Question 1

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

Accepted Answer

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

Question 2

Economists use the term "demand" to refer to

Accepted Answer

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

Question 3

Which of the following would best be classiﬁed as a complement for new houses/homes?

Accepted Answer

A)   lumber or steel
B)   construction equipment
C)   mortgage loans
D)   rental apartments

Question 4

Suppose that in each of four successive years, producers sell more of their product and at lower prices. This could be explained

Accepted Answer

A)   by small annual increases in supply accompanied by large annual increases in demand.
B)   in terms of a stable supply curve and increasing demand.
C)   in terms of a stable demand curve and increasing supply.
D)   as an exception to the law of supply.

Question 5

Black markets are associated with

Accepted Answer

A)   price ﬂoors and the resulting product surpluses.
B)   price ﬂoors and the resulting product shortages.
C)   ceiling prices and the resulting product shortages.
D)   ceiling prices and the resulting product surpluses.

Question 6

Refer to the above graph with three demand curves. An increase in price, other factors constant, would cause a change from

Accepted Answer

A)   point 4 to point 5.
B)   point 3 to point 6.
C)   point 1 to point 5.
D)   point 2 to point 4.

Question 7

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the ﬁnal position after the curve shifts.
 Which diagram illustrates the effect on the natural-gas market of the widespread use of "fracking,"
Or hydraulic fracturing, by gas-drilling companies?

Accepted Answer

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

Question 8

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 corn, if gasoline producers
Use more ethanol from corn and good weather during the growing season yields a bumper harvest.

Accepted Answer

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

Question 9

A market that achieves productive eﬃciency is necessarily producing the quantity of goods most
desired by society.

Accepted Answer

A) True 
 B)False

Question 10

The "dynamic pricing" model used by the ride-sharing ﬁrm Uber, along with a few other ﬁrms, illustrates which of the following?

Accepted Answer

A)   When there is shortage in a market, the equilibrium price will rise.
B)   Once the equilibrium price is reached, it will remain there for at least several days.
C)   Since actual quantity bought always equals actual quantity sold, the market is always at equilibrium.
D)   When there is surplus in a market, the equilibrium price will rise.

Question 11

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 12 million
Bushels. Is this evidence that the law of demand does not apply to corn?

Accepted Answer

A)   Yes, because there is a direct relationship between the price of corn and the quantity supplied.
B)   Yes, because there is an inverse relationship between the price of corn and the quantity demanded.
C)   No, because the other-things-equal assumption was violated over the two-year period.
D)   No, because the evidence indicates that there is a shortage of corn.

Question 12

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.

Question 13

When an economist says that the demand for a product has increased, this means that

Accepted Answer

A)   consumers are now willing to purchase more of this product at each possible price.
B)   the product has become particularly scarce for some reason.
C)   product price has fallen and, as a consequence, consumers are buying a larger quantity of the product.
D)   the demand curve has shifted to the left.

Question 14

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 cannot be a result of

Accepted Answer

A)   buyers' expectations of lower prices for beef in the very near future.
B)   a health report warning of the dangers of beef consumption
C)   a widespread concern about mad-cow disease.
D)   a decrease in the productivity of cattle farms.

Question 15

Refer to the 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.

Question 16

If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium

Accepted Answer

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

Question 17

Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information we can conclude that

Accepted Answer

A)   the supply of clothing has grown faster than the demand for clothing.
B)   demand for clothing has grown faster than the supply of clothing.
C)   the supply of and demand for clothing have grown by the same proportion.
D)   there is no way to determine what has happened to supply and demand with this information.

Question 18

A decrease in demand and an increase in supply will

Accepted Answer

A)   affect price in an indeterminate way and decrease the equilibrium quantity.
B)   increase price and affect the equilibrium quantity in an indeterminate way.
C)   decrease price and affect the equilibrium quantity in an indeterminate way.
D)   increase price and increase the equilibrium quantity.

Question 19

Refer to the above graph with three demand curves. A "decrease in demand" would be illustrated as a change from

Accepted Answer

A)   point 1 to point 4.
B)   point 1 to point 3.
C)   line C to B.
D)   line A to C.

Question 20

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Accepted Answer

A)   an increase in the demand for hybrid cars
B)   a decrease in the demand for hybrid cars
C)   higher prices of car batteries
D)   lower prices for gasoline

Exam 3: Demand, Supply, and Market Equilibrium

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

Correct Answer
verified

When an economist says that the demand for a product has increased, this means that

Correct Answer
verified

Refer to the 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
verified

Suppose that in each of four successive years, producers sell more of their product and at lower prices. This could be explained

Correct Answer
verified

A market that achieves productive eﬃciency is necessarily producing the quantity of goods most desired by society.

Correct Answer
verified

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

Correct Answer
verified

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 corn, if gasoline producers Use more ethanol from corn and good weather during the growing season yields a bumper harvest.

Correct Answer
verified

Economists use the term "demand" to refer to

Correct Answer
verified

Refer to the above graph with three demand curves. A "decrease in demand" would be illustrated as a change from

Correct Answer
verified

If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium

Correct Answer
verified

Correct Answer
verified

The "dynamic pricing" model used by the ride-sharing ﬁrm Uber, along with a few other ﬁrms, illustrates which of the following?

Correct Answer
verified

Refer to the above graph with three demand curves. An increase in price, other factors constant, would cause a change from

Correct Answer
verified

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 12 million Bushels. Is this evidence that the law of demand does not apply to corn?

Correct Answer
verified

A decrease in demand and an increase in supply will

Correct Answer
verified

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Correct Answer
verified

Black markets are associated with

Correct Answer
verified

Which of the following would best be classiﬁed as a complement for new houses/homes?

Correct Answer
verified

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 cannot be a result of

Correct Answer
verified

Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information we can conclude that

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

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

Correct AnswerverifiedShow Answer

When an economist says that the demand for a product has increased, this means that

Correct AnswerverifiedShow Answer

Refer to the 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

Suppose that in each of four successive years, producers sell more of their product and at lower prices. This could be explained

Correct AnswerverifiedShow Answer

A market that achieves productive eﬃciency is necessarily producing the quantity of goods most desired by society.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 corn, if gasoline producers Use more ethanol from corn and good weather during the growing season yields a bumper harvest.

Correct AnswerverifiedShow Answer

Economists use the term "demand" to refer to

Correct AnswerverifiedShow Answer

Refer to the above graph with three demand curves. A "decrease in demand" would be illustrated as a change from

Correct AnswerverifiedShow Answer

If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The "dynamic pricing" model used by the ride-sharing ﬁrm Uber, along with a few other ﬁrms, illustrates which of the following?

Correct AnswerverifiedShow Answer

Refer to the above graph with three demand curves. An increase in price, other factors constant, would cause a change from

Correct AnswerverifiedShow Answer

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 12 million Bushels. Is this evidence that the law of demand does not apply to corn?

Correct AnswerverifiedShow Answer

A decrease in demand and an increase in supply will

Correct AnswerverifiedShow Answer

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Correct AnswerverifiedShow Answer

Black markets are associated with

Correct AnswerverifiedShow Answer

Which of the following would best be classiﬁed as a complement for new houses/homes?

Correct AnswerverifiedShow Answer

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 cannot be a result of

Correct AnswerverifiedShow Answer

Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information we can conclude that

Correct AnswerverifiedShow Answer

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