Question 1

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) ​cause consumers to consume more apples because of greater savings on that good. 
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 real income to spend on all goods. 
A) ​cause consumers to consume more apples because of greater savings on that good. 
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 real income to spend on all goods.

Question 3

If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10, that change would be described as a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 4

The quantity of a good demanded tends to increase as its price falls because:

Accepted Answer

A) ​a decrease in price shifts the demand curve to the right. 
B) ​a decrease in price shifts the demand curve to the left. 
C) ​a decrease in price shifts the supply curve to the right. 
D) ​a decrease in price leads consumers to substitute toward this now relatively cheaper product. 
A) ​a decrease in price shifts the demand curve to the right. 
B) ​a decrease in price shifts the demand curve to the left. 
C) ​a decrease in price shifts the supply curve to the right. 
D) ​a decrease in price leads consumers to substitute toward this now relatively cheaper product.

Question 5

A surplus exists in a market if

Accepted Answer

A) ​there is an excess demand for the good. 
B) ​quantity demanded exceeds quantity supplied. 
C) ​the current price is above its equilibrium price. 
D) ​All of the above are correct. 
A) ​there is an excess demand for the good. 
B) ​quantity demanded exceeds quantity supplied. 
C) ​the current price is above its equilibrium price. 
D) ​All of the above are correct.

Question 6

Which of the following is true of a demand curve?

Accepted Answer

A) ​It must remain stable over time. 
B) ​It can shift either rightward or leftward. 
C) ​It is possible to move along the curve, but the demand curve will not shift. 
D) ​None of the above are true. 
A) ​It must remain stable over time. 
B) ​It can shift either rightward or leftward. 
C) ​It is possible to move along the curve, but the demand curve will not shift. 
D) ​None of the above are true.

Question 7

Which of the following would cause the demand curve for DVDs to shift to the right?

Accepted Answer

A) ​a decrease in the price of DVDs 
B) ​a decrease in the price of DVD players 
C) ​a change in the tastes towards watching movies in movie theaters 
D) ​a decrease in the number of people in the market for DVDs 
A) ​a decrease in the price of DVDs 
B) ​a decrease in the price of DVD players 
C) ​a change in the tastes towards watching movies in movie theaters 
D) ​a decrease in the number of people in the market for DVDs

Question 8

Which of the following demonstrates the law of supply?

Accepted Answer

A) ​When leather became more expensive, belt producers decreased their supply of belts. 
B) ​When car production technology improved, car producers increased their supply of cars. 
C) ​When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D) ​When lemon prices rose, lemon growers increased their quantity supplied of lemons. 
A) ​When leather became more expensive, belt producers decreased their supply of belts. 
B) ​When car production technology improved, car producers increased their supply of cars. 
C) ​When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D) ​When lemon prices rose, lemon growers increased their quantity supplied of lemons.

Question 9

The quantity demanded of a good is the amount that buyers are

Accepted Answer

A) ​willing to buy. 
B) ​willing and able to buy. 
C) ​willing, able, and need to buy. 
D) ​able to buy. 
A) ​willing to buy. 
B) ​willing and able to buy. 
C) ​willing, able, and need to buy. 
D) ​able to buy.

Question 10

The law of demand asserts that:

Accepted Answer

A) ​output prices are more important than input prices. 
B) ​when people want a good badly enough they will find a way to pay for it. 
C) ​people want to buy more of goods that are priced very high because of their prestige. 
D) ​the quantity of a good that people will buy is inversely related to the product's price. 
A) ​output prices are more important than input prices. 
B) ​when people want a good badly enough they will find a way to pay for it. 
C) ​people want to buy more of goods that are priced very high because of their prestige. 
D) ​the quantity of a good that people will buy is inversely related to the product's price.

Question 11

A university's basketball gymnasium is never more than half-full during basketball games. This implies

Accepted Answer

A) ​the ticket price is above the equilibrium price. 
B) ​the ticket price is below the equilibrium price. 
C) ​the ticket price is at the equilibrium price. 
D) ​nothing about the equilibrium price. 
A) ​the ticket price is above the equilibrium price. 
B) ​the ticket price is below the equilibrium price. 
C) ​the ticket price is at the equilibrium price. 
D) ​nothing about the equilibrium price.

Question 12

Either technological progress or cost increasing new government regulations will increase supply.

Accepted Answer

A) True 
 B)False

Question 13

Two donut chains in your town are battling for customers. The manager of the Real Yum Donut Shop lowered donut prices. As a result, customers:

Accepted Answer

A) ​increase the quantity demanded of Real Yum donuts. 
B) ​decrease the quantity demanded of Real Yum donuts. 
C) ​buy the same quantity of Real Yum donuts as before the price change. 
D) ​decrease their demand for Real Yum donuts. 
A) ​increase the quantity demanded of Real Yum donuts. 
B) ​decrease the quantity demanded of Real Yum donuts. 
C) ​buy the same quantity of Real Yum donuts as before the price change. 
D) ​decrease their demand for Real Yum donuts.

Question 14

To an economist, a decrease in supply means a:

Accepted Answer

A) ​rightward shift of the supply curve. 
B) ​movement up along a supply curve. 
C) ​leftward shift of the supply curve. 
D) ​movement down along the supply curve. 
A) ​rightward shift of the supply curve. 
B) ​movement up along a supply curve. 
C) ​leftward shift of the supply curve. 
D) ​movement down along the supply curve.

Question 15

At an equilibrium price:

Accepted Answer

A) ​quantity demanded exceeds quantity supplied. 
B) ​quantity demanded equals quantity supplied. 
C) ​quantity demanded is less than quantity supplied. 
D) ​there is no scarcity. 
A) ​quantity demanded exceeds quantity supplied. 
B) ​quantity demanded equals quantity supplied. 
C) ​quantity demanded is less than quantity supplied. 
D) ​there is no scarcity.

Question 16

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

Accepted Answer

A) True 
 B)False

Question 17

Upward shifts are

Accepted Answer

A) ​increases in both demand and supply. 
B) ​decreases in both demand and supply. 
C) ​increases in demand and decreases in supply. 
D) ​increases in supply and decreases in demand. 
A) ​increases in both demand and supply. 
B) ​decreases in both demand and supply. 
C) ​increases in demand and decreases in supply. 
D) ​increases in supply and decreases in demand.

Question 18

​Exhibit 4-5  
-Refer to Exhibit 4-5. A change from Point A to Point C represents a(n):

Accepted Answer

A) ​increase in supply. 
B) ​decrease in supply. 
C) ​increase in quantity supplied. 
D) ​decrease in quantity supplied. 
A) ​increase in supply. 
B) ​decrease in supply. 
C) ​increase in quantity supplied. 
D) ​decrease in quantity supplied.

Question 19

A leftward shift in supply could be caused by:

Accepted Answer

A) ​an improvement in productive technology. 
B) ​a decrease in income. 
C) ​some firms leaving the industry. 
D) ​a fall in the price of inputs to the industry. 
A) ​an improvement in productive technology. 
B) ​a decrease in income. 
C) ​some firms leaving the industry. 
D) ​a fall in the price of inputs to the industry.

Question 20

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Accepted Answer

A) ​the current market demand for chocolate will decrease. 
B) ​the current market demand for chocolate will increase. 
C) ​the current quantity demanded for chocolate will decrease. 
D) ​there is no change in the current market for chocolate, but there will be after the current crop of cocoa bean plants is processed into chocolate. 
A) ​the current market demand for chocolate will decrease. 
B) ​the current market demand for chocolate will increase. 
C) ​the current quantity demanded for chocolate will decrease. 
D) ​there is no change in the current market for chocolate, but there will be after the current crop of cocoa bean plants is processed into chocolate.

Exam 4: Demand, Supply, and Market Equilibrium

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

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

If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10, that change would be described as a decrease in demand.

The quantity of a good demanded tends to increase as its price falls because:

A surplus exists in a market if

Which of the following is true of a demand curve?

Which of the following would cause the demand curve for DVDs to shift to the right?

Which of the following demonstrates the law of supply?

The quantity demanded of a good is the amount that buyers are

The law of demand asserts that:

A university's basketball gymnasium is never more than half-full during basketball games. This implies

Either technological progress or cost increasing new government regulations will increase supply.

Two donut chains in your town are battling for customers. The manager of the Real Yum Donut Shop lowered donut prices. As a result, customers:

To an economist, a decrease in supply means a:

At an equilibrium price:

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

Upward shifts are

​Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point C represents a(n):

A leftward shift in supply could be caused by:

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

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

Filters

Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point C represents a(n):