Question 1

-In the above figure,a surplus exists in the gasoline market when the price is

Accepted Answer

A)  $1/gallon.
B)  $2/gallon.
C)  $4/gallon.
D)  below $2/gallon.E) A) and D)
F) C) and D)

Question 2

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) All of the above
F) B) and C)

Question 3

When the price of a good rises,there is

Accepted Answer

A)  an increase in supply.
B)  a decrease in supply.
C)  a decrease in quantity supplied.
D)  an increase in quantity supplied.E) A) and B)
F) None of the above

Question 4

Which of the following is a determinant of supply?

Accepted Answer

A)  Tastes and preferences of consumers
B)  Technology
C)  Consumer income
D)  Number of consumersE) B) and D)
F) A) and D)

Question 5

The law of demand implies that the demand curve

Accepted Answer

A)  has a negative slope.
B)  has a positive slope.
C)  shifts to the right when the price of a good increases.
D)  shifts to the left when the price of a good decreases.E) None of the above
F) All of the above

Question 6

A demand curve

Accepted Answer

A)  slopes down because of the inverse relationship between price and quantity demanded.
B)  slopes up because of the direct relationship between price and quantity demanded.
C)  can slope up or down depending on the tastes of the consumer.
D)  is vertical for necessities,upward sloping for luxury goods,and downward sloping for all other goods.E) A) and D)
F) None of the above

Question 7

Which of the following is an example of the law of demand?

Accepted Answer

A)  An increase in the price of magnetic optical disks is followed by a reduction in the amount of magnetic optical disks purchased.
B)  An increase in the price of tablets is followed by an increase in the sale of tablets.
C)  A decrease in the price of milk has no effect on the amount of milk consumed.
D)  The amount of smartphones sold increases while the price of smartphones is constant.E) All of the above
F) A) and B)

Question 8

Which one of the following would cause an increase in the supply of cardboard?

Accepted Answer

A)  a decrease in the demand for cardboard
B)  an increase in the price of cardboard
C)  an increase in taxes applied to cardboard producers
D)  an improvement in the technology used to produce cardboardE) A) and B)
F) A) and C)

Question 9

-Refer to the above figure.Which panel shows the effect of an increase in the price of a good on the demand curve of that good?

Accepted Answer

A)  Panel A.
B)  Panel B.
C)  Both panels.
D)  Neither panel.E) A) and D)
F) B) and C) D

Question 10

Fashion trends are a nonprice determinant for demand because

Accepted Answer

A)  they cause a movement along the demand curve.
B)  they influence people's tastes and preferences in clothing.
C)  they change the supply of accessories.
D)  they do not affect demand.E) None of the above
F) A) and B)

Question 11

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) A) and B)
F) A) and D) A

Question 12

Suppose we observe that the demand for eggs increases when people buy more potatoes.We can conclude that eggs and potatoes are

Accepted Answer

A)  inferior goods.
B)  normal goods.
C)  complements.
D)  substitutes.E) B) and D)
F) A) and C)

Question 13

Mary decreases her consumption of Good X after the price of Good Y decreased.For Mary

Accepted Answer

A)  Good X and Good Y are substitutes.
B)  Good X and Good Y are complements.
C)  Good X is an inferior good.
D)  Good Y is an inferior good.E) A) and C)
F) A) and B)

Question 14

2 is A) P2. B) P0. C) P1. D) cannot be determined from the diagram." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above figure.The highest price that consumers would be willing to pay for quantity Q2 is

Accepted Answer

A)  P2.
B)  P0.
C)  P1.
D)  cannot be determined from the diagram.E) All of the above
F) None of the above

Question 15

The concept of "demand" in economics refers to

Accepted Answer

A)  the different quantities of a good or service people will buy at different possible prices.
B)  the different types of goods and services that people of different income levels want to buy.
C)  how changes in the prices of all goods affect people's buying behavior.
D)  changes in people's consumption behavior over time.E) A) and B)
F) A) and C) A

Question 16

If the price of hot dogs increases,the demand for hot dog buns will

Accepted Answer

A)  increase.
B)  decrease.
C)  remain constant.
D)  shift to the right.E) None of the above
F) A) and C)

Question 17

Suppose that a new study finds that eating more peanut butter will improve a person's health.As a result,

Accepted Answer

A)  the demand for peanut butter will fall.
B)  the demand for peanut butter will rise.
C)  the price of peanut butter will fall.
D)  a smaller amount of peanut butter will be purchased.E) A) and D)
F) B) and C)

Question 18

The supply curve shows the relationship between the

Accepted Answer

A)  cost of production and the price of the product.
B)  cost of resources and cost of production.
C)  price of the product and quantity supplied.
D)  quantity demanded and the quantity supplied.E) All of the above
F) A) and B)

Question 19

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) B) and C)
F) A) and B)

Question 20

The absolute price of a good is its

Accepted Answer

A)  relative price.
B)  money price.
C)  subjective price.
D)  projected price.E) None of the above
F) C) and D)

Exam 3: Demand and Supply

-In the above figure,a surplus exists in the gasoline market when the price is

Correct AnswerverifiedShow Answer

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

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When the price of a good rises,there is

Correct AnswerverifiedShow Answer

Which of the following is a determinant of supply?

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The law of demand implies that the demand curve

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A demand curve

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Which of the following is an example of the law of demand?

Correct AnswerverifiedShow Answer

Which one of the following would cause an increase in the supply of cardboard?

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-Refer to the above figure.Which panel shows the effect of an increase in the price of a good on the demand curve of that good?

Correct AnswerverifiedD

Fashion trends are a nonprice determinant for demand because

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

Correct AnswerverifiedA

Suppose we observe that the demand for eggs increases when people buy more potatoes.We can conclude that eggs and potatoes are

Correct AnswerverifiedShow Answer

Mary decreases her consumption of Good X after the price of Good Y decreased.For Mary

Correct AnswerverifiedShow Answer

-Refer to the above figure.The highest price that consumers would be willing to pay for quantity Q2 is

Correct AnswerverifiedShow Answer

The concept of "demand" in economics refers to

Correct AnswerverifiedA

If the price of hot dogs increases,the demand for hot dog buns will

Correct AnswerverifiedShow Answer

Suppose that a new study finds that eating more peanut butter will improve a person's health.As a result,

Correct AnswerverifiedShow Answer

The supply curve shows the relationship between the

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

The absolute price of a good is its

Correct AnswerverifiedShow Answer

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D

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A

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-Refer to the above figure.The highest price that consumers would be willing to pay for quantity Q₂ is

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A

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