Question 1

An increase in demand means that:

Accepted Answer

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

Question 2

At the point where the demand and supply curves intersect:

Accepted Answer

A)   the buying and selling decisions of consumers and producers are inconsistent with one another.
B)   the market is in disequilibrium.
C)   there is neither a surplus nor a shortage of the product.
D)   quantity demanded exceeds quantity supplied.E) B) and C)
F) A) and B)

Question 3

Suppose an excise tax is imposed on product X.We would expect this tax to:

Accepted Answer

A)   increase the demand for complementary good Y and decrease the demand for substitute product Z.
B)   decrease the demand for complementary good Y and increase the demand for substitute product Z.
C)   increase the demands for both complementary good Y and substitute product Z.
D)   decrease the demands for both complementary good Y and substitute product Z.E) B) and D)
F) A) and B)

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. Consumer expectations that the price of X will rise sharply in the future will:

Accepted Answer

A)   increase S,increase P,and increase Q.
B)   increase D,increase P,and increase Q.
C)   decrease S,increase P,and increase Q.
D)   increase D,decrease P,and increase Q.E) All of the above
F) C) and D)

Question 5

Drawing demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Accepted Answer

A)   price.
B)   expectations.
C)   preferences.
D)   incomes.E) A) and D)
F) None of the above

Question 6

A government subsidy per unit of output increases supply.

Accepted Answer

A) True 
 B)False

Question 7

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A)   a decline in income if X is an inferior good.
B)   a decline in the price of Z if X and Z are substitute goods.
C)   a change in consumer tastes that is unfavorable to X.
D)   an increase in the price of Y if X and Y are complementary goods.E) B) and C)
F) B) and D)

Question 8

If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Accepted Answer

A)   consumer incomes have fallen.
B)   cattle production has declined.
C)   the price of steak has risen.
D)   the price of cattle feed has gone up.E) B) and D)
F) B) and C)

Question 9

Assume,in a competitive market,price is initially above the equilibrium level.We predict that price will:

Accepted Answer

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

Question 10

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Accepted Answer

A)   An increase in supply
B)   An increase in demand
C)   A decrease in supply
D)   A decrease in demandE) All of the above
F) B) and C)

Question 11

Ticket scalping:

Accepted Answer

A)   imposes economic losses on both buyers and sellers.
B)   creates economic gains for both buyers and sellers.
C)   imposes losses on buyers but creates gains for sellers.
D)   imposes losses on sellers but creates gains for buyers.E) B) and D)
F) B) and C)

Question 12

Refer to the above diagram.A price of $60 in this market will result in:

Accepted Answer

A)   equilibrium.
B)   a shortage of 50 units.
C)   a surplus of 50 units.
D)   a surplus of 100 units.E) B) and D)
F) A) and D)

Question 13

1 to D3? A)  A decrease in the price of tea B)  An increase in consumer incomes C)  A decrease 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 D3?

Accepted Answer

A)   A decrease in the price of tea
B)   An increase in consumer incomes
C)   A decrease in the price of sugar
D)   A technological improvement in the production of coffeeE) A) and C)
F) All of the above

Question 14

In presenting the model of a demand curve,economists presume the most important variable in determining the quantity demanded is:

Accepted Answer

A)   the price of the product itself.
B)   consumer income.
C)   the prices of related goods.
D)   consumer tastes.E) B) and C)
F) A) and B)

Question 15

An increase in the quantity demanded means that:

Accepted Answer

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

Question 16

Refer to the above diagram.A price of $20 in this market will result in:

Accepted Answer

A)   a shortage of 50 units.
B)   a surplus of 50 units.
C)   a surplus of 100 units.
D)   a shortage of 100 units.E) A) and B)
F) None of the above

Question 17

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

Question 18

"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Accepted Answer

A)   In neither statement
B)   In the second statement
C)   In the first statement
D)   In both statementsE) None of the above
F) B) and C)

Question 19

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

Accepted Answer

A)   A widely publicized study that 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) None of the above
F) B) and C)

Question 20

The law of supply:

Accepted Answer

A)   reflects the amounts that producers want to offer at each price in a series of prices.
B)   is reflected in a downsloping supply curve.
C)   shows that the relationship between producer revenue and quantity supplied is negative.
D)   reflects the income and substitution effects of a price change.E) A) and D)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

At the point where the demand and supply curves intersect:

Correct Answer
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Assume,in a competitive market,price is initially above the equilibrium level.We predict that price will:

Correct Answer
verified

Drawing demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Correct Answer
verified

In presenting the model of a demand curve,economists presume the most important variable in determining the quantity demanded is:

Correct Answer
verified

An increase in the quantity demanded means that:

Correct Answer
verified

Refer to the above diagram.A price of $60 in this market will result in:

Correct Answer
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Ticket scalping:

Correct Answer
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Suppose an excise tax is imposed on product X.We would expect this tax to:

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 D₃?

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

Correct Answer
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If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Correct Answer
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An increase in demand means that:

Correct Answer
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Assume the demand curve for product X shifts to the right.This might be caused by:

Correct Answer
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"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Correct Answer
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The law of supply:

Correct Answer
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Refer to the above diagram.A price of $20 in this market will result in:

Correct Answer
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A government subsidy per unit of output increases supply.

Correct Answer
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Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct Answer
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Correct Answer
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Exam 3: Demand, Supply, and Market Equilibrium

At the point where the demand and supply curves intersect:

Correct AnswerverifiedShow Answer

Assume,in a competitive market,price is initially above the equilibrium level.We predict that price will:

Correct AnswerverifiedShow Answer

Drawing demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Correct AnswerverifiedShow Answer

In presenting the model of a demand curve,economists presume the most important variable in determining the quantity demanded is:

Correct AnswerverifiedShow Answer

An increase in the quantity demanded means that:

Correct AnswerverifiedShow Answer

Refer to the above diagram.A price of $60 in this market will result in:

Correct AnswerverifiedShow Answer

Ticket scalping:

Correct AnswerverifiedShow Answer

Suppose an excise tax is imposed on product X.We would expect this tax to:

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 D3?

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Correct AnswerverifiedShow Answer

An increase in demand means that:

Correct AnswerverifiedShow Answer

Assume the demand curve for product X shifts to the right.This might be caused by:

Correct AnswerverifiedShow Answer

"In the corn market,demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Correct AnswerverifiedShow Answer

The law of supply:

Correct AnswerverifiedShow Answer

Refer to the above diagram.A price of $20 in this market will result in:

Correct AnswerverifiedShow Answer

A government subsidy per unit of output increases supply.

Correct AnswerverifiedShow Answer

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow 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 D₃?

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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