Question 1

Which of the following will occur as the price of a good decreases?

Accepted Answer

A)   The demand curve for that good will shift to the left.
B)   The demand curve for that good will shift to the right.
C)   The quantity demanded for that good will increase.
D)   Demand for that good will increase.E) A) and B)
F) A) and C)

Question 2

A market is in equilibrium when

Accepted Answer

A)   the quantity demanded equals the quantity supplied at the market clearing price.
B)   the horizontal axis crosses the vertical axis.
C)   buyers do not desire for the price to be any lower.
D)   the equilibrium price is below the market price.E) A) and B)
F) A) and C)

Question 3

Consider the following:  The relative price of movies this year has

Accepted Answer

A)   increased.
B)   decreased.
C)   stayed the same.
D)   Not enough information has been given to calculate an answer.E) A) and C)
F) A) and D)

Question 4

Regarding the law of supply, which of the following statements is correct?

Accepted Answer

A)   As the price of a good or service rises, the quantity supplied will increase.
B)   As the price of a good or service rises, the quantity supplied will decrease.
C)   The ceteris paribus assumption does not apply.
D)   As demand falls, supply rises.E) A) and C)
F) All of the above

Question 5

The imposition of a per unit tax on a product

Accepted Answer

A)   will cause the supply curve to shift downward and to the right.
B)   will cause the supply curve to shift upward and to the left.
C)   will reduce the quantity supplied of the product.
D)   will encourage producers to increase the quantity supplied of the product.E) A) and D)
F) B) and D)

Question 6

Distinguish between a change in demand and a change in quantity demanded.

Accepted Answer

A change in quantity demanded is caused ...

Question 7

A demand curve for a normal good

Accepted Answer

A)   slopes upward and to the right.
B)   is constructed based on the assumption that income is rising.
C)   is constructed based on the assumption that an inverse relationship exists between price and income.
D)   shows the inverse relationship between price and quantity demanded.E) None of the above
F) A) and D)

Question 8

Demand is a schedule of

Accepted Answer

A)   how much of a good a person wants.
B)   how much of a good people will purchase at each different possible price.
C)   how much of a good people will purchase at each income level.
D)   each possible price and the amount people will buy when their incomes change.E) A) and B)
F) B) and D)

Question 9

Which of the following is NOT a non-price determinant of demand?

Accepted Answer

A)   the price of the good or service
B)   tastes and preferences
C)   expectations of future prices
D)   prices of related goods and servicesE) None of the above
F) All of the above

Question 10

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A)   increased from 0.25 to 0.6.
B)   decreased from 4.0 to 3.0.
C)   stayed constant at 0.25.
D)   stayed constant at 4.0.E) A) and D)
F) A) and B)

Question 11

-Using the above table, the market clearing price for this product is

Accepted Answer

A)   $5.
B)   $4.
C)   $3.
D)   $2.E) A) and B)
F) None of the above

Question 12

-According to the above table, at a price of $16 per DVD, there is

Accepted Answer

A)   an equilibrium.
B)   a surplus of 3000 DVDs.
C)   a shortage of 3000 DVDs.
D)   a shortage of 1500 DVDs.E) B) and C)
F) None of the above

Question 13

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Accepted Answer

A)   0.67.
B)   1.0.
C)   0.75.
D)   1.50.E) C) and D)
F) All of the above

Question 14

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Accepted Answer

A)   the price of that good in the law of demand.
B)   consumers' income.
C)   consumers' tastes and preferences.
D)   the number of potential buyers.E) A) and C)
F) A) and B)

Question 15

-According to the above table, a surplus exists when

Accepted Answer

A)   the price is $1 per unit.
B)   the price is $2 per unit.
C)   the price is $3 per unit.
D)   the price is greater than $3 per unit.E) C) and D)
F) All of the above

Question 16

Which of the following causes a movement along a supply curve?

Accepted Answer

A)   a change in resource costs
B)   a change in technology
C)   a change in the price
D)   all of the aboveE) B) and C)
F) A) and D)

Question 17

Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then today the gasoline

Accepted Answer

A)   demand curve will shift to the right.
B)   demand curve will shift to the left.
C)   supply curve will shift to the right.
D)   supply curve will shift to the left.E) B) and C)
F) All of the above

Question 18

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

Accepted Answer

A)   the quantity demanded of the used textbook to increase and the quantity demanded of the new textbook to decrease.
B)   the quantity demanded of both to fall.
C)   the demand for the new textbook to increase and the demand for the used textbook to decrease.
D)   the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.E) None of the above
F) B) and C)

Question 19

Market clearing price

Accepted Answer

A)   refers to a movement along the demand curve.
B)   refers to a supply curve.
C)   exists at a the point at which quantity demanded equals quantity supplied.
D)   refers to a surplus.E) All of the above
F) A) and B)

Question 20

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

Accepted Answer

A)   substitute goods.
B)   capital goods.
C)   inferior goods.
D)   complementary goods.E) C) and D)
F) None of the above

Exam 3: Demand and Supply

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Correct AnswerverifiedShow Answer

Demand is a schedule of

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Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then today the gasoline

Correct AnswerverifiedShow Answer

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Correct AnswerverifiedShow Answer

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Correct AnswerverifiedShow Answer

When the price of tablet devices decreased in the 2010s, there was an increase in the demand for computing apps because tablet devices and computing apps are

Correct AnswerverifiedShow Answer

Which of the following causes a movement along a supply curve?

Correct AnswerverifiedShow Answer

Consider the following: The relative price of movies this year has

Correct AnswerverifiedShow Answer

The price of a new textbook increases from $120 to $160, while the price of used copies of the textbook increased from $80 to $100. Other things being equal, we would expect

Correct AnswerverifiedShow Answer

A demand curve for a normal good

Correct AnswerverifiedShow Answer

-According to the above table, at a price of $16 per DVD, there is

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A market is in equilibrium when

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Which of the following is NOT a non-price determinant of demand?

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-Using the above table, the market clearing price for this product is

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Distinguish between a change in demand and a change in quantity demanded.

Correct AnswerverifiedA change in quantity demanded is caused ...View AnswerShow Answer

The imposition of a per unit tax on a product

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Which of the following will occur as the price of a good decreases?

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Market clearing price

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-According to the above table, a surplus exists when

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Regarding the law of supply, which of the following statements is correct?

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A change in quantity demanded is caused ...
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