Question 1

What combination of changes in supply and demand would most likely increase the equilibrium price?

Accepted Answer

A)  when supply increases and demand decreases
B)  when supply decreases and demand increases
C)  when supply decreases and demand decreases
D)  when supply increases and demand increasesE) A) and B)
F) All of the above

Question 2

If product Y is an inferior good, an increase in consumer incomes will:

Accepted Answer

A)  result in a surplus of product Y.
B)  not affect the sales of product Y.
C)  shift the demand curve for product Y to the left.
D)  shift the demand curve for product Y to the right.E) All of the above
F) B) and C)

Question 3

The law of supply:

Accepted Answer

A)  reflects the amounts which producers will want to offer at each price in a series of prices.
B)  is reflected in an upsloping supply curve.
C)  shows that the relationship between price and quantity supplied is positive.
D)  is reflected in all of the above.E) B) and D)
F) None of the above

Question 4

1/3Q. B) is P = 5 + 2Q. C) is P = 5 + 3Q. D) is P = 5 - 3Q." class="answers-bank-image d-inline" rel="preload" > The equation for the supply curve in the above diagram:

Accepted Answer

A)  is P = 5 + 1/3Q.
B)  is P = 5 + 2Q.
C)  is P = 5 + 3Q.
D)  is P = 5 - 3Q.E) A) and B)
F) None of the above

Question 5

A television station reports that the price of orange juice has declined but the quantity sold has increased.This situation would be caused by a(n) :

Accepted Answer

A)  increase in demand.
B)  increase in supply.
C)  decrease in demand.
D)  decrease in supply.E) All of the above
F) A) and B)

Question 6

The income and substitution effects account for:

Accepted Answer

A)  the upward sloping supply curve.
B)  the downward sloping demand curve.
C)  movements along a given supply curve.
D)  the "other things equal" assumption.E) A) and B)
F) None of the above B

Question 7

Uber's pricing model creates what type of waiting lines?

Accepted Answer

A)  Long
B)  Short
C)  Normal
D)  UncertainE) A) and B)
F) A) and C)

Question 8

An "increase in demand" means that:

Accepted Answer

A)  given supply, the price of the product can be expected to decline.
B)  the demand curve has shifted to the right.
C)  price has declined and consumers therefore want to purchase more of the product.
D)  the demand curve has shifted to the left.E) None of the above
F) B) and C)

Question 9

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.E) A) and B)
F) A) and C) B

Question 10

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

Accepted Answer

A)  the number of firms producing this good
B)  expectations about the future price of the product
C)  techniques used in producing this product
D)  the price of the product for which the supply curve is relevantE) B) and C)
F) All of the above

Question 11

All of the following are held to be constant when the supply curve for a product is drawn, except the:

Accepted Answer

A)  price of the product.
B)  state of technology.
C)  number of producers.
D)  price of inputs used to make the product.E) All of the above
F) A) and B)

Question 12

A headline reads "Soccer is the new popular sport among youth." In a competitive market, this situation would lead to a(n) :

Accepted Answer

A)  increase in the price of soccer shoes and quantity sold.
B)  decrease in the price of soccer shoes and quantity sold.
C)  increase in the price of soccer shoes and decrease in quantity sold.
D)  decrease in the price of soccer shoes and increase in quantity sold.E) B) and C)
F) A) and D)

Question 13

The minimum wage imposes a legal floor under the wage of the least skilled worker.

Accepted Answer

A) True 
 B)False  True

Question 14

During the 1970s the price of oil rose dramatically, which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

Accepted Answer

A)  complementary goods and the higher price for oil increased the demand for coal.
B)  substitute goods and the higher price for oil increased the demand for coal.
C)  complementary goods and the higher price for oil decreased the supply of coal.
D)  substitute goods and the higher price for oil decreased the supply of coal.E) B) and D)
F) B) and C)

Question 15

Because of their scarcity, the efficient use of resources is:

Accepted Answer

A)  an important issue in all economies.
B)  an important issue only in centrally planned economies.
C)  an important issue only in market economies.
D)  not an important issue.E) None of the above
F) C) and D)

Question 16

The following graph represents a competitive market for a product.where the government now has introduced a price floor of 0C.Which area in the graph represents the producers' revenue after the imposition of the price floor?

Accepted Answer

A)  0CFL
B)  0CEJ
C)  0BGK
D)  0BHLE) B) and C)
F) None of the above

Question 17

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

Question 18

The location of the product supply curve depends on:

Accepted Answer

A)  production technology.
B)  the number of buyers in the market.
C)  the tastes of buyers.
D)  the location of the demand curve.E) A) and C)
F) B) and C)

Question 19

Assuming an economy has fixed quantities of resources, that economy:

Accepted Answer

A)  is more efficient, the larger the amount of goods and services it produces.
B)  is able to satisfy all consumer wants.
C)  will produce the same output whether or not resources are used efficiently.
D)  is able to produce the same amount of output regardless of the production technologies it chooses.E) C) and D)
F) All of the above

Question 20

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Accepted Answer

A)  An increase in supply with a decrease in demand will result in an increase in price.
B)  An increase in supply with no change in demand will result in an increase in price.
C)  An increase in supply with no change in demand will result in a decline in sales.
D)  An increase in demand with no change in supply will result in an increase in sales.E) B) and C)
F) A) and D)

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

What combination of changes in supply and demand would most likely increase the equilibrium price?

Correct AnswerverifiedShow Answer

If product Y is an inferior good, an increase in consumer incomes will:

Correct AnswerverifiedShow Answer

The law of supply:

Correct AnswerverifiedShow Answer

The equation for the supply curve in the above diagram:

Correct AnswerverifiedShow Answer

A television station reports that the price of orange juice has declined but the quantity sold has increased.This situation would be caused by a(n) :

Correct AnswerverifiedShow Answer

The income and substitution effects account for:

Correct AnswerverifiedB

Uber's pricing model creates what type of waiting lines?

Correct AnswerverifiedShow Answer

An "increase in demand" means that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

All of the following are held to be constant when the supply curve for a product is drawn, except the:

Correct AnswerverifiedShow Answer

A headline reads "Soccer is the new popular sport among youth." In a competitive market, this situation would lead to a(n) :

Correct AnswerverifiedShow Answer

The minimum wage imposes a legal floor under the wage of the least skilled worker.

Correct AnswerverifiedTrue

During the 1970s the price of oil rose dramatically, which in turn caused the price of coal to increase.This can best be explained by saying that oil and coal are:

Correct AnswerverifiedShow Answer

Because of their scarcity, the efficient use of resources is:

Correct AnswerverifiedShow Answer

The following graph represents a competitive market for a product.where the government now has introduced a price floor of 0C.Which area in the graph represents the producers' revenue after the imposition of the price floor?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The location of the product supply curve depends on:

Correct AnswerverifiedShow Answer

Assuming an economy has fixed quantities of resources, that economy:

Correct AnswerverifiedShow Answer

Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Correct AnswerverifiedShow Answer

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B

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B

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True

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