Question 1

To realize "full production" a society must achieve:

Accepted Answer

A)  income inequality.
B)  productive efficiency only.
C)  both allocative and productive efficiency.
D)  any output lying inside of its production possibilities curve.E) None of the above
F) B) and D)

Question 2

An increase in product price will cause:

Accepted Answer

A)  quantity demanded to decrease.
B)  quantity supplied to decrease.
C)  quantity demanded to increase.
D)  the supply curve to shift to the right.E) C) and D)
F) A) and B)

Question 3

Assume in a competitive market that price is initially above the equilibrium level.We can predict that price will:

Accepted Answer

A)  decrease, quantity demanded will decrease, and quantity supplied will increase.
B)  decrease and quantity demanded and quantity supplied will both decrease.
C)  decrease, quantity demanded will increase, and quantity supplied will decrease.
D)  increase, quantity demanded will decrease, and quantity supplied will increase.E) A) and C)
F) B) and D)

Question 4

If two goods are close substitutes:

Accepted Answer

A)  consumers will always buy the one that has the highest price.
B)  a fall in the price of one will decrease the demand for the other.
C)  an increase in the price of one causes the demand for the other to decrease.
D)  a decrease in the price of one causes an increase in the demand for the other.E) B) and D)
F) B) and C)

Question 5

Which would be an example of a government price ceiling?

Accepted Answer

A)  limits on interest rates charged by credit card companies
B)  subsidies for apartment rent in major cities
C)  minimum-wage laws for unskilled workers
D)  price supports for agricultural productsE) A) and B)
F) A) and C)

Question 6

Tennis rackets and ballpoint pens are:

Accepted Answer

A)  substitute goods.
B)  complementary goods.
C)  inferior goods.
D)  independent goods.E) C) and D)
F) A) and C)

Question 7

Which diagram above illustrates the effects on the peanut butter market as a result of a higher wage rate for peanut workers?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) All of the above
F) B) and D)

Question 8

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.A shift in the demand curve from D0 to D1 might be caused by a(n) : 0 to D1 might be caused by a(n) :   A) decrease in income if X is an inferior good. B) increase in the price of complementary good Y. C) increase in money incomes if X is a normal good. D) increase in the price of substitute product Y." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  decrease in income if X is an inferior good.
B)  increase in the price of complementary good Y.
C)  increase in money incomes if X is a normal good.
D)  increase in the price of substitute product Y.E) B) and D)
F) B) and C)

Question 9

Which of the following would cause an increase in the supply of a product at a given price?

Accepted Answer

A)  an increase in the price of the product
B)  a decrease in the cost of producing a substitute product
C)  an increase in the cost of resources to produce the product
D)  a reduction in the cost of resources to produce the productE) All of the above
F) B) and C)

Question 10

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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 above.A reduction in the number of firms producing X will:

Accepted Answer

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

Question 11

Given a downward sloping demand curve and an upward sloping supply curve for product X, an increase in the price of a substitute good (in consumption)  will:

Accepted Answer

A)  increase equilibrium price and quantity of X.
B)  decrease equilibrium price and quantity of X.
C)  increase equilibrium price and decrease equilibrium quantity of X.
D)  decrease equilibrium price and increase equilibrium quantity of X.E) A) and D)
F) All of the above

Question 12

The location of the supply curve of a product depends on:

Accepted Answer

A)  the technology used to produce it.
B)  the prices of resources used in its production.
C)  the number of sellers in the market.
D)  all of the above.E) A) and C)
F) C) and D)

Question 13

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 above information.The equilibrium quantity is:

Accepted Answer

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

Question 14

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Accepted Answer

A) True 
 B)False

Question 15

If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Accepted Answer

A)  price must rise, but equilibrium quantity may either 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.E) A) and B)
F) All of the above

Question 16

An "increase in efficiency" suggests that an economy:

Accepted Answer

A)  has moved from a point outside of, to a point on, its production possibilities curve.
B)  has decided to produce more consumer goods and fewer capital goods.
C)  has moved from a point on, to a point inside, its production possibilities curve.
D)  is able to get more output from a given amount of inputs.E) A) and D)
F) All of the above

Question 17

Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D1 to D2? 1 to D2?   A) a decrease in the price of tea B) an increase in consumer incomes C) an increase in the price of sugar D) a technological improvement in the production of coffee" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  a decrease in the price of tea
B)  an increase in consumer incomes
C)  an increase in the price of sugar
D)  a technological improvement in the production of coffeeE) C) and D)
F) A) and D)

Question 18

Which of the following strategies is being used by Uber to attain equilibrium?

Accepted Answer

A)  Static pricing
B)  Inexpensive advertising
C)  Dynamic pricing
D)  Price floorE) A) and C)
F) A) and D)

Question 19

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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 above.An increase in income, if X is a normal good, 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) B) and D)
F) A) and D)

Question 20

A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Accepted Answer

A)  increase in the price of lettuce and quantity purchased.
B)  decrease in the price of lettuce and quantity purchased.
C)  increase in the price of lettuce and decrease in quantity purchased.
D)  decrease in the price of lettuce and increase in quantity purchased.E) C) and D)
F) B) and C)

Exam 3: B: Demand, Supply, and Market Equilibrium

Assume in a competitive market that price is initially above the equilibrium level.We can predict that price will:

Correct Answer
verified

A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Correct Answer
verified

Tennis rackets and ballpoint pens are:

Correct Answer
verified

Which of the following would cause an increase in the supply of a product at a given price?

Correct Answer
verified

Correct Answer
verified

An increase in product price will cause:

Correct Answer
verified

An "increase in efficiency" suggests that an economy:

Correct Answer
verified

Correct Answer
verified

If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Correct Answer
verified

To realize "full production" a society must achieve:

Correct Answer
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Which of the following strategies is being used by Uber to attain equilibrium?

Correct Answer
verified

If two goods are close substitutes:

Correct Answer
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Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.A shift in the demand curve from D₀ to D₁ might be caused by a(n) :

Correct Answer
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The location of the supply curve of a product depends on:

Correct Answer
verified

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 above information.The equilibrium quantity is:

Correct Answer
verified

Given a downward sloping demand curve and an upward sloping supply curve for product X, an increase in the price of a substitute good (in consumption) will:

Correct Answer
verified

Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

Correct Answer
verified

Which would be an example of a government price ceiling?

Correct Answer
verified

Which diagram above illustrates the effects on the peanut butter market as a result of a higher wage rate for peanut workers?

Correct Answer
verified

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Correct Answer
verified

Exam 3: B: Demand, Supply, and Market Equilibrium

Assume in a competitive market that price is initially above the equilibrium level.We can predict that price will:

Correct AnswerverifiedShow Answer

A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Correct AnswerverifiedShow Answer

Tennis rackets and ballpoint pens are:

Correct AnswerverifiedShow Answer

Which of the following would cause an increase in the supply of a product at a given price?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in product price will cause:

Correct AnswerverifiedShow Answer

An "increase in efficiency" suggests that an economy:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Correct AnswerverifiedShow Answer

To realize "full production" a society must achieve:

Correct AnswerverifiedShow Answer

Which of the following strategies is being used by Uber to attain equilibrium?

Correct AnswerverifiedShow Answer

If two goods are close substitutes:

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.A shift in the demand curve from D0 to D1 might be caused by a(n) :

Correct AnswerverifiedShow Answer

The location of the supply curve of a product depends on:

Correct AnswerverifiedShow Answer

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 above information.The equilibrium quantity is:

Correct AnswerverifiedShow Answer

Given a downward sloping demand curve and an upward sloping supply curve for product X, an increase in the price of a substitute good (in consumption) will:

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D1 to D2?

Correct AnswerverifiedShow Answer

Which would be an example of a government price ceiling?

Correct AnswerverifiedShow Answer

Which diagram above illustrates the effects on the peanut butter market as a result of a higher wage rate for peanut workers?

Correct AnswerverifiedShow Answer

An increase in consumer incomes will cause a decrease in the demand for an inferior good.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.A shift in the demand curve from D₀ to D₁ might be caused by a(n) :

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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