Question 1

There is a shortage in a market for a product when:

Accepted Answer

A)   the increase in supply is greater than the increase in demand.
B)   the increase in demand is greater than the increase in supply.
C)   quantity demanded is less than quantity supplied.
D)   quantity demanded is greater than quantity supplied.

Question 2

For some commodities,purchases tend to decrease as the buyer's income increases.Such commodities are known as:

Accepted Answer

A)   common goods.
B)   inferior goods.
C)   inverse goods.
D)   normal goods.

Question 3

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A)   a decline in income if X is an inferior good.
B)   a decline in the price of Z if X and Z are substitute goods.
C)   a change in consumer tastes which is unfavourable to X.
D)   an increase in the price of Y if X and Y are complementary goods.

Question 4

Which of the following would cause an increase in the supply of a product at a given price?

Accepted Answer

A)   an increase in the price of the product
B)   a decrease in the cost of producing a substitute product
C)   an increase in the cost of resources to produce the product
D)   a reduction in the cost of resources to produce the product

Question 5

A product market is in equilibrium:

Accepted Answer

A)   when there is a surplus of the product.
B)   when there is a shortage of the product.
C)   when consumers want to buy more of the product than producers offer for sale.
D)   where the demand and supply curves intersect.

Question 6

1 to S2? A)  an increase in the price of fertilizer B)  a change in consumer tastes away from cornbread C)  a decrease in consumer incomes D)  the development of a more effective insecticide for corn rootworm" class="answers-bank-image d-inline" rel="preload" >
-Refer to the above diagram,which shows three supply curves for corn.Which of the following would cause the change in the supply of corn illustrated by the shift from S1 to S2?

Accepted Answer

A)   an increase in the price of fertilizer
B)   a change in consumer tastes away from cornbread
C)   a decrease in consumer incomes
D)   the development of a more effective insecticide for corn rootworm

Question 7

The further a ceiling price is below the equilibrium price,the smaller will be the shortage of the product.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Accepted Answer

A)   an increase in supply
B)   an increase in demand
C)   a decrease in supply
D)   a decrease in demand

Question 9

Which will not cause a shift in the demand for product A?

Accepted Answer

A)   a change in consumer preferences
B)   a change in the price of A
C)   a decline in consumer incomes
D)   a decrease in the price of close-substitute product B

Question 10

The market system corrects a shortage by:

Accepted Answer

A)   lowering the product price to decrease production.
B)   raising the product price to increase production.
C)   lowering the product price to increase production.
D)   raising the product price to decrease production.

Question 11

Which would be an example of a government price ceiling?

Accepted Answer

A)   limits on interest rates charged by credit card companies
B)   subsidies for apartment rent in major cities
C)   minimum-wage laws for unskilled workers
D)   price supports for agricultural products

Question 12

-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 13

The law of demand states that:

Accepted Answer

A)   price and quantity demanded are inversely related.
B)   the larger the number of buyers in a market,the lower will be product price.
C)   price and quantity demanded are directly related.
D)   consumers will buy more of a product at high prices than at low prices.

Question 14

What combination of changes would most likely decrease the equilibrium price?

Accepted Answer

A)   when supply decreases and demand increases
B)   when demand increases and supply increases
C)   when demand decreases and supply decreases
D)   when supply increases and demand decreases

Question 15

When the price of a product rises,consumers shift their purchases to other products whose prices are now relatively lower.This statement describes:

Accepted Answer

A)   an inferior good.
B)   complementary goods.
C)   the substitution effect.
D)   the income effect.

Question 16

An increase in demand and an increase in supply will:

Accepted Answer

A)   affect price in an indeterminate way and decrease the equilibrium quantity.
B)   increase price and increase the equilibrium quantity.
C)   affect price in an indeterminate way and increase the equilibrium quantity.
D)   decrease price and increase the equilibrium quantity.

Question 17

If a product is in surplus supply,we can conclude that its price:

Accepted Answer

A)   is below the equilibrium level.
B)   is above the equilibrium level.
C)   will rise in the near future.
D)   is in equilibrium.

Question 18

A price floor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

Question 19

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.
-Refer to the above.If X is an inferior good,a decrease in income will:

Accepted Answer

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

Question 20

Which of the following will not cause the supply curve to shift?

Accepted Answer

A)   a change in resource costs
B)   a technological change
C)   a change in the price of the good
D)   a change in the prices of other goods

Exam 3: Demand, Supply, and Market Equilibrium

A product market is in equilibrium:

Correct Answer
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The law of demand states that:

Correct Answer
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Correct Answer
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An increase in demand and an increase in supply will:

Correct Answer
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What combination of changes would most likely decrease the equilibrium price?

Correct Answer
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Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct Answer
verified

For some commodities,purchases tend to decrease as the buyer's income increases.Such commodities are known as:

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

Correct Answer
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The further a ceiling price is below the equilibrium price,the smaller will be the shortage of the product.

Correct Answer
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A price floor in a competitive market will result in persistent shortages of a product.

Correct Answer
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The market system corrects a shortage by:

Correct Answer
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Which of the following would cause an increase in the supply of a product at a given price?

Correct Answer
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When the price of a product rises,consumers shift their purchases to other products whose prices are now relatively lower.This statement describes:

Correct Answer
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-Refer to the above diagram,which shows three supply curves for corn.Which of the following would cause the change in the supply of corn illustrated by the shift from S₁ to S₂?

Correct Answer
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Which will not cause a shift in the demand for product A?

Correct Answer
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There is a shortage in a market for a product when:

Correct Answer
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Assume the demand curve for product X shifts to the right.This might be caused by:

Correct Answer
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Which of the following will not cause the supply curve to shift?

Correct Answer
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If a product is in surplus supply,we can conclude that its price:

Correct Answer
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Which would be an example of a government price ceiling?

Correct Answer
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Exam 3: Demand, Supply, and Market Equilibrium

A product market is in equilibrium:

Correct AnswerverifiedShow Answer

The law of demand states that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in demand and an increase in supply will:

Correct AnswerverifiedShow Answer

What combination of changes would most likely decrease the equilibrium price?

Correct AnswerverifiedShow Answer

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct AnswerverifiedShow Answer

For some commodities,purchases tend to decrease as the buyer's income increases.Such commodities are known as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The further a ceiling price is below the equilibrium price,the smaller will be the shortage of the product.

Correct AnswerverifiedShow Answer

A price floor in a competitive market will result in persistent shortages of a product.

Correct AnswerverifiedShow Answer

The market system corrects a shortage by:

Correct AnswerverifiedShow Answer

Which of the following would cause an increase in the supply of a product at a given price?

Correct AnswerverifiedShow Answer

When the price of a product rises,consumers shift their purchases to other products whose prices are now relatively lower.This statement describes:

Correct AnswerverifiedShow Answer

-Refer to the above diagram,which shows three supply curves for corn.Which of the following would cause the change in the supply of corn illustrated by the shift from S1 to S2?

Correct AnswerverifiedShow Answer

Which will not cause a shift in the demand for product A?

Correct AnswerverifiedShow Answer

There is a shortage in a market for a product when:

Correct AnswerverifiedShow Answer

Assume the demand curve for product X shifts to the right.This might be caused by:

Correct AnswerverifiedShow Answer

Which of the following will not cause the supply curve to shift?

Correct AnswerverifiedShow Answer

If a product is in surplus supply,we can conclude that its price:

Correct AnswerverifiedShow Answer

Which would be an example of a government price ceiling?

Correct AnswerverifiedShow Answer

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-Refer to the above diagram,which shows three supply curves for corn.Which of the following would cause the change in the supply of corn illustrated by the shift from S₁ to S₂?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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