Question 1

-In the figure above, an increase in the supply of oil would result in a movement from

Accepted Answer

A)  point a to point b. 
B)  point a to point d. 
C)  point a to point e. 
D)  point a to point c.

Question 2

If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts rightward, the equilibrium

Accepted Answer

A)  quantity of bottled water definitely increases. 
B)  price of bottled water definitely decreases. 
C)  price of bottled water definitely increases. 
D)  quantity of bottled water definitely decreases.

Question 3

For consumers, goods A and B are complementary goods. The cost of a resource used in the production of A decreases. As a result,

Accepted Answer

A)  the equilibrium prices of both A and B will fall. 
B)  the equilibrium price of B will fall and the equilibrium price of A will rise. 
C)  the equilibrium prices of both A and B will rise. 
D)  the equilibrium price of B will rise and the equilibrium price of A will fall.

Question 4

Which of the following is true?

Accepted Answer

A)  If consumers expect the price of a good will rise in the future, the demand curve shifts leftward. 
B)  For an inferior good, when income increases, the demand curve shifts leftward. 
C)  An increase in population shifts the demand curve for most goods leftward. 
D)  The demand curve for a good shifts leftward when the price of a substitute rises.

Question 5

When economists speak of preferences as influencing demand, they are referring to

Accepted Answer

A)  an individual's attitudes toward goods and services. 
B)  directly observable changes in prices and income. 
C)  the availability of a good to all income classes. 
D)  the excess of wants over the available supplies.

Question 6

If the equilibrium relative price for a two- liter bottle of Coca- Cola is $1.50 today, just like it was ten years ago, can we safely say that all supply and demand conditions in the market for Coke have remained very stable all these years?

Accepted Answer

The answer of If the equilibrium relative price for a...

Question 7

If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments.

Accepted Answer

A) True 
 B)False

Question 8

If macaroni and cheese is an inferior good, then a decrease in income will result in

Accepted Answer

A)  an increase in the supply of macaroni and cheese. 
B)  a decrease in the supply of macaroni and cheese. 
C)  a decrease in the demand for macaroni and cheese. 
D)  an increase in the demand for macaroni and cheese.

Question 9

If the price of a video rental is below its equilibrium price, the quantity supplied is than the quantity demanded. If the price of a video rental is above its equilibrium price, the quantity supplied is _ than the quantity demanded.

Accepted Answer

A)  less; less 
B)  less; greater 
C)  greater; less 
D)  greater; greater

Question 10

A normal good is a good for which

Accepted Answer

A)  demand increases when income increases. 
B)  there are very few complements. 
C)  there are few substitutes. 
D)  demand decreases when income increases.

Question 11

Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the

Accepted Answer

A)  supply curve of good B leftward. 
B)  demand curve for good B leftward. 
C)  supply curve of good B rightward. 
D)  demand curve for good B rightward.

Question 12

The "law of demand" states that changes in

Accepted Answer

A)  the quantity demanded of a good are not related to changes in the quantity supplied. 
B)  demand are inversely related to changes in supply. 
C)  the quantity demanded of a good are inversely related to changes in its price. 
D)  demand are related directly to changes in supply.

Question 13

The quantity supplied of a good or service is the quantity that a producer at a particular price during a given time period.

Accepted Answer

A)  should sell 
B)  is willing to sell 
C)  actually sells 
D)  needs to sell

Question 14

If the quantity of textbooks supplied is 10,000 per year and the quantity of textbooks demanded is 8,000 per year, there is a in the market and the price will .

Accepted Answer

A)  surplus; fall 
B)  shortage; rise 
C)  shortage; fall 
D)  surplus; rise

Question 15

Which of the following decreases the supply of popcorn?

Accepted Answer

A)  a technological advance in the production of popcorn 
B)  an increase in the price of popcorn 
C)  a decrease in the price of popcorn 
D)  a decrease in the number of popcorn producers

Question 16

The equilibrium price is the price at which the quantity

Accepted Answer

A)  sold equals the quantity bought. 
B)  demanded equals the quantity supplied. 
C)  demanded equals the quantity sold. 
D)  supplied equals the quantity bought.

Question 17

What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

Accepted Answer

A)  The equilibrium quantity of wooden desks increases and the equilibrium price rises. 
B)  The equilibrium quantity of wooden desks decreases and the equilibrium price falls. 
C)  The equilibrium quantity of wooden desks increases and the equilibrium price falls. 
D)  The equilibrium quantity of wooden desks decreases and the equilibrium price rises.

Question 18

-The above figure shows the market for pizza. Which figure shows the effect of an increase in the price of the tomato sauce used to produce pizza?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 19

To say that "supply increases" for any reason, means there is a

Accepted Answer

A)  movement leftward along a supply curve. 
B)  movement rightward along a supply curve. 
C)  shift rightward in the supply curve. 
D)  shift leftward in the supply curve.

Question 20

A drop in the price of a DVD shifts the demand curve for prerecorded video tapes leftward. From that you know DVDs and prerecorded tapes are

Accepted Answer

A)  inferior goods. 
B)  complements. 
C)  substitutes. 
D)  normal goods.

Exam 3: Demand and Supply