Question 1

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Accepted Answer

A)  price of electric cars
B)  price of gasoline cars
C)  quantity of electric cars demanded by buyers
D)  how much sellers are charging customers for electric carsE) C) and D)
F) All of the above

Question 2

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) A) and C)

Question 3

(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) C) and D)
F) A) and D)

Question 4

A product market is in equilibrium

Accepted Answer

A)  whenever there is no surplus of the product.
B)  whenever there is no shortage of the product.
C)  when consumers want to buy more of the product than producers offer for sale.
D)  where the demand and supply curves intersect.E) B) and C)
F) All of the above

Question 5

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Accepted Answer

A) True 
 B)False  False

Question 6

Suppose an excise tax is imposed on product X.We expect this tax to

Accepted Answer

A)  increase the demand for complementary good Y and decrease the demand for substitute product Z.
B)  decrease the demand for complementary good Y and increase the demand for substitute product Z.
C)  increase the demands for both complementary good Y and substitute product Z.
D)  decrease the demands for both complementary good Y and substitute product Z.E) B) and D)
F) A) and C)

Question 7

Graphically, the market demand curve is

Accepted Answer

A)  steeper than any individual demand curve that is part of it.
B)  greater than the sum of the individual demand curves.
C)  the horizontal sum of individual demand curves.
D)  the vertical sum of individual demand curves.E) A) and B)
F) B) and C)

Question 8

The equilibrium price and quantity in a market usually produce allocative efficiency because

Accepted Answer

A)  all consumers who want the good are satisfied.
B)  marginal benefit and marginal cost are equal at that point.
C)  equilibrium ensures an equitable distribution of output.
D)  the excess of goods produced at equilibrium guarantees that all will have enough.E) A) and B)
F) A) and C) B

Question 9

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 10

(Last Word)  Based on economic theory and research on tuition costs and student borrowing, the best way to reduce tuition costs for students would be to

Accepted Answer

A)  increase subsidies for student loans.
B)  impose price floors on tuition.
C)  subsidize higher education to increase the supply.
D)  increase grants to students (such as Pell Grants)  that do not need to be repaid.E) A) and C)
F) C) and D) C

Question 11

Which of the following will cause the demand curve for product A to shift to the left?

Accepted Answer

A)  population growth that causes an expansion in the number of persons consuming A
B)  an increase in money income if A is a normal good
C)  a decrease in the price of complementary product C
D)  an increase in money income if A is an inferior goodE) All of the above
F) None of the above

Question 12

In the foreign exchange market, if Americans significantly increase their investments in securities in British financial markets, one effect is that the dollar will tend to depreciate against the pound.

Accepted Answer

A) True 
 B)False

Question 13

There is a shortage in a market for a product when

Accepted Answer

A)  the current price is higher than the equilibrium price.
B)  supply is less than demand.
C)  quantity demanded is less than quantity supplied.
D)  quantity demanded is greater than quantity supplieD.E) None of the above
F) B) and C)

Question 14

If there is a surplus of a product, its price

Accepted Answer

A)  is below the equilibrium level.
B)  is above the equilibrium level.
C)  will rise in the near future.
D)  is in equilibrium.E) All of the above
F) C) and D)

Question 15

A decrease in the price of digital cameras will

Accepted Answer

A)  cause the demand curve for memory cards to become vertical.
B)  shift the demand curve for memory cards to the right.
C)  shift the demand curve for memory cards to the left.
D)  not affect the demand for memory cards.E) A) and B)
F) None of the above

Question 16

At the equilibrium price,

Accepted Answer

A)  quantity supplied may exceed quantity demanded or vice versa.
B)  there are no pressures on price to either rise or fall.
C)  there are forces that cause price to rise.
D)  there are forces that cause price to fall.E) None of the above
F) A) and D)

Question 17

A market is in equilibrium

Accepted Answer

A)  provided there is no surplus of the product.
B)  at all prices above that shown by the intersection of the supply and demand curves.
C)  if the amount producers want to sell is equal to the amount consumers want to buy.
D)  whenever the demand curve is downsloping and the supply curve is upsloping.E) B) and C)
F) C) and D)

Question 18

Which of the following factors will decrease the current demand for a product?

Accepted Answer

A)  an expected increase in the future price of the product
B)  a decrease in the current price of a substitute product
C)  a decrease in the current price of a complementary product
D)  an increase in the current price of a substitute productE) All of the above
F) None of the above

Question 19

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 increase in the price of a product that is a close substitute for X will

Accepted Answer

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

Question 20

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

Exam 3: Demand, Supply, and Market Equilibrium

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Correct Answer
verified

Economists use the term "demand" to refer to

Correct Answer
verified

(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 Answer
verified

A product market is in equilibrium

Correct Answer
verified

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Correct Answer
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False

Suppose an excise tax is imposed on product X.We expect this tax to

Correct Answer
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Graphically, the market demand curve is

Correct Answer
verified

The equilibrium price and quantity in a market usually produce allocative efficiency because

Correct Answer
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B

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

Correct Answer
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(Last Word) Based on economic theory and research on tuition costs and student borrowing, the best way to reduce tuition costs for students would be to

Correct Answer
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C

Which of the following will cause the demand curve for product A to shift to the left?

Correct Answer
verified

In the foreign exchange market, if Americans significantly increase their investments in securities in British financial markets, one effect is that the dollar will tend to depreciate against the pound.

Correct Answer
verified

There is a shortage in a market for a product when

Correct Answer
verified

If there is a surplus of a product, its price

Correct Answer
verified

A decrease in the price of digital cameras will

Correct Answer
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At the equilibrium price,

Correct Answer
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A market is in equilibrium

Correct Answer
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Which of the following factors will decrease the current demand for a product?

Correct Answer
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Correct Answer
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The law of demand states that, other things equal,

Correct Answer
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Exam 3: Demand, Supply, and Market Equilibrium

The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?

Correct AnswerverifiedShow Answer

Economists use the term "demand" to refer to

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

A product market is in equilibrium

Correct AnswerverifiedShow Answer

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Correct AnswerverifiedFalse

Suppose an excise tax is imposed on product X.We expect this tax to

Correct AnswerverifiedShow Answer

Graphically, the market demand curve is

Correct AnswerverifiedShow Answer

The equilibrium price and quantity in a market usually produce allocative efficiency because

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

(Last Word) Based on economic theory and research on tuition costs and student borrowing, the best way to reduce tuition costs for students would be to

Correct AnswerverifiedC

Which of the following will cause the demand curve for product A to shift to the left?

Correct AnswerverifiedShow Answer

In the foreign exchange market, if Americans significantly increase their investments in securities in British financial markets, one effect is that the dollar will tend to depreciate against the pound.

Correct AnswerverifiedShow Answer

There is a shortage in a market for a product when

Correct AnswerverifiedShow Answer

If there is a surplus of a product, its price

Correct AnswerverifiedShow Answer

A decrease in the price of digital cameras will

Correct AnswerverifiedShow Answer

At the equilibrium price,

Correct AnswerverifiedShow Answer

A market is in equilibrium

Correct AnswerverifiedShow Answer

Which of the following factors will decrease the current demand for a product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The law of demand states that, other things equal,

Correct AnswerverifiedShow Answer

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False

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B

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C

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