Question 1

If two goods are complementary, a(n) :

Accepted Answer

A)  decrease in the price of one product will cause a decrease in the demand for the other product.
B)  decrease in the price of one product will cause an increase in the demand for the other product.
C)  increase in the price of one product will cause an increase in the supply of the other product.
D)  increase in the price of one product will cause a decrease in the supply of the other product.
E)  increase in the price of one product will cause an increase in the demand for the other product.

Question 2

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Accepted Answer

A)  Yes, Martha is correct. Sam's demand has decreased.
B)  No, Martha is incorrect. Sam's demand has increased.
C)  No, Martha is incorrect. Sam's quantity demanded has decreased, and his demand has not changed.
D)  No, Martha is incorrect. Sam's quantity demanded has increased, and his demand has increased.
E)  No, Martha is incorrect. Sam's demand has increased, and his quantity demanded has decreased.

Question 3

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Accepted Answer

A)  not change; only quantity demanded will change.
B)  increase, because the goods are substitutes.
C)  decrease, because the goods are substitutes.
D)  decrease, because the goods are complements.
E)  increase, because the goods are complements.

Question 4

Exhibit 3-9 Demand and supply curves  In Exhibit 3-9, if the market price is $50,

Accepted Answer

A)  this market will be in equilibrium.
B)  a shortage of 27 units would result.
C)  the price is below the equilibrium price.
D)  a surplus of 26 units would result.
E)  a surplus of 27 units would result.

Question 5

Which of the following will increase the supply of a good?

Accepted Answer

A)  An increase in the price of another good that producers could produce.
B)  A lower price paid for resources used in the production of the good.
C)  A decrease in the number of sellers.
D)  An increase in taxes paid to the government by producers.

Question 6

A leftward shift of a supply curve is called a(n) :

Accepted Answer

A)  decrease in demand.
B)  increase in supply.
C)  decrease in supply.
D)  increase in quantity supplied.
E)  decrease in quantity supplied.

Question 7

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Accepted Answer

A) True 
 B)False

Question 8

Higher milk prices reduce the demand for milk.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 3-12 Supply and demand data  In Exhibit 3-12, which of the following occurs at a price of $1.00?

Accepted Answer

A)  A shortage puts a downward pressure on price.
B)  Quantity demanded exceeds quantity supplied, putting upward pressure on price.
C)  Quantity supplied exceeds quantity demanded, putting upward pressure on price.
D)  The surplus would be so small that there would be only slight upward pressure on price.

Question 10

Assuming that clothing is a normal good, an increase in consumer income, other things being equal, would:

Accepted Answer

A)  increase the demand for clothing.
B)  decrease the demand for clothing.
C)  increase the quantity of clothing demanded.
D)  decrease the quantity of clothing demanded

Question 11

Exhibit 3-3 Demand curves  Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Accepted Answer

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

Question 12

Which of the following will cause the demand curve for a good to shift to the right?

Accepted Answer

A)  Decrease in income for a normal good.
B)  Increase in the price of a complementary good.
C)  Decrease in the price of the good.
D)  Increase in the price of a substitute good.
E)  Expectation of a future price decline.

Question 13

For a normal good, an increase in consumer income will cause the market demand for the product to:

Accepted Answer

A)  decrease, which is a shift to the left of the demand curve.
B)  decrease, which is a shift to the right of the demand curve.
C)  increase, which is a shift to the left of the demand curve.
D)  increase, which is a shift to the right of the demand curve.

Question 14

Complementary goods are goods:

Accepted Answer

A)  that are consumed jointly.
B)  that are consumed one in place of the other.
C)  for which demand increases when the price of its complementary goods increases.
D)  for which demand decreases when the price of its complementary goods decreases.
E)  that are inversely related.

Question 15

How will an increase in lumber prices influence the home construction market?

Accepted Answer

A)  The demand for newly constructed homes will increase.
B)  The demand for newly constructed homes will decrease.
C)  The supply of newly constructed homes will increase.
D)  The supply of newly constructed homes will decrease.

Question 16

Assume Qs represents the quantity supplied at a given price and Qd represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?

Accepted Answer

A)  Qs = 1,000, Qd = 750.
B)  Qs = 750, Qd = 750.
C)  Qs = 750, Qd = 1,000.
D)  Qs = 1,000, Qd = 1,000.

Question 17

A baby boom will have what immediate effect on the disposable diaper market?

Accepted Answer

A)  Supply decreases.
B)  Supply increases.
C)  Demand decreases.
D)  Demand increases.
E)  Supply and demand remains the same.

Question 18

Equilibrium in a market exists when there is neither a surplus nor a shortage of the item.

Accepted Answer

A) True 
 B)False

Question 19

If equilibrium is present in a market:

Accepted Answer

A)  there is either a shortage or a surplus.
B)  the quantity demanded equals quantity supplied.
C)  the quantity demanded exceeds quantity supplied.
D)  the quantity supplied exceeds quantity demanded.

Question 20

Coffee and tea are:

Accepted Answer

A)  complements.
B)  substitutes.
C)  inferior goods.
D)  unrelated goods.
E)  nonmarket goods.

Exam 3: Market Demand and Supply

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Correct AnswerverifiedShow Answer

Exhibit 3-9 Demand and supply curves In Exhibit 3-9, if the market price is $50,

Correct AnswerverifiedShow Answer

Higher milk prices reduce the demand for milk.

Correct AnswerverifiedShow Answer

Which of the following will increase the supply of a good?

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for a good to shift to the right?

Correct AnswerverifiedShow Answer

For a normal good, an increase in consumer income will cause the market demand for the product to:

Correct AnswerverifiedShow Answer

If two goods are complementary, a(n) :

Correct AnswerverifiedShow Answer

If pork and beans is an inferior good, other things being equal, an increase in consumer income will decrease the demand for pork and beans.

Correct AnswerverifiedShow Answer

If equilibrium is present in a market:

Correct AnswerverifiedShow Answer

Equilibrium in a market exists when there is neither a surplus nor a shortage of the item.

Correct AnswerverifiedShow Answer

Exhibit 3-3 Demand curves Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?

Correct AnswerverifiedShow Answer

Assume Qs represents the quantity supplied at a given price and Qd represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?

Correct AnswerverifiedShow Answer

A leftward shift of a supply curve is called a(n) :

Correct AnswerverifiedShow Answer

How will an increase in lumber prices influence the home construction market?

Correct AnswerverifiedShow Answer

Coffee and tea are:

Correct AnswerverifiedShow Answer

Complementary goods are goods:

Correct AnswerverifiedShow Answer

At a price of $5, Sam buys 10 units of a product; when the price increases to $6, Sam buys 8 units. Martha says Sam's demand has decreased. Is Martha correct?

Correct AnswerverifiedShow Answer

Assuming that clothing is a normal good, an increase in consumer income, other things being equal, would:

Correct AnswerverifiedShow Answer

A baby boom will have what immediate effect on the disposable diaper market?

Correct AnswerverifiedShow Answer

Exhibit 3-12 Supply and demand data In Exhibit 3-12, which of the following occurs at a price of $1.00?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Assume Q_s represents the quantity supplied at a given price and Q_d represents the quantity demanded at the same given price. Which of the following market conditions produce a downward movement of the price?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified