Question 1

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Accepted Answer

A)  an increase in the demand for hybrid cars
B)  a decrease in the demand for hybrid cars
C)  higher prices of car batteries
D)  lower prices for gasolineE) A) and C)
F) None of the above

Question 2

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)

Accepted Answer

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

Question 3

If an economy produces its most wanted goods but uses outdated production methods, it is

Accepted Answer

A)  achieving productive efficiency but not allocative efficiency.
B)  not achieving productive efficiency.
C)  achieving both productive and allocative efficiency.
D)  engaged in roundabout production.E) A) and B)
F) C) and D)

Question 4

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Accepted Answer

A)  In neither statement.
B)  In the second statement.
C)  In the first statement.
D)  In both statements.E) A) and D)
F) None of the above

Question 5

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will

Accepted Answer

A)  increase equilibrium price and quantity.
B)  decrease equilibrium price and quantity.
C)  decrease equilibrium price and increase equilibrium quantity.
D)  increase equilibrium price and decrease equilibrium quantity.E) B) and C)
F) None of the above

Question 6

The location of the product supply curve depends on

Accepted Answer

A)  production technology.
B)  the number of buyers in the market.
C)  the tastes of buyers.
D)  the location of the demand curve.E) None of the above
F) C) and D)

Question 7

Price floors and ceiling prices both

Accepted Answer

A)  cause shortages.
B)  cause surpluses.
C)  cause the supply and demand curves to shift until equilibrium is established.
D)  interfere with the rationing function of prices.E) None of the above
F) B) and D)

Question 8

If price is above the equilibrium level, competition among sellers to reduce the resulting

Accepted Answer

A)  surplus will increase quantity demanded and decrease quantity supplied.
B)  shortage will decrease quantity demanded and increase quantity supplied.
C)  surplus will decrease quantity demanded and increase quantity supplied.
D)  shortage will increase quantity demanded and decrease quantity supplied.E) B) and C)
F) B) and D)

Question 9

A market that achieves productive efficiency is necessarily producing the quantity of goods most desired by society.

Accepted Answer

A) True 
 B)False

Question 10

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) A) and B)
F) A) and C)

Question 11

A decrease in the price of digital cameras would lead to a(n)

Accepted Answer

A)  increase in the price and quantity sold of memory cards.
B)  decrease in the price and quantity sold of memory cards.
C)  increase in the price and a decrease in quantity sold of memory cards.
D)  decrease in the price and an increase in quantity sold of memory cards.E) A) and D)
F) A) and B)

Question 12

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

Question 13

Which of the following will not cause the demand for product K to change?

Accepted Answer

A)  a change in the price of close-substitute product J
B)  an increase in incomes of buyers of product K
C)  a change in the price of product K
D)  a change in consumer tastes for product KE) A) and D)
F) A) and C)

Question 14

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Accepted Answer

A)  The increase in demand was greater than the decrease in supply.
B)  The decrease in demand was greater than the decrease in supply.
C)  The increase in supply was greater than the decrease in demand.
D)  The decrease in supply was greater than the increase in demand.E) None of the above
F) All of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

When high-school and college graduates apply for jobs in the labor markets,

Accepted Answer

A)  job applicants are the "buyers" while employers are the "sellers."
B)  job applicants are the "sellers" while employers are the "buyers."
C)  job applicants and employers are both "sellers" in the market.
D)  job applicants and employers are both "buyers" in the market.E) B) and C)
F) B) and D)

Question 17

A price ceiling imposed by the government is intended to benefit the sellers of the product.

Accepted Answer

A) True 
 B)False

Question 18

An inferior good is

Accepted Answer

A)  one whose demand curve will shift rightward as incomes rise.
B)  one whose price and quantity demanded vary directly.
C)  one that has not been approved by the Federal Food and Drug Administration.
D)  not accurately defined by any of these statements.E) None of the above
F) All of the above

Question 19

The "dynamic pricing" model used by the ride-sharing firm Uber, along with a few other firms, illustrates which of the following?

Accepted Answer

A)  When there is shortage in a market, the equilibrium price will rise.
B)  Once the equilibrium price is reached, it will remain there for at least several days.
C)  Since actual quantity bought always equals actual quantity sold, the market is always at equilibrium.
D)  When there is surplus in a market, the equilibrium price will rise.E) All of the above
F) A) and B)

Question 20

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda.When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by

Accepted Answer

A)  the substitution effect.
B)  the income effect.
C)  the price effect.
D)  a rightward shift in the demand curve for hamburgers.E) A) and C)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

The "dynamic pricing" model used by the ride-sharing firm Uber, along with a few other firms, illustrates which of the following?

Correct Answer
verified

If price is above the equilibrium level, competition among sellers to reduce the resulting

Correct Answer
verified

A price ceiling imposed by the government is intended to benefit the sellers of the product.

Correct Answer
verified

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Correct Answer
verified

An inferior good is

Correct Answer
verified

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda.When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by

Correct Answer
verified

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)

Correct Answer
verified

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Correct Answer
verified

Which of the following will not cause the demand for product K to change?

Correct Answer
verified

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

Correct Answer
verified

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will

Correct Answer
verified

The location of the product supply curve depends on

Correct Answer
verified

A decrease in the price of digital cameras would lead to a(n)

Correct Answer
verified

Correct Answer
verified

If an economy produces its most wanted goods but uses outdated production methods, it is

Correct Answer
verified

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

Correct Answer
verified

A market that achieves productive efficiency is necessarily producing the quantity of goods most desired by society.

Correct Answer
verified

When high-school and college graduates apply for jobs in the labor markets,

Correct Answer
verified

Price floors and ceiling prices both

Correct Answer
verified

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

The "dynamic pricing" model used by the ride-sharing firm Uber, along with a few other firms, illustrates which of the following?

Correct AnswerverifiedShow Answer

If price is above the equilibrium level, competition among sellers to reduce the resulting

Correct AnswerverifiedShow Answer

A price ceiling imposed by the government is intended to benefit the sellers of the product.

Correct AnswerverifiedShow Answer

"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?

Correct AnswerverifiedShow Answer

An inferior good is

Correct AnswerverifiedShow Answer

Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda.When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda.Steve's response to the decrease in the price of hamburgers is best explained by

Correct AnswerverifiedShow Answer

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This situation would lead to a(n)

Correct AnswerverifiedShow Answer

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Correct AnswerverifiedShow Answer

Which of the following will not cause the demand for product K to change?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices will

Correct AnswerverifiedShow Answer

The location of the product supply curve depends on

Correct AnswerverifiedShow Answer

A decrease in the price of digital cameras would lead to a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an economy produces its most wanted goods but uses outdated production methods, it is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A market that achieves productive efficiency is necessarily producing the quantity of goods most desired by society.

Correct AnswerverifiedShow Answer

When high-school and college graduates apply for jobs in the labor markets,

Correct AnswerverifiedShow Answer

Price floors and ceiling prices both

Correct AnswerverifiedShow Answer

An increase in the equilibrium quantity of hybrid cars would be caused by which of the following?

Correct AnswerverifiedShow Answer

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