Question 1

A television station reports that the price of coffee has increased but the quantity sold in the market has decreased.This situation would be caused by a(n) :

Accepted Answer

A)   increase in demand.
B)   increase in supply.
C)   decrease in demand.
D)   decrease in supply.E) B) and C)
F) None of the above

Question 2

If two goods are substitutes in consumption,a decline in the price of one will cause an increase in the demand for the other.

Accepted Answer

A) True 
 B)False

Question 3

A normal good is one:

Accepted Answer

A)   for which quantity demanded remains the same even as price increases.
B)   for which quantity supplied falls as price increases.
C)   for which demand increases when price decreases.
D)   for which demand increases when income increases.E) All of the above
F) None of the above

Question 4

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Accepted Answer

A)   higher education is an exception to the law of demand.
B)   the supply of education provided by IU has also increased over the twenty-year period.
C)   school-age population,incomes,and preferences for education have changed over the twenty-year period.
D)   IU's supply curve of education is downward sloping.E) B) and D)
F) All of the above

Question 5

If the price of K declines,the demand curve for the complementary product J will:

Accepted Answer

A)   shift to the left.
B)   decrease.
C)   shift to the right.
D)   remain unchanged.E) A) and C)
F) None of the above

Question 6

2 because landlords abandon rental units,but rent controls remain,the quantity demanded for housing would be at point: A)  d and the quantity supplied at point a. B)  g and the quantity supplied at point b. C)  f and the quantity supplied at point d. D)  g and the quantity supplied at point a." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above graph,which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units,but rent controls remain,the quantity demanded for housing would be at point:

Accepted Answer

A)   d and the quantity supplied at point a.
B)   g and the quantity supplied at point b.
C)   f and the quantity supplied at point d.
D)   g and the quantity supplied at point a.E) A) and D)
F) B) and D)

Question 7

During the 1970s the price of oil rose dramatically,which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

Accepted Answer

A)   complementary goods and the higher price for oil increased the demand for coal.
B)   substitute goods and the higher price for oil increased the demand for coal.
C)   complementary goods and the higher price for oil decreased the supply of coal.
D)   substitute goods and the higher price for oil decreased the supply of coal.E) None of the above
F) A) and B)

Question 8

At the point where the demand and supply curves intersect:

Accepted Answer

A)   the market is in equilibrium.
B)   there is neither a surplus nor a shortage of the product.
C)   quantity demanded equals quantity supplied.
D)   all of the above hold true.E) B) and C)
F) All of the above

Question 9

-Refer to the above data.If the price in this market was $14:

Accepted Answer

A)   farmers would reduce the number of acres allocated to the growing of wheat.
B)   buyers would want to purchase more wheat than is currently being supplied.
C)   farmers would not be able to sell all of their wheat.
D)   there would be a shortage of wheat.E) None of the above
F) B) and D)

Question 10

Given the supply curve for butter,a reduction in the price of margarine will tend to:

Accepted Answer

A)   increase the demand for butter.
B)   increase the demand for margarine.
C)   raise the price of butter.
D)   lower the price of butter.E) A) and C)
F) A) and B)

Question 11

If the demand for a normal good (for example,steak) shifts to the left,the most likely reason is that:

Accepted Answer

A)   consumer incomes have fallen.
B)   cattle production has declined.
C)   the price of steak has risen.
D)   the price of cattle feed has gone up.E) A) and B)
F) A) and C)

Question 12

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.
-Refer to the above information.If demand changes from P = 10 - .2Q to P = 7 - .3Q,we can conclude that:

Accepted Answer

A)   demand has increased.
B)   demand has declined.
C)   supply will increase.
D)   supply will decrease.E) B) and D)
F) B) and C)

Question 13

-Which diagram above illustrates the effects on the peanut butter market as a result of a higher wage rate for peanut workers?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and B)
F) A) and C)

Question 14

Which of the following will cause the demand curve for product A to shift to the left?

Accepted Answer

A)   population growth which causes an expansion in the number of persons consuming A
B)   an increase in money income if A is a normal good
C)   a decrease in the price of complementary product C
D)   an increase in money income if A is an inferior goodE) C) and D)
F) All of the above

Question 15

Suppose in each of four successive years producers sell more of their product and at lower prices.This could be explained:

Accepted Answer

A)   by small annual increases in supply accompanied by large annual increases in demand.
B)   in terms of a stable supply curve and increasing demand.
C)   in terms of a stable demand curve and increasing supply.
D)   as an exception to the law of supply.E) None of the above
F) B) and C)

Question 16

-Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment upon the market for corn?

Accepted Answer

A)   B only
B)   C only
C)   B and C
D)   D onlyE) A) and B)
F) C) and D)

Question 17

Assuming an economy has fixed quantities of resources,that economy:

Accepted Answer

A)   is more efficient,the larger the amount of goods and services it produces.
B)   is able to satisfy all consumer wants.
C)   will produce the same output whether or not resources are used efficiently.
D)   is able to produce the same amount of output regardless of the production technologies it chooses.E) B) and D)
F) None of the above

Question 18

If consumers are willing to pay a higher price than previously for each level of output,we can say that there has occurred:

Accepted Answer

A)   a decrease in demand.
B)   an increase in demand.
C)   a decrease in supply.
D)   an increase in supply.E) A) and B)
F) C) and D)

Question 19

A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n) :

Accepted Answer

A)   increase in the demand for and the supply of gasoline.
B)   decrease in the demand for and the supply of gasoline.
C)   increase in the supply of gasoline and a decrease in the demand for gasoline.
D)   decrease in the supply of gasoline and an increase in the demand for gasoline.E) B) and C)
F) All of the above

Question 20

When economists say that the demand for a product has increased,they mean that::

Accepted Answer

A)   consumers are now willing to purchase more of this product at each possible price.
B)   the product has become particularly scarce for some reason.
C)   the product price has fallen and as a consequence consumers are buying a larger quantity of the product.
D)   the demand curve has shifted to the left.E) B) and D)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Correct AnswerverifiedShow Answer

Assuming an economy has fixed quantities of resources,that economy:

Correct AnswerverifiedShow Answer

When economists say that the demand for a product has increased,they mean that::

Correct AnswerverifiedShow Answer

A normal good is one:

Correct AnswerverifiedShow Answer

If the price of K declines,the demand curve for the complementary product J will:

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for product A to shift to the left?

Correct AnswerverifiedShow Answer

-Refer to the above graph,which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units,but rent controls remain,the quantity demanded for housing would be at point:

Correct AnswerverifiedShow Answer

Suppose in each of four successive years producers sell more of their product and at lower prices.This could be explained:

Correct AnswerverifiedShow Answer

-Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment upon the market for corn?

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves intersect:

Correct AnswerverifiedShow Answer

A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n) :

Correct AnswerverifiedShow Answer

If two goods are substitutes in consumption,a decline in the price of one will cause an increase in the demand for the other.

Correct AnswerverifiedShow Answer

-Refer to the above data.If the price in this market was $14:

Correct AnswerverifiedShow Answer

-Which diagram above illustrates the effects on the peanut butter market as a result of a higher wage rate for peanut workers?

Correct AnswerverifiedShow Answer

Given the supply curve for butter,a reduction in the price of margarine will tend to:

Correct AnswerverifiedShow Answer

If consumers are willing to pay a higher price than previously for each level of output,we can say that there has occurred:

Correct AnswerverifiedShow Answer

A television station reports that the price of coffee has increased but the quantity sold in the market has decreased.This situation would be caused by a(n) :

Correct AnswerverifiedShow Answer

If the demand for a normal good (for example,steak) shifts to the left,the most likely reason is that:

Correct AnswerverifiedShow Answer

During the 1970s the price of oil rose dramatically,which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

Correct AnswerverifiedShow Answer

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. -Refer to the above information.If demand changes from P = 10 - .2Q to P = 7 - .3Q,we can conclude that:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-Refer to the above graph,which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S₂ because landlords abandon rental units,but rent controls remain,the quantity demanded for housing would be at point:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified