Question 1

An decrease in demand is represented by a

Accepted Answer

A)  shift of the demand curve to the left. 
B)  shift of the demand curve to the right. 
C)  movement down the demand curve. 
D)  movement up the demand curve. 
A)  shift of the demand curve to the left. 
B)  shift of the demand curve to the right. 
C)  movement down the demand curve. 
D)  movement up the demand curve.

Question 2

A demand curve

Accepted Answer

A)  slopes down because of the inverse relationship between price and quantity demanded. 
B)  slopes up because of the direct relationship between price and quantity demanded. 
C)  can slope up or down depending on the tastes of the consumer. 
D)  is vertical for necessities, upward sloping for luxury goods, and downward sloping for all other goods. 
A)  slopes down because of the inverse relationship between price and quantity demanded. 
B)  slopes up because of the direct relationship between price and quantity demanded. 
C)  can slope up or down depending on the tastes of the consumer. 
D)  is vertical for necessities, upward sloping for luxury goods, and downward sloping for all other goods.

Question 3

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Accepted Answer

A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase 
A)  decrease; increase 
B)  decrease; decrease 
C)  increase; decrease 
D)  increase; increase

Question 4

Which of the following would cause an increase in the market supply of drones?

Accepted Answer

A)  a decrease in the demand for drones 
B)  an increase in taxes levied on drones 
C)  an increase in the cost of components used to make drones 
D)  an increase in the number of firms making drones 
A)  a decrease in the demand for drones 
B)  an increase in taxes levied on drones 
C)  an increase in the cost of components used to make drones 
D)  an increase in the number of firms making drones

Question 5

Suppose a shortage for good A exists. Given this information, we know that

Accepted Answer

A)  the price of good A will tend to rise toward the equilibrium level. 
B)  the price of good A will tend to fall toward the equilibrium level. 
C)  a government price floor should be imposed above the current price so that the market can work more effectively. 
D)  a government price ceiling should be imposed above the current price so that the market can work more effectively. 
A)  the price of good A will tend to rise toward the equilibrium level. 
B)  the price of good A will tend to fall toward the equilibrium level. 
C)  a government price floor should be imposed above the current price so that the market can work more effectively. 
D)  a government price ceiling should be imposed above the current price so that the market can work more effectively.

Question 6

Which of the following will shift today's supply curve to the right?

Accepted Answer

A)  Input prices rise. 
B)  Sales taxes increase. 
C)  Prices are expected to be higher in the future. 
D)  Prices are expected to be lower in the future. 
A)  Input prices rise. 
B)  Sales taxes increase. 
C)  Prices are expected to be higher in the future. 
D)  Prices are expected to be lower in the future.

Question 7

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

Accepted Answer

The equilibrium price is determined by t

Question 8

-Refer to the above table. There is an excess quantity supplied of 2,000 units at a price of

Accepted Answer

A)  $450. 
B)  $500. 
C)  $600. 
D)  $700. 
A)  $450. 
B)  $500. 
C)  $600. 
D)  $700.

Question 9

Which of the following would most likely be considered complements?

Accepted Answer

A)  butter and margarine 
B)  rental cars and taxis 
C)  plastic wrap and aluminum foil 
D)  tennis rackets and tennis balls 
A)  butter and margarine 
B)  rental cars and taxis 
C)  plastic wrap and aluminum foil 
D)  tennis rackets and tennis balls

Question 10

A shortage will occur when

Accepted Answer

A)  the price equals the market clearing level. 
B)  the price is above the market clearing level. 
C)  there is an excess quantity supplied. 
D)  the price is below the market clearing level. 
A)  the price equals the market clearing level. 
B)  the price is above the market clearing level. 
C)  there is an excess quantity supplied. 
D)  the price is below the market clearing level.

Question 11

A demand curve for a normal good

Accepted Answer

A)  slopes upward and to the right. 
B)  is constructed based on the assumption that income is rising. 
C)  is constructed based on the assumption that an inverse relationship exists between price and income. 
D)  shows the inverse relationship between price and quantity demanded. 
A)  slopes upward and to the right. 
B)  is constructed based on the assumption that income is rising. 
C)  is constructed based on the assumption that an inverse relationship exists between price and income. 
D)  shows the inverse relationship between price and quantity demanded.

Exam 3: Demand and Supply

An decrease in demand is represented by a

A demand curve

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Which of the following would cause an increase in the market supply of drones?

Suppose a shortage for good A exists. Given this information, we know that

Which of the following will shift today's supply curve to the right?

How is the equilibrium price determined? What happens if the price is above the equilibrium price? What happens if the price is below the equilibrium price?

-Refer to the above table. There is an excess quantity supplied of 2,000 units at a price of

Which of the following would most likely be considered complements?

A shortage will occur when

A demand curve for a normal good

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

A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .