Question 1

Toothpaste and toothbrushes are substitute goods.

Accepted Answer

A) True 
 B)False

Question 2

The figure below shows three demand curves for coffee. 1 to D3. B)  shift from D1 to D2. C)  movement from point a to point b. D)  movement from point b to point a." class="answers-bank-image d-inline" rel="preload" > An increase in the price of coffee, other factors constant, would cause a

Accepted Answer

A)   shift from D1 to D3.
B)   shift from D1 to D2.
C)   movement from point a to point b.
D)   movement from point b to point a.E) C) and D)
F) All of the above

Question 3

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

Accepted Answer

A) True 
 B)False

Question 4

Which would be a likely cause of an increase in the demand for pizza?

Accepted Answer

A)   a reduced desire for take-out and fast-food dining
B)   a decrease in the price of hamburger sandwiches
C)   a decrease in the prices of cheese, pepperoni, and mushrooms
D)   a health report stating that eating pizza reduces stressE) A) and C)
F) B) and C)

Question 5

(Advanced analysis)  The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. If demand changed from P = 100 - 2Q to P = 130 - Q, the new equilibrium price is

Accepted Answer

A)   $90.
B)   $110.
C)   $96.
D)   $106.E) None of the above
F) A) and C)

Question 6

A market that is achieving allocative efficiency must also be achieving productive efficiency.

Accepted Answer

A) True 
 B)False

Question 7

Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread, and potatoes are a consumer substitute for bread, we would expect the price of wheat to

Accepted Answer

A)   rise, the supply of bread to increase, and the demand for potatoes to increase.
B)   rise, the supply of bread to decrease, and the demand for potatoes to increase.
C)   rise, the supply of bread to decrease, and the demand for potatoes to decrease.
D)   fall, the supply of bread to increase, and the demand for potatoes to increase.E) All of the above
F) A) and C)

Question 8

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Accepted Answer

A)   inferior goods.
B)   direct goods.
C)   average goods.
D)   normal goods.E) All of the above
F) A) and C)

Question 9

(Consider This)  Uberâ€™s dynamic pricing

Accepted Answer

A)   prevents regulated taxi drivers from changing their fares.
B)   keeps the market for rides in equilibrium by constantly adjusting fares to supply and demand conditions.
C)   creates long wait times for consumers wanting rides at peak demand times.
D)   results in ride pricing that is unfair to consumers.E) A) and B)
F) B) and C)

Question 10

An increase in quantity supplied might be caused by an increase in production costs.

Accepted Answer

A) True 
 B)False

Question 11

Economists use the term "demand" to refer to

Accepted Answer

A)   a particular price-quantity combination on a stable demand curve.
B)   the total amount spent on a particular commodity over a fixed time period.
C)   an upsloping line on a graph that relates consumer purchases and product price.
D)   a schedule of various combinations of market prices and amounts/quantities demanded.E) C) and D)
F) None of the above

Question 12

An effective price floor will

Accepted Answer

A)   force some firms in this industry to go out of business.
B)   result in a product surplus.
C)   result in a product shortage.
D)   clear the market.E) None of the above
F) A) and B)

Question 13

The relationship between quantity supplied and price is , and the relationship between quantity demanded and price is .

Accepted Answer

A)   direct; inverse
B)   inverse; direct
C)   inverse; inverse
D)   direct; directE) All of the above
F) A) and D)

Question 14

The table below shows the weekly demand for hamburger in a market where there are just three buyers.  At a price of $6, the weekly market quantity demanded for hamburger is

Accepted Answer

A)   17.
B)   23.
C)   18.
D)   24.E) A) and C)
F) C) and D)

Question 15

When economists say that the demand for a product has decreased, they mean that

Accepted Answer

A)   the demand curve has shifted to the right.
B)   the product has become particularly scarce for some reason.
C)   the product has become more expensive and thus consumers are buying less of it.
D)   consumers are now willing and able to buy less of this product at each possible price.E) A) and C)
F) C) and D)

Question 16

If products A and B are complements and the price of B decreases, the

Accepted Answer

A)   demand curves for both A and B will shift to the left.
B)   amount of B purchased will increase, but the demand curve for A will not shift.
C)   demand for A will increase and the quantity of B demanded will increase.
D)   demand for A will decline and the demand for B will increase.E) None of the above
F) A) and B)

Question 17

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Accepted Answer

A)   price to go up and quantity to go down.
B)   price to go up and quantity to go up.
C)   price to go down and quantity to go down.
D)   price to go down and quantity to go up.E) All of the above
F) B) and C)

Question 18

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. An improvement in the technology used to produce X will

Accepted Answer

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

Question 19

Markets, viewed from the perspective of the supply and demand model,

Accepted Answer

A)   assume many buyers and many sellers of a standardized product.
B)   assume market power so that buyers and sellers bargain with one another.
C)   do not exist in the real-world economy.
D)   are approximated by markets in which a single seller determines price.E) B) and C)
F) None of the above

Question 20

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 9 million bushels. Is this evidence that the law of demand does not apply to corn?

Accepted Answer

A)   Yes, because there is a direct relationship between the price of corn and the quantity supplied.
B)   Yes, because there is an inverse relationship between the price of corn and the quantity demanded.
C)   No, because the other-things-equal assumption was violated over the two-year period.
D)   No, because the evidence indicates that there is a shortage of corn.E) A) and B)
F) All of the above

Exam 3: Demand, Supply, and Market Equilibrium

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

Correct Answer
verified

The relationship between quantity supplied and price is , and the relationship between quantity demanded and price is .

Correct Answer
verified

When economists say that the demand for a product has decreased, they mean that

Correct Answer
verified

An effective price floor will

Correct Answer
verified

Toothpaste and toothbrushes are substitute goods.

Correct Answer
verified

A market that is achieving allocative efficiency must also be achieving productive efficiency.

Correct Answer
verified

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Correct Answer
verified

Correct Answer
verified

An increase in quantity supplied might be caused by an increase in production costs.

Correct Answer
verified

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 9 million bushels. Is this evidence that the law of demand does not apply to corn?

Correct Answer
verified

Economists use the term "demand" to refer to

Correct Answer
verified

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. If demand changed from P = 100 - 2Q to P = 130 - Q, the new equilibrium price is

Correct Answer
verified

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Correct Answer
verified

Markets, viewed from the perspective of the supply and demand model,

Correct Answer
verified

Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread, and potatoes are a consumer substitute for bread, we would expect the price of wheat to

Correct Answer
verified

Which would be a likely cause of an increase in the demand for pizza?

Correct Answer
verified

The table below shows the weekly demand for hamburger in a market where there are just three buyers. At a price of $6, the weekly market quantity demanded for hamburger is

Correct Answer
verified

(Consider This) Uberâ€™s dynamic pricing

Correct Answer
verified

The figure below shows three demand curves for coffee. An increase in the price of coffee, other factors constant, would cause a

Correct Answer
verified

If products A and B are complements and the price of B decreases, the

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

In the market for sushi, an increase in supply and a greater decrease in demand will cause both the equilibrium price and quantity to decrease.

Correct AnswerverifiedShow Answer

The relationship between quantity supplied and price is , and the relationship between quantity demanded and price is .

Correct AnswerverifiedShow Answer

When economists say that the demand for a product has decreased, they mean that

Correct AnswerverifiedShow Answer

An effective price floor will

Correct AnswerverifiedShow Answer

Toothpaste and toothbrushes are substitute goods.

Correct AnswerverifiedShow Answer

A market that is achieving allocative efficiency must also be achieving productive efficiency.

Correct AnswerverifiedShow Answer

An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in quantity supplied might be caused by an increase in production costs.

Correct AnswerverifiedShow Answer

Last year the price of corn was $3 a bushel and the quantity of corn demanded was 10 million bushels. This year the price of corn was $4.00 a bushel and the quantity demanded was 9 million bushels. Is this evidence that the law of demand does not apply to corn?

Correct AnswerverifiedShow Answer

Economists use the term "demand" to refer to

Correct AnswerverifiedShow Answer

(Advanced analysis) The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. If demand changed from P = 100 - 2Q to P = 130 - Q, the new equilibrium price is

Correct AnswerverifiedShow Answer

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Correct AnswerverifiedShow Answer

Markets, viewed from the perspective of the supply and demand model,

Correct AnswerverifiedShow Answer

Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread, and potatoes are a consumer substitute for bread, we would expect the price of wheat to

Correct AnswerverifiedShow Answer

Which would be a likely cause of an increase in the demand for pizza?

Correct AnswerverifiedShow Answer

The table below shows the weekly demand for hamburger in a market where there are just three buyers. At a price of $6, the weekly market quantity demanded for hamburger is

Correct AnswerverifiedShow Answer

(Consider This) Uberâ€™s dynamic pricing

Correct AnswerverifiedShow Answer

The figure below shows three demand curves for coffee. An increase in the price of coffee, other factors constant, would cause a

Correct AnswerverifiedShow Answer

If products A and B are complements and the price of B decreases, the

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