Question 1

Which of the following leads to a leftward shift of the demand curve?

Accepted Answer

A)  An expectation of a decline in the product price in the future
B)  A decrease in the good's own price
C)  An increase in the price of a substitute
D)  A decrease in the price of a complement
E)  An increase in the number of consumers

Question 2

If it is discovered that using a smartphone regularly causes brain cancer, then in the market for smartphones,

Accepted Answer

A)  equilibrium price will fall and equilibrium quantity will rise.
B)  equilibrium price and equilibrium quantity will fall.
C)  there will be no change in equilibrium price or quantity.
D)  equilibrium price will rise as demand for computers decreases.
E)  equilibrium price will rise as supply decreases.

Question 3

If there is a surplus of a product, we can conclude that

Accepted Answer

A)  the product's price is above equilibrium.
B)  the product's price is too low for equilibrium.
C)  quantity demanded exceeds quantity supplied.
D)  the product's price will rise.
E)  consumers want to buy more than is being made available by producers.

Question 4

When economists say that the demand for a product has increased, they mean that consumers are willing to buy more of the product at any given price.

Accepted Answer

A) True 
 B)False

Question 5

If the demand curve for product X shifts to the left as the price of product Y increases, then X and Y are complementary goods.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 3-2 
-In the market represented in Exhibit 3-2, if price is $.50,

Accepted Answer

A)  producers are not able to sell all they are willing to sell.
B)  a surplus of 30 units results.
C)  producers are willing to produce more than is being purchased.
D)  consumers are willing to buy more than is being produced.
E)  consumers are willing to buy the same amount as that being produced.

Question 7

Which of the following would not affect the supply of automobiles?

Accepted Answer

A)  A decrease in the number of automobile producers
B)  An increase in the price of steel
C)  An increase in the productivity of workers
D)  An increase in the price of motor oil
E)  An improvement in the technology of automobile manufacturing

Question 8

When a shortage exists in a market, the actual price is greater than the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 3-3 
-Refer to Exhibit 3-3. The equilibrium price and quantity in the market are

Accepted Answer

A)  $27 and 25 units, respectively.
B)  $9 and 25 units, respectively.
C)  $18 and 32 units, respectively.
D)  $9 and 10 units, respectively.
E)  $27 and 55 units, respectively.

Question 10

Exhibit 3-3 
-A market is in equilibrium when a price is low enough for all consumers to afford.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 3-2 
-If price is below equilibrium,

Accepted Answer

A)  demand is too low for equilibrium.
B)  the income and substitution effects will cause the price to rise.
C)  quantity supplied exceeds quantity demanded, and a shortage exists.
D)  quantity demanded exceeds quantity supplied, and a shortage exists.
E)  demand will increase.

Question 12

A supply schedule is a

Accepted Answer

A)  table of prices and quantities people are willing to sell at each price.
B)  graph of prices and quantities supplied.
C)  graph of costs and associated quantities supplied.
D)  table of prices and quantities people are willing to buy at each price.
E)  graph of prices and revenues.

Question 13

If the government decides to pay producers of houses $5,000 for every house they build,

Accepted Answer

A)  the opportunity cost of producing a house will fall.
B)  demand for housing will increase.
C)  housing will no longer be scarce.
D)  consumers will buy more houses, even if the price does not fall.
E)  producers will be willing to build more houses, even if the price does not rise.

Question 14

Which of the following would be a likely cause for the decreases in gasoline prices after 2014?

Accepted Answer

A)  Increases in gasoline demand
B)  Increases in U.S.oil production
C)  Higher production costs for gasoline
D)  Rapid economic and employment growth in the United States
E)  Decreases in oil supply from the Middle East

Question 15

The demand schedule is a table or list of the prices and corresponding quantities demanded of a particular good or service.

Accepted Answer

A) True 
 B)False

Question 16

A market is in equilibrium

Accepted Answer

A)  when the government imposes price controls.
B)  when the price is low.
C)  where the demand and supply curves intersect.
D)  when the price is high.
E)  when equilibrium price equals equilibrium quantity.

Question 17

Exhibit 3-1 
-Consider the market described by the schedule in Exhibit 3-1. At a price of $5 per unit,

Accepted Answer

A)  the quantity traded is 1,000 units.
B)  there is a shortage.
C)  the quantity sold is 1,800 units.
D)  there is a surplus of 1,100 units.
E)  the quantity purchased is 1,000 units.

Question 18

When there is an increase in quantity supplied,

Accepted Answer

A)  producers are forced to supply more by government mandate.
B)  producers are displaying a decreased willingness to produce because price has risen.
C)  technology must have improved.
D)  there must have been an increase in output price, ceteris paribus.
E)  consumers are unlikely to buy the additional product.

Question 19

When there is a decrease in supply, all else held equal,

Accepted Answer

A)  equilibrium price falls, demand increases, and equilibrium quantity increases.
B)  equilibrium price falls, demand does not change, and equilibrium quantity increases.
C)  equilibrium price rises, quantity demanded decreases, and equilibrium quantity decreases.
D)  equilibrium price falls, quantity demanded decreases, and equilibrium quantity decreases.
E)  equilibrium price rises, demand does not change, and equilibrium quantity increases.

Question 20

When a market equilibrium is achieved,

Accepted Answer

A)  those who are willing to pay the most for the good obtain it.
B)  government regulation will have succeeded.
C)  anyone who has the skills to produce the good sells some.
D)  shortages and surpluses become minor.
E)  anyone who is willing to pay anything for the good obtains it.

Exam 3: The Supply and Demand Model

Exhibit 3-3 -Refer to Exhibit 3-3. The equilibrium price and quantity in the market are

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A market is in equilibrium

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Which of the following leads to a leftward shift of the demand curve?

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Exhibit 3-3 -A market is in equilibrium when a price is low enough for all consumers to afford.

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The demand schedule is a table or list of the prices and corresponding quantities demanded of a particular good or service.

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When there is an increase in quantity supplied,

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A supply schedule is a

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When a shortage exists in a market, the actual price is greater than the equilibrium price.

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Exhibit 3-2 -In the market represented in Exhibit 3-2, if price is $.50,

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Exhibit 3-1 -Consider the market described by the schedule in Exhibit 3-1. At a price of $5 per unit,

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Which of the following would not affect the supply of automobiles?

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When there is a decrease in supply, all else held equal,

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When a market equilibrium is achieved,

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If there is a surplus of a product, we can conclude that

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When economists say that the demand for a product has increased, they mean that consumers are willing to buy more of the product at any given price.

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Exhibit 3-2 -If price is below equilibrium,

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If the demand curve for product X shifts to the left as the price of product Y increases, then X and Y are complementary goods.

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Which of the following would be a likely cause for the decreases in gasoline prices after 2014?

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If the government decides to pay producers of houses $5,000 for every house they build,

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If it is discovered that using a smartphone regularly causes brain cancer, then in the market for smartphones,

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