Question 1

In which of the following instances will the effect on equilibrium price be dependent on the magnitude of the shifts in supply and demand?

Accepted Answer

A)  demand rises and supply rises
B)  supply falls and demand remains constant
C)  demand rises and supply falls
D)  supply rises and demand fallsE) A) and B)
F) All of the above

Question 2

Other things equal, an excise tax on a product will:

Accepted Answer

A)  increase its supply.
B)  increase its price.
C)  increase the quantity sold.
D)  increase its demand.E) A) and B)
F) All of the above

Question 3

Refer to the diagram.The equilibrium price and quantity in this market will be:

Accepted Answer

A)  $1.00 and 200.
B)  $1.60 and 130.
C)  $.50 and 130.
D)  $1.60 and 290.E) None of the above
F) B) and C)

Question 4

An increase in the price of corn:

Accepted Answer

A)  will eventually increase the cost of corn-fed beef and, the price of hamburgers.
B)  will eventually decrease the price of corn syrup and, the price of soft drinks.
C)  will eventually reduce the price of corn-tortillas.
D)  will eventually decrease the cost of corn-fed beef and, increase the price of steak.E) A) and B)
F) None of the above

Question 5

Which would cause an increase in quantity supplied of product A?

Accepted Answer

A)  an improvement in technology affecting the production of A
B)  an increase in the price of product B, a complement in the production of A
C)  a decrease in the price of resources used in producing A
D)  an increase in the price of AE) None of the above
F) B) and D)

Question 6

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information.The equilibrium price for X is:

Accepted Answer

A)  $2
B)  $4
C)  $6
D)  $7E) C) and D)
F) All of the above

Question 7

As a result of a decrease in the price of a hamburger, consumers buy more hamburgers and fewer frankfurters.This is an illustration of:

Accepted Answer

A)  consumer sovereignty.
B)  the income effect.
C)  the substitution effect.
D)  changing tastes and preferences.E) C) and D)
F) A) and B)

Question 8

Suppose product X is an input in the production of product Y.Product Y in turn is a substitute in production for product Z.An increase in the price of X can be expected to:

Accepted Answer

A)  decrease the quantity demanded for Z.
B)  increase the quantity demanded for Z.
C)  have no effect on the quantity demanded for Z.
D)  decrease the supply of Z.E) B) and C)
F) A) and C)

Question 9

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.E) B) and D)
F) B) and C)

Question 10

Which of the above diagrams illustrate(s)  the effect of an increase in automobile worker wages on the market for automobiles?

Accepted Answer

A)  A only
B)  B only
C)  C only
D)  D onlyE) All of the above
F) A) and B)

Question 11

1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at: A) P1 and there would be a shortage of rental housing. B) P2 and there would be a shortage of rental housing. C) P3 and there would be a surplus of rental housing. D) P4 and there would be a surplus of rental housing." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Accepted Answer

A)  P1 and there would be a shortage of rental housing.
B)  P2 and there would be a shortage of rental housing.
C)  P3 and there would be a surplus of rental housing.
D)  P4 and there would be a surplus of rental housing.E) None of the above
F) All of the above

Question 12

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.E) All of the above
F) A) and C)

Question 13

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates that:

Accepted Answer

A)  the demand for oranges will necessarily rise.
B)  the equilibrium quantity of oranges will rise.
C)  the amount of oranges that will be available at various prices has declined.
D)  the price of oranges will fall.E) A) and B)
F) A) and C)

Question 14

When the price of a product increases, a consumer is able to buy less of it with a given money income.This describes:

Accepted Answer

A)  the cost effect.
B)  the inflationary effect.
C)  the income effect.
D)  the substitution effect.E) A) and B)
F) A) and C)

Question 15

Refer to the above diagram.The highest price that buyers will be willing and able to pay for 100 units of this product is:

Accepted Answer

A)  $30
B)  $60
C)  $40
D)  $20E) A) and B)
F) A) and C)

Question 16

Which of the following is most likely to be an inferior good?

Accepted Answer

A)  fur coats
B)  Porsches
C)  used clothing
D)  steakE) B) and D)
F) All of the above

Question 17

If peanut butter and cheese spread are substitute products, which diagram above illustrates the effect on the peanut butter market of a decrease in the price of cheese spread?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) All of the above
F) B) and C)

Question 18

Which of the following would most likely cause a decrease in current consumer demand for normal good X?

Accepted Answer

A)  a decline in the price of product X
B)  an increase in consumer income
C)  a decrease in the prices of goods which are close substitutes for X
D)  an increase in the price which consumers expect will prevail for product X in the futureE) A) and C)
F) B) and D)

Question 19

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

Accepted Answer

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

Question 20

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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.An increase in the tastes and preferences for X will:

Accepted Answer

A)  increase S, decrease P, and increase Q.
B)  decrease S, decrease P, and decrease Q.
C)  increase D, increase P, and increase Q.
D)  decrease D, decrease P, and decrease Q.E) None of the above
F) All of the above

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

As a result of a decrease in the price of a hamburger, consumers buy more hamburgers and fewer frankfurters.This is an illustration of:

Correct Answer
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Which of the following is most likely to be an inferior good?

Correct Answer
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Which of the following would most likely cause a decrease in current consumer demand for normal good X?

Correct Answer
verified

Suppose product X is an input in the production of product Y.Product Y in turn is a substitute in production for product Z.An increase in the price of X can be expected to:

Correct Answer
verified

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information.The equilibrium price for X is:

Correct Answer
verified

The law of demand states that:

Correct Answer
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Refer to the diagram.The equilibrium price and quantity in this market will be:

Correct Answer
verified

Other things equal, an excise tax on a product will:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
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Which would cause an increase in quantity supplied of product A?

Correct Answer
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Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D₁ and the supply S₁ for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Correct Answer
verified

If peanut butter and cheese spread are substitute products, which diagram above illustrates the effect on the peanut butter market of a decrease in the price of cheese spread?

Correct Answer
verified

Which of the above diagrams illustrate(s) the effect of an increase in automobile worker wages on the market for automobiles?

Correct Answer
verified

In which of the following instances will the effect on equilibrium price be dependent on the magnitude of the shifts in supply and demand?

Correct Answer
verified

When the price of a product increases, a consumer is able to buy less of it with a given money income.This describes:

Correct Answer
verified

An increase in the price of corn:

Correct Answer
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Correct Answer
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Refer to the above diagram.The highest price that buyers will be willing and able to pay for 100 units of this product is:

Correct Answer
verified

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates that:

Correct Answer
verified

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

As a result of a decrease in the price of a hamburger, consumers buy more hamburgers and fewer frankfurters.This is an illustration of:

Correct AnswerverifiedShow Answer

Which of the following is most likely to be an inferior good?

Correct AnswerverifiedShow Answer

Which of the following would most likely cause a decrease in current consumer demand for normal good X?

Correct AnswerverifiedShow Answer

Suppose product X is an input in the production of product Y.Product Y in turn is a substitute in production for product Z.An increase in the price of X can be expected to:

Correct AnswerverifiedShow Answer

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information.The equilibrium price for X is:

Correct AnswerverifiedShow Answer

The law of demand states that:

Correct AnswerverifiedShow Answer

Refer to the diagram.The equilibrium price and quantity in this market will be:

Correct AnswerverifiedShow Answer

Other things equal, an excise tax on a product will:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which would cause an increase in quantity supplied of product A?

Correct AnswerverifiedShow Answer

Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Correct AnswerverifiedShow Answer

If peanut butter and cheese spread are substitute products, which diagram above illustrates the effect on the peanut butter market of a decrease in the price of cheese spread?

Correct AnswerverifiedShow Answer

Which of the above diagrams illustrate(s) the effect of an increase in automobile worker wages on the market for automobiles?

Correct AnswerverifiedShow Answer

In which of the following instances will the effect on equilibrium price be dependent on the magnitude of the shifts in supply and demand?

Correct AnswerverifiedShow Answer

When the price of a product increases, a consumer is able to buy less of it with a given money income.This describes:

Correct AnswerverifiedShow Answer

An increase in the price of corn:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above diagram.The highest price that buyers will be willing and able to pay for 100 units of this product is:

Correct AnswerverifiedShow Answer

Because of unseasonably cold weather, the supply of oranges has substantially decreased.This statement indicates that:

Correct AnswerverifiedShow Answer

Correct Answer
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Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D₁ and the supply S₁ for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

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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Correct Answer
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Correct Answer
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