Question 1

Which of the diagrams illustrates 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 only

Question 2

Quantity Demanded  Price  Quantity Supplied 52$5073624562724051823542923033\begin{array} { | c | c | c | } \hline 	ext { Quantity Demanded } & 	ext { Price } & 	ext { Quantity Supplied } \\hline 52 & \$ 50 & 73 \\hline 62 & 45 & 62 \\hline 72 & 40 & 51 \\hline 82 & 35 & 42 \\hline 92 & 30 & 33 \\hline\end{array} Quantity Demanded 5262728292​ Price $5045403530​ Quantity Supplied 7362514233​​  In this market, economists would call a government-set minimum price of $50 a

Accepted Answer

A)   price ceiling.
B)   price ?oor.
C)   equilibrium price.
D)   fair price.

Question 3

If the supply and demand curves for a product both decrease, then equilibrium

Accepted Answer

A)   quantity must fall and equilibrium price must rise.
B)   price must fall, but equilibrium quantity may rise, fall, or remain unchanged.
C)   quantity must decline, but equilibrium price may rise, fall, or remain unchanged.
D)   quantity and equilibrium price must both decline.

Question 4

In which of the following instances is the effect on equilibrium price (whether it rises, falls, or remains unchanged)  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 falls

Question 5

(Advanced analysis)  The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. If demand changes from P = 10 - 0.2Q to P = 7 - 0.3Q, we can
Conclude that

Accepted Answer

A)   demand has increased.
B)   demand has decreased.
C)   supply will increase.
D)   supply will decrease.

Question 6

Consumers buy more of normal goods as their incomes rise.

Accepted Answer

A) True 
 B)False

Question 7

75,

Accepted Answer

A)   a smaller quantity of C will be demanded.
B)   a larger quantity of C will be demanded.
C)   the demand for C will increase.
D)   the demand for C will decrease.

Question 8

In competitive markets, a surplus or shortage will

Accepted Answer

A)   never exist because the markets are always at equilibrium.
B)   cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage.
C)   cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage.
D)   cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage.

Question 9

A leftward shift of the supply curve for oil in the United States is most likely to result from

Accepted Answer

A)   a decrease in the fees that oil companies must pay for drilling licenses.
B)   an increase in the subsidy for oil exploration and drilling.
C)   a decrease in the world price of oil.
D)   an increase in the costs of exploration and drilling for oil.

Question 10

The relationship between quantity supplied and price is _____, and the relationship between quantity demanded and price is _____.

Accepted Answer

A)   direct; inverse
B)   inverse; direct
C)   inverse; inverse
D)   direct; direct

Question 11

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

Accepted Answer

A)   $1.10, that is, $1.60 minus $.50.
B)   $1.60.
C)   $1.00.
D)   $0.50.

Question 12

Refer to the diagram. A shortage 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)   $0.50.

Question 13

Refer to the above graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P2?

Accepted Answer

A)   an increase in consumer incomes
B)   an increase in production costs
C)   a decrease in the price of a complementary product
D)   an increase in the price of a substitute product

Question 14

An effective price ﬂoor on wheat will

Accepted Answer

A)   force otherwise proﬁtable farmers out of business.
B)   result in a shortage of wheat.
C)   result in a surplus of wheat.
D)   clear the market for wheat.

Question 15

If consumer incomes increase, the demand for product X

Accepted Answer

A)   will necessarily remain unchanged.
B)   may shift either to the right or left.
C)   will necessarily shift to the right.
D)   will necessarily shift to the left.

Question 16

A ceiling price in a competitive market will result in persistent surpluses of a product.

Accepted Answer

A) True 
 B)False

Question 17

In the following question 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.
A reduction in the number of ﬁrms producing X will

Accepted Answer

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

Question 18

Increasing marginal cost of production explains

Accepted Answer

A)   the law of demand.
B)   the income effect.
C)   why the supply curve is upsloping.
D)   why the demand curve is downsloping.

Question 19

Refer to the four graphs above. Select the graph that best shows the changes in demand and supply in the market speciﬁed in the following situation: the market for music CDs sold in stores, if
More consumers switch to music-downloads from the Internet and the cost of making music CDs
Decreases because of technological improvement in production.

Accepted Answer

A)   Graph A
B)   Graph B
C)   Graph C
D)   Graph D

Question 20

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

Accepted Answer

A)   smartwatches
B)   ocean cruises
C)   used clothing
D)   steak

Exam 3: Demand, Supply, and Market Equilibrium

Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?

Correct Answer
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Consumers buy more of normal goods as their incomes rise.

Correct Answer
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Refer to the above graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P2?

Correct Answer
verified

Refer to the diagram. A shortage of 160 units would be encountered if price was

Correct Answer
verified

In competitive markets, a surplus or shortage will

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

Correct Answer
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Correct Answer
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In which of the following instances is the effect on equilibrium price (whether it rises, falls, or remains unchanged) dependent on the magnitude of the shifts in supply and demand?

Correct Answer
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75,

Correct Answer
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Increasing marginal cost of production explains

Correct Answer
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A leftward shift of the supply curve for oil in the United States is most likely to result from

Correct Answer
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(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. If demand changes from P = 10 - 0.2Q to P = 7 - 0.3Q, we can Conclude that

Correct Answer
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If consumer incomes increase, the demand for product X

Correct Answer
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The relationship between quantity supplied and price is _, and the relationship between quantity demanded and price is _.

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

Correct Answer
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An effective price ﬂoor on wheat will

Correct Answer
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A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct Answer
verified

If the supply and demand curves for a product both decrease, then equilibrium

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Which of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?

Correct AnswerverifiedShow Answer

Consumers buy more of normal goods as their incomes rise.

Correct AnswerverifiedShow Answer

Refer to the above graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P1 to P2?

Correct AnswerverifiedShow Answer

Refer to the diagram. A shortage of 160 units would be encountered if price was

Correct AnswerverifiedShow Answer

In competitive markets, a surplus or shortage will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In which of the following instances is the effect on equilibrium price (whether it rises, falls, or remains unchanged) dependent on the magnitude of the shifts in supply and demand?

Correct AnswerverifiedShow Answer

75,

Correct AnswerverifiedShow Answer

Increasing marginal cost of production explains

Correct AnswerverifiedShow Answer

A leftward shift of the supply curve for oil in the United States is most likely to result from

Correct AnswerverifiedShow Answer

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. If demand changes from P = 10 - 0.2Q to P = 7 - 0.3Q, we can Conclude that

Correct AnswerverifiedShow Answer

If consumer incomes increase, the demand for product X

Correct AnswerverifiedShow Answer

The relationship between quantity supplied and price is _____, and the relationship between quantity demanded and price is _____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An effective price ﬂoor on wheat will

Correct AnswerverifiedShow Answer

A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct AnswerverifiedShow Answer

If the supply and demand curves for a product both decrease, then equilibrium

Correct AnswerverifiedShow Answer

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The relationship between quantity supplied and price is _, and the relationship between quantity demanded and price is _.

Correct Answer
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