Question 1

A product market is in equilibrium:

Accepted Answer

A)  when there is a surplus of the product.
B)  when there is a shortage of the product.
C)  when consumers want to buy more of the product than producers offer for sale.
D)  where the demand and supply curves intersect.E) A) and C)
F) B) and D)

Question 2

To realize "full production" a society must achieve:

Accepted Answer

A)  income inequality.
B)  productive efficiency only.
C)  both allocative and productive efficiency.
D)  any output lying inside of its production possibilities curve.E) All of the above
F) None of the above

Question 3

Which are not generally considered to be complementary goods?

Accepted Answer

A)  gasoline and motor oil
B)  beef and chicken
C)  beer and pretzels
D)  razors and razor bladesE) A) and D)
F) A) and B)

Question 4

Which of the following would usually be an inferior good?

Accepted Answer

A)  French wines
B)  generic beer
C)  theatre tickets
D)  steakE) None of the above
F) All of the above

Question 5

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.Consumer expectations that the price of X will rise sharply in the future will:

Accepted Answer

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

Question 6

The table below shows three individual buyers' demand for wheat.Assume that there are three buyers in the market for wheat (data are hypothetical) .  Refer to the table above.At a price of $6, the market demand for wheat is:

Accepted Answer

A)  17 bushels.
B)  24 bushels.
C)  37 bushels.
D)  49 bushels.E) A) and D)
F) A) and C)

Question 7

Which would be an example of a government price ceiling?

Accepted Answer

A)  limits on interest rates charged by credit card companies
B)  subsidies for apartment rent in major cities
C)  minimum-wage laws for unskilled workers
D)  price supports for agricultural productsE) None of the above
F) A) and D)

Question 8

A normal good is one:

Accepted Answer

A)  for which quantity demanded remains the same even as price increases.
B)  for which quantity supplied falls as price increases.
C)  for which demand increases when price decreases.
D)  for which demand increases when income increases.E) B) and D)
F) C) and D)

Question 9

1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in demand may have been caused by: A) a decline in the number of buyers in the market. B) a decline in the price of a substitute good. C) an increase in incomes if the product is a normal good. D) an increase in incomes if the product is an inferior good." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in demand may have been caused by:

Accepted Answer

A)  a decline in the number of buyers in the market.
B)  a decline in the price of a substitute good.
C)  an increase in incomes if the product is a normal good.
D)  an increase in incomes if the product is an inferior good.E) B) and C)
F) A) and B)

Question 10

Economists use the term "demand" as:

Accepted Answer

A)  a particular price-quantity combination on a stable demand curve.
B)  the total amount spent on a particular commodity over a stipulated time period.
C)  an upsloping line on a graph which relates consumer purchases and product price.
D)  a schedule of various combinations of market prices and amounts demanded.E) A) and B)
F) A) and C)

Question 11

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) A) and B)
F) None of the above

Question 12

A surplus indicates that the quantity demanded is greater than the quantity supplied at that price.

Accepted Answer

A) True 
 B)False

Question 13

1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market: A) supply has decreased and equilibrium price has increased. B) demand and Supply have increased and equilibrium price has decreased. C) demand has decreased and equilibrium price has decreased. D) demand has increased and equilibrium price has increased." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market:

Accepted Answer

A)  supply has decreased and equilibrium price has increased.
B)  demand and Supply have increased and equilibrium price has decreased.
C)  demand has decreased and equilibrium price has decreased.
D)  demand has increased and equilibrium price has increased.E) All of the above
F) B) and D)

Question 14

If two goods are substitutes in consumption, a decline in the price of one will cause an increase in the demand for the other.

Accepted Answer

A) True 
 B)False

Question 15

A market demand schedule for a product indicates that:

Accepted Answer

A)  as the product's price falls, consumers buy less of the good.
B)  there is a direct relationship between price and quantity demanded.
C)  as a product's price rises, consumers buy less of other goods.
D)  there is an inverse relationship between price and quantity demanded.E) B) and C)
F) B) and D)

Question 16

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

Accepted Answer

A)  when supply decreases and demand increases
B)  when demand increases and supply increases
C)  when demand decreases and supply decreases
D)  when supply increases and demand decreasesE) A) and B)
F) B) and C)

Question 17

An "increase in the quantity demanded" means that:

Accepted Answer

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

Question 18

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) A) and B)
F) C) and D)

Question 19

People demand more of product X when the price of product Y decreases.This means X and Y are:

Accepted Answer

A)  complements.
B)  substitutes.
C)  not related.
D)  both inexpensive.E) None of the above
F) All of the above

Question 20

Lamps and light bulbs are:

Accepted Answer

A)  substitute goods.
B)  complementary goods.
C)  independent goods.
D)  inferior goods.E) B) and C)
F) A) and B)

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

Correct Answer
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Which of the following would usually be an inferior good?

Correct Answer
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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
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If two goods are substitutes in consumption, a decline in the price of one will cause an increase in the demand for the other.

Correct Answer
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Which would be an example of a government price ceiling?

Correct Answer
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To realize "full production" a society must achieve:

Correct Answer
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People demand more of product X when the price of product Y decreases.This means X and Y are:

Correct Answer
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The table below shows three individual buyers' demand for wheat.Assume that there are three buyers in the market for wheat (data are hypothetical) . Refer to the table above.At a price of $6, the market demand for wheat is:

Correct Answer
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A surplus indicates that the quantity demanded is greater than the quantity supplied at that price.

Correct Answer
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An "increase in the quantity demanded" means that:

Correct Answer
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A normal good is one:

Correct Answer
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A product market is in equilibrium:

Correct Answer
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Which are not generally considered to be complementary goods?

Correct Answer
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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market:

Correct Answer
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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market the indicated shift in demand may have been caused by:

Correct Answer
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Lamps and light bulbs are:

Correct Answer
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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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Economists use the term "demand" as:

Correct Answer
verified

A market demand schedule for a product indicates that:

Correct Answer
verified

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

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

Which of the following would usually be an inferior good?

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

If two goods are substitutes in consumption, a decline in the price of one will cause an increase in the demand for the other.

Correct AnswerverifiedShow Answer

Which would be an example of a government price ceiling?

Correct AnswerverifiedShow Answer

To realize "full production" a society must achieve:

Correct AnswerverifiedShow Answer

People demand more of product X when the price of product Y decreases.This means X and Y are:

Correct AnswerverifiedShow Answer

The table below shows three individual buyers' demand for wheat.Assume that there are three buyers in the market for wheat (data are hypothetical) . Refer to the table above.At a price of $6, the market demand for wheat is:

Correct AnswerverifiedShow Answer

A surplus indicates that the quantity demanded is greater than the quantity supplied at that price.

Correct AnswerverifiedShow Answer

An "increase in the quantity demanded" means that:

Correct AnswerverifiedShow Answer

A normal good is one:

Correct AnswerverifiedShow Answer

A product market is in equilibrium:

Correct AnswerverifiedShow Answer

Which are not generally considered to be complementary goods?

Correct AnswerverifiedShow Answer

Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market:

Correct AnswerverifiedShow Answer

Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in demand may have been caused by:

Correct AnswerverifiedShow Answer

Lamps and light bulbs are:

Correct AnswerverifiedShow Answer

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

Economists use the term "demand" as:

Correct AnswerverifiedShow Answer

A market demand schedule for a product indicates that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market:

Correct Answer
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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market the indicated shift in demand may have been caused by:

Correct Answer
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