Question 1

For almost all goods, the:

Accepted Answer

A)   lower the price goes, the higher the quantity supplied.
B)   higher the price goes, the more luxurious it is.
C)   lower the price goes, the more luxurious it is.
D)   higher the price goes, the higher the quantity supplied.E) B) and D)
F) B) and C)

Question 2

According to the graph shown, at a price of $15, there is a:

Accepted Answer

A)   shortage of 10.
B)   shortage of 20.
C)   shortage of 30.
D)   surplus of 20.E) B) and D)
F) C) and D)

Question 3

Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect:

Accepted Answer

A)   Jackie's income, as she now needs to buy Converse and will have less to spend on other goods.
B)   Jackie's preferences for shoes, since she feels as though she needs them now.
C)   Jackie's expectations of future prices, since the price of Converse will likely go up because they're getting so popular.
D)   the prices of related goods, since other shoes will be less popular and cost less now.E) A) and D)
F) A) and C)

Question 4

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Accepted Answer

A)   equilibrium.
B)   optimization.
C)   maximization.
D)   market collapse.E) B) and C)
F) A) and D)

Question 5

A supply curve is a:

Accepted Answer

A)   graph that visually displays the supply schedule.
B)   graph depicting various price-quantity combinations of multiple goods.
C)   graph that shows the quantities of a particular good or service that producers will sell at one price.
D)   table that displays various price-quantity combinations of a good or service.E) A) and B)
F) None of the above

Question 6

As part of recent cutbacks, Paul just accepted a 10% cut in pay. Now he brews coffee at home instead of stopping at Starbucks every day. Based on this behavior, we can say home-brewed coffee:

Accepted Answer

A)   is a normal good, and Starbucks coffee is an inferior good for Paul.
B)   and Starbucks coffee are normal goods for Paul.
C)   will become a normal good for Paul over time.
D)   is an inferior good, while Starbucks coffee is a normal good for Paul.E) All of the above
F) A) and D)

Question 7

A decrease in the price of ice cream is likely to cause:

Accepted Answer

A)   an increase in the demand for ice cream cones due to a change in the price of a complementary good.
B)   an increase in the demand for ice cream cones due to a change in the price of a substitute good.
C)   an increase in the demand for ice cream cones due to a change in the preferences of consumers.
D)   a decrease in the demand for ice cream cones due to a change in the price of a related good.E) All of the above
F) A) and D)

Question 8

The demand curve represents the relationship between:

Accepted Answer

A)   price and quantity demanded with everything else held constant.
B)   income and quantity demanded with everything else held constant.
C)   consumer preferences and quantity demanded with everything else held constant.
D)   income and price demanded with everything else held constant.E) A) and C)
F) B) and C)

Question 9

The market clearing price refers to the:

Accepted Answer

A)   equilibrium price that quantity supplied is the highest possible.
B)   price where quantity demanded and quantity supplied are the same.
C)   minimum price at which items could be sold.
D)   maximum price where all suppliers are willing to sell all their production.E) C) and D)
F) B) and D)

Question 10

This table shows the demand and supply schedule of a good.  According to the table shown, at a price of $2.00 quantity demanded:

Accepted Answer

A)   exceeds quantity supplied and a shortage exists.
B)   is less than quantity supplied and a shortage exists.
C)   exceeds quantity supplied and a surplus exists.
D)   is less than quantity supplied and a surplus exists.E) All of the above
F) A) and B)

Question 11

2? A)  The price of buttons has increased. B)  The price of ties went up. C)  The price of sweatshirts went up. D)  Income has increased." class="answers-bank-image d-inline" rel="preload" > Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S. What type of shock might cause a shift from D to D2?

Accepted Answer

A)   The price of buttons has increased.
B)   The price of ties went up.
C)   The price of sweatshirts went up.
D)   Income has increased.E) A) and B)
F) A) and C)

Question 12

A table which shows the quantities of a particular good or service that producers are willing to sell (supply)  at various prices is known as a supply:

Accepted Answer

A)   schedule.
B)   figure.
C)   curve.
D)   graph.E) All of the above
F) A) and B)

Question 13

Ray's company just announced that everyone will be getting their pay cut by 5% in order to avoid having to close down. Ray's demand for coffee, a normal good, will likely:

Accepted Answer

A)   decrease, and his demand curve will shift to the right.
B)   decrease, and his demand curve will shift to the left.
C)   increase, and his demand curve will shift to the right.
D)   increase, and his demand curve will shift to the left.E) B) and C)
F) A) and C)

Question 14

This table shows individual demand schedules for a market.  According to the table shown, what can be said of Betty and Barney's demand for this good?

Accepted Answer

A)   Betty's and Barney's demand both follow the law of demand.
B)   Barney's demand follows the law of demand, but Betty's does not.
C)   Betty's demand follows the law of demand, but Barney's does not.
D)   Neither Betty's nor Barney's demand follows the law of demand.E) B) and C)
F) C) and D)

Question 15

The price of chocolate chips has increased. For the producers of chocolate chip cookies, this means:

Accepted Answer

A)   they can supply more at each price because some of the competition will drop out.
B)   they can supply less at each price because the price of a main input has gone up.
C)   they can supply more at each price because the price of a main input has gone up.
D)   they can supply more at each price because of more competition.E) C) and D)
F) A) and D)

Question 16

A factory recently added new robots to its production line, increasing productivity. This will likely cause a:

Accepted Answer

A)   rightward shift of the supply curve.
B)   leftward shift of the supply curve.
C)   shift downward of the supply curve.
D)   movement up along the supply curve.E) A) and D)
F) B) and C)

Question 17

Ceteris paribus is:

Accepted Answer

A)   the Latin term for "all other things being the same."
B)   only necessary for the definition of the law of demand.
C)   often used by economists to isolate the effect of a multiple changes that are important.
D)   the Latin term for "as things change only consider these changes".E) B) and C)
F) A) and B)

Question 18

This table shows the demand and supply schedule of a good.  According to the table shown, at a price of $1.00:

Accepted Answer

A)   a shortage will exist.
B)   a surplus will exist.
C)   more is being supplied than demanded.
D)   the market is in equilibrium.E) A) and B)
F) A) and C)

Question 19

The recent rise in the price of gasoline has caused:

Accepted Answer

A)   automakers to produce more gas-efficient cars.
B)   automakers to drop the price of gas-efficient vehicles.
C)   automakers to spend more money marketing bigger vehicles.
D)   would not affect an automaker's supply decisions.E) All of the above
F) A) and B)

Question 20

Junie is shopping for dinner. She picks up a package of hot dogs on sale, instead of the burgers she was intending to buy. She then heads over to buy a package of hot dog buns. Junie's change in the demand for hot dog is due to a change in:

Accepted Answer

A)   the price of related goods.
B)   Junie's income.
C)   Junie's preferences.
D)   Junie's expectation of future prices.E) A) and B)
F) All of the above

Exam 3: Markets

Ray's company just announced that everyone will be getting their pay cut by 5% in order to avoid having to close down. Ray's demand for coffee, a normal good, will likely:

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A decrease in the price of ice cream is likely to cause:

Correct AnswerverifiedShow Answer

A table which shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices is known as a supply:

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For almost all goods, the:

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Ceteris paribus is:

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The recent rise in the price of gasoline has caused:

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Jackie notices everyone wearing Converse sneakers on the first day of school. Ever the fashionista, this will likely affect:

Correct AnswerverifiedShow Answer

Junie is shopping for dinner. She picks up a package of hot dogs on sale, instead of the burgers she was intending to buy. She then heads over to buy a package of hot dog buns. Junie's change in the demand for hot dog is due to a change in:

Correct AnswerverifiedShow Answer

This table shows individual demand schedules for a market. According to the table shown, what can be said of Betty and Barney's demand for this good?

Correct AnswerverifiedShow Answer

This table shows the demand and supply schedule of a good. According to the table shown, at a price of $2.00 quantity demanded:

Correct AnswerverifiedShow Answer

A factory recently added new robots to its production line, increasing productivity. This will likely cause a:

Correct AnswerverifiedShow Answer

The demand curve represents the relationship between:

Correct AnswerverifiedShow Answer

The market clearing price refers to the:

Correct AnswerverifiedShow Answer

According to the graph shown, at a price of $15, there is a:

Correct AnswerverifiedShow Answer

This table shows the demand and supply schedule of a good. According to the table shown, at a price of $1.00:

Correct AnswerverifiedShow Answer

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Correct AnswerverifiedShow Answer

As part of recent cutbacks, Paul just accepted a 10% cut in pay. Now he brews coffee at home instead of stopping at Starbucks every day. Based on this behavior, we can say home-brewed coffee:

Correct AnswerverifiedShow Answer

A supply curve is a:

Correct AnswerverifiedShow Answer

Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S. What type of shock might cause a shift from D to D2?

Correct AnswerverifiedShow Answer

The price of chocolate chips has increased. For the producers of chocolate chip cookies, this means:

Correct AnswerverifiedShow Answer

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Assume the graph shown represents the market for button-up shirts and was originally in equilibrium with D and S. What type of shock might cause a shift from D to D₂?

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