Question 1

What is the most likely effect of deregulation on the supply curve?

Accepted Answer

A) ​The supply curve will shift to the left 
B) ​The quantity supplied will reduce 
C) ​The supply curve will shift to the right 
D) ​The supply curve will not be effected 
A) ​The supply curve will shift to the left 
B) ​The quantity supplied will reduce 
C) ​The supply curve will shift to the right 
D) ​The supply curve will not be effected

Question 2

The law of demand refers to the:

Accepted Answer

A) ​negative relationship between the price of a good and the willingness of producers to sell it. 
B) ​price increase that results from an increase in demand. 
C) ​inverse relationship between the price of a good and the quantity demanded. 
D) ​increase in the quantity of a good made available when its price increases. 
A) ​negative relationship between the price of a good and the willingness of producers to sell it. 
B) ​price increase that results from an increase in demand. 
C) ​inverse relationship between the price of a good and the quantity demanded. 
D) ​increase in the quantity of a good made available when its price increases.

Question 3

Economists normally

Accepted Answer

A) ​do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B) ​believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C) ​do not believe that people's tastes determine demand, so they ignore the subject of tastes. 
D) ​incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements. 
A) ​do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B) ​believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C) ​do not believe that people's tastes determine demand, so they ignore the subject of tastes. 
D) ​incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.

Question 4

How will a decrease in price tend to affect supply?

Accepted Answer

A) ​Supply will increase. 
B) ​Supply will decrease. 
C) ​Supply will not change. 
D) ​It is uncertain. 
A) ​Supply will increase. 
B) ​Supply will decrease. 
C) ​Supply will not change. 
D) ​It is uncertain.

Question 5

Rhonda views movie tickets and DVD rentals to be substitute forms of entertainment. An increase in the price of a DVD rental will probably result in an increase in the:

Accepted Answer

A) ​supply of movie tickets. 
B) ​quantity of movie tickets demanded. 
C) ​quantity of DVD rentals demanded. 
D) ​demand for movie tickets. 
A) ​supply of movie tickets. 
B) ​quantity of movie tickets demanded. 
C) ​quantity of DVD rentals demanded. 
D) ​demand for movie tickets.

Question 6

Which of the following would increase the quantity of LCD TVs demanded but would not increase the demand for LCD TVs?

Accepted Answer

A) ​an increase in the price of plasma TVs, a substitute 
B) ​an increase in incomes assuming that LCD TVs are normal goods 
C) ​an increase in the expected future price of LCD TVs 
D) ​a decrease in the current price of LCD TVs 
A) ​an increase in the price of plasma TVs, a substitute 
B) ​an increase in incomes assuming that LCD TVs are normal goods 
C) ​an increase in the expected future price of LCD TVs 
D) ​a decrease in the current price of LCD TVs

Question 7

The current price of wheat is $10 per bushel, but the equilibrium price of wheat is $5 per bushel. As a result,

Accepted Answer

A) ​the quantity supplied of wheat exceeds the quantity demanded of wheat at $10 per bushel. 
B) ​the equilibrium quantity of wheat exceeds the quantity demanded at the $10 price. 
C) ​there is a surplus of wheat at the $10 price. 
D) ​All of the above are correct. 
A) ​the quantity supplied of wheat exceeds the quantity demanded of wheat at $10 per bushel. 
B) ​the equilibrium quantity of wheat exceeds the quantity demanded at the $10 price. 
C) ​there is a surplus of wheat at the $10 price. 
D) ​All of the above are correct.

Question 8

If consumers are less willing and able to pay for each level of output than they were previously, then apparently:

Accepted Answer

A) ​demand has increased. 
B) ​supply has increased. 
C) ​demand has decreased. 
D) ​there has been a movement down along the demand curve. 
A) ​demand has increased. 
B) ​supply has increased. 
C) ​demand has decreased. 
D) ​there has been a movement down along the demand curve.

Question 9

If an increase in the price of Good A causes an increase in the demand for Good B, Goods A and B are said to be complements.

Accepted Answer

A) True 
 B)False

Question 10

Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current price.

Accepted Answer

A) True 
 B)False

Question 11

According to the substitution effect, an increase in the price of oranges will:

Accepted Answer

A) ​cause consumers to consume fewer apples because more money is spent on oranges. 
B) ​cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. 
C) ​cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. 
D) ​leave consumers with less money to spend on all goods. 
A) ​cause consumers to consume fewer apples because more money is spent on oranges. 
B) ​cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. 
C) ​cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. 
D) ​leave consumers with less money to spend on all goods.

Question 12

Which of the following is expected to happen if import restrictions are removed for a particular industry?

Accepted Answer

A) ​Supply will increase 
B) ​Supply curve will shift to the left 
C) ​Demand curve will shift to the left 
D) ​Prices will increase 
A) ​Supply will increase 
B) ​Supply curve will shift to the left 
C) ​Demand curve will shift to the left 
D) ​Prices will increase

Question 13

When quantity demanded decreases at every possible price, the demand curve

Accepted Answer

A) ​shifts to the left. 
B) ​shifts to the right. 
C) ​there is a movement along the given demand curve. 
D) ​none of the above. 
A) ​shifts to the left. 
B) ​shifts to the right. 
C) ​there is a movement along the given demand curve. 
D) ​none of the above.

Question 14

If the price of tennis rackets were to increase, we would expect:

Accepted Answer

A) ​the demand for tennis balls to increase. 
B) ​the demand for tennis balls to decrease. 
C) ​the supply of tennis balls to increase, leading to a movement along the demand curve for tennis balls. 
D) ​the supply of tennis balls to decrease. 
A) ​the demand for tennis balls to increase. 
B) ​the demand for tennis balls to decrease. 
C) ​the supply of tennis balls to increase, leading to a movement along the demand curve for tennis balls. 
D) ​the supply of tennis balls to decrease.

Question 15

Which of the following would not cause an increase in the demand for cheese?

Accepted Answer

A) ​a decrease in the price of crackers, which are consumed with cheese 
B) ​an increase in the income of cheese consumers, assuming that cheese is a normal good 
C) ​an increase in the population 
D) ​a technological advance that makes it cheaper to produce cheese 
A) ​a decrease in the price of crackers, which are consumed with cheese 
B) ​an increase in the income of cheese consumers, assuming that cheese is a normal good 
C) ​an increase in the population 
D) ​a technological advance that makes it cheaper to produce cheese

Question 16

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Accepted Answer

A) ​Goods X and Y are complements. 
B) ​Goods X and Y are substitutes. 
C) ​Goods X and Y are normal goods. 
D) ​the price of Good Y will increase. 
A) ​Goods X and Y are complements. 
B) ​Goods X and Y are substitutes. 
C) ​Goods X and Y are normal goods. 
D) ​the price of Good Y will increase.

Question 17

As a result of an increase in a product's price:

Accepted Answer

A) ​product supply increases. 
B) ​product supply decreases. 
C) ​product supply does not change, but quantity supplied increases. 
D) ​the impact on product supply is uncertain.Economic theory has no answer to this question. 
A) ​product supply increases. 
B) ​product supply decreases. 
C) ​product supply does not change, but quantity supplied increases. 
D) ​the impact on product supply is uncertain.Economic theory has no answer to this question.

Question 18

Which of the following will cause a change in the supply of a product?

Accepted Answer

A) ​a change in the price of suppliers' inputs 
B) ​a change in the price of alternative goods that could be produced with the same resources 
C) ​a change in the expected future price of the product 
D) ​all of the above 
A) ​a change in the price of suppliers' inputs 
B) ​a change in the price of alternative goods that could be produced with the same resources 
C) ​a change in the expected future price of the product 
D) ​all of the above

Question 19

Other things constant, an increase in the price of beef will:

Accepted Answer

A) ​encourage consumers to buy more beef. 
B) ​discourage consumers from buying as much beef. 
C) ​shift the demand curve for beef to the right. 
D) ​shift the demand curve for beef to the left. 
A) ​encourage consumers to buy more beef. 
B) ​discourage consumers from buying as much beef. 
C) ​shift the demand curve for beef to the right. 
D) ​shift the demand curve for beef to the left.

Question 20

If the demand for milk is downward sloping, then an increase in the price of milk will result in a(n):

Accepted Answer

A) ​increase in the demand for milk. 
B) ​decrease in the demand for milk. 
C) ​increase in the quantity of milk demanded. 
D) ​decrease in the quantity of milk demanded. 
A) ​increase in the demand for milk. 
B) ​decrease in the demand for milk. 
C) ​increase in the quantity of milk demanded. 
D) ​decrease in the quantity of milk demanded.

Exam 4: Demand, Supply, and Market Equilibrium

What is the most likely effect of deregulation on the supply curve?

The law of demand refers to the:

Economists normally

How will a decrease in price tend to affect supply?

Rhonda views movie tickets and DVD rentals to be substitute forms of entertainment. An increase in the price of a DVD rental will probably result in an increase in the:

Which of the following would increase the quantity of LCD TVs demanded but would not increase the demand for LCD TVs?

The current price of wheat is $10 per bushel, but the equilibrium price of wheat is $5 per bushel. As a result,

If consumers are less willing and able to pay for each level of output than they were previously, then apparently:

If an increase in the price of Good A causes an increase in the demand for Good B, Goods A and B are said to be complements.

Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current price.

According to the substitution effect, an increase in the price of oranges will:

Which of the following is expected to happen if import restrictions are removed for a particular industry?

When quantity demanded decreases at every possible price, the demand curve

If the price of tennis rackets were to increase, we would expect:

Which of the following would not cause an increase in the demand for cheese?

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

As a result of an increase in a product's price:

Which of the following will cause a change in the supply of a product?

Other things constant, an increase in the price of beef will:

If the demand for milk is downward sloping, then an increase in the price of milk will result in a(n):

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

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