Question 1

Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is

Accepted Answer

A)   $30.
B)   $60.
C)   $40.
D)   $20.E) A) and C)
F) All of the above

Question 2

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by

Accepted Answer

A)   an increase in the wages paid to workers producing this good.
B)   the development of more eﬃcient machinery for producing this commodity.
C)   this product becoming less fashionable.
D)   an increase in consumer incomes.E) A) and B)
F) B) and D)

Question 3

Plastics manufacturers can make either toys or plastic containers. If the prices and proﬁtability of plastic toys increase, then the

Accepted Answer

A)   demand for plastic containers will decrease.
B)   supply of plastic containers will increase.
C)   demand for plastic containers will increase.
D)   supply of plastic containers will decrease.E) B) and C)
F) A) and B)

Question 4

The ﬁgure below shows three demand curves for coffee.  Which of the following would cause a shift in coffee demand from D1 to D3?

Accepted Answer

A)   a decrease in the cost of producing coffee
B)   a scientiﬁc report stating that coffee improves memory
C)   a decrease in the prices of cream and sugar
D)   a decrease in the price of teaE) A) and C)
F) B) and C)

Question 5

Refer to the above graph. An increase in price, other factors constant, would cause a change from

Accepted Answer

A)   point 5 to point 1.
B)   point 4 to point 5.
C)   point 1 to point 6.
D)   point 3 to point 4.E) C) and D)
F) B) and C)

Question 6

There will be a surplus of a product when

Accepted Answer

A)   price is below the equilibrium level.
B)   the supply curve is downward sloping and the demand curve is upward sloping.
C)   the demand and supply curves fail to intersect.
D)   consumers want to buy less than producers offer for sale.E) B) and C)
F) B) and D)

Question 7

A and B are substitute goods, but A and C are complementary goods. If the cost of producing A decreases, then the demand for

Accepted Answer

A)   both B and C will decrease.
B)   both B and C will increase.
C)   B will increase and the demand for C will decrease.
D)   B will decrease and the demand for C will increase.E) A) and C)
F) A) and D)

Question 8

Quantity Demanded  Price  Quantity Supplied 5$7966875784693510241113\begin{array} { | c | c | c | } \hline 	ext { Quantity Demanded } & 	ext { Price } & 	ext { Quantity Supplied } \\hline 5 & \$ 7 & 9 \\hline 6 & 6 & 8 \\hline 7 & 5 & 7 \\hline 8 & 4 & 6 \\hline 9 & 3 & 5 \\hline 10 & 2 & 4 \\hline 11 & 1 & 3 \\hline\end{array} Quantity Demanded 567891011​ Price $7654321​ Quantity Supplied 9876543​​  Refer to the above table. If demand decreased by 4 units at each price, what would the new equilibrium price and quantity be?

Accepted Answer

A)   $3 and 5 units
B)   $4 and 6 units
C)   $5 and 7 units
D)   $6 and 8 units E) B) and C)
F) A) and D)

Question 9

Refer to the four graphs above. Select the graph that best shows the changes in demand and supply in the market speciﬁed in the following situation: the market for beef, if a new diet fad
Favoring beef consumption becomes hugely popular, while cattle producers see steeply rising costs
Of cattle feed.

Accepted Answer

A)   Graph A
B)   Graph B
C)   Graph C
D)   Graph DE) None of the above
F) A) and B)

Question 10

There is a shortage in a market for a product when

Accepted Answer

A)   the current price is higher than the equilibrium price.
B)   supply is less than demand.
C)   quantity demanded is less than quantity supplied.
D)   quantity demanded is greater than quantity supplied.E) All of the above
F) A) and B)

Question 11

Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective)  will

Accepted Answer

A)   increase equilibrium price and quantity.
B)   decrease equilibrium price and quantity.
C)   increase equilibrium price and decrease equilibrium quantity.
D)   decrease equilibrium price and increase equilibrium quantity.E) A) and B)
F) None of the above

Question 12

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Accepted Answer

A)   An increase in supply with a decrease in demand will result in an increase in price.
B)   An increase in supply with no change in demand will result in an increase in price.
C)   An increase in supply with no change in demand will result in a decline in revenue.
D)   An increase in demand with no change in supply will result in an increase in revenue.E) A) and C)
F) All of the above

Question 13

Refer to the diagram. A decrease in quantity demanded is depicted by a

Accepted Answer

A)   move from point x to point y.
B)   shift from D1 to D2.
C)   shift from D2 to D1.
D)   move from point y to point x.E) A) and B)
F) B) and C)

Question 14

The ﬁgure below shows three demand curves for coffee.  Which of the following would cause a shift in coffee demand from D1 to D2?

Accepted Answer

A)   a decrease in the price of tea
B)   an increase in consumer incomes
C)   an increase in the prices of cream and sugar
D)   a decrease in the price of coffeeE) B) and C)
F) A) and B)

Question 15

(1) (2) (3) (4)  (5)  QdQd Price QSQS5040$1070806050960708060850609070740501008063040\begin{array} { | c | c | c | c | c | } \hline ( 1 )  & ( 2 )  & ( 3 )  & ( 4 )  & 	ext { (5)  } \Q _ { d } & Q _ { d } & 	ext { Price } & Q _ { S } & Q _ { S } \\hline 50 & 40 & \$ 10 & 70 & 80 \\hline 60 & 50 & 9 & 60 & 70 \\hline 80 & 60 & 8 & 50 & 60 \\hline 90 & 70 & 7 & 40 & 50 \\hline 100 & 80 & 6 & 30 & 40 \\hline\end{array}(1) Qd​50608090100​(2) Qd​4050607080​(3)  Price $109876​(4) QS​7060504030​ (5)  QS​8070605040​​  Refer to the table. Suppose that demand is represented by columns (3)  and (2)  and supply is represented by columns (3)  and (5) . If the price were arti?cially set at $6,

Accepted Answer

A)   the market would clear.
B)   a surplus of 40 units would occur.
C)   a shortage of 40 units would occur.
D)   demand would change from columns (3)  and (2)  to columns (3)  and (1) . E) B) and C)
F) A) and D)

Question 16

Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to

Accepted Answer

A)   decrease the demand for Z.
B)   increase the demand for Z.
C)   have no effect on the demand for Z.
D)   decrease the supply of Z.E) A) and D)
F) B) and C)

Question 17

As a result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of

Accepted Answer

A)   the income effect.
B)   the substitution effect.
C)   diminishing marginal utility.
D)   consumer sovereignty.E) B) and C)
F) All of the above

Question 18

The location of the product supply curve depends on

Accepted Answer

A)   production technology.
B)   the number of buyers in the market.
C)   the tastes of buyers.
D)   the location of the demand curve.E) A) and C)
F) All of the above

Question 19

(Consider This)  Uber's dynamic pricing

Accepted Answer

A)   prevents regulated taxi drivers from changing their fares.
B)   keeps the market for rides in equilibrium by constantly adjusting fares to supply and demand conditions.
C)   creates long wait times for consumers wanting rides at peak demand times.
D)   results in ride pricing that is unfair to consumers.E) None of the above
F) All of the above

Question 20

Allocative eﬃciency involves determining

Accepted Answer

A)   which output mix will result in the most rapid rate of economic growth.
B)   which production possibilities curve reﬂects the lowest opportunity costs.
C)   the mix of output that will maximize society's satisfaction.
D)   the optimal rate of technological progress.E) All of the above
F) A) and B)

Exam 3: Demand, Supply, and Market Equilibrium

The ﬁgure below shows three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

Correct Answer
verified

Correct Answer
verified

There is a shortage in a market for a product when

Correct Answer
verified

Allocative eﬃciency involves determining

Correct Answer
verified

Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is

Correct Answer
verified

The ﬁgure below shows three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D2?

Correct Answer
verified

The location of the product supply curve depends on

Correct Answer
verified

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by

Correct Answer
verified

Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to

Correct Answer
verified

A and B are substitute goods, but A and C are complementary goods. If the cost of producing A decreases, then the demand for

Correct Answer
verified

Refer to the above graph. An increase in price, other factors constant, would cause a change from

Correct Answer
verified

Correct Answer
verified

Refer to the diagram. A decrease in quantity demanded is depicted by a

Correct Answer
verified

(Consider This) Uber's dynamic pricing

Correct Answer
verified

There will be a surplus of a product when

Correct Answer
verified

As a result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of

Correct Answer
verified

Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will

Correct Answer
verified

Plastics manufacturers can make either toys or plastic containers. If the prices and proﬁtability of plastic toys increase, then the

Correct Answer
verified

Correct Answer
verified

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

The ﬁgure below shows three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

There is a shortage in a market for a product when

Correct AnswerverifiedShow Answer

Allocative eﬃciency involves determining

Correct AnswerverifiedShow Answer

Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is

Correct AnswerverifiedShow Answer

The ﬁgure below shows three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D2?

Correct AnswerverifiedShow Answer

The location of the product supply curve depends on

Correct AnswerverifiedShow Answer

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by

Correct AnswerverifiedShow Answer

Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to

Correct AnswerverifiedShow Answer

A and B are substitute goods, but A and C are complementary goods. If the cost of producing A decreases, then the demand for

Correct AnswerverifiedShow Answer

Refer to the above graph. An increase in price, other factors constant, would cause a change from

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the diagram. A decrease in quantity demanded is depicted by a

Correct AnswerverifiedShow Answer

(Consider This) Uber's dynamic pricing

Correct AnswerverifiedShow Answer

There will be a surplus of a product when

Correct AnswerverifiedShow Answer

As a result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more driving trips. This is an illustration of

Correct AnswerverifiedShow Answer

Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will

Correct AnswerverifiedShow Answer

Plastics manufacturers can make either toys or plastic containers. If the prices and proﬁtability of plastic toys increase, then the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified