Question 1

An expectation that the price of a good will increase in the future is likely to:

Accepted Answer

A)   increase current demand.
B)   decrease current demand.
C)   have no impact on current demand.
D)   only affect the seller's decisions.E) A) and B)
F) A) and C)

Question 2

Consider a market that is in equilibrium. If the market experiences an increase in supply:

Accepted Answer

A)   the equilibrium price and quantity will rise.
B)   the equilibrium price will fall and the equilibrium quantity will rise.
C)   the equilibrium price and quantity will fall.
D)   the equilibrium price will rise and the equilibrium quantity will fall.E) C) and D)
F) None of the above

Question 3

A demand curve is a graph that:

Accepted Answer

A)   visually displays the demand schedule.
B)   depicts various price-quantity combinations of a good for a seller.
C)   shows the quantities demanded by consumers of a particular good or service at various incomes.
D)   shows the quantities demanded by consumers of a particular good or service at one price.E) A) and B)
F) C) and D)

Question 4

The law of demand states that, all else held equal:

Accepted Answer

A)   quantity demanded rises as price falls.
B)   quantity demanded rises as price rises.
C)   quantity demanded rises as income rises.
D)   demand rises as price falls.E) C) and D)
F) B) and D)

Question 5

The table shown depicts the demand and supply schedules of a good. At a price of $1.50:

Accepted Answer

A)   the market is in equilibrium.
B)   a surplus (excess supply)  will exist.
C)   more is being supplied than demanded.
D)   a shortage (excess demand)  will exist.E) B) and C)
F) All of the above

Question 6

Which of the following would not affect an individual's demand?

Accepted Answer

A)   Prices of related goods
B)   The individual's preferences
C)   The individual's income
D)   The costs of inputsE) C) and D)
F) A) and D)

Question 7

The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D)  and supply curve (S1)  intersect. Something changes in the market, and the supply curve shifts to S2. Which of the following statements is true?

Accepted Answer

A)   The equilibrium price will decrease by $5.
B)   The equilibrium quantity will increase by 20 units.
C)   The equilibrium price will increase by $5.
D)   The equilibrium quantity will increase by 30 units.E) A) and B)
F) A) and D)

Question 8

Suppose John just won the Mega Millions lottery jackpot. What can we assume about his demand?

Accepted Answer

A)   His demand for normal goods will increase.
B)   His demand for inferior goods will increase.
C)   His demand for normal goods will decrease.
D)   His demand for normal goods will stay the same.E) All of the above
F) A) and C)

Question 9

Ren loves to go to the movie theater, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. Which of the following factors of demand caused the change in Ren's behavior?

Accepted Answer

A)   Income
B)   Price
C)   Consumer preferences
D)   Number of buyersE) A) and B)
F) A) and D)

Question 10

A decrease in the price of spaghetti is likely to cause:

Accepted Answer

A)   a movement to the right along the demand curve for spaghetti.
B)   an inward shift of the demand curve for spaghetti.
C)   an outward shift of the demand curve for spaghetti.
D)   a movement to the left along the demand curve for spaghetti.E) A) and D)
F) C) and D)

Question 11

Consider a market that is in equilibrium. If the market experiences both an increase in demand and a decrease in supply:

Accepted Answer

A)   the equilibrium price and quantity will rise.
B)   the equilibrium quantity will rise, but the change in the equilibrium price cannot be predicted.
C)   the equilibrium price will rise, but the change in the equilibrium quantity cannot be predicted.
D)   the equilibrium price and quantity will fall.E) A) and B)
F) A) and C)

Question 12

The table shown depicts the demand and supply schedules of a good. At a price of $6.00, quantity demanded:

Accepted Answer

A)   exceeds quantity supplied, and a shortage (excess demand)  exists.
B)   is less than quantity supplied, and a shortage (excess demand)  exists.
C)   exceeds quantity supplied, and a surplus (excess supply)  exists.
D)   is less than quantity supplied, and a surplus (excess supply)  exists.E) None of the above
F) A) and C)

Question 13

An increase in the price of Heinz ketchup is likely to cause a(n)  _____ in the demand for Hunt's ketchup, due to a change in _____.

Accepted Answer

A)   increase; consumer preferences
B)   increase; the price of a substitute good
C)   decrease; consumer preferences
D)   increase; the price of a complementary goodE) None of the above
F) A) and D)

Question 14

In the market shown in the graph, the equilibrium price is ___ and the equilibrium quantity is _____.

Accepted Answer

A)   $5; 30
B)   $10; 20
C)   $20; 10
D)   $15; 30E) A) and D)
F) A) and C)

Question 15

We study the simple model of competitive markets because it helps to:

Accepted Answer

A)   provide useful insights to markets that are not perfectly competitive.
B)   show how the government controls the economy.
C)   indicate whether buyers or sellers matter more.
D)   show how poorly the economy actually functions.E) None of the above
F) B) and C)

Question 16

The law of supply is described as the:

Accepted Answer

A)   inverse relationship between price and quantity supplied.
B)   direct relationship between price and quantity supplied.
C)   inverse relationship between income and quantity supplied.
D)   direct relationship between income and quantity supplied.E) B) and D)
F) All of the above

Question 17

Juan goes to his favorite store to buy a shirt, and while he's shopping he spots a sign indicating that all shirts will be on sale starting tomorrow. We would expect Juan's current demand for sweaters to:

Accepted Answer

A)   increase.
B)   shift to the left.
C)   move down along his demand curve.
D)   shift to the right.E) A) and B)
F) A) and C)

Question 18

Equilibrium takes place where:

Accepted Answer

A)   supply and demand intersect.
B)   supply is highest.
C)   demand is highest.
D)   prices are maximized.E) B) and D)
F) A) and B)

Question 19

Suppose the graph shown depicts the demand for a normal good. A shift from A to B might be caused by:

Accepted Answer

A)   an increase in price.
B)   a decrease in price.
C)   an increase in income.
D)   a decrease in income.E) A) and D)
F) A) and C)

Question 20

The graph shown depicts the market for a good. At a price of $18, there is:

Accepted Answer

A)   a shortage (excess demand)  of 9,000 units.
B)   a shortage (excess demand)  of 5,000 units.
C)   a shortage (excess demand)  of 4,000 units.
D)   a surplus (excess supply)  of 5,000 units.E) A) and B)
F) A) and C)

Exam 3: Markets

Juan goes to his favorite store to buy a shirt, and while he's shopping he spots a sign indicating that all shirts will be on sale starting tomorrow. We would expect Juan's current demand for sweaters to:

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The graph shown depicts the market for a good. At a price of $18, there is:

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Consider a market that is in equilibrium. If the market experiences an increase in supply:

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A demand curve is a graph that:

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The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D) and supply curve (S1) intersect. Something changes in the market, and the supply curve shifts to S2. Which of the following statements is true?

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Which of the following would not affect an individual's demand?

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Suppose John just won the Mega Millions lottery jackpot. What can we assume about his demand?

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The table shown depicts the demand and supply schedules of a good. At a price of $6.00, quantity demanded:

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Suppose the graph shown depicts the demand for a normal good. A shift from A to B might be caused by:

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Ren loves to go to the movie theater, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. Which of the following factors of demand caused the change in Ren's behavior?

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The law of supply is described as the:

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium. If the market experiences both an increase in demand and a decrease in supply:

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In the market shown in the graph, the equilibrium price is ___ and the equilibrium quantity is _____.

Correct AnswerverifiedShow Answer

A decrease in the price of spaghetti is likely to cause:

Correct AnswerverifiedShow Answer

The table shown depicts the demand and supply schedules of a good. At a price of $1.50:

Correct AnswerverifiedShow Answer

The law of demand states that, all else held equal:

Correct AnswerverifiedShow Answer

Equilibrium takes place where:

Correct AnswerverifiedShow Answer

An increase in the price of Heinz ketchup is likely to cause a(n) _____ in the demand for Hunt's ketchup, due to a change in _____.

Correct AnswerverifiedShow Answer

We study the simple model of competitive markets because it helps to:

Correct AnswerverifiedShow Answer

An expectation that the price of a good will increase in the future is likely to:

Correct AnswerverifiedShow Answer

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In the market shown in the graph, the equilibrium price is _ and the equilibrium quantity is ___.

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An increase in the price of Heinz ketchup is likely to cause a(n) _ in the demand for Hunt's ketchup, due to a change in _.

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