Question 1

If the market price falls from P0 to P1 in the above figure, then

Accepted Answer

A)  a new equilibrium quantity is established. 
B)  there is a shortage equal to the distance EF. 
C)  there will be a further tendency for price to fall. 
D)  there is a surplus of goods on the market equal to the distance Q1, Q2. 
A)  a new equilibrium quantity is established. 
B)  there is a shortage equal to the distance EF. 
C)  there will be a further tendency for price to fall. 
D)  there is a surplus of goods on the market equal to the distance Q1, Q2.

Question 2

-Refer to the above figure. A movement from point A to point B for a good is most likely a result of

Accepted Answer

A)  an increase in the price of that good. 
B)  a decrease in the price of that good. 
C)  an expectation of an increase in the relative price of that good. 
D)  an expectation of a decrease in the relative price of that good. 
A)  an increase in the price of that good. 
B)  a decrease in the price of that good. 
C)  an expectation of an increase in the relative price of that good. 
D)  an expectation of a decrease in the relative price of that good.

Question 3

All of the following are non-price determinants of demand EXCEPT

Accepted Answer

A)  price of related goods. 
B)  price of raw materials used in production of the good. 
C)  income. 
D)  number of consumers. 
A)  price of related goods. 
B)  price of raw materials used in production of the good. 
C)  income. 
D)  number of consumers.

Question 4

Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect

Accepted Answer

A)  the quantity of good Y demanded to increase and the demand for good X to increase also. 
B)  an increase in the demand for good X and a decrease in the quantity of good Y demanded. 
C)  an increase in the quantity demanded of good Y and a decrease in the demand for good X. 
D)  an increase in the demand for both good X and good Y. 
A)  the quantity of good Y demanded to increase and the demand for good X to increase also. 
B)  an increase in the demand for good X and a decrease in the quantity of good Y demanded. 
C)  an increase in the quantity demanded of good Y and a decrease in the demand for good X. 
D)  an increase in the demand for both good X and good Y.

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)  If there is an increase in the demand for a product, consumers want to buy more of the product at each and every possible price. 
B)  A decrease in demand shifts the demand curve leftward toward the origin, while a decrease in quantity demanded involves a movement upward along a particular demand curve. 
C)  If the price of a good rises, quantity demanded of the good decreases and the demand curve shifts toward the origin as long as supply is static. 
D)  A change in the demand for a product is caused by factors other than changes in the product's price. 
A)  If there is an increase in the demand for a product, consumers want to buy more of the product at each and every possible price. 
B)  A decrease in demand shifts the demand curve leftward toward the origin, while a decrease in quantity demanded involves a movement upward along a particular demand curve. 
C)  If the price of a good rises, quantity demanded of the good decreases and the demand curve shifts toward the origin as long as supply is static. 
D)  A change in the demand for a product is caused by factors other than changes in the product's price.

Question 6

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

Accepted Answer

A)  $55; 80 
B)  $60; 150 
C)  $70; 150 
D)  $150; 150 
A)  $55; 80 
B)  $60; 150 
C)  $70; 150 
D)  $150; 150

Question 7

A shift of the demand curve to the left 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 8

Which of the following will NOT cause a shift in the demand for portable power banks?

Accepted Answer

A)  a change in taste 
B)  a change in income 
C)  a change in the price of portable power banks 
D)  a change in the price of smartphones 
A)  a change in taste 
B)  a change in income 
C)  a change in the price of portable power banks 
D)  a change in the price of smartphones

Question 9

All of the following will cause a shift in the supply of portable power banks EXCEPT

Accepted Answer

A)  a decrease in the prices of portable power banks. 
B)  an increase in the cost of producing portable power banks. 
C)  a per-unit government subsidy on the production of portable power banks. 
D)  a decrease in the number of portable power bank manufacturers. 
A)  a decrease in the prices of portable power banks. 
B)  an increase in the cost of producing portable power banks. 
C)  a per-unit government subsidy on the production of portable power banks. 
D)  a decrease in the number of portable power bank manufacturers.

Question 10

-In the above figure, when the price of Good B increases, the result can be shown by

Accepted Answer

A)  the movement from D1 to D2 in Graph A. 
B)  the movement from D2 to D1 in Graph A. 
C)  the movement along D0 from P1 to P2. 
D)  the movement along D0 from P2 to P1. 
A)  the movement from D1 to D2 in Graph A. 
B)  the movement from D2 to D1 in Graph A. 
C)  the movement along D0 from P1 to P2. 
D)  the movement along D0 from P2 to P1.

Question 11

-According to the above figure, equilibrium is at point

Accepted Answer

A)  E. 
B)  B. 
C)  C. 
D)  D. 
A)  E. 
B)  B. 
C)  C. 
D)  D.

Question 12

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are

Accepted Answer

A)  a normal good. 
B)  an inferior good. 
C)  an income complement. 
D)  an income substitute. 
A)  a normal good. 
B)  an inferior good. 
C)  an income complement. 
D)  an income substitute.

Question 13

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A)  increased from 0.25 to 0.6. 
B)  decreased from 4.0 to 3.0. 
C)  stayed constant at 0.25. 
D)  stayed constant at 4.0. 
A)  increased from 0.25 to 0.6. 
B)  decreased from 4.0 to 3.0. 
C)  stayed constant at 0.25. 
D)  stayed constant at 4.0.

Question 14

If a good is a normal good, an increase in income will

Accepted Answer

A)  decrease the quantity demanded of the good. 
B)  increase the demand for the good. 
C)  cause the demand curve for the good to shift to the left. 
D)  cause a movement down along the demand curve. 
A)  decrease the quantity demanded of the good. 
B)  increase the demand for the good. 
C)  cause the demand curve for the good to shift to the left. 
D)  cause a movement down along the demand curve.

Question 15

In economic terminology, an inferior good is a good

Accepted Answer

A)  that no one will purchase. 
B)  that doesn't work properly. 
C)  that has no monetary value. 
D)  for which demand increases as income decreases. 
A)  that no one will purchase. 
B)  that doesn't work properly. 
C)  that has no monetary value. 
D)  for which demand increases as income decreases.

Question 16

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

Accepted Answer

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

Question 17

Distinguish between a change in quantity supplied and a change in supply.

Accepted Answer

A change in quantity supplied is a movem

Question 18

Which of the following will NOT cause market supply to increase?

Accepted Answer

A)  an increase in the number of firms supplying the product in the market 
B)  a change in technology which allows a larger level of production at every price 
C)  an increase in the costs of resources used to produce the product 
D)  a decrease in labor costs 
A)  an increase in the number of firms supplying the product in the market 
B)  a change in technology which allows a larger level of production at every price 
C)  an increase in the costs of resources used to produce the product 
D)  a decrease in labor costs

Question 19

Which of the following is TRUE of the activities of ticket scalpers?

Accepted Answer

A)  These activities cannot generate profits for the scalpers unless ticket prices are currently below market clearing levels. 
B)  These activities help reduce the quantities of excess tickets supplied for events in which ticket surpluses currently exist. 
C)  Engaging in these activities enable scalpers to push the price above the market clearing level. 
D)  Engaging in these activities enable scalpers to push the price below the market clearing level. 
A)  These activities cannot generate profits for the scalpers unless ticket prices are currently below market clearing levels. 
B)  These activities help reduce the quantities of excess tickets supplied for events in which ticket surpluses currently exist. 
C)  Engaging in these activities enable scalpers to push the price above the market clearing level. 
D)  Engaging in these activities enable scalpers to push the price below the market clearing level.

Question 20

A demand schedule

Accepted Answer

A)  holds all prices constant. 
B)  is only for a given time period. 
C)  holds quantity constant. 
D)  is for a given variety of goods. 
A)  holds all prices constant. 
B)  is only for a given time period. 
C)  holds quantity constant. 
D)  is for a given variety of goods.

Exam 3: Demand and Supply

If the market price falls from P0 to P1 in the above figure, then

-Refer to the above figure. A movement from point A to point B for a good is most likely a result of

All of the following are non-price determinants of demand EXCEPT

Suppose that goods X and Y are substitutes and the price of good Y falls. We would then expect

Which of the following statements is FALSE?

-Using the above table, the market clearing price is ________ and equilibrium quantity is ________.

A shift of the demand curve to the left represents

Which of the following will NOT cause a shift in the demand for portable power banks?

All of the following will cause a shift in the supply of portable power banks EXCEPT

-In the above figure, when the price of Good B increases, the result can be shown by

-According to the above figure, equilibrium is at point

If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

If a good is a normal good, an increase in income will

In economic terminology, an inferior good is a good

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

Distinguish between a change in quantity supplied and a change in supply.

Which of the following will NOT cause market supply to increase?

Which of the following is TRUE of the activities of ticket scalpers?

A demand schedule

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

-Using the above table, the market clearing price is and equilibrium quantity is .