Question 1

Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are

Accepted Answer

A)  complements. 
B)  substitutes. 
C)  unrelated goods. 
D)  perfect substitutes.

Question 2

When the decrease in the price of one good causes the demand for another good to decrease, the goods are

Accepted Answer

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

Question 3

Which of the following will definitely occur when there is an increase in demand for and a decrease in supply of milk?

Accepted Answer

A)  an increase in equilibrium price 
B)  a decrease in equilibrium price 
C)  an increase in equilibrium quantity 
D)  a decrease in equilibrium quantity

Question 4

Refer to the information provided in Figure 3.9 below to answer the following question(s).  Figure 3.9
-Refer to Figure 3.9. Assume there are only two people in the market for coconuts: Sasha and Kyle. Along the market demand curve for coconuts, at a price of ________, quantity demanded would be ________.

Accepted Answer

A)  $10; 9 
B)  $10; 10 
C)  $14; 9 
D)  $14; 8

Question 5

A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying

Accepted Answer

A)  the supply of calzones increased and the supply of pizzas decreased. 
B)  there has been an increase in the quantity supplied of calzones and a decrease in the quantity supplied of pizzas. 
C)  there has been an increase in the quantity supplied of calzones and a decrease in the supply of pizza. 
D)  the supply of calzones increased and the quantity supplied of pizza decreased.

Question 6

Refer to the information provided in Figure 3.10 below to answer the following question(s).  Figure 3.10
-Refer to Figure 3.10. A decrease in the price of pizza sauce will cause a movement from Point B on supply curve S2 to

Accepted Answer

A)  supply curve S3. 
B)  supply curve S1. 
C)  Point A on supply curve S2. 
D)  Point C on supply curve S2.

Question 7

According to the law of supply, there is a

Accepted Answer

A)  negative relationship between price and the quantity of a good supplied. 
B)  positive relationship between price and the quantity of a good supplied. 
C)  negative relationship between price and the change in supply. 
D)  positive relationship between price and the change in supply.

Question 8

Refer to the information provided in Table 3.1 below to answer the question(s) that follow.
Table 3.1
 $$\begin{array} { | c | c | c | } 
\hline \text { Price per Pizza } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Pizzas per Month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Pizzas per Month) }
\end{array} \
\hline \$ 3 & 1,200 & 600 \
\hline 6 & 1,000 & 700 \
\hline 9 & 800 & 800 \
\hline 12 & 600 & 900 \
\hline 15 & 400 & 1,000 \
\hline
\end{array}$$
-Refer to Table 3.1. In this market there will be an excess demand of 300 pizzas at a price of

Accepted Answer

A)  $6. 
B)  $9. 
C)  $12. 
D)  $15.

Question 9

A good whose demand is inversely related to income is a(n)

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  regular good. 
D)  new good.

Question 10

If the market for bluetooth headsets is unregulated and is presently characterized by excess demand, you can accurately predict that price will

Accepted Answer

A)  increase, the quantity demanded will fall, and the quantity supplied will rise. 
B)  increase, the quantity demanded will rise, and the quantity supplied will fall. 
C)  decrease, the quantity demanded will rise, and the quantity supplied will fall. 
D)  decrease, the quantity demanded will fall, and the quantity supplied will rise.

Question 11

If demand is represented as Qd = 20 - 3P and supply is represented as Qs = 4 + 5P, the equilibrium quantity is

Accepted Answer

A)  2. 
B)  3. 
C)  7. 
D)  14.

Question 12

Refer to the information provided in Table 3.1 below to answer the question(s) that follow.
Table 3.1
 $$\begin{array} { | c | c | c | } 
\hline \text { Price per Pizza } & \begin{array} { c } 
\text { Quantity Demanded } \
\text { (Pizzas per Month) }
\end{array} & \begin{array} { c } 
\text { Quantity Supplied } \
\text { (Pizzas per Month) }
\end{array} \
\hline \$ 3 & 1,200 & 600 \
\hline 6 & 1,000 & 700 \
\hline 9 & 800 & 800 \
\hline 12 & 600 & 900 \
\hline 15 & 400 & 1,000 \
\hline
\end{array}$$
-Refer to Table 3.1. If the price per pizza is $6, the price will

Accepted Answer

A)  remain constant because the market is in equilibrium. 
B)  increase because there is an excess supply in the market. 
C)  increase because there is an excess demand in the market. 
D)  decrease because there is an excess supply in the market.

Question 13

Factors of production are traded in the product market.

Accepted Answer

A) True 
 B)False

Question 14

Resources are exchanged in ________ markets.

Accepted Answer

A)  product 
B)  factor 
C)  exchange rate 
D)  stock

Question 15

Refer to the information provided in Figure 3.7 below to answer the following question(s).  Figure 3.7
-Refer to Figure 3.7. An increase in quantity demanded is represented by the movement

Accepted Answer

A)  from D2 to D1. 
B)  from D2 to D3. 
C)  along D2 from Point B to point A. 
D)  along D2 from Point B to point C.

Question 16

In college you could barely afford to dine in restaurants. Now you earn $80,000 a year and dine out at least three times per week. We can safely conclude that you consider restaurant meals to be a(n)

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  substitute good. 
D)  complementary good.

Question 17

Refer to the information provided in Figure 3.12 below to answer the question(s) that follow.  Figure 3.12
-Refer to Figure 3.12. The supply curve for hula hoops shifts from S0 to S1. This could be caused by

Accepted Answer

A)  a decrease in the price of hula hoops. 
B)  a decrease in the number of firms selling hula hoops. 
C)  a decrease in the demand for hula hoops. 
D)  either B or C.

Question 18

Refer to the information provided in Figure 3.18 below to answer the question(s) that follow.  Figure 3.18
-Refer to Figure 3.18 The market is initially in equilibrium at Point A. If demand shifts from D1 to D2, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.

Accepted Answer

A)  $3.00; 250 
B)  $6.00; 250 
C)  $4.00; 350 
D)  $4.00; 150

Question 19

A change in the price of a good leads to a change in the demand of the good.

Accepted Answer

A) True 
 B)False

Question 20

A movement along the demand curve to the left may be caused by a

Accepted Answer

A)  rise in income. 
B)  decrease in supply. 
C)  fall in the number of substitute goods. 
D)  fall in the price of inputs.

Exam 3: Demand, Supply, and Market Equilibrium

Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are

When the decrease in the price of one good causes the demand for another good to decrease, the goods are

Which of the following will definitely occur when there is an increase in demand for and a decrease in supply of milk?

Refer to the information provided in Figure 3.9 below to answer the following question(s) . Figure 3.9 -Refer to Figure 3.9. Assume there are only two people in the market for coconuts: Sasha and Kyle. Along the market demand curve for coconuts, at a price of , quantity demanded would be .

A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying

Refer to the information provided in Figure 3.10 below to answer the following question(s) . Figure 3.10 -Refer to Figure 3.10. A decrease in the price of pizza sauce will cause a movement from Point B on supply curve S₂ to

According to the law of supply, there is a

A good whose demand is inversely related to income is a(n)

If the market for bluetooth headsets is unregulated and is presently characterized by excess demand, you can accurately predict that price will

If demand is represented as Q_d = 20 - 3P and supply is represented as Q_s = 4 + 5P, the equilibrium quantity is

Factors of production are traded in the product market.

Resources are exchanged in ________ markets.

Refer to the information provided in Figure 3.7 below to answer the following question(s) . Figure 3.7 -Refer to Figure 3.7. An increase in quantity demanded is represented by the movement

In college you could barely afford to dine in restaurants. Now you earn $80,000 a year and dine out at least three times per week. We can safely conclude that you consider restaurant meals to be a(n)

Refer to the information provided in Figure 3.12 below to answer the question(s) that follow. Figure 3.12 -Refer to Figure 3.12. The supply curve for hula hoops shifts from S₀ to S₁. This could be caused by

Refer to the information provided in Figure 3.18 below to answer the question(s) that follow. Figure 3.18 -Refer to Figure 3.18 The market is initially in equilibrium at Point A. If demand shifts from D₁ to D₂, the new equilibrium price will be and the new equilibrium quantity will be .

A change in the price of a good leads to a change in the demand of the good.

A movement along the demand curve to the left may be caused by a

Exam 3: Demand, Supply, and Market Equilibrium

Suppose the demand for books goes down when the price of video games goes down. We can say that these two goods are

When the decrease in the price of one good causes the demand for another good to decrease, the goods are

Which of the following will definitely occur when there is an increase in demand for and a decrease in supply of milk?

A frozen food manufacturer can produce either pizzas or calzones. As the result of an increase in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying

Refer to the information provided in Figure 3.10 below to answer the following question(s) . Figure 3.10 -Refer to Figure 3.10. A decrease in the price of pizza sauce will cause a movement from Point B on supply curve S2 to

According to the law of supply, there is a

A good whose demand is inversely related to income is a(n)

If the market for bluetooth headsets is unregulated and is presently characterized by excess demand, you can accurately predict that price will

If demand is represented as Qd = 20 - 3P and supply is represented as Qs = 4 + 5P, the equilibrium quantity is

Factors of production are traded in the product market.

Resources are exchanged in ________ markets.

Refer to the information provided in Figure 3.7 below to answer the following question(s) . Figure 3.7 -Refer to Figure 3.7. An increase in quantity demanded is represented by the movement

In college you could barely afford to dine in restaurants. Now you earn $80,000 a year and dine out at least three times per week. We can safely conclude that you consider restaurant meals to be a(n)

Refer to the information provided in Figure 3.12 below to answer the question(s) that follow. Figure 3.12 -Refer to Figure 3.12. The supply curve for hula hoops shifts from S0 to S1. This could be caused by

A change in the price of a good leads to a change in the demand of the good.

A movement along the demand curve to the left may be caused by a

Refer to the information provided in Figure 3.10 below to answer the following question(s) . Figure 3.10 -Refer to Figure 3.10. A decrease in the price of pizza sauce will cause a movement from Point B on supply curve S₂ to

If demand is represented as Q_d = 20 - 3P and supply is represented as Q_s = 4 + 5P, the equilibrium quantity is

Refer to the information provided in Figure 3.12 below to answer the question(s) that follow. Figure 3.12 -Refer to Figure 3.12. The supply curve for hula hoops shifts from S₀ to S₁. This could be caused by