Question 1

If an effective ceiling price is placed on hamburgers, then

Accepted Answer

A)  the quantity demanded will exceed the quantity supplied.
B)  a black market for hamburgers may evolve.
C)  the price charged will be below the market-clearing price.
D)  All of these are likely outcomes.

Question 2

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

Accepted Answer

A)  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 on equilibrium price or quantity.

Question 3

If consumer incomes increase, the demand for product X

Accepted Answer

A)  will necessarily remain unchanged.
B)  may shift either to the right or left.
C)  will necessarily shift to the right.
D)  will necessarily shift to the left.

Question 4

In understanding and analyzing "demand," we focus on how much of a product the buyers are

Accepted Answer

A)  willing and wanting to buy.
B)  actually buying now and in the recent past.
C)  able to buy with their given income.
D)  willing and able to buy.

Question 5

If two goods are complements,

Accepted Answer

A)  they are consumed independently.
B)  an increase in the price of one will increase the demand for the other.
C)  a decrease in the price of one will increase the demand for the other.
D)  they are necessarily inferior goods.

Question 6

The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and able to buy and the

Accepted Answer

A)  product's price.
B)  buyers' incomes.
C)  cost of producing the product.
D)  available supply of the product.

Question 7

A recent study found that an increase in the federal tax on beer (which would increase the price of beer)  would reduce the demand for marijuana.Based on this information we can conclude that

Accepted Answer

A)  beer and marijuana are substitute goods.
B)  beer and marijuana are complementary goods.
C)  beer is an inferior good.
D)  marijuana is an inferior good.

Question 8

If a price ceiling is set below the equilibrium price in a market,

Accepted Answer

A)  rationing will be unnecessary.
B)  surpluses of the commodity will develop.
C)  the quantity demanded will exceed the quantity supplied.
D)  the quantity supplied will exceed the quantity demanded.

Question 9

All markets involve the following elements, except

Accepted Answer

A)  demand or buyers.
B)  face-to-face negotiation.
C)  prices of goods and services.
D)  supply or sellers.

Question 10

Which of the following statements is true about price ceilings?

Accepted Answer

A)  price ceilings create surpluses for goods but shortages for services.
B)  Price ceilings cause goods to be rationed by some other means than legally determined market prices.
C)  Ration coupons are the only way to ration goods when price ceilings are in place.
D)  All of the other statements are correct.

Question 11

Which of the following pairs are not considered to be complementary goods?

Accepted Answer

A)  steel and cars
B)  digital cameras and memory cards
C)  gasoline and motor oil
D)  fertilizer and irrigation systems

Question 12

(Last Word)  In examining the relationship between student loans and college tuition, the New York Federal Reserve Bank found that

Accepted Answer

A)  increases in tuition costs caused an increase in student borrowing.
B)  increases in student borrowing caused tuition costs to rise.
C)  while student borrowing and tuition costs have both risen over time, there is no causal relationship between the two.
D)  subsidizing the supply of higher education has increased both tuition costs and student borrowing.

Question 13

An increase in demand for oil along with a simultaneous increase in supply of oil will

Accepted Answer

A)  decrease price and increase quantity.
B)  increase price and decrease quantity.
C)  increase quantity, but whether it increases price depends on how much each curve shifts.
D)  increase price, but whether it increases quantity depends on how much each curve shifts.

Question 14

In order to derive a market demand curve from individuals' demand curves, we add up the

Accepted Answer

A)  various individuals' quantities demanded at each price level.
B)  various prices that each buyer is willing and able to pay.
C)  incomes of all buyers, assuming that their tastes remain constant.
D)  total number of buyers in the market at each time period.

Question 15

A surplus indicates that the quantity demanded is greater than the quantity supplied at that price.

Accepted Answer

A) True 
 B)False

Question 16

The term "quantity demanded"

Accepted Answer

A)  refers to the entire series of prices and quantities that comprise the demand schedule.
B)  refers to a situation in which the income and substitution effects do not apply.
C)  refers to the amount of a product that will be purchased at some specific price.
D)  means the same thing as demand.

Question 17

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.

Question 18

Running shoes and staplers are

Accepted Answer

A)  substitute goods.
B)  complementary goods.
C)  inferior goods.
D)  independent goods.

Question 19

An effective price ceiling will

Accepted Answer

A)  induce new firms to enter the industry.
B)  result in a product surplus.
C)  result in a product shortage.
D)  clear the market.

Question 20

A government subsidy to the producers of a product

Accepted Answer

A)  reduces product supply.
B)  increases product supply.
C)  reduces product demand.
D)  increases product demand.

Exam 3: Demand, Supply, and Market Equilibrium

If an effective ceiling price is placed on hamburgers, then

Correct AnswerverifiedShow Answer

An increase in the quantity demanded means that

Correct AnswerverifiedShow Answer

A government subsidy to the producers of a product

Correct AnswerverifiedShow Answer

An effective price ceiling will

Correct AnswerverifiedShow Answer

Which of the following statements is true about price ceilings?

Correct AnswerverifiedShow Answer

If consumer incomes increase, the demand for product X

Correct AnswerverifiedShow Answer

Which of the following pairs are not considered to be complementary goods?

Correct AnswerverifiedShow Answer

If two goods are complements,

Correct AnswerverifiedShow Answer

In understanding and analyzing "demand," we focus on how much of a product the buyers are

Correct AnswerverifiedShow Answer

The market demand schedule or curve for a product shows the relationship between how much of the product buyers are willing and able to buy and the

Correct AnswerverifiedShow Answer

If a price ceiling is set below the equilibrium price in a market,

Correct AnswerverifiedShow Answer

The term "quantity demanded"

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All markets involve the following elements, except

Correct AnswerverifiedShow Answer

In order to derive a market demand curve from individuals' demand curves, we add up the

Correct AnswerverifiedShow Answer

A recent study found that an increase in the federal tax on beer (which would increase the price of beer) would reduce the demand for marijuana.Based on this information we can conclude that

Correct AnswerverifiedShow Answer

Running shoes and staplers are

Correct AnswerverifiedShow Answer

(Last Word) In examining the relationship between student loans and college tuition, the New York Federal Reserve Bank found that

Correct AnswerverifiedShow Answer

An increase in demand for oil along with a simultaneous increase in supply of oil will

Correct AnswerverifiedShow Answer

A surplus indicates that the quantity demanded is greater than the quantity supplied at that price.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified