Question 1

A market is in equilibrium:

Accepted Answer

A)   provided there is no surplus of the product.
B)   at all prices above that shown by the intersection of the supply and demand curves.
C)   if the amount producers want to sell is equal to the amount consumers want to buy.
D)   whenever the demand curve is downsloping and the supply curve is upsloping.E) C) and D)
F) A) and B)

Question 2

The demand curve for a product might shift as the result of a change in:

Accepted Answer

A)   consumer tastes.
B)   consumer incomes.
C)   the prices of related goods.
D)   all of these.E) A) and B)
F) A) and D)

Question 3

Assume a drought in the Great Plains reduces the supply of wheat.Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Accepted Answer

A)   rise,the supply of bread to increase,and the demand for potatoes to increase.
B)   rise,the supply of bread to decrease,and the demand for potatoes to increase.
C)   rise,the supply of bread to decrease,and the demand for potatoes to decrease.
D)   fall,the supply of bread to increase,and the demand for potatoes to increase.E) A) and C)
F) C) and D)

Question 4

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. A reduction in the number of firms producing X will:

Accepted Answer

A)   increase D,increase P,and increase Q.
B)   increase S,decrease P,and increase Q.
C)   decrease S,increase P,and decrease Q.
D)   decrease S,decrease P,and increase Q.E) B) and D)
F) None of the above

Question 5

The law of supply indicates that:

Accepted Answer

A)   producers will offer more of a product at high prices than they will at low prices.
B)   the product supply curve is downsloping.
C)   consumers will purchase less of a good at high prices than they will at low prices.
D)   producers will offer more of a product at low prices than they will at high prices.E) None of the above
F) All of the above

Question 6

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Accepted Answer

A)   complementary goods.
B)   competitive goods.
C)   inferior goods.
D)   normal goods.E) All of the above
F) A) and B)

Question 7

Which of the following is most likely to be an inferior good?

Accepted Answer

A)   Fur coats
B)   Ocean cruises
C)   Used clothing
D)   SteakE) B) and D)
F) C) and D)

Question 8

1 to D2? A)  A decrease in the price of tea B)  An increase in consumer incomes C)  An increase in the price of sugar D)  A technological improvement in the production of coffee" class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram,which shows three demand curves for coffee.Which would cause the change in the demand for coffee illustrated by the shift 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 price of sugar
D)   A technological improvement in the production of coffeeE) None of the above
F) A) and B)

Question 9

A government tax per unit of output reduces supply.

Accepted Answer

A) True 
 B)False

Question 10

At the current price there is a shortage of a product.We would expect price to:

Accepted Answer

A)   increase,quantity demanded to increase,and quantity supplied to decrease.
B)   increase,quantity demanded to decrease,and quantity supplied to increase.
C)   increase,quantity demanded to increase,and quantity supplied to increase.
D)   decrease,quantity demanded to increase,and quantity supplied to decrease.E) C) and D)
F) B) and D)

Question 11

An effective price floor on wheat will:

Accepted Answer

A)   force otherwise profitable farmers out of business.
B)   result in a shortage of wheat.
C)   result in a surplus of wheat.
D)   clear the market for wheat.E) All of the above
F) A) and B)

Question 12

The quantity demanded of a product increases as its price declines because the:

Accepted Answer

A)   lower price shifts the demand curve rightward.
B)   lower price shifts the demand curve leftward.
C)   lower price results in an increase in supply.
D)   demand curve is downsloping.E) None of the above
F) A) and B)

Question 13

The supply curve shows the relationship between:

Accepted Answer

A)   price and quantity supplied.
B)   production costs and the amount demanded.
C)   total business revenues and quantity supplied.
D)   physical inputs of resources and the resulting units of output.E) A) and B)
F) None of the above

Question 14

An increase in product price will cause:

Accepted Answer

A)   quantity demanded to decrease.
B)   quantity supplied to decrease.
C)   quantity demanded to increase.
D)   the supply curve to shift to the left.E) None of the above
F) All of the above

Question 15

If demand increases and supply simultaneously decreases,equilibrium price will rise.

Accepted Answer

A) True 
 B)False

Question 16

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. An improvement in the technology used to produce X will:

Accepted Answer

A)   decrease S,increase P,and decrease Q.
B)   decrease S,increase P,and increase Q.
C)   increase S,decrease P,and increase Q.
D)   decrease D,decrease P,and decrease Q.E) All of the above
F) None of the above

Question 17

1 to D2. C)  shift from D2 to D1. D)  move from point y to point x." class="answers-bank-image d-inline" rel="preload" > Refer to the above 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) B) and C)
F) A) and D)

Question 18

A leftward shift of a product supply curve might be caused by:

Accepted Answer

A)   an improvement in the relevant technique of production.
B)   a decline in the prices of needed inputs.
C)   an increase in consumer incomes.
D)   some firms leaving an industry.E) B) and C)
F) C) and D)

Question 19

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Accepted Answer

A) True 
 B)False

Exam 3: Demand, Supply, and Market Equilibrium

A leftward shift of a product supply curve might be caused by:

Correct Answer
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If demand increases and supply simultaneously decreases,equilibrium price will rise.

Correct Answer
verified

The quantity demanded of a product increases as its price declines because the:

Correct Answer
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The law of supply indicates that:

Correct Answer
verified

A market is in equilibrium:

Correct Answer
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An effective price floor on wheat will:

Correct Answer
verified

The demand curve for a product might shift as the result of a change in:

Correct Answer
verified

An increase in product price will cause:

Correct Answer
verified

Correct Answer
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The supply curve shows the relationship between:

Correct Answer
verified

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Correct Answer
verified

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

Correct Answer
verified

Refer to the above diagram,which shows three demand curves for coffee.Which would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

Correct Answer
verified

A government tax per unit of output reduces supply.

Correct Answer
verified

Assume a drought in the Great Plains reduces the supply of wheat.Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Correct Answer
verified

Which of the following is most likely to be an inferior good?

Correct Answer
verified

At the current price there is a shortage of a product.We would expect price to:

Correct Answer
verified

Correct Answer
verified

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

A leftward shift of a product supply curve might be caused by:

Correct AnswerverifiedShow Answer

If demand increases and supply simultaneously decreases,equilibrium price will rise.

Correct AnswerverifiedShow Answer

The quantity demanded of a product increases as its price declines because the:

Correct AnswerverifiedShow Answer

The law of supply indicates that:

Correct AnswerverifiedShow Answer

A market is in equilibrium:

Correct AnswerverifiedShow Answer

An effective price floor on wheat will:

Correct AnswerverifiedShow Answer

The demand curve for a product might shift as the result of a change in:

Correct AnswerverifiedShow Answer

An increase in product price will cause:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The supply curve shows the relationship between:

Correct AnswerverifiedShow Answer

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Refer to the above diagram,which shows three demand curves for coffee.Which would cause the change in the demand for coffee illustrated by the shift from D1 to D2?

Correct AnswerverifiedShow Answer

A government tax per unit of output reduces supply.

Correct AnswerverifiedShow Answer

Assume a drought in the Great Plains reduces the supply of wheat.Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread,we would expect the price of wheat to:

Correct AnswerverifiedShow Answer

Which of the following is most likely to be an inferior good?

Correct AnswerverifiedShow Answer

At the current price there is a shortage of a product.We would expect price to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Refer to the above diagram,which shows three demand curves for coffee.Which would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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