Question 1

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) None of the above

Question 2

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will
Be

Accepted Answer

A)   F and C, respectively.
B)   G and B, respectively.
C)   F and A, respectively.
D)   E and B, respectively.E) B) and C)
F) A) and C)

Question 3

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.
A decrease in the number of consumers of product X will

Accepted Answer

A)   decrease S, decrease P, and decrease Q.
B)   increase D, increase P, and increase Q.
C)   decrease D, decrease P, and decrease Q.
D)   decrease D, decrease P, and increase Q.E) None of the above
F) A) and B)

Question 4

Refer to the diagram. A decrease in demand is depicted by a

Accepted Answer

A)   move from point x to point y.
B)   shift from D1 to D2.
C)   shift from D2 to D1.
D)   move from point y to point x.E) None of the above
F) B) and D)

Question 5

Other things equal, if the price of a key resource used to produce product X falls, the

Accepted Answer

A)   supply curve of product X will shift to the right.
B)   demand curve of product X will shift to the right.
C)   supply curve of product X will shift to the left.
D)   supply curve of product X will not shift.E) None of the above
F) C) and D)

Question 6

If there is a shortage of product X, and the price is free to change,

Accepted Answer

A)   fewer resources will be allocated to the production of this good.
B)   the price of the product will rise.
C)   the price of the product will decline.
D)   the supply curve will shift to the left and the demand curve to the right, eliminating the shortage.E) None of the above
F) A) and B)

Question 7

Surpluses drive market prices up; shortages drive them down.

Accepted Answer

A) True 
 B)False  False

Question 8

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Accepted Answer

A)   increase the supply of X and decrease the demand for X.
B)   increase the demand for X and decrease the supply of X.
C)   increase the quantity supplied of X and decrease the quantity demanded of X.
D)   decrease the quantity supplied of X and increase the quantity demanded of X.E) B) and D)
F) C) and D)

Question 9

If the demand for steak (a normal good)  shifts to the left, the most likely reason is that

Accepted Answer

A)   consumer incomes have fallen.
B)   cattle production has declined.
C)   the price of steak has risen.
D)   the price of cattle feed has gone up.E) B) and C)
F) None of the above

Question 10

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

Accepted Answer

A)   shortage of 20 million gallons.
B)   shortage of 10 million gallons.
C)   surplus of 10 million gallons.
D)   surplus of 30 million gallons.E) A) and D)
F) A) and C)

Question 11

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Accepted Answer

A)   productive eﬃciency.
B)   allocative eﬃciency.
C)   minimum opportunity costs.
D)   maximum process and revenues.E) B) and D)
F) All of the above

Question 12

If X is a normal good, a rise in money income will shift the

Accepted Answer

A)   supply curve for X to the left.
B)   supply curve for X to the right.
C)   demand curve for X to the left.
D)   demand curve for X to the right.E) None of the above
F) A) and B) D

Question 13

(Consider This)  A primary advantage of Uber to government-regulated taxis is that

Accepted Answer

A)   Uber riders are guaranteed lower fares.
B)   Uber drivers are required to meet more stringent safety standards.
C)   Uber's dynamic pricing avoids the ineﬃciencies caused by regulated taxi fares.
D)   the greater monopoly for rides increases proﬁts for both Uber and regular taxi drivers.E) A) and B)
F) A) and C)

Question 14

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

Question 15

A market for a product reaches equilibrium when

Accepted Answer

A)   the actual quantity bought by buyers equals actual quantity sold by sellers.
B)   the price rises further after there is a surplus.
C)   buyers intend to buy a quantity equal to the quantity that sellers intend to sell.
D)   price falls further after there is a shortage.E) All of the above
F) A) and C)

Question 16

Price Per Unit  Quantity Supplied  Quantity Demanded $101002951115027512190250132202201424518015265135\begin{array} { | c | c | c | } \hline 	ext { Price Per Unit } & 	ext { Quantity Supplied } & 	ext { Quantity Demanded } \\hline \$ 10 & 100 & 295 \\hline 11 & 150 & 275 \\hline 12 & 190 & 250 \\hline 13 & 220 & 220 \\hline 14 & 245 & 180 \\hline 15 & 265 & 135 \\hline\end{array} Price Per Unit $101112131415​ Quantity Supplied 100150190220245265​ Quantity Demanded 295275250220180135​​  If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price, the new equilibrium price would be

Accepted Answer

A)   $11.
B)   $12.
C)   $13.
D)   $14. E) A) and B)
F) A) and C)

Question 17

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Accepted Answer

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

Question 18

A surplus of a product will arise when price is

Accepted Answer

A)   above equilibrium, with the result that quantity demanded exceeds quantity supplied.
B)   above equilibrium, with the result that quantity supplied exceeds quantity demanded.
C)   below equilibrium, with the result that quantity demanded exceeds quantity supplied.
D)   below equilibrium, with the result that quantity supplied exceeds quantity demanded.E) None of the above
F) All of the above B

Question 19

A fall in the price of milk, used in the production of ice cream, will

Accepted Answer

A)   decrease the supply of ice cream.
B)   increase the supply of ice cream.
C)   cause a movement along the supply curve of ice cream.
D)   have no effect on the supply of ice cream.E) A) and B)
F) A) and C)

Question 20

In a competitive market, every consumer willing to pay the market price can buy a product and
every producer willing to sell the product at that price can sell it.

Accepted Answer

A) True 
 B)False

Exam 3: Demand, Supply, and Market Equilibrium

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

Correct Answer
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Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will Be

Correct Answer
verified

Correct Answer
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Refer to the diagram. A decrease in demand is depicted by a

Correct Answer
verified

Other things equal, if the price of a key resource used to produce product X falls, the

Correct Answer
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If there is a shortage of product X, and the price is free to change,

Correct Answer
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Surpluses drive market prices up; shortages drive them down.

Correct Answer
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False

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Correct Answer
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If the demand for steak (a normal good) shifts to the left, the most likely reason is that

Correct Answer
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Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

Correct Answer
verified

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Correct Answer
verified

If X is a normal good, a rise in money income will shift the

Correct Answer
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D

(Consider This) A primary advantage of Uber to government-regulated taxis is that

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

Correct Answer
verified

A market for a product reaches equilibrium when

Correct Answer
verified

Correct Answer
verified

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Correct Answer
verified

A surplus of a product will arise when price is

Correct Answer
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B

A fall in the price of milk, used in the production of ice cream, will

Correct Answer
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In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

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

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price and quantity will Be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the diagram. A decrease in demand is depicted by a

Correct AnswerverifiedShow Answer

Other things equal, if the price of a key resource used to produce product X falls, the

Correct AnswerverifiedShow Answer

If there is a shortage of product X, and the price is free to change,

Correct AnswerverifiedShow Answer

Surpluses drive market prices up; shortages drive them down.

Correct AnswerverifiedFalse

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will

Correct AnswerverifiedShow Answer

If the demand for steak (a normal good) shifts to the left, the most likely reason is that

Correct AnswerverifiedShow Answer

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a

Correct AnswerverifiedShow Answer

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain

Correct AnswerverifiedShow Answer

If X is a normal good, a rise in money income will shift the

Correct AnswerverifiedD

(Consider This) A primary advantage of Uber to government-regulated taxis is that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A market for a product reaches equilibrium when

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A television station reports that the price of coffee has increased and the quantity traded in the market has decreased. This situation would be caused by a(n)

Correct AnswerverifiedShow Answer

A surplus of a product will arise when price is

Correct AnswerverifiedB

A fall in the price of milk, used in the production of ice cream, will

Correct AnswerverifiedShow Answer

In a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct AnswerverifiedShow Answer

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False

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D

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B

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