Question 1

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.
If X is a normal good, an increase in income will

Accepted Answer

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

Question 2

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

Accepted Answer

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

Question 3

Assume the demand curve for product X shifts to the right. This might be caused by

Accepted Answer

A)   a decline in income if X is an inferior good.
B)   a decline in the price of Z if X and Z are substitute goods.
C)   a change in consumer tastes that is unfavorable to X.
D)   an increase in the price of Y if X and Y are complementary goods.E) A) and B)
F) A) and C)

Question 4

An increase in the price of digital cameras will result in a(n)

Accepted Answer

A)   shift of the demand curve for digital cameras to the left.
B)   decrease in the demand for digital cameras.
C)   shift of the demand curve for digital cameras to the right.
D)   movement up and to the left along the demand curve for digital cameras.E) None of the above
F) All of the above

Question 5

Which of the following is not a determinant of demand for laptop computers?

Accepted Answer

A)   income of buyers of laptop computers
B)   the cost of inputs for producing laptop computers
C)   the prices of related goods such as software and iPads
D)   expectations about the future price of laptop computersE) All of the above
F) A) and B)

Question 6

Assume that the graphs show a competitive market for the product stated in the question.  Select the graph above that best shows the change in the market speciﬁed in the following
Situation: the market for digital cameras, when the productivity of workers in the digital camera
Industry increases.

Accepted Answer

A)   Graph A
B)   Graph B
C)   Graph C
D)   Graph DE) B) and C)
F) C) and D)

Question 7

Refer to the diagram. An increase in quantity supplied is depicted by a

Accepted Answer

A)   move from point y to point x.
B)   shift from S1 to S2.
C)   shift from S2 to S1.
D)   move from point x to point y.E) B) and C)
F) A) and B)

Question 8

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Accepted Answer

A) True 
 B)False

Question 9

Which of the diagrams illustrate(s)  the effect of a decline in the price of personal computers on the market for software?

Accepted Answer

A)   A only
B)   A and D
C)   B only
D)   D onlyE) B) and C)
F) None of the above

Question 10

There is a surplus of tomatoes in the market. This implies that

Accepted Answer

A)   the current price is set above the equilibrium level.
B)   the price will be rising, as a result.
C)   supply of tomatoes is more than the demand.
D)   quantity demanded is more than quantity supplied.E) A) and B)
F) None of the above

Question 11

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

Accepted Answer

A)   a decrease in demand
B)   an increase in demand
C)   a decrease in supply
D)   an increase in supplyE) None of the above
F) A) and B)

Question 12

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

Question 13

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

Question 14

If we say that a price is too high to clear the market, we mean that

Accepted Answer

A)   quantity demanded exceeds quantity supplied.
B)   the equilibrium price is above the current price.
C)   quantity supplied exceeds quantity demanded.
D)   the price of the good is likely to rise.E) A) and B)
F) None of the above

Question 15

Quantity Demanded  Price  Quantity Supplied 52$5073624562724051823542923033\begin{array} { | c | r | c | } \hline 	ext { Quantity Demanded } & 	ext { Price } & 	ext { Quantity Supplied } \\hline 52 & \$ 50 & 73 \\hline 62 & 45 & 62 \\hline 72 & 40 & 51 \\hline 82 & 35 & 42 \\hline 92 & 30 & 33 \\hline\end{array} Quantity Demanded 5262728292​ Price $5045403530​ Quantity Supplied 7362514233​​  If government set a maximum price of $45 in the market,

Accepted Answer

A)   a shortage of 21 units would arise.
B)   a surplus of 21 units would arise.
C)   a surplus of 40 units would arise.
D)   it would create neither a shortage nor a surplus. E) None of the above
F) A) and B)

Question 16

Which of the diagrams illustrate(s)  the effect of a decline in the price of irrigation equipment on the market for corn?

Accepted Answer

A)   B only
B)   C only
C)   B and C
D)   D onlyE) C) and D)
F) B) and D)

Question 17

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Accepted Answer

A)   complementary goods, and the higher price for oil increased the demand for natural gas.
B)   substitute goods, and the higher price for oil increased the demand for natural gas.
C)   complementary goods, and the higher price for oil decreased the supply of natural gas.
D)   substitute goods, and the higher price for oil decreased the supply of natural gas.E) A) and B)
F) B) and D)

Question 18

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Accepted Answer

A)   an inferior good.
B)   the rationing function of prices.
C)   the substitution effect.
D)   the income effect.E) All of the above
F) A) and B)

Question 19

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

Question 20

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)   a widely publicized study that indicates beef consumption increases one's cholesterol
B)   a reduction in the price of cattle feed
C)   an effective advertising campaign by pork producers
D)   a change in the incomes of beef consumersE) None of the above
F) B) and D)

Exam 3: Demand, Supply, and Market Equilibrium

Assume the demand curve for product X shifts to the right. This might be caused by

Correct Answer
verified

An increase in the price of digital cameras will result in a(n)

Correct Answer
verified

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

Correct Answer
verified

Correct Answer
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A demand curve

Correct Answer
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Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for digital cameras, when the productivity of workers in the digital camera Industry increases.

Correct Answer
verified

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Correct Answer
verified

The law of demand states that, other things equal,

Correct Answer
verified

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

Correct Answer
verified

Which of the following is not a determinant of demand for laptop computers?

Correct Answer
verified

Refer to the diagram. An increase in quantity supplied is depicted by a

Correct Answer
verified

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Correct Answer
verified

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

Correct Answer
verified

There is a surplus of tomatoes in the market. This implies that

Correct Answer
verified

If we say that a price is too high to clear the market, we mean that

Correct Answer
verified

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

Correct Answer
verified

Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Correct Answer
verified

Which of the following would not shift the demand curve for beef?

Correct Answer
verified

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Assume the demand curve for product X shifts to the right. This might be caused by

Correct AnswerverifiedShow Answer

An increase in the price of digital cameras will result in a(n)

Correct AnswerverifiedShow Answer

Which of the diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A demand curve

Correct AnswerverifiedShow Answer

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for digital cameras, when the productivity of workers in the digital camera Industry increases.

Correct AnswerverifiedShow Answer

In 2018, the price of oil increased, which in turn contributed to a rise in the price of natural gas. This can best be explained by saying that oil and natural gas are

Correct AnswerverifiedShow Answer

The law of demand states that, other things equal,

Correct AnswerverifiedShow Answer

If producers obtain higher prices than before to produce given levels of output, then the following has occurred.

Correct AnswerverifiedShow Answer

Which of the following is not a determinant of demand for laptop computers?

Correct AnswerverifiedShow Answer

Refer to the diagram. An increase in quantity supplied is depicted by a

Correct AnswerverifiedShow Answer

When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

There is a surplus of tomatoes in the market. This implies that

Correct AnswerverifiedShow Answer

If we say that a price is too high to clear the market, we mean that

Correct AnswerverifiedShow Answer

Suppose that a more eﬃcient way to produce a good is discovered, thus lowering production costs for the good. This will cause a(n)

Correct AnswerverifiedShow Answer

Which of the diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Correct AnswerverifiedShow Answer

Which of the following would not shift the demand curve for beef?

Correct AnswerverifiedShow Answer

If demand increases and supply simultaneously decreases, equilibrium price will rise.

Correct AnswerverifiedShow Answer

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