Question 1

All of the following will cause the supply curve of good A to shift rightward EXCEPT

Accepted Answer

A)  a reduction in the prices of inputs used to produce good A.
B)  an increase in the number of firms in the industry producing good A.
C)  a decrease in the per-unit tax on good A which producers must pay.
D)  an increase in the market price of good A.E) None of the above
F) A) and B)

Question 2

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Accepted Answer

A)  the price of the good itself.
B)  the price of related goods.
C)  incomes.
D)  tastes.E) B) and C)
F) A) and D)

Question 3

In a free market, the market price and quantity in the above figure will adjust to equilibrium values of

Accepted Answer

A)  $1 per gallon and 50 million gallons.
B)  $4 per gallon and 10 million gallons.
C)  $2 per gallon and 60 million gallons.
D)  $2 per gallon and 30 million gallons.E) A) and B)
F) None of the above

Question 4

Which of the following is NOT a non-price determinant of demand?

Accepted Answer

A)  the price of the good or service
B)  tastes and preferences
C)  expectations of future prices
D)  prices of related goods and servicesE) C) and D)
F) A) and D)

Question 5

-According to the above figure, equilibrium is at point

Accepted Answer

A)  E.
B)  B.
C)  C.
D)  D.E) None of the above
F) B) and C)

Question 6

Total market demand can be calculated by

Accepted Answer

A)  horizontally summing individual demand curves at each and every price level.
B)  vertically summing individual demand curves at each and every income level.
C)  adding up the largest quantity demanded by each individual.
D)  looking at the changes in the products' popularity.E) A) and B)
F) A) and C)

Question 7

A fundamental principle in demand analysis is that a change in price leads to

Accepted Answer

A)  a movement along the demand curve.
B)  a rightward shift of the demand curve.
C)  a leftward shift of the demand curve.
D)  a complementary movement on the supply curve.E) None of the above
F) A) and B)

Question 8

According to the above figure for a gasoline market, an increase in the price from $2 to $4 will result in

Accepted Answer

A)  a shortage of 30 million gallons.
B)  an increase in quantity demanded of 10 million gallons.
C)  an increase in quantity supplied of 20 million gallons.
D)  an increase in demand of 20 million gallons.E) None of the above
F) A) and B)

Question 9

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Accepted Answer

A)  0.67.
B)  1.0.
C)  0.75.
D)  1.50.E) A) and C)
F) A) and B)

Question 10

According to the law of demand, other things being equal,

Accepted Answer

A)  when the price a good goes up, then people buy more of that good.
B)  when the price a good goes up, then people buy less of that good.
C)  when people's income goes up, then they buy more of a good.
D)  when people's income goes up, then they buy less of a good.E) None of the above
F) A) and B)

Question 11

An increase in the price of input used to produce a product will lead to

Accepted Answer

A)  a decrease in the demand for that product.
B)  a decrease in quantity supplied of that product
C)  a decrease in the supply of that product.
D)  an increase in the supply of that product.E) B) and C)
F) B) and D)

Question 12

Which of the following is an example of the law of supply?

Accepted Answer

A)  The price of gum has increased so producers are making more gum.
B)  The price of labor has increased and producers decrease supply.
C)  The amount of a good purchased increases when the price decreases.
D)  Producers provide less of a good when the price increases.E) A) and B)
F) B) and D)

Question 13

An indirect or inverse relationship between price and quantity demanded is

Accepted Answer

A)  the market clearing price.
B)  a change in demand.
C)  a supply curve.
D)  a demand curve.E) C) and D)
F) A) and B)

Question 14

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

Accepted Answer

A)  graph C
B)  graph D
C)  neither graph
D)  both graphsE) A) and C)
F) All of the above

Question 15

The market supply curve can be derived by

Accepted Answer

A)  vertically adding the individual supplies at each quantity level.
B)  multiplying the price and quantity supplied at each price level.
C)  horizontally adding the individual supplies at each price level.
D)  looking at the capacity utilization in the largest firms in the industry.E) None of the above
F) All of the above

Question 16

Which of the following does NOT cause a rightward shift in the supply curve?

Accepted Answer

A)  a reduction in resource costs
B)  an increase in technology
C)  a reduction in the price of the good
D)  a reduction in the expected future price of the goodE) None of the above
F) A) and B)

Question 17

If one day a terrible disease were to wipe out over one-half of the world's lime trees, which of the following would likely result?

Accepted Answer

A)  The supply curve of lime juice would shift downward and to the right.
B)  The supply curve of lime juice would shift upward and to the left.
C)  The demand curve for lime juice would shift to the right.
D)  The demand curve for lime juice would shift to the left.E) A) and B)
F) A) and C)

Question 18

Which of the following illustrates the law of demand?

Accepted Answer

A)  More people watch college basketball in March than in November.
B)  The number of long distance calls in the United States is greater on Christmas than on Valentine's Day.
C)  College enrollment increases when federal tuition grants are readily available to students.
D)  The prevailing wage rate in an industry determines how many people choose to work in the industry.E) A) and B)
F) A) and C)

Question 19

There will be an increase in supply when

Accepted Answer

A)  a consumer's income increases.
B)  there is an improvement in technology.
C)  the demand curve shifts.
D)  the market price rises from $3 to $4.E) B) and C)
F) All of the above

Question 20

An increase in quantity demanded is caused by

Accepted Answer

A)  an increase in income.
B)  a decrease in the price of the good.
C)  a decrease in the price of a complement.
D)  a change in expectations about price in the future.E) A) and D)
F) B) and C)

Exam 3: Demand and Supply

An increase in the price of input used to produce a product will lead to

Correct AnswerverifiedShow Answer

In a free market, the market price and quantity in the above figure will adjust to equilibrium values of

Correct AnswerverifiedShow Answer

An indirect or inverse relationship between price and quantity demanded is

Correct AnswerverifiedShow Answer

Which of the following illustrates the law of demand?

Correct AnswerverifiedShow Answer

Which of the following is an example of the law of supply?

Correct AnswerverifiedShow Answer

-According to the above figure, equilibrium is at point

Correct AnswerverifiedShow Answer

If one day a terrible disease were to wipe out over one-half of the world's lime trees, which of the following would likely result?

Correct AnswerverifiedShow Answer

According to the above figure for a gasoline market, an increase in the price from $2 to $4 will result in

Correct AnswerverifiedShow Answer

Which of the following does NOT cause a rightward shift in the supply curve?

Correct AnswerverifiedShow Answer

The market supply curve can be derived by

Correct AnswerverifiedShow Answer

A fundamental principle in demand analysis is that a change in price leads to

Correct AnswerverifiedShow Answer

Suppose that the price of cornflakes is $3 per box and the price of oatmeal is $4.50 per box. Both boxes contain the same number of ounces of cereal. The relative price of cornflakes in terms of oatmeal is

Correct AnswerverifiedShow Answer

According to the law of demand, other things being equal,

Correct AnswerverifiedShow Answer

Total market demand can be calculated by

Correct AnswerverifiedShow Answer

Which of the following is NOT a non-price determinant of demand?

Correct AnswerverifiedShow Answer

The law of demand includes the statement "other things being equal." These other things include all of the following EXCEPT

Correct AnswerverifiedShow Answer

-Refer to the above figure. Which diagram shows the effect on the market of Corn Flakes when the price of Corn Flakes has increased?

Correct AnswerverifiedShow Answer

An increase in quantity demanded is caused by

Correct AnswerverifiedShow Answer

There will be an increase in supply when

Correct AnswerverifiedShow Answer

All of the following will cause the supply curve of good A to shift rightward EXCEPT

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