Question 1

Answer the question on the basis of the given supply and demand data for wheat:   Bushels Demanded  Bushels Supplied Per  Per Month  Price Per Bushel  Month 45$57750473563686126167157\begin{array} { c c c } 	ext { Bushels Demanded }&&	ext { Bushels Supplied Per }\	ext { Per Month } & 	ext { Price Per Bushel } & 	ext { Month } \ \hline45 & \$ 5 & 77 \ 50 & 4 & 73 \ 56 & 3 & 68 \ 61 & 2 & 61 \ 67 & 1 & 57 \end{array} Bushels Demanded  Per Month 4550566167​ Price Per Bushel $54321​ Bushels Supplied Per  Month 7773686157​​  Refer to the data.If the price in this market was $4:

Accepted Answer

A)   the market would clear;quantity demanded would equal quantity supplied.
B)   buyers would want to purchase more wheat than is currently being supplied.
C)   farmers would not be able to sell all their wheat.
D)   there would be a shortage of wheat. E) None of the above
F) All of the above

Question 2

(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Accepted Answer

A)   law of supply has been violated.
B)   law of demand has been violated.
C)   demand for salsa has increased.
D)   supply of salsa has increased.E) A) and C)
F) A) and B) D

Question 3

(Last Word) A market for human organs (rather than the current volunteer-donor system) would be expected to:

Accepted Answer

A)   reduce the price of organs.
B)   create a surplus of organs.
C)   reduce the supply of organs.
D)   eliminate the shortage of organs.E) All of the above
F) B) and D)

Question 4

A price floor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

Question 5

A demand curve:

Accepted Answer

A)   shows the relationship between price and quantity supplied.
B)   indicates the quantity demanded at each price in a series of prices.
C)   graphs as an upsloping line.
D)   shows the relationship between income and spending.E) A) and B)
F) A) and C)

Question 6

If two goods are complements:

Accepted Answer

A)   they are consumed independently.
B)   an increase in the price of one will increase the demand for the other.
C)   a decrease in the price of one will increase the demand for the other.
D)   they are necessarily inferior goods.E) None of the above
F) All of the above

Question 7

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. Refer to the given information.If X is an inferior good,a decrease in income will:

Accepted Answer

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

Question 8

(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

Accepted Answer

A)   10.
B)   20.
C)   15.
D)   30.E) A) and D)
F) A) and B)

Question 9

If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Accepted Answer

A)   consumer incomes have fallen.
B)   cattle production has declined.
C)   the price of steak has risen.
D)   the price of cattle feed has gone up.E) A) and B)
F) A) and C) A

Question 10

The law of demand states that,other things equal:

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) All of the above
F) B) and C)

Question 11

Consumers buy more of normal goods as their incomes rise.

Accepted Answer

A) True 
 B)False

Question 12

Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

Accepted Answer

A)   reduce the demand for tacos and increase the demand for soda.
B)   reduce the demand for soda and increase the demand for tacos.
C)   increase the demand for both soda and tacos.
D)   reduce the demand for both soda and tacos.E) All of the above
F) A) and B) B

Question 13

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana.We can conclude that:

Accepted Answer

A)   beer and marijuana are substitute goods.
B)   beer and marijuana are complementary goods.
C)   beer is an inferior good.
D)   marijuana is an inferior good.E) C) and D)
F) A) and B)

Question 14

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;directE) C) and D)
F) A) and C)

Question 15

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

Accepted Answer

A)   alter both equilibrium price and quantity.
B)   alter equilibrium quantity but not equilibrium price.
C)   alter equilibrium price but not equilibrium quantity.
D)   have no effect on equilibrium price or quantity.E) None of the above
F) All of the above

Question 16

In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Accepted Answer

A)   an increase in the cost of making donuts.
B)   an increase in the price of coffee.
C)   consumers expecting donut prices to fall.
D)   a change in buyer tastes.E) A) and D)
F) A) and B)

Question 17

(Advanced analysis) Answer the question on the basis of the following information.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 given information.If demand changed from P = 10 - .2Q to P = 7 - .3Q,the new equilibrium quantity is:

Accepted Answer

A)   10.
B)   20.
C)   15.
D)   30.E) A) and B)
F) A) and C)

Question 18

(Consider This) Ticket scalping implies that:

Accepted Answer

A)   event sponsors have established ticket prices at above-equilibrium levels.
B)   an event is not likely to be sold out.
C)   event sponsors have established ticket prices at below-equilibrium levels.
D)   the demand for tickets has fallen between the time tickets were originally sold and the event takes place.E) A) and B)
F) A) and C)

Question 19

Productive efficiency refers to:

Accepted Answer

A)   the use of the least-cost method of production.
B)   the production of the product mix most wanted by society.
C)   the full employment of all available resources.
D)   production at some point inside of the production possibilities curve.E) A) and D)
F) B) and D)

Question 20

An effective ceiling price will:

Accepted Answer

A)   induce new firms to enter the industry.
B)   result in a product surplus.
C)   result in a product shortage.
D)   clear the market.E) All of the above
F) A) and B)

Exam 3: Demand, Supply, and Market Equilibrium

Correct Answer
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(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Correct Answer
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D

(Last Word) A market for human organs (rather than the current volunteer-donor system) would be expected to:

Correct Answer
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A price floor in a competitive market will result in persistent shortages of a product.

Correct Answer
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A demand curve:

Correct Answer
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If two goods are complements:

Correct Answer
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Correct Answer
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(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

Correct Answer
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If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Correct Answer
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A

The law of demand states that,other things equal:

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

Correct Answer
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Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

Correct Answer
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B

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana.We can conclude that:

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
verified

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

Correct Answer
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In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Correct Answer
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Correct Answer
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(Consider This) Ticket scalping implies that:

Correct Answer
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Productive efficiency refers to:

Correct Answer
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An effective ceiling price will:

Correct Answer
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Exam 3: Demand, Supply, and Market Equilibrium

Correct AnswerverifiedShow Answer

(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year.Based on this information,we can conclude that the:

Correct AnswerverifiedD

(Last Word) A market for human organs (rather than the current volunteer-donor system) would be expected to:

Correct AnswerverifiedShow Answer

A price floor in a competitive market will result in persistent shortages of a product.

Correct AnswerverifiedShow Answer

A demand curve:

Correct AnswerverifiedShow Answer

If two goods are complements:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.The equilibrium quantity is:

Correct AnswerverifiedShow Answer

If the demand for steak (a normal good) shifts to the left,the most likely reason is that:

Correct AnswerverifiedA

The law of demand states that,other things equal:

Correct AnswerverifiedShow Answer

Consumers buy more of normal goods as their incomes rise.

Correct AnswerverifiedShow Answer

Suppose that tacos and pizza are substitutes,and that soda and pizza are complements.We would expect an increase in the price of pizza to:

Correct AnswerverifiedB

A recent study found that an increase in the federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana.We can conclude that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assuming conventional supply and demand curves,changes in the determinants of both supply and demand will generally:

Correct AnswerverifiedShow Answer

In the past few years,the demand for donuts has greatly increased.This increase in demand might best be explained by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

(Consider This) Ticket scalping implies that:

Correct AnswerverifiedShow Answer

Productive efficiency refers to:

Correct AnswerverifiedShow Answer

An effective ceiling price will:

Correct AnswerverifiedShow Answer

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D

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A

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B

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

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