Question 1

Table 3-4
 
-In Table 3-4,if price rises from $8 to $10

Accepted Answer

A)  quantity demanded rises by 500 and quantity supplied falls by 700.
B)  quantity demanded falls by 500 and quantity supplied rises by 700.
C)  quantity demanded rises by 1000 and quantity supplies falls by 1700.
D)  quantity demand falls by 500 but quantity supplied does not change.

Question 2

If the price of hot dogs increases,the demand for hot dog buns will

Accepted Answer

A)  shift to the right.
B)  increase.
C)  decrease.
D)  remain constant.

Question 3

The relationship between quantity supplied and the price of output is such that

Accepted Answer

A)  an increase in price will lead to an increase in quantity supplied.
B)  quantity will decrease as the number of firms increases.
C)  an increase in price will produce an inward shift in the supply curve.
D)  an increase in quantity will automatically lead to a reduction in price.

Question 4

Which of the following is NOT a determinant of consumer demand?

Accepted Answer

A)  tastes and preferences
B)  household income
C)  the state of technology
D)  prices of related goods

Question 5

A new government subsidy paid to the producers of butter would

Accepted Answer

A)  have no effect on the supply of butter
B)  shift the supply curve to the left.
C)  reduce the supply of butter.
D)  shift the supply curve to the right.

Question 6

Figure 3-6 
-According to Figure 3-6,if steel mills shift from ignoring the cost of pollution to bearing that cost,then the supply curve would

Accepted Answer

A)  remain at S₁.
B)  shift from S₁ to S₂.
C)  shift from S₂ to S₁.
D)  shift,but it is impossible to say in which direction without more information.

Question 7

If the price of cotton used in making blue jeans increases,which of the following will definitely occur?

Accepted Answer

A)  There will be a movement along the original blue jean supply curve.
B)  The supply curve for jeans will shift outward,followed by a movement along the curve.
C)  The supply curve for jeans will shift leftward.
D)  The supply curve for jeans will shift rightward.

Question 8

Which of the following would most likely be complementary goods?

Accepted Answer

A)  beef and chicken.
B)  beer and pretzels.
C)  margarine and butter.
D)  tea and coffee.

Question 9

Which of the following statements is FALSE?

Accepted Answer

A)  A change in the demand for a product is caused by factors other than changes in the product's price.
B)  A decrease in demand shifts the demand curve leftward toward the origin,while a decrease in quantity demanded involves a movement upward along a particular demand curve.
C)  If there is an increase in the demand for a product,consumers want to buy more of the product at each and every possible price.
D)  If the price of a good rises,quantity demanded of the good decreases and the demand curve shifts toward the origin.

Question 10

Table 3-1
 
-In Table 3-1,what quantity of CDs would be demanded at a price of $12?

Accepted Answer

A)  6
B)  9
C)  12
D)  24

Question 11

The demand for a coffee ________ when the price of cream decreases.

Accepted Answer

A)  will fall.
B)  will shift outward.
C)  remains constant.
D)  will shift inward.

Question 12

An increase in the price of corn,ceteris paribus,will lead to

Accepted Answer

A)  an upward (and leftward) movement along the demand curve.
B)  an inward shift in demand.
C)  an increase in the quantity of corn consumed.
D)  an outward shift in the supply of corn.

Question 13

Briefly explain the determinants of a good's supply curve.

Accepted Answer

Ceteris paribus,an increase in the price...

Question 14

Figure 3-6 
-According to Figure 3-6,if steel mills ignore the cost of pollution (shown as the difference between S₂ and S₁) the equilibrium quantity of steel will be

Accepted Answer

A)  Q₂.
B)  Q₂ - Q₁.
C)  Q₁.
D)  Q₂ + Q₁.

Question 15

Other things constant,quantity supplied of a product is determined by

Accepted Answer

A)  input prices.
B)  the product's price.
C)  taxes and subsidies.
D)  price expectations.

Question 16

Table 3-4
 
-According to Table 3-4,at a price of $16 per CD,there is

Accepted Answer

A)  an equilibrium.
B)  a shortage of 3,000 CDs.
C)  an excess demand of 3,000 CDs.
D)  an excess supply of 3,000 CDs.

Question 17

When market demand and supply both increase

Accepted Answer

A)  equilibrium price will increase and equilibrium quantity will decrease.
B)  equilibrium quantity will increase but equilibrium price may increase or decrease.
C)  equilibrium quantity will increase and equilibrium price will increase.
D)  equilibrium price will decrease and equilibrium quantity will decrease.

Question 18

Explain the difference between wanting a pizza and demanding it.

Accepted Answer

People who demand a pizza are "willing a...

Question 19

Figure 3-3 
-In Figure 3-3,if the market price is reduced from P₀ to P₁,then

Accepted Answer

A)  there will be a shortage of Q₂ units minus Q₁ units.
B)  there will be a further tendency for price to fall.
C)  there will be a surplus equal to Q₂ units minus Q₁ units.
D)  price will rise to P₂ in the next period.

Question 20

Which of the following statements is TRUE,ceteris paribus?

Accepted Answer

A)  If price goes down,demand decreases.
B)  If price goes down,demand increases.
C)  If demand increases,then the demand curve shifts to the left.
D)  If demand decreases,then the demand curve shifts to the left.

Exam 3: Demand and Supply

If the price of cotton used in making blue jeans increases,which of the following will definitely occur?

Correct AnswerverifiedShow Answer

Figure 3-6 -According to Figure 3-6,if steel mills ignore the cost of pollution (shown as the difference between S₂ and S₁) the equilibrium quantity of steel will be

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An increase in the price of corn,ceteris paribus,will lead to

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If the price of hot dogs increases,the demand for hot dog buns will

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Figure 3-6 -According to Figure 3-6,if steel mills shift from ignoring the cost of pollution to bearing that cost,then the supply curve would

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When market demand and supply both increase

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Figure 3-3 -In Figure 3-3,if the market price is reduced from P₀ to P₁,then

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The relationship between quantity supplied and the price of output is such that

Correct AnswerverifiedShow Answer

Briefly explain the determinants of a good's supply curve.

Correct AnswerverifiedCeteris paribus,an increase in the price...View AnswerShow Answer

A new government subsidy paid to the producers of butter would

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Table 3-1 -In Table 3-1,what quantity of CDs would be demanded at a price of $12?

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Which of the following is NOT a determinant of consumer demand?

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The demand for a coffee ________ when the price of cream decreases.

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Which of the following would most likely be complementary goods?

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Explain the difference between wanting a pizza and demanding it.

Correct AnswerverifiedPeople who demand a pizza are "willing a...View AnswerShow Answer

Table 3-4 -According to Table 3-4,at a price of $16 per CD,there is

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Which of the following statements is FALSE?

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Other things constant,quantity supplied of a product is determined by

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Table 3-4 -In Table 3-4,if price rises from $8 to $10

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Which of the following statements is TRUE,ceteris paribus?

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Ceteris paribus,an increase in the price...
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People who demand a pizza are "willing a...
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