demand curve in response to the market. 
C)  total equilibrium demand for the market. 
D)  the demand for and supply of a good or service.

Question 7

Suppose the price of steel goes up in the United States. What happens in the market for automobiles?

Accepted Answer

A)  Supply shifts upward and to the left. 
B)  Demand shifts left. 
C)  Supply shifts downward and to the right. 
D)  Demand shifts to the right. 
A)  Supply shifts upward and to the left. 
B)  Demand shifts left. 
C)  Supply shifts downward and to the right. 
D)  Demand shifts to the right.

Question 8

If the price of apples goes down, then the demand for pears will

Accepted Answer

A)  increase, assuming apples and pears are substitutes. 
B)  decrease, assuming apples and pears are substitutes. 
C)  decrease, assuming apples and pears are complements. 
D)  remain constant, assuming apples and pears are related goods. 
A)  increase, assuming apples and pears are substitutes. 
B)  decrease, assuming apples and pears are substitutes. 
C)  decrease, assuming apples and pears are complements. 
D)  remain constant, assuming apples and pears are related goods.

Question 9

The only variable that can affect a movement along the demand curve is

Accepted Answer

A)  income levels. 
B)  the price of the good itself. 
C)  the number of buyers. 
D)  the number of substitutes. 
A)  income levels. 
B)  the price of the good itself. 
C)  the number of buyers. 
D)  the number of substitutes.

Question 10

The relative price of a good is that price

Accepted Answer

A)  expressed in today's dollars. 
B)  expressed in constant 2017 dollars. 
C)  expressed in terms of the price of another good. 
D)  that is equal to the equilibrium price. 
A)  expressed in today's dollars. 
B)  expressed in constant 2017 dollars. 
C)  expressed in terms of the price of another good. 
D)  that is equal to the equilibrium price.

Question 11

-According to the above figure, at a price of $6 per DVD, there is a

Accepted Answer

A)  surplus of 4000 DVDs per month. 
B)  market equilibrium of 4000 DVDs per month. 
C)  shortage of 4000 DVDs per month. 
D)  market equilibrium of 6000 DVDs per month. 
A)  surplus of 4000 DVDs per month. 
B)  market equilibrium of 4000 DVDs per month. 
C)  shortage of 4000 DVDs per month. 
D)  market equilibrium of 6000 DVDs per month.

Question 12

If the price of personal computers were to rise, then the demand for printers would decrease because personal computers and printers are

Accepted Answer

A)  complementary goods. 
B)  consumer goods. 
C)  inferior goods. 
D)  substitute goods. 
A)  complementary goods. 
B)  consumer goods. 
C)  inferior goods. 
D)  substitute goods.

Question 13

In general, any ceteris paribus determinant of supply that is favorable to production will

Accepted Answer

A)  cause a movement along the supply curve. 
B)  shift the supply curve to the right. 
C)  shift the demand curve to the left. 
D)  shift the supply curve to the left. 
A)  cause a movement along the supply curve. 
B)  shift the supply curve to the right. 
C)  shift the demand curve to the left. 
D)  shift the supply curve to the left.

Question 14

The equilibrium or market clearing price occurs at the point at which

Accepted Answer

A)  quantity demanded equals quantity supplied. 
B)  the supply curve intersects the horizontal axis. 
C)  the demand curve intersects the vertical axis. 
D)  there is a shortage of the desired good. 
A)  quantity demanded equals quantity supplied. 
B)  the supply curve intersects the horizontal axis. 
C)  the demand curve intersects the vertical axis. 
D)  there is a shortage of the desired good.

Question 15

-According to the above table, at a price of $8 per unit, other things constant

Accepted Answer

A)  consumers will continue to bid prices upward. 
B)  there will be no tendency for the market to approach an equilibrium. 
C)  a surplus of 100 units will exist. 
D)  a shortage of 80 units will exist. 
A)  consumers will continue to bid prices upward. 
B)  there will be no tendency for the market to approach an equilibrium. 
C)  a surplus of 100 units will exist. 
D)  a shortage of 80 units will exist.

Question 16

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of butter is ________.

Accepted Answer

A)  0.5; 0.8. 
B)  0.5; 1.25. 
C)  2.0; 1.25. 
D)  2.0; 0.8. 
A)  0.5; 0.8. 
B)  0.5; 1.25. 
C)  2.0; 1.25. 
D)  2.0; 0.8.

Question 17

Briefly discuss the determinants of supply other than price.

Accepted Answer

An increase in the costs of inputs used

Question 18

The law of demand states that

Accepted Answer

A)  consumers with more income will spend more on goods and services. 
B)  a higher price will lead to increased sales. 
C)  the price can never be too high for some consumers. 
D)  quantity demanded of a good will vary inversely with the price of that good. 
A)  consumers with more income will spend more on goods and services. 
B)  a higher price will lead to increased sales. 
C)  the price can never be too high for some consumers. 
D)  quantity demanded of a good will vary inversely with the price of that good.

Question 19

The law of demand implies that the demand curve

Accepted Answer

A)  has a negative slope. 
B)  has a positive slope. 
C)  shifts to the right when the price of a good increases. 
D)  shifts to the left when the price of a good decreases. 
A)  has a negative slope. 
B)  has a positive slope. 
C)  shifts to the right when the price of a good increases. 
D)  shifts to the left when the price of a good decreases.

Question 20

According to the above figure, a shortage will occur at a price at which

Accepted Answer

A)  quantity demanded equals quantity supplied. 
B)  quantity demanded exceeds quantity supplied. 
C)  quantity supplied exceeds quantity demanded. 
D)  government sets a price above equilibrium. 
A)  quantity demanded equals quantity supplied. 
B)  quantity demanded exceeds quantity supplied. 
C)  quantity supplied exceeds quantity demanded. 
D)  government sets a price above equilibrium.

Exam 3: Demand and Supply

-According to the above figure, a shortage is shown between which two points?

With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?

A shift in the demand curve will occur when

In order to increase the supply of a good, producers must

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Market demand is

Suppose the price of steel goes up in the United States. What happens in the market for automobiles?

If the price of apples goes down, then the demand for pears will

The only variable that can affect a movement along the demand curve is

The relative price of a good is that price

-According to the above figure, at a price of $6 per DVD, there is a

If the price of personal computers were to rise, then the demand for printers would decrease because personal computers and printers are

In general, any ceteris paribus determinant of supply that is favorable to production will

The equilibrium or market clearing price occurs at the point at which

-According to the above table, at a price of $8 per unit, other things constant

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of butter is ________.

Briefly discuss the determinants of supply other than price.

The law of demand states that

The law of demand implies that the demand curve

According to the above figure, a shortage will occur at a price at which

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

The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is , while the price of a gallon of milk relative to a pound of butter is .