Question 1

If the government sets a price floor above what would be the competitive market price of a product,a shortage of the product will develop.

Accepted Answer

A) True 
 B)False

Question 2

A market:

Accepted Answer

A)   exhibits upsloping demand and downsloping supply curves.
B)   entails the exchange of goods but not services.
C)   is an institution or mechanism that brings together buyers and sellers.
D)   always requires face-to-face contact between buyer and seller.

Question 3

1 to S2. C)  shift from S2 to S1. D)  move from point y to point x." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram.A decrease in supply is depicted by a:

Accepted Answer

A)   move from point x to point y.
B)   shift from S1 to S2.
C)   shift from S2 to S1.
D)   move from point y to point x.

Question 4

DVD players and DVDs are:

Accepted Answer

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

Question 5

A normal good is one:

Accepted Answer

A)   whose amount demanded will increase as its price decreases.
B)   whose amount demanded will decrease as its price decreases.
C)   whose demand curve will shift leftward as incomes rise.
D)   the consumption of which varies directly with incomes.

Question 6

If the price of a product increases,we would expect:

Accepted Answer

A)   demand to decrease.
B)   quantity supplied to increase.
C)   supply to decrease.
D)   quantity demanded to increase.

Question 7

Tennis rackets and ballpoint pens are:

Accepted Answer

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

Question 8

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Accepted Answer

A) True 
 B)False

Question 9

Assume,in a competitive market,price is initially below the equilibrium level.We predict that price will:

Accepted Answer

A)   decrease,quantity demanded will decrease,and quantity supplied will increase.
B)   decrease and quantity demanded and quantity supplied will both decrease.
C)   increase,quantity demanded will increase,and quantity supplied will decrease.
D)   increase,quantity demanded will decrease,and quantity supplied will increase.

Question 10

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

Accepted Answer

A)   increase the supply of X and decrease the demand for X.
B)   increase the demand for X and decrease the supply of X.
C)   increase the quantity supplied of X and decrease the quantity demanded of X.
D)   decrease the quantity supplied of X and increase the quantity demanded of X.

Question 11

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Accepted Answer

A)   increase equilibrium price and quantity.
B)   decrease equilibrium price and quantity.
C)   decrease equilibrium price and increase equilibrium quantity.
D)   increase equilibrium price and decrease equilibrium quantity.

Question 12

The demand curve shows the relationship between:

Accepted Answer

A)   money income and quantity demanded.
B)   price and production costs.
C)   price and quantity demanded.
D)   consumer tastes and the quantity demanded.

Question 13

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 increase in the prices of resources used to produce X will:

Accepted Answer

A)   increase S,increase P,and increase Q.
B)   increase D,increase P,and increase Q.
C)   decrease S,decrease P,and decrease Q.
D)   decrease S,increase P,and decrease Q.

Question 14

In moving along a stable demand curve,which of the following is not held constant?

Accepted Answer

A)   Price of the product for which the demand curve is relevant
B)   Price expectations
C)   Consumer incomes
D)   Prices of complementary goods

Question 15

If the price of product L increases,the demand curve for close-substitute product J will:

Accepted Answer

A)   shift downward toward the horizontal axis.
B)   shift to the left.
C)   shift to the right.
D)   remain unchanged.

Question 16

Which of the above diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for computer software?

Accepted Answer

A)   A only
B)   A and D
C)   B only
D)   D only

Question 17

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 18

Refer to the above table.If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4) ,equilibrium price and quantity will be:

Accepted Answer

A)   $10 and 60 units.
B)   $9 and 60 units.
C)   $8 and 80 units.
D)   $7 and 30 units.

Question 19

At the point where the demand and supply curves for a product intersect:

Accepted Answer

A)   the selling price and the buying price need not be equal.
B)   the market may,or may not,be in equilibrium.
C)   either a shortage or a surplus of the product might exist,depending on the degree of competition.
D)   the quantity that consumers want to purchase and the amount producers choose to sell are the same.

Question 20

Assume the demand schedule 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.

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the above diagram.A decrease in supply is depicted by a:

Correct Answer
verified

The demand curve shows the relationship between:

Correct Answer
verified

In moving along a stable demand curve,which of the following is not held constant?

Correct Answer
verified

At the point where the demand and supply curves for a product intersect:

Correct Answer
verified

If the price of product L increases,the demand curve for close-substitute product J will:

Correct Answer
verified

Refer to the above table.If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4) ,equilibrium price and quantity will be:

Correct Answer
verified

If the government sets a price floor above what would be the competitive market price of a product,a shortage of the product will develop.

Correct Answer
verified

Tennis rackets and ballpoint pens are:

Correct Answer
verified

DVD players and DVDs are:

Correct Answer
verified

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Correct Answer
verified

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

Correct Answer
verified

Assume,in a competitive market,price is initially below the equilibrium level.We predict that price will:

Correct Answer
verified

Assume the demand schedule for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Correct Answer
verified

If the price of a product increases,we would expect:

Correct Answer
verified

A market:

Correct Answer
verified

Correct Answer
verified

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Correct Answer
verified

Which of the above diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for computer software?

Correct Answer
verified

The upward slope of the supply curve reflects the:

Correct Answer
verified

A normal good is one:

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the above diagram.A decrease in supply is depicted by a:

Correct AnswerverifiedShow Answer

The demand curve shows the relationship between:

Correct AnswerverifiedShow Answer

In moving along a stable demand curve,which of the following is not held constant?

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves for a product intersect:

Correct AnswerverifiedShow Answer

If the price of product L increases,the demand curve for close-substitute product J will:

Correct AnswerverifiedShow Answer

Refer to the above table.If demand is represented by columns (3) and (1) and supply is represented by columns (3) and (4) ,equilibrium price and quantity will be:

Correct AnswerverifiedShow Answer

If the government sets a price floor above what would be the competitive market price of a product,a shortage of the product will develop.

Correct AnswerverifiedShow Answer

Tennis rackets and ballpoint pens are:

Correct AnswerverifiedShow Answer

DVD players and DVDs are:

Correct AnswerverifiedShow Answer

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Correct AnswerverifiedShow Answer

If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

Correct AnswerverifiedShow Answer

Assume,in a competitive market,price is initially below the equilibrium level.We predict that price will:

Correct AnswerverifiedShow Answer

Assume the demand schedule for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Correct AnswerverifiedShow Answer

If the price of a product increases,we would expect:

Correct AnswerverifiedShow Answer

A market:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

With a downsloping demand curve and an upsloping supply curve for a product,a decrease in resource prices will:

Correct AnswerverifiedShow Answer

Which of the above diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for computer software?

Correct AnswerverifiedShow Answer

The upward slope of the supply curve reflects the:

Correct AnswerverifiedShow Answer

A normal good is one:

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