Question 1

Refer to the diagram. The equilibrium price and quantity in this market will be

Accepted Answer

A)   $1.00 and 200.
B)   $1.60 and 130.
C)   $0.50 and 130.
D)   $1.60 and 290.E) A) and B)
F) A) and C)

Question 2

An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are

Accepted Answer

A)   complementary goods.
B)   substitute goods.
C)   inferior goods.
D)   normal goods.E) B) and C)
F) A) and D)

Question 3

The rationing function of prices refers to the

Accepted Answer

A)   tendency of supply and demand to shift in opposite directions.
B)   fact that ration coupons are needed to alleviate wartime shortages of goods.
C)   capacity of a competitive market to equalize quantity demanded and quantity supplied.
D)   ability of the market system to generate an equitable distribution of income.E) B) and D)
F) None of the above

Question 4

In order to derive the market supply curve from individual supply curves, we add up the

Accepted Answer

A)   various prices that individual sellers are charging for the product.
B)   various quantities that individual sellers want to sell at speciﬁc price levels.
C)   total number of sellers in the market at a given time.
D)   costs that all individual sellers incur in producing the product.E) All of the above
F) B) and D)

Question 5

Suppose that in 2017, Ford sold 500,000 Mustangs at an average price of $28,800 per car; in 2018, 600,000 Mustangs were sold at an average price of $29,500 per car. These statements

Accepted Answer

A)   suggest that the demand for Mustangs decreased between 2017 and 2018.
B)   suggest that the supply of Mustangs must have increased between 2017 and 2018.
C)   suggest that the demand for Mustangs increased between 2017 and 2018.
D)   constitute an exception to the law of demand in that they suggest an upsloping demand curve.E) All of the above
F) B) and D)

Question 6

Over time, the equilibrium price of a gigabyte of computer memory has fallen, while the equilibrium quantity purchased has increased. Based on this we can conclude that

Accepted Answer

A)   decreases in the demand for computer memory have exceeded increases in supply.
B)   decreases in the supply of computer memory have exceeded increases in demand.
C)   increases in the demand for computer memory have exceeded increases in supply.
D)   increases in the supply of computer memory have exceeded increases in demand.E) C) and D)
F) A) and B)

Question 7

Toothpaste and toothbrushes are substitute goods.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the above diagram of the market for corn. There will be a surplus of 8 thousand bushels at the price of

Accepted Answer

A)   $4/bushel.
B)   $3/bushel.
C)   $2/bushel.
D)   $5/bushel.E) A) and B)
F) All of the above

Question 9

A price ﬂoor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

Question 10

(Advanced analysis)  The equation for the demand curve in the diagram shown.

Accepted Answer

A)   is P = 70 - Q.
B)   is P = 35 - 2Q.
C)   is P = 35 - .5Q.
D)   cannot be determined from the information given.E) C) and D)
F) B) and D)

Question 11

In moving along a supply curve, which of the following is not held constant?

Accepted Answer

A)   the number of ﬁrms producing this good
B)   expectations about the future price of the product
C)   techniques used in producing this product
D)   the price of the product itselfE) A) and B)
F) All of the above

Question 12

In moving along a demand curve, which of the following is not held constant?

Accepted Answer

A)   the price of the product itself.
B)   price expectations
C)   consumer incomes
D)   prices of complementary goodsE) A) and B)
F) None of the above

Question 13

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

Question 14

When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike
Soccer balls?

Accepted Answer

A)   the substitution effect
B)   the income effect
C)   an increase in the demand for Nike soccer balls
D)   the price effectE) A) and B)
F) A) and C)

Question 15

At the point where the demand and supply curves for a product intersect,

Accepted Answer

A)   the selling price and the buying price need not be equal.
B)   the market may, or may not, be in equilibrium.
C)   either a shortage or a surplus of the product might exist, depending on the degree of competition.
D)   the quantity that consumers want to purchase and the amount producers choose to sell are the same.E) A) and C)
F) B) and D)

Question 16

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the ﬁnal position after the curve shifts.
 Which diagram illustrates the effects on the peanut butter market, if severe ﬂooding destroys a large
Portion of the peanut crop in the economy?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) None of the above
F) All of the above

Question 17

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Accepted Answer

A)   the equilibrium position has shifted from M to K.
B)   an increase in demand has been more than offset by an increase in supply.
C)   the new equilibrium price and quantity are both greater than originally.
D)   point M shows the new equilibrium position.E) A) and C)
F) C) and D)

Question 18

By an "increase in demand," economists mean that

Accepted Answer

A)   product price has fallen, so consumers move down to a new point on the demand curve.
B)   the quantity demanded at each price in a set of prices is greater.
C)   the quantity demanded at each price in a set of prices is smaller.
D)   a leftward shift of the demand curve has occurred.E) A) and C)
F) C) and D)

Question 19

Quantity Demanded  Price  Quantity Supplied 52$5073624562724051823542923033\begin{array} { | c | r | c | } \hline 	ext { Quantity Demanded } & 	ext { Price } & 	ext { Quantity Supplied } \\hline 52 & \$ 50 & 73 \\hline 62 & 45 & 62 \\hline 72 & 40 & 51 \\hline 82 & 35 & 42 \\hline 92 & 30 & 33 \\hline\end{array} Quantity Demanded 5262728292​ Price $5045403530​ Quantity Supplied 7362514233​​  If government set a minimum price of $50 in the market, a

Accepted Answer

A)   shortage of 21 units would occur.
B)   shortage of 125 units would occur.
C)   surplus of 21 units would occur.
D)   surplus of 125 units would occur. E) None of the above
F) C) and D)

Question 20

A higher price reduces the quantity demanded for a product because

Accepted Answer

A)   the purchasing power of individuals increases.
B)   the ﬁnancial assets of individuals increase.
C)   individuals will buy more of the product and less of its substitutes.
D)   individuals can afford less of the product and will switch to substitutes.E) A) and B)
F) B) and C)

Exam 3: Demand, Supply, and Market Equilibrium

By an "increase in demand," economists mean that

Correct Answer
verified

Refer to the diagram. The equilibrium price and quantity in this market will be

Correct Answer
verified

In moving along a supply curve, which of the following is not held constant?

Correct Answer
verified

A higher price reduces the quantity demanded for a product because

Correct Answer
verified

The rationing function of prices refers to the

Correct Answer
verified

(Advanced analysis) The equation for the demand curve in the diagram shown.

Correct Answer
verified

In order to derive the market supply curve from individual supply curves, we add up the

Correct Answer
verified

A price ﬂoor in a competitive market will result in persistent shortages of a product.

Correct Answer
verified

Toothpaste and toothbrushes are substitute goods.

Correct Answer
verified

Suppose that in 2017, Ford sold 500,000 Mustangs at an average price of $28,800 per car; in 2018, 600,000 Mustangs were sold at an average price of $29,500 per car. These statements

Correct Answer
verified

An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are

Correct Answer
verified

At the point where the demand and supply curves for a product intersect,

Correct Answer
verified

When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike Soccer balls?

Correct Answer
verified

Over time, the equilibrium price of a gigabyte of computer memory has fallen, while the equilibrium quantity purchased has increased. Based on this we can conclude that

Correct Answer
verified

Correct Answer
verified

In moving along a demand curve, which of the following is not held constant?

Correct Answer
verified

Refer to the above diagram of the market for corn. There will be a surplus of 8 thousand bushels at the price of

Correct Answer
verified

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

By an "increase in demand," economists mean that

Correct AnswerverifiedShow Answer

Refer to the diagram. The equilibrium price and quantity in this market will be

Correct AnswerverifiedShow Answer

In moving along a supply curve, which of the following is not held constant?

Correct AnswerverifiedShow Answer

A higher price reduces the quantity demanded for a product because

Correct AnswerverifiedShow Answer

The rationing function of prices refers to the

Correct AnswerverifiedShow Answer

(Advanced analysis) The equation for the demand curve in the diagram shown.

Correct AnswerverifiedShow Answer

In order to derive the market supply curve from individual supply curves, we add up the

Correct AnswerverifiedShow Answer

A price ﬂoor in a competitive market will result in persistent shortages of a product.

Correct AnswerverifiedShow Answer

Toothpaste and toothbrushes are substitute goods.

Correct AnswerverifiedShow Answer

Suppose that in 2017, Ford sold 500,000 Mustangs at an average price of $28,800 per car; in 2018, 600,000 Mustangs were sold at an average price of $29,500 per car. These statements

Correct AnswerverifiedShow Answer

An increase in the price of product B leads to an increase in the demand for product C. This indicates that products B and C are

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves for a product intersect,

Correct AnswerverifiedShow Answer

When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike Soccer balls?

Correct AnswerverifiedShow Answer

Over time, the equilibrium price of a gigabyte of computer memory has fallen, while the equilibrium quantity purchased has increased. Based on this we can conclude that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In moving along a demand curve, which of the following is not held constant?

Correct AnswerverifiedShow Answer

Refer to the above diagram of the market for corn. There will be a surplus of 8 thousand bushels at the price of

Correct AnswerverifiedShow Answer

Refer to the diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

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