Question 1

At any above-equilibrium price:

Accepted Answer

A)  quantity demanded exceeds quantity supplied.
B)  the equilibrium price is above the current price.
C)  quantity supplied exceeds quantity demanded.
D)  the price of the good is likely to rise.

Question 2

2 because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point: A) d and the quantity supplied at point a. B) g and the quantity supplied at point b. C) f and the quantity supplied at point d. D) g and the quantity supplied at point a." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point:

Accepted Answer

A)  d and the quantity supplied at point a.
B)  g and the quantity supplied at point b.
C)  f and the quantity supplied at point d.
D)  g and the quantity supplied at point a.

Question 3

One can say with certainty that equilibrium price will decline when supply:

Accepted Answer

A)  and demand both decrease.
B)  increases and demand decreases.
C)  decreases and demand increases.
D)  and demand both increase.

Question 4

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents?

Accepted Answer

A)  Poor people will be able to find adequate housing.
B)  Tenants will reduce their use of housing space, making more available for others.
C)  Those whose needs for housing are most urgent will be able to obtain the space they want.
D)  People moving into the community will have difficulty locating residential space to rent.

Question 5

An unusually bountiful crop of coffee beans might:

Accepted Answer

A)  increase the supply of coffee.
B)  increase the price of coffee.
C)  decrease the quantity of coffee consumed.
D)  increase the price of tea.

Question 6

Other things equal, which of the following might shift the demand curve for gasoline to the left?

Accepted Answer

A)  the discovery of vast new oil reserves in Alberta
B)  the development of a low-cost electric automobile
C)  an increase in the price of train and air transportation
D)  a large decline in the price of automobiles

Question 7

The upward slope of the supply curve reflects the:

Accepted Answer

A)  principle of specialization in production.
B)  law of supply.
C)  fact that price and quantity supplied are inversely related.
D)  law of diminishing marginal utility.

Question 8

Refer to the above diagram.A surplus of 160 units would be encountered if price was:

Accepted Answer

A)  $1.10, that is, $1.60 minus $.50.
B)  $1.60.
C)  $1.00.
D)  $.50.

Question 9

Assuming conventional supply and demand curves, changes in the determinants of supply and demand will:

Accepted Answer

A)  in all likelihood alter both equilibrium price and quantity.
B)  alter equilibrium quantity, but not equilibrium price.
C)  alter equilibrium price, but not equilibrium quantity.
D)  have no effect upon equilibrium price or quantity.

Question 10

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates that:

Accepted Answer

A)  the demand for oranges will necessarily rise.
B)  the equilibrium quantity of oranges will rise.
C)  the amount of oranges that will be available at various prices has declined.
D)  the price of oranges will fall.

Question 11

A decrease in supply:

Accepted Answer

A)  refers to a leftward shift in the supply curve.
B)  refers to a downward movement along a supply curve.
C)  has the same meaning as the phrase "a decrease in quantity supplied."
D)  is likely to result from the decrease in the price of a productive resource.

Question 12

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Accepted Answer

A) True 
 B)False

Question 13

The law of supply states that, ceteris paribus, there is an inverse relationship between the price of a good and the quantity supplied of the good.

Accepted Answer

A) True 
 B)False

Question 14

If X is a normal good, a rise in money income will shift the:

Accepted Answer

A)  supply curve for X to the left.
B)  supply curve for X to the right.
C)  demand curve for X to the left.
D)  demand curve for X to the right.

Question 15

Which of the following strategies is being used by Uber to attain equilibrium?

Accepted Answer

A)  Static pricing
B)  Inexpensive advertising
C)  Dynamic pricing
D)  Price floor

Question 16

Refer to the above data.If the price in this market was $14:

Accepted Answer

A)  farmers would reduce the number of acres allocated to the growing of wheat.
B)  buyers would want to purchase more wheat than is currently being supplied.
C)  farmers would not be able to sell all of their wheat.
D)  there would be a shortage of wheat.

Question 17

If two goods are complements:

Accepted Answer

A)  they are consumed jointly.
B)  an increase in the price of one will reduce the demand for the other.
C)  a decrease in the price of one will increase the demand for the other.
D)  all of the above will be true.

Question 18

1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from: A) a decrease in consumer incomes. B) an increase in the wages of chicken workers. C) an increase in the price of beef products. D) improved technology in the chicken industry." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

Accepted Answer

A)  a decrease in consumer incomes.
B)  an increase in the wages of chicken workers.
C)  an increase in the price of beef products.
D)  improved technology in the chicken industry.

Question 19

Graphically, the market demand curve is:

Accepted Answer

A)  steeper than any individual demand curve which comprises it.
B)  greater than the sum of the individual demand curves.
C)  the horizontal sum of individual demand curves.
D)  the vertical sum of individual demand curves.

Question 20

A fall in the price of milk, used in the production of ice cream, will:

Accepted Answer

A)  decrease the supply of ice cream, causing the supply curve of ice cream to shift to the left.
B)  increase the supply of ice cream, causing the supply curve of ice cream to shift to the right.
C)  cause a downward movement along the supply curve of ice cream.
D)  have no effect on the supply of ice cream.

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

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents?

Correct AnswerverifiedShow Answer

Refer to the above data.If the price in this market was $14:

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Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates that:

Correct AnswerverifiedShow Answer

Refer to the above diagram.A surplus of 160 units would be encountered if price was:

Correct AnswerverifiedShow Answer

One can say with certainty that equilibrium price will decline when supply:

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If two goods are complements:

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Refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

Correct AnswerverifiedShow Answer

Assuming conventional supply and demand curves, changes in the determinants of supply and demand will:

Correct AnswerverifiedShow Answer

Which of the following strategies is being used by Uber to attain equilibrium?

Correct AnswerverifiedShow Answer

The upward slope of the supply curve reflects the:

Correct AnswerverifiedShow Answer

The law of supply states that, ceteris paribus, there is an inverse relationship between the price of a good and the quantity supplied of the good.

Correct AnswerverifiedShow Answer

An unusually bountiful crop of coffee beans might:

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A decrease in supply:

Correct AnswerverifiedShow Answer

Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S2 because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point:

Correct AnswerverifiedShow Answer

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Correct AnswerverifiedShow Answer

Other things equal, which of the following might shift the demand curve for gasoline to the left?

Correct AnswerverifiedShow Answer

Graphically, the market demand curve is:

Correct AnswerverifiedShow Answer

At any above-equilibrium price:

Correct AnswerverifiedShow Answer

A fall in the price of milk, used in the production of ice cream, will:

Correct AnswerverifiedShow Answer

If X is a normal good, a rise in money income will shift the:

Correct AnswerverifiedShow Answer

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Refer to the above graph, which shows the market for chicken where D₁ and D₂ represent different demand curves.A change from E₁to E₂is most likely to result from:

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Refer to the above graph, which shows the supply and demand for rental housing in a city.If over time the supply curve shifts to S₂ because landlords abandon rental units, but rent controls remain, the quantity demanded for housing would be at point:

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