Question 1

An expected increase in the price of automobiles will lead to

Accepted Answer

A)  no predictable impact on today's demand for automobiles.
B)  a movement down the demand schedule for automobiles.
C)  an outward shift in demand for automobiles today.
D)  a reduction in the demand for gasoline today.

Question 2

Two goods are substitutes if

Accepted Answer

A)  the two goods have the same price.
B)  the more you buy of one,the less you buy of the other.
C)  the two goods are used together.
D)  the more you have of one,the more you want the other.

Question 3

The term ceteris paribus means ________.

Accepted Answer

other infl...

Question 4

The price of a new textbook increases from $60 to $75 while over the same period the price of a used textbook increased by 25 percent.What happened to the relative price of a used textbook?

Accepted Answer

It remaine...

Question 5

Sarah gets a raise in pay of twenty percent.Before her raise,she purchased 5 kilograms of hamburger and 1 kilogram of steak a month.After her raise,she consumes 3 kilograms of steak and 2 kilograms of hamburger a month.If no other relevant influence has changed,we know that for Sarah

Accepted Answer

A)  both steak and hamburger are normal goods.
B)  hamburger is an inferior good and steak is a normal good.
C)  hamburger is a normal good and steak is an inferior good.
D)  both steak and hamburger are inferior goods.

Question 6

Adding the quantities of a good or service demanded by each consumer at every price will yield

Accepted Answer

A)  the total substitution effect from a price change.
B)  the number of consumers.
C)  the market-clearing price.
D)  the market demand curve.

Question 7

A shortage will occur when

Accepted Answer

A)  the price is below the market-clearing level.
B)  the price equals the market-clearing level.
C)  there is excess supply.
D)  the price is above the market-clearing level.

Question 8

Table 3-2
 
-According to Table 3-2,at a price of $2 per unit,which of the following would occur?

Accepted Answer

A)  a shortage of 200 units
B)  a shortage of 800 units
C)  a surplus of 800 units
D)  a shortage of 400 units

Question 9

When the price of beef rises,the demand for chicken increases because beef and chicken are

Accepted Answer

A)  consumer goods.
B)  inferior goods.
C)  complementary goods.
D)  substitute goods.

Question 10

Which of the following will shift today's supply curve to the right?

Accepted Answer

A)  Input prices rise
B)  Prices are expected to be lower in the future
C)  Sales taxes increase
D)  Prices are expected to be higher in the future

Question 11

Which of the following statements about a supply curve is TRUE?

Accepted Answer

A)  It typically has a positive slope.
B)  It shows the quantity demanded at each specific price.
C)  It shows an inverse relationship between price and quantity supplied.
D)  It typically slopes downward.

Question 12

When the actual price is above the equilibrium price there will be

Accepted Answer

A)  a shortage.
B)  an incentive for consumers to increase their purchases.
C)  excess supply.
D)  neither an excess nor a shortage.

Question 13

The expectation of a future increase in the price of gasoline is likely to

Accepted Answer

A)  make gasoline an inferior good.
B)  increase gasoline demand now.
C)  increase the supply of gasoline now.
D)  decrease gasoline demand now.

Question 14

Suppose that goods X and Y are substitutes and the price of good Y falls.We would then expect

Accepted Answer

A)  a decrease in the demand for good X and an increase in the quantity of good Y demanded.
B)  an increase in the demand for good Y and a decrease in the demand for good X.
C)  the quantity demanded of good Y to increase and the demand for good X to increase also.
D)  an increase in demand for both good X and good Y. A

Question 15

The market supply curve for a good or service is found by

Accepted Answer

A)  plotting the supply curves of individual firms.
B)  summing up and plotting the supply curves of individual firms.
C)  plotting the supply curves of individual consumers.
D)  taking the supply curve of the representative firm. B

Question 16

Figure 3-2 
-According to Figure 3-2,a shortage will occur at any price for which

Accepted Answer

A)  quantity supplied exceeds quantity demanded.
B)  government sets a price above equilibrium.
C)  quantity demanded exceeds quantity supplied.
D)  quantity demanded equals quantity supplied.

Question 17

Other things being equal,the relationship between price and quantity supplied is

Accepted Answer

A)  negative.
B)  non-existent.
C)  positive.
D)  constant.

Question 18

An inferior good is one for which

Accepted Answer

A)  the demand curve is vertical.
B)  demand decreases as income increases.
C)  the demand curve slope is positive.
D)  demand increases as income increases. B

Question 19

Shortages occur because

Accepted Answer

A)  our wants are greater than can be satisfied with the resources available.
B)  the price of a good or service is too high for people to afford it.
C)  the price of a good or service is set by firms trying to make large profits.
D)  the price of a good or service is below its equilibrium level.

Question 20

For typical goods and services,supply curves are

Accepted Answer

A)  vertical.
B)  horizontal.
C)  downward sloping.
D)  upward sloping.

Exam 3: Demand and Supply

An expected increase in the price of automobiles will lead to

Correct AnswerverifiedShow Answer

Two goods are substitutes if

Correct AnswerverifiedShow Answer

The term ceteris paribus means ________.

Correct Answerverifiedother infl...View AnswerShow Answer

The price of a new textbook increases from $60 to $75 while over the same period the price of a used textbook increased by 25 percent.What happened to the relative price of a used textbook?

Correct AnswerverifiedIt remaine...View AnswerShow Answer

Sarah gets a raise in pay of twenty percent.Before her raise,she purchased 5 kilograms of hamburger and 1 kilogram of steak a month.After her raise,she consumes 3 kilograms of steak and 2 kilograms of hamburger a month.If no other relevant influence has changed,we know that for Sarah

Correct AnswerverifiedShow Answer

Adding the quantities of a good or service demanded by each consumer at every price will yield

Correct AnswerverifiedShow Answer

A shortage will occur when

Correct AnswerverifiedShow Answer

Table 3-2 -According to Table 3-2,at a price of $2 per unit,which of the following would occur?

Correct AnswerverifiedShow Answer

When the price of beef rises,the demand for chicken increases because beef and chicken are

Correct AnswerverifiedShow Answer

Which of the following will shift today's supply curve to the right?

Correct AnswerverifiedShow Answer

Which of the following statements about a supply curve is TRUE?

Correct AnswerverifiedShow Answer

When the actual price is above the equilibrium price there will be

Correct AnswerverifiedShow Answer

The expectation of a future increase in the price of gasoline is likely to

Correct AnswerverifiedShow Answer

Suppose that goods X and Y are substitutes and the price of good Y falls.We would then expect

Correct AnswerverifiedA

The market supply curve for a good or service is found by

Correct AnswerverifiedB

Figure 3-2 -According to Figure 3-2,a shortage will occur at any price for which

Correct AnswerverifiedShow Answer

Other things being equal,the relationship between price and quantity supplied is

Correct AnswerverifiedShow Answer

An inferior good is one for which

Correct AnswerverifiedB

Shortages occur because

Correct AnswerverifiedShow Answer

For typical goods and services,supply curves are

Correct AnswerverifiedShow Answer

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