Question 1

Which of the diagrams illustrate(s)  the effect of a decrease in incomes on the market for second- hand clothing?

Accepted Answer

A)   A and C
B)   A only
C)   B only
D)   C onlyE) None of the above
F) A) and B)

Question 2

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Accepted Answer

A)   inferior goods.
B)   direct goods.
C)   average goods.
D)   normal goods.E) B) and D)
F) A) and D)

Question 3

A shift to the right in the demand curve for product A can be most reasonably explained by saying that

Accepted Answer

A)   consumer incomes have declined, and consumers now want to buy less of A at each possible price.
B)   the price of A has increased and, as a result, consumers want to purchase less of it.
C)   consumer preferences have changed in favor of A so they now want to buy more at each possible price.
D)   the price of A has declined and, as a result, consumers want to purchase more of it.E) None of the above
F) C) and D)

Question 4

The following are explanations of the Law of Demand, except

Accepted Answer

A)   expectations effect.
B)   diminishing marginal utility.
C)   income effect.
D)   substitution effect.E) None of the above
F) A) and D)

Question 5

(Last Word)  According to recent research, 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) A) and D)
F) A) and C)

Question 6

In a competitive market illustrated by the diagram above, a price ceiling of $25 per unit will result in

Accepted Answer

A)   the market staying at an equilibrium price of $15.
B)   a surplus of 200 units.
C)   a shortage of 200 units.
D)   a shortage of 150 units.E) A) and B)
F) A) and C)

Question 7

As a result of a decrease in the price of online streaming movies, consumers download more movies online and buy fewer DVDs. This is an illustration of

Accepted Answer

A)   consumer sovereignty.
B)   the income effect.
C)   the substitution effect.
D)   diminishing marginal utility.E) C) and D)
F) All of the above

Question 8

When economists say that the demand for a product has decreased, they mean that

Accepted Answer

A)   the demand curve has shifted to the right.
B)   the product has become particularly scarce for some reason.
C)   the product has become more expensive and thus consumers are buying less of it.
D)   consumers are now willing and able to buy less of this product at each possible price.E) A) and C)
F) A) and D)

Question 9

An increase in product price will cause

Accepted Answer

A)   quantity demanded to decrease.
B)   quantity supplied to decrease.
C)   quantity demanded to increase.
D)   the supply curve to shift to the left.E) None of the above
F) A) and B)

Question 10

Which of the following statements about ticket scalping is correct?

Accepted Answer

A)   Scalping tends to be prevalent when there is a surplus of tickets.
B)   Scalping tends to be prevalent when there is a shortage of tickets.
C)   Scalping beneﬁts only one party-the sellers-but not the buyers.
D)   Scalping beneﬁts only one party-the buyers-but not the sellers.E) A) and D)
F) None of the above

Question 11

Markets, viewed from the perspective of the supply and demand model,

Accepted Answer

A)   assume many buyers and many sellers of a standardized product.
B)   assume market power so that buyers and sellers bargain with one another.
C)   do not exist in the real-world economy.
D)   are approximated by markets in which a single seller determines price.E) None of the above
F) C) and D)

Question 12

If an economy is being "productively eﬃcient," then that means the economy is

Accepted Answer

A)   producing the products most wanted by society.
B)   fully employing all economic resources.
C)   maximizing the returns to factors of production.
D)   using the least costly production techniques.E) All of the above
F) C) and D)

Question 13

A headline reads, "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n)

Accepted Answer

A)   increase in the price and quantity of new homes.
B)   decrease in the price and quantity of new homes.
C)   increase in the price of new homes and decrease in quantity.
D)   decrease in the price of new homes and increase in quantity.E) C) and D)
F) B) and D)

Question 14

With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product 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 D)
F) All of the above

Question 15

Which of the following would most likely increase the demand for gasoline?

Accepted Answer

A)   the expectation by consumers that gasoline prices will be higher in the future
B)   the expectation by consumers that gasoline prices will be lower in the future
C)   a widespread shift in car ownership from SUVs to hybrid sedans
D)   a decrease in the price of public transportationE) C) and D)
F) B) and C)

Question 16

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) A) and B)
F) All of the above

Question 17

At the current price, there is a shortage of a product. We would expect price to

Accepted Answer

A)   increase, quantity demanded to increase, and quantity supplied to decrease.
B)   increase, quantity demanded to decrease, and quantity supplied to increase.
C)   increase, quantity demanded to increase, and quantity supplied to increase.
D)   decrease, quantity demanded to increase, and quantity supplied to decrease.E) All of the above
F) A) and B)

Question 18

(1) (2) (3) (4) (5) QdQd Price QSQS5040$1070806050960708060850609070740501008063040\begin{array} { | c | c | c | c | c | } \hline ( 1 )  & ( 2 )  & ( 3 )  & ( 4 )  & ( 5 )  \Q _ { d } & Q _ { d } & 	ext { Price } & Q _ { S } & Q _ { S } \\hline 50 & 40 & \$ 10 & 70 & 80 \\hline 60 & 50 & 9 & 60 & 70 \\hline 80 & 60 & 8 & 50 & 60 \\hline 90 & 70 & 7 & 40 & 50 \\hline 100 & 80 & 6 & 30 & 40 \\hline\end{array}(1) Qd​50608090100​(2) Qd​4050607080​(3)  Price $109876​(4) QS​7060504030​(5) QS​8070605040​​  Refer to the table. Suppose that demand is represented by columns (3)  and (2)  and supply is represented by columns (3)  and (5) . If the price were arti?cially set at $9,

Accepted Answer

A)   the market would clear.
B)   a surplus of 20 units would occur.
C)   a shortage of 20 units would occur.
D)   demand would change from columns (3)  and (2)  to columns (3)  and (1) . E) B) and C)
F) A) and D)

Question 19

Assume that the graphs show a competitive market for the product stated in the question.  Select the graph above that best shows the change in the market speciﬁed in the following
Situation: the market for chicken, when the price of a substitute, such as beef, decreases.

Accepted Answer

A)   Graph A
B)   Graph B
C)   Graph C
D)   Graph DE) C) and D)
F) B) and D)

Question 20

(Consider This)  Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound in 2016. Based on this information, we can
Conclude that the

Accepted Answer

A)   law of supply has been violated.
B)   law of demand has been violated.
C)   demand for coffee beans has increased.
D)   supply of coffee beans has increased.E) C) and D)
F) B) and D)

Exam 3: Demand, Supply, and Market Equilibrium

A shift to the right in the demand curve for product A can be most reasonably explained by saying that

Correct Answer
verified

The following are explanations of the Law of Demand, except

Correct Answer
verified

If there is a surplus of a product, its price

Correct Answer
verified

A headline reads, "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n)

Correct Answer
verified

Correct Answer
verified

If an economy is being "productively eﬃcient," then that means the economy is

Correct Answer
verified

Which of the following would most likely increase the demand for gasoline?

Correct Answer
verified

At the current price, there is a shortage of a product. We would expect price to

Correct Answer
verified

Which of the following statements about ticket scalping is correct?

Correct Answer
verified

An increase in product price will cause

Correct Answer
verified

With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product will

Correct Answer
verified

Markets, viewed from the perspective of the supply and demand model,

Correct Answer
verified

(Consider This) Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound in 2016. Based on this information, we can Conclude that the

Correct Answer
verified

In a competitive market illustrated by the diagram above, a price ceiling of $25 per unit will result in

Correct Answer
verified

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for chicken, when the price of a substitute, such as beef, decreases.

Correct Answer
verified

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Correct Answer
verified

As a result of a decrease in the price of online streaming movies, consumers download more movies online and buy fewer DVDs. This is an illustration of

Correct Answer
verified

(Last Word) According to recent research, which of the following best explains rising tuition costs over the past several years?

Correct Answer
verified

When economists say that the demand for a product has decreased, they mean that

Correct Answer
verified

Which of the diagrams illustrate(s) the effect of a decrease in incomes on the market for second- hand clothing?

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

A shift to the right in the demand curve for product A can be most reasonably explained by saying that

Correct AnswerverifiedShow Answer

The following are explanations of the Law of Demand, except

Correct AnswerverifiedShow Answer

If there is a surplus of a product, its price

Correct AnswerverifiedShow Answer

A headline reads, "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an economy is being "productively eﬃcient," then that means the economy is

Correct AnswerverifiedShow Answer

Which of the following would most likely increase the demand for gasoline?

Correct AnswerverifiedShow Answer

At the current price, there is a shortage of a product. We would expect price to

Correct AnswerverifiedShow Answer

Which of the following statements about ticket scalping is correct?

Correct AnswerverifiedShow Answer

An increase in product price will cause

Correct AnswerverifiedShow Answer

With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product will

Correct AnswerverifiedShow Answer

Markets, viewed from the perspective of the supply and demand model,

Correct AnswerverifiedShow Answer

(Consider This) Suppose that coffee growers sell 200 million pounds of coffee beans at $2 per pound in 2015 and 240 million pounds for $3 per pound in 2016. Based on this information, we can Conclude that the

Correct AnswerverifiedShow Answer

In a competitive market illustrated by the diagram above, a price ceiling of $25 per unit will result in

Correct AnswerverifiedShow Answer

Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best shows the change in the market speciﬁed in the following Situation: the market for chicken, when the price of a substitute, such as beef, decreases.

Correct AnswerverifiedShow Answer

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as

Correct AnswerverifiedShow Answer

As a result of a decrease in the price of online streaming movies, consumers download more movies online and buy fewer DVDs. This is an illustration of

Correct AnswerverifiedShow Answer

(Last Word) According to recent research, which of the following best explains rising tuition costs over the past several years?

Correct AnswerverifiedShow Answer

When economists say that the demand for a product has decreased, they mean that

Correct AnswerverifiedShow Answer

Which of the diagrams illustrate(s) the effect of a decrease in incomes on the market for second- hand clothing?

Correct AnswerverifiedShow Answer

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