Question 1

An excess quantity supplied can be corrected by

Accepted Answer

A)  a fall in price. 
B)  legally fixing the price at its present level. 
C)  a decrease in demand. 
D)  an increase in supply. 
A)  a fall in price. 
B)  legally fixing the price at its present level. 
C)  a decrease in demand. 
D)  an increase in supply.

Question 2

Which of the following is an example of the law of demand?

Accepted Answer

A)  A decrease in the price of tea is followed by an increase in tea purchases. 
B)  A decrease in the price of tea is followed by a decrease in tea purchases. 
C)  An increase in the price of tea has no effect on the amount of tea purchased. 
D)  The amount of tea purchased increases when the price is constant. 
A)  A decrease in the price of tea is followed by an increase in tea purchases. 
B)  A decrease in the price of tea is followed by a decrease in tea purchases. 
C)  An increase in the price of tea has no effect on the amount of tea purchased. 
D)  The amount of tea purchased increases when the price is constant.

Question 3

The market supply curve is found by

Accepted Answer

A)  surveys of consumer groups. 
B)  vertically summing up the equilibrium prices of individual firms. 
C)  horizontally summing up the supply curves of individual firms. 
D)  estimating what the supply curve would be of one huge firm large enough to serve the entire market. 
A)  surveys of consumer groups. 
B)  vertically summing up the equilibrium prices of individual firms. 
C)  horizontally summing up the supply curves of individual firms. 
D)  estimating what the supply curve would be of one huge firm large enough to serve the entire market.

Question 4

Which of the following is a non-price determinant of supply?

Accepted Answer

A)  the price of related goods consumers may buy 
B)  technological advances in production 
C)  consumers' incomes 
D)  the number of consumers 
A)  the price of related goods consumers may buy 
B)  technological advances in production 
C)  consumers' incomes 
D)  the number of consumers

Question 5

The imposition of a per unit tax on a product

Accepted Answer

A)  will cause the supply curve to shift downward and to the right. 
B)  will cause the supply curve to shift upward and to the left. 
C)  will reduce the quantity supplied of the product. 
D)  will encourage producers to increase the quantity supplied of the product. 
A)  will cause the supply curve to shift downward and to the right. 
B)  will cause the supply curve to shift upward and to the left. 
C)  will reduce the quantity supplied of the product. 
D)  will encourage producers to increase the quantity supplied of the product.

Question 6

A change in quantity demanded

Accepted Answer

A)  is a shift of the demand curve. 
B)  is a movement along the demand curve. 
C)  can be either a shift or a movement along the demand curve. 
D)  is caused when there is a change in a ceteris paribus factor. 
A)  is a shift of the demand curve. 
B)  is a movement along the demand curve. 
C)  can be either a shift or a movement along the demand curve. 
D)  is caused when there is a change in a ceteris paribus factor.

Question 7

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

Accepted Answer

Market equilibrium occurs at the point a

Question 8

The data points on a supply curve come from

Accepted Answer

A)  survey analysis. 
B)  the same place from which we get the data points on a demand curve. 
C)  the supply schedule. 
D)  companies' annual reports. 
A)  survey analysis. 
B)  the same place from which we get the data points on a demand curve. 
C)  the supply schedule. 
D)  companies' annual reports.

Question 9

A shift in the demand curve to the right represents

Accepted Answer

A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in quantity demanded. 
D)  a decrease in quantity demanded. 
A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in quantity demanded. 
D)  a decrease in quantity demanded.

Question 10

If the price of a product increases, we would expect

Accepted Answer

A)  the level of demand to decrease. 
B)  quantity supplied to increase. 
C)  the level of supply to increase. 
D)  an increase in quantity demanded. 
A)  the level of demand to decrease. 
B)  quantity supplied to increase. 
C)  the level of supply to increase. 
D)  an increase in quantity demanded.

Question 11

Which of the following will NOT affect the supply of trucks?

Accepted Answer

A)  an increase in the price of steel 
B)  an improvement in truck production technology 
C)  an increase in the productivity of truck factories 
D)  a decrease in the price of trucks 
A)  an increase in the price of steel 
B)  an improvement in truck production technology 
C)  an increase in the productivity of truck factories 
D)  a decrease in the price of trucks

Question 12

Which of the following pairs of goods is LEAST likely to be a pair of complements?

Accepted Answer

A)  gasoline and vehicles 
B)  coffee and sugar 
C)  beer and wine 
D)  razors and razor blades 
A)  gasoline and vehicles 
B)  coffee and sugar 
C)  beer and wine 
D)  razors and razor blades

Question 13

Distinguish between a change in demand and a change in quantity demanded.

Accepted Answer

A change in quantity demanded is caused

Question 14

Which of the following represents the law of supply?

Accepted Answer

A)  An increase in the price of a good causes an increase in the supply of that good. 
B)  An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C)  An increase in the price of a good causes an increase in the quantity supplied of that good. 
D)  all of the above 
A)  An increase in the price of a good causes an increase in the supply of that good. 
B)  An increase in the price of a good causes a rightward shift of the supply curve for that good. 
C)  An increase in the price of a good causes an increase in the quantity supplied of that good. 
D)  all of the above

Question 15

A fundamental principle in demand analysis is that a change in price leads to

Accepted Answer

A)  a movement along the demand curve. 
B)  a rightward shift of the demand curve. 
C)  a leftward shift of the demand curve. 
D)  a complementary movement on the supply curve. 
A)  a movement along the demand curve. 
B)  a rightward shift of the demand curve. 
C)  a leftward shift of the demand curve. 
D)  a complementary movement on the supply curve.

Question 16

The law of demand tells us that people will buy less of a good if

Accepted Answer

A)  the price of that good increases. 
B)  the prices of other goods increase. 
C)  people's income decreases. 
D)  every factor that can affect people's buying decisions changes. 
A)  the price of that good increases. 
B)  the prices of other goods increase. 
C)  people's income decreases. 
D)  every factor that can affect people's buying decisions changes.

Question 17

In economics, the meaning of demand refers to

Accepted Answer

A)  how badly someone wants a good. 
B)  the quantities of a good that people will buy at various prices. 
C)  the quantities of a good that people will sell at various prices. 
D)  the total satisfaction that consuming a good provides people at different prices. 
A)  how badly someone wants a good. 
B)  the quantities of a good that people will buy at various prices. 
C)  the quantities of a good that people will sell at various prices. 
D)  the total satisfaction that consuming a good provides people at different prices.

Question 18

Ashley decreases her consumption of Good A after the price of Good B decreased. For Ashley

Accepted Answer

A)  Good A and Good B are substitutes. 
B)  Good A and Good B are complements. 
C)  Good A is an inferior good. 
D)  Good B is an inferior good. 
A)  Good A and Good B are substitutes. 
B)  Good A and Good B are complements. 
C)  Good A is an inferior good. 
D)  Good B is an inferior good.

Question 19

If the price of oil rises, producers of oil will

Accepted Answer

A)  increase the quantity of oil supplied. 
B)  supply less oil. 
C)  leave the amount of oil supplied unchanged. 
D)  cut the price. 
A)  increase the quantity of oil supplied. 
B)  supply less oil. 
C)  leave the amount of oil supplied unchanged. 
D)  cut the price.

Question 20

A supply curve

Accepted Answer

A)  has an indirect or negative relationship between price and quantity supplied. 
B)  has a direct or positive relationship between price and quantity supplied. 
C)  shows the relationship between quantity supplied and income. 
D)  shows the relationship between complements. 
A)  has an indirect or negative relationship between price and quantity supplied. 
B)  has a direct or positive relationship between price and quantity supplied. 
C)  shows the relationship between quantity supplied and income. 
D)  shows the relationship between complements.

Exam 3: Demand and Supply

An excess quantity supplied can be corrected by

Which of the following is an example of the law of demand?

The market supply curve is found by

Which of the following is a non-price determinant of supply?

The imposition of a per unit tax on a product

A change in quantity demanded

Given a market equilibrium point, explain, using the concepts of demand and supply, how it is achieved.

The data points on a supply curve come from

A shift in the demand curve to the right represents

If the price of a product increases, we would expect

Which of the following will NOT affect the supply of trucks?

Which of the following pairs of goods is LEAST likely to be a pair of complements?

Distinguish between a change in demand and a change in quantity demanded.

Which of the following represents the law of supply?

A fundamental principle in demand analysis is that a change in price leads to

The law of demand tells us that people will buy less of a good if

In economics, the meaning of demand refers to

Ashley decreases her consumption of Good A after the price of Good B decreased. For Ashley

If the price of oil rises, producers of oil will

A supply curve

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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