Question 1

At the point where the demand and supply curves for a product intersect,

Accepted Answer

A)   the selling price and the buying price need not be equal.
B)   the market may, or may not, be in equilibrium.
C)   either a shortage or a surplus of the product might exist, depending on the degree of competition.
D)   the quantity that consumers want to purchase and the amount producers choose to sell are the same.E) A) and B)
F) None of the above

Question 2

(Advanced analysis)  The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium price for X is

Accepted Answer

A)   $2.
B)   $4.
C)   $6.
D)   $7.E) All of the above
F) A) and B)

Question 3

Other things equal, which of the following might shift the demand curve for gasoline to the left?

Accepted Answer

A)   the discovery of vast new oil reserves in Montana
B)   the development of a low-cost electric automobile
C)   an increase in the price of train and air transportation
D)   a large decline in the price of automobilesE) A) and B)
F) A) and C)

Question 4

The horizontal axis of a graph that shows a market demand curve indicates the

Accepted Answer

A)   different prices at which various levels of output can be sold.
B)   number of consumers who are in the market for this product.
C)   various quantities of output at which the market will be cleared.
D)   quantities which consumers will be willing and able to buy at various prices.E) B) and C)
F) C) and D)

Question 5

(Consider This)  Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound in 2016. Based on this information, we can conclude that the

Accepted Answer

A)   law of supply has been violated.
B)   law of demand has been violated.
C)   demand for coffee beans has increased.
D)   supply of coffee beans has increased.E) B) and C)
F) A) and D)

Question 6

Which of the following statements is correct?

Accepted Answer

A)   If demand increases and supply decreases, equilibrium price will fall.
B)   If supply increases and demand decreases, equilibrium price will fall.
C)   If demand decreases and supply increases, equilibrium price will rise.
D)   If supply declines and demand remains constant, equilibrium price will fall.E) B) and D)
F) B) and C)

Question 7

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) B) and D)
F) B) and C)

Question 8

(Last Word)  According to research by the New York Federal Reserve Bank, which of the following best explains rising tuition costs over the past several years?

Accepted Answer

A)   increased Federal subsidies for student loans
B)   increased spending on faculty salaries
C)   increased spending on technological infrastructure, including digital classrooms and internet connectivity
D)   widespread closing of colleges and universities, leading to a dramatic reduction in the supply of higher educationE) A) and D)
F) B) and C)

Question 9

Which of the following pairs are not considered to be complementary goods?

Accepted Answer

A)   steel and cars
B)   digital cameras and memory cards
C)   gasoline and motor oil
D)   fertilizer and irrigation systemsE) A) and C)
F) B) and D)

Question 10

In cases where the supply curve is vertical, any change in demand will cause only a change in price but no change in quantity.

Accepted Answer

A) True 
 B)False

Question 11

Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to

Accepted Answer

A)   decrease the demand for Z.
B)   increase the demand for Z.
C)   have no effect on the demand for Z.
D)   decrease the supply of Z.E) None of the above
F) A) and D)

Question 12

Which of the following will not cause the supply curve to shift?

Accepted Answer

A)   a change in the costs of resources needed to produce the good
B)   a technological change in the production of the good
C)   a change in the price of the good
D)   a change in the prices of other goods that producers could be producingE) A) and B)
F) B) and D)

Question 13

(Consider This)  Dynamic pricing refers to

Accepted Answer

A)   the ability to set equilibrium prices in real time in response to changing supply and demand conditions.
B)   the rapid inflation that occurs in economies without a stable money supply.
C)   pricing tickets so low that an athletic or artistic event is guaranteed to sell out and create a buzz among fans.
D)   reselling a good at a price above its original purchase price.E) All of the above
F) None of the above

Question 14

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Accepted Answer

A) True 
 B)False

Question 15

Two months ago, the Maryville Shirt company sold 2,000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3,000 shirts. Evidently the company experienced a(n)

Accepted Answer

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

Question 16

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.  In which diagrams would we see a shortage at the initial price after the indicated curve has shifted?

Accepted Answer

A)   A and D
B)   B and D
C)   B and C
D)   A and CE) None of the above
F) A) and D)

Question 17

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Accepted Answer

A) True 
 B)False

Question 18

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

Accepted Answer

A)   demand curve for cigarettes rightward.
B)   demand curve for cigarettes leftward.
C)   supply curve for cigarettes rightward.
D)   supply curve for cigarettes leftward.E) C) and D)
F) B) and D)

Question 19

In the dollar-yen foreign exchange market, if Japanese companies sharply increase their importation of U.S. products, then the

Accepted Answer

A)   supply of yen will decrease and the yen will appreciate.
B)   supply of yen will increase and the yen will depreciate.
C)   demand for yen will increase and the yen will appreciate.
D)   demand yen will decrease and the yen will depreciate.E) All of the above
F) A) and B)

Question 20

The law of supply indicates that, other things equal,

Accepted Answer

A)   producers will offer more of a product at high prices than at low prices.
B)   the product supply curve is downsloping.
C)   consumers will purchase less of a good at high prices than at low prices.
D)   producers will offer more of a product at low prices than at high prices.E) A) and B)
F) B) and C)

Exam 3: Demand, Supply, and Market Equilibrium

The law of supply indicates that, other things equal,

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves for a product intersect,

Correct AnswerverifiedShow Answer

Suppose product X is an input in the production of product Y. Product Y in turn is a substitute for product Z. An increase in the price of X can be expected to

Correct AnswerverifiedShow Answer

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium price for X is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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. In which diagrams would we see a shortage at the initial price after the indicated curve has shifted?

Correct AnswerverifiedShow Answer

Other things equal, which of the following might shift the demand curve for gasoline to the left?

Correct AnswerverifiedShow Answer

(Consider This) Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound in 2016. Based on this information, we can conclude that the

Correct AnswerverifiedShow Answer

(Last Word) According to research by the New York Federal Reserve Bank, which of the following best explains rising tuition costs over the past several years?

Correct AnswerverifiedShow Answer

An increase in the excise tax on cigarettes raises the price of cigarettes by shifting the

Correct AnswerverifiedShow Answer

(Consider This) Dynamic pricing refers to

Correct AnswerverifiedShow Answer

In the dollar-yen foreign exchange market, if Japanese companies sharply increase their importation of U.S. products, then the

Correct AnswerverifiedShow Answer

The horizontal axis of a graph that shows a market demand curve indicates the

Correct AnswerverifiedShow Answer

Which of the following will not cause the supply curve to shift?

Correct AnswerverifiedShow Answer

In cases where the supply curve is vertical, any change in demand will cause only a change in price but no change in quantity.

Correct AnswerverifiedShow Answer

Which of the following pairs are not considered to be complementary goods?

Correct AnswerverifiedShow Answer

Two months ago, the Maryville Shirt company sold 2,000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3,000 shirts. Evidently the company experienced a(n)

Correct AnswerverifiedShow Answer

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Correct AnswerverifiedShow Answer

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Correct AnswerverifiedShow Answer

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

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

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