Question 1

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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.Refer to the above.An increase in the price of a product which is a close substitute for X will:

Accepted Answer

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

Question 2

A price floor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

Question 3

At the point where the demand and supply curves for a product intersect:

Accepted Answer

A)  the "selling price" and the "buying price" need not be equal.
B)  the market may, or may not, be in equilibrium.
C)  either a shortage or a surplus of the product might exist, depending on the degree of competition.
D)  the quantity which consumers want to purchase and the amount producers choose to sell are the same.E) All of the above
F) A) and D)

Question 4

As a result of a decrease in the price of hamburgers, consumers buy more hamburgers and more T-bone steak.This is an illustration of:

Accepted Answer

A)  irrational consumer behaviour.
B)  changing tastes and preferences.
C)  the substitution effect.
D)  the income effect.E) B) and C)
F) None of the above

Question 5

Graphically, the horizontal sum of all individual demand curves is known as:

Accepted Answer

A)  consumers' tastes and preferences.
B)  the market demand curve.
C)  the equilibrium price.
D)  consumer sovereignty.E) B) and C)
F) None of the above

Question 6

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 the industry.E) A) and B)
F) C) and D)

Question 7

In moving along a stable supply curve which of the following is not held constant?

Accepted Answer

A)  the number of firms producing this good
B)  expectations about the future price of the product
C)  techniques used in producing this product
D)  the price of the product for which the supply curve is relevantE) A) and D)
F) A) and C)

Question 8

An "increase in demand" means that:

Accepted Answer

A)  given supply, the price of the product can be expected to decline.
B)  the demand curve has shifted to the right.
C)  price has declined and consumers therefore want to purchase more of the product.
D)  the demand curve has shifted to the left.E) A) and B)
F) B) and C)

Question 9

An effective price floor will:

Accepted Answer

A)  force some firms in this industry to go out of business.
B)  result in a product surplus.
C)  result in a product shortage.
D)  clear the market.E) B) and D)
F) B) and C)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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.Refer to the above.An increase in the tastes and preferences for X will:

Accepted Answer

A)  increase S, decrease P, and increase Q.
B)  decrease S, decrease P, and decrease Q.
C)  increase D, increase P, and increase Q.
D)  decrease D, decrease P, and decrease Q.E) A) and D)
F) A) and B)

Question 12

A newspaper reports that in an urban area the average price of new homes had decreased, but the number of new homes sold had increased.This situation would best be explained by a(n) :

Accepted Answer

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

Question 13

We observe a market in which the price has risen and the quantity sold has risen as well.This could 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) B) and D)

Question 14

An economist predicts that in a bicycle company, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction is based on the assumption that:

Accepted Answer

A)  there are many goods which are substitutes for bicycles.
B)  there are many goods which are complementary to bicycles.
C)  there are few goods which are substitutes for bicycles.
D)  bicycles are normal goods.E) A) and B)
F) A) and C)

Question 15

Refer to the above 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)  $20E) A) and C)
F) A) and B)

Question 16

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)  a widely publicized study which indicates beef increases one's cholesterol
B)  a reduction in the price of cattle feed
C)  an effective advertising campaign by pork producers
D)  a change in the incomes of beef consumersE) A) and B)
F) C) and D)

Question 17

An effective ceiling price will:

Accepted Answer

A)  induce new firms to enter the industry.
B)  result in a product surplus.
C)  result in a product shortage.
D)  clear the market.E) C) and D)
F) None of the above

Question 18

If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:

Accepted Answer

A)  both A and B are inferior goods.
B)  A is a superior good and B is an inferior good.
C)  A is an inferior good and B is a superior good.
D)  A and B are complementary goods.E) None of the above
F) B) and C)

Question 19

The concept of economic efficiency is primarily concerned with:

Accepted Answer

A)  the limited wants-unlimited resources dilemma.
B)  considerations of equity in the distribution of wealth.
C)  obtaining the maximum output from available resources.
D)  the conservation of irreplaceable natural resources.E) A) and B)
F) All of the above

Question 20

Compared to the normal taxi waiting lines, Uber has:

Accepted Answer

A)  shorter waiting lines.
B)  longer waiting lines.
C)  about the same waiting lines.
D)  Finite waiting lines.E) A) and D)
F) A) and B)

Exam 3: Part B: Demand, Supply, and Market Equilibrium

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

Correct Answer
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Graphically, the horizontal sum of all individual demand curves is known as:

Correct Answer
verified

A newspaper reports that in an urban area the average price of new homes had decreased, but the number of new homes sold had increased.This situation would best be explained by a(n) :

Correct Answer
verified

If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:

Correct Answer
verified

We observe a market in which the price has risen and the quantity sold has risen as well.This could be caused by a(n) :

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

Correct Answer
verified

As a result of a decrease in the price of hamburgers, consumers buy more hamburgers and more T-bone steak.This is an illustration of:

Correct Answer
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At the point where the demand and supply curves for a product intersect:

Correct Answer
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An effective ceiling price will:

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

Correct Answer
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An effective price floor will:

Correct Answer
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Correct Answer
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Which of the following would not shift the demand curve for beef?

Correct Answer
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An "increase in demand" means that:

Correct Answer
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An economist predicts that in a bicycle company, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction is based on the assumption that:

Correct Answer
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The concept of economic efficiency is primarily concerned with:

Correct Answer
verified

Correct Answer
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A price floor in a competitive market will result in persistent shortages of a product.

Correct Answer
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In moving along a stable supply curve which of the following is not held constant?

Correct Answer
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Compared to the normal taxi waiting lines, Uber has:

Correct Answer
verified

Exam 3: Part B: Demand, Supply, and Market Equilibrium

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

Correct AnswerverifiedShow Answer

Graphically, the horizontal sum of all individual demand curves is known as:

Correct AnswerverifiedShow Answer

A newspaper reports that in an urban area the average price of new homes had decreased, but the number of new homes sold had increased.This situation would best be explained by a(n) :

Correct AnswerverifiedShow Answer

If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that:

Correct AnswerverifiedShow Answer

We observe a market in which the price has risen and the quantity sold has risen as well.This could be caused by a(n) :

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

As a result of a decrease in the price of hamburgers, consumers buy more hamburgers and more T-bone steak.This is an illustration of:

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves for a product intersect:

Correct AnswerverifiedShow Answer

An effective ceiling price will:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An effective price floor will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would not shift the demand curve for beef?

Correct AnswerverifiedShow Answer

An "increase in demand" means that:

Correct AnswerverifiedShow Answer

An economist predicts that in a bicycle company, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction is based on the assumption that:

Correct AnswerverifiedShow Answer

The concept of economic efficiency is primarily concerned with:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A price floor in a competitive market will result in persistent shortages of a product.

Correct AnswerverifiedShow Answer

In moving along a stable supply curve which of the following is not held constant?

Correct AnswerverifiedShow Answer

Compared to the normal taxi waiting lines, Uber has:

Correct AnswerverifiedShow Answer

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