Question 1

Which of the following statements is correct?

Accepted Answer

A)  If demand increases and supply decreases, equilibrium price will fall.
B)  If supply increases and demand decreases, equilibrium price will fall.
C)  If demand decreases and supply increases, equilibrium price will rise.
D)  If supply declines and demand remains constant, equilibrium price will fall.E) C) and D)
F) A) and B)

Question 2

Which of the following would most likely increase the demand for gasoline?

Accepted Answer

A)  the expectation by consumers that gasoline prices will be higher in the future
B)  the expectation by consumers that gasoline prices will be lower in the future
C)  a widespread shift in car ownership from SUVs to hybrid sedans
D)  a decrease in the price of public transportationE) A) and C)
F) B) and D)

Question 3

Black markets are associated with

Accepted Answer

A)  price floors and the resulting product surpluses.
B)  price floors and the resulting product shortages.
C)  ceiling prices and the resulting product shortages.
D)  ceiling prices and the resulting product surpluses.E) A) and B)
F) All of the above

Question 4

Topic: Changes in Supply, Demand, and Equilibrium 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) B) and C)

Question 5

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) C) and D)
F) None of the above

Question 6

Allocative efficiency refers to

Accepted Answer

A)  the use of the least-cost method of production.
B)  the production of the product mix most wanted by society.
C)  the full employment of all available resources.
D)  production at some point inside of the production possibilities curve.E) A) and C)
F) A) and B)

Question 7

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) A) and B)
F) None of the above

Question 8

If the decrease in supply is less than the decrease in demand, then the equilibrium price will decrease.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following would best be classified as a complement for new houses/homes?

Accepted Answer

A)  lumber or steel
B)  construction equipment
C)  mortgage loans
D)  rental apartmentsE) B) and C)
F) A) and D)

Question 10

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75,

Accepted Answer

A)  a smaller quantity of C will be demanded.
B)  a larger quantity of C will be demanded.
C)  the demand for C will increase.
D)  the demand for C will decrease.E) None of the above
F) All of the above

Question 11

(Advanced analysis)  The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q.If demand changes from P = 100 - 2Q to P = 130 - Q, the new equilibrium quantity is

Accepted Answer

A)  15.
B)  20.
C)  24.
D)  32.E) A) and C)
F) A) and B)

Question 12

A decrease in the price of digital cameras will cause the demand for memory cards to shift to the left.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is consistent with the law of demand?

Accepted Answer

A)  A decrease in the price of tacos causes sellers to want to sell less.
B)  An increase in the people's craving for pizza causes buyers to buy more pizza.
C)  An increase in the price of hamburgers causes buyers to buy fewer hamburgers.
D)  A decrease in the price of egg rolls causes a decrease in the quantity of egg rolls demanded.E) C) and D)
F) B) and C)

Question 14

Which of the following statements is correct? (Assume demand is interacting with an upward sloping supply curve.)

Accepted Answer

A)  If demand increases, then price will decrease.
B)  If demand decreases, then price will decrease.
C)  If price increases, then demand will decrease.
D)  If price decreases, then demand will decrease.E) A) and C)
F) A) and D)

Question 15

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Accepted Answer

A) True 
 B)False

Question 16

In the dollar-yen foreign exchange market, if Japanese companies sharply increase their importation of U.S.products, then the

Accepted Answer

A)  supply of yen will decrease and the yen will appreciate.
B)  supply of yen will increase and the yen will depreciate.
C)  demand for yen will increase and the yen will appreciate.
D)  demand yen will decrease and the yen will depreciate.E) All of the above
F) B) and C)

Question 17

With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will

Accepted Answer

A)  increase equilibrium price and quantity if the product is a normal good.
B)  decrease equilibrium price and quantity if the product is a normal good.
C)  have no effect on equilibrium price and quantity.
D)  reduce the quantity demanded but not shift the demand curve.E) A) and C)
F) None of the above

Question 18

What is the likely effect on the market for wine of a simultaneous increase in both consumer incomes and producer taxes on wine?

Accepted Answer

A)  an increase in both price and quantity
B)  an increase in price and a decrease in output
C)  a decrease in price and an indeterminate effect on quantity
D)  an increase in price and an indeterminate effect on quantityE) A) and B)
F) B) and D)

Question 19

A government tax per unit of output reduces supply.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that in each of four successive years, producers sell more of their product and at lower prices.This could be explained

Accepted Answer

A)  by small annual increases in supply accompanied by large annual increases in demand.
B)  in terms of a stable supply curve and increasing demand.
C)  in terms of a stable demand curve and increasing supply.
D)  as an exception to the law of supply.E) A) and D)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

What is the likely effect on the market for wine of a simultaneous increase in both consumer incomes and producer taxes on wine?

Correct Answer
verified

Which of the following would best be classified as a complement for new houses/homes?

Correct Answer
verified

Which of the following statements is correct? (Assume demand is interacting with an upward sloping supply curve.)

Correct Answer
verified

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

Correct Answer
verified

In the dollar-yen foreign exchange market, if Japanese companies sharply increase their importation of U.S.products, then the

Correct Answer
verified

Which of the following is consistent with the law of demand?

Correct Answer
verified

Black markets are associated with

Correct Answer
verified

Suppose that in each of four successive years, producers sell more of their product and at lower prices.This could be explained

Correct Answer
verified

With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will

Correct Answer
verified

The supply curve shows the relationship between

Correct Answer
verified

Which of the following would most likely increase the demand for gasoline?

Correct Answer
verified

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Correct Answer
verified

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75,

Correct Answer
verified

A decrease in the price of digital cameras will cause the demand for memory cards to shift to the left.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

If the decrease in supply is less than the decrease in demand, then the equilibrium price will decrease.

Correct Answer
verified

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q.If demand changes from P = 100 - 2Q to P = 130 - Q, the new equilibrium quantity is

Correct Answer
verified

Correct Answer
verified

A government tax per unit of output reduces supply.

Correct Answer
verified

Allocative efficiency refers to

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

What is the likely effect on the market for wine of a simultaneous increase in both consumer incomes and producer taxes on wine?

Correct AnswerverifiedShow Answer

Which of the following would best be classified as a complement for new houses/homes?

Correct AnswerverifiedShow Answer

Which of the following statements is correct? (Assume demand is interacting with an upward sloping supply curve.)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the dollar-yen foreign exchange market, if Japanese companies sharply increase their importation of U.S.products, then the

Correct AnswerverifiedShow Answer

Which of the following is consistent with the law of demand?

Correct AnswerverifiedShow Answer

Black markets are associated with

Correct AnswerverifiedShow Answer

Suppose that in each of four successive years, producers sell more of their product and at lower prices.This could be explained

Correct AnswerverifiedShow Answer

With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will

Correct AnswerverifiedShow Answer

The supply curve shows the relationship between

Correct AnswerverifiedShow Answer

Which of the following would most likely increase the demand for gasoline?

Correct AnswerverifiedShow Answer

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Correct AnswerverifiedShow Answer

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75,

Correct AnswerverifiedShow Answer

A decrease in the price of digital cameras will cause the demand for memory cards to shift to the left.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If the decrease in supply is less than the decrease in demand, then the equilibrium price will decrease.

Correct AnswerverifiedShow Answer

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q.If demand changes from P = 100 - 2Q to P = 130 - Q, the new equilibrium quantity is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A government tax per unit of output reduces supply.

Correct AnswerverifiedShow Answer

Allocative efficiency refers to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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