Question 1

Supply describes how much of something producers:

Accepted Answer

A)  are willing and able to buy under certain circumstances.
B)  want to buy under certain circumstances,although they may not be able to.
C)  are willing and able to offer for sale under certain circumstances.
D)  want to offer for sale under certain circumstances,although they may not be able to.E) A) and B)
F) C) and D)

Question 2

Jan heads to the store to buy burgers for dinner.Seeing a sale on hot dogs,she buys those instead.The change in her demand for burgers is due to which factor?

Accepted Answer

A)  Preferences
B)  Income
C)  Prices of related goods
D)  Number of buyersE) A) and D)
F) B) and C)

Question 3

The most likely complementary good for hot dogs would be:

Accepted Answer

A)  ketchup.
B)  burgers.
C)  a grill.
D)  a plate.E) None of the above
F) A) and B)

Question 4

The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

Accepted Answer

A)  they can supply more at each price because some of the competition will drop out.
B)  they can supply less at each price because the price of a main input has gone up.
C)  they can supply more at each price because the price of a main input has gone up.
D)  None of these statements is true.E) B) and C)
F) All of the above

Question 5

The term "shortage" refers to:

Accepted Answer

A)  a situation in which the quantity supplied is less than the quantity demanded.
B)  a situation in which the quantity demanded is less than the quantity supplied.
C)  a market in which transactions have to be sold quickly or the goods tend to rot or otherwise expire.
D)  a signal that producers need to decrease the price of the good.E) None of the above
F) All of the above

Question 6

If producers incorrectly set the price of their product too low:

Accepted Answer

A)  a shortage will result.
B)  a surplus will result.
C)  equilibrium will result.
D)  the industry will soon die out.E) A) and D)
F) A) and C)

Question 7

Oliver just brought home a new kitten.We could expect:

Accepted Answer

A)  Oliver's demand for cat toys,a complementary good,to increase.
B)  Oliver's demand for cat toys,a complementary good,to decrease.
C)  Oliver's demand for dog toys,a substitute good,to increase.
D)  Oliver's demand for dog toys,a substitute good,to decrease.E) None of the above
F) A) and B)

Question 8

An increase in the price of butter is likely to cause:

Accepted Answer

A)  the demand for margarine to increase.
B)  the demand for margarine to stay the same.
C)  the demand for butter to increase.
D)  the demand for butter to stay the same.E) None of the above
F) C) and D)

Question 9

The term market refers to:

Accepted Answer

A)  the physical location where buyers and sellers meet to exchange goods for money.
B)  the buyers and sellers who trade a particular good or service,not to a physical location.
C)  the location where buyers go to fulfill their wants and needs.
D)  a physical or virtual place of exchange.E) B) and C)
F) None of the above

Question 10

Consider the market for ride-on lawn mowers and the recent increases in the price of oil.The recent increase in the price of oil makes it more expensive to manufacture ride-on lawn mowers.An increase in the price of oil also makes it more expensive to run a ride-on mower.What factors of demand and/or supply are affected by the changing price of oil?

Accepted Answer

A)  Price of related good,expectations of future
B)  Price of related good,price of input
C)  Price of input,income
D)  Price of input,number of buyersE) All of the above
F) C) and D)

Question 11

As part of recent cutbacks,Paul just accepted a 10% cut in pay.Now he brews coffee at home instead of stopping at Starbucks every day.Based on this behavior,we can say:

Accepted Answer

A)  home-brewed coffee is a normal good,and Starbucks coffee is an inferior good for Paul.
B)  home-brewed coffee and Starbucks coffee are substitute goods for Paul.
C)  home-brewed coffee will become a normal good for Paul over time.
D)  We cannot make any of these assumptions about Paul.E) A) and B)
F) None of the above

Question 12

Consider the market for ride-on lawn mowers and the recent increases in the price of oil.The recent increase in the price of oil makes it more expensive to manufacture ride-on lawn mowers.An increase in the price of oil also makes it more expensive to run a ride-on mower.What is likely to happen to equilibrium price and quantity of lawn mowers as a result in the changing price of oil?

Accepted Answer

A)  Supply and demand will both increase,increasing equilibrium quantity and having an indeterminate effect on price.
B)  Supply and demand will both decrease,decreasing equilibrium quantity and having an indeterminate effect on price.
C)  Supply and demand will both increase,increasing equilibrium price and having an indeterminate effect on quantity.
D)  Supply and demand will both decrease,increasing equilibrium price and having an indeterminate effect on quantity.E) B) and C)
F) None of the above

Question 13

Some nonprice determinants of demand are:

Accepted Answer

A)  consumer preferences,expectations of future prices,and the number of buyers in the market.
B)  consumer preferences,the price of the good,and incomes.
C)  incomes,expectations of future prices,and the number of sellers in the market.
D)  prices of related goods,knowledge of past prices,and the number of buyers in the market.E) A) and C)
F) B) and D)

Question 14

This table shows the demand and supply schedule of a good. 
According to the table shown,the equilibrium in this market will occur at:

Accepted Answer

A)  a price of $1.50 and a quantity of 62.
B)  a price of $1.50 and a quantity of 31.
C)  a price of $0.00 and a quantity of 75.
D)  Cannot be determined without more information.E) B) and C)
F) A) and C)

Question 15

The price of dog collars,a normal good,has gone down.This change can be shown graphically as:

Accepted Answer

A)  a shift in the demand curve to the right.
B)  a shift in the demand curve to the left.
C)  a movement along the demand curve to the right.
D)  a movement along the demand curve to the left.E) A) and B)
F) A) and C)

Question 16

The advancement of computers has increased the productivity of a paper mill.How will this likely affect the supply of paper?

Accepted Answer

A)  It will cause a rightward shift in the supply of paper.
B)  It will cause a leftward shift in the supply of paper.
C)  It will cause a shift straight up in the supply of paper.
D)  It will cause no shift,but a movement up and to the right along the supply curve.E) None of the above
F) B) and D)

Question 17

A shortage will occur if:

Accepted Answer

A)  the quantity being supplied at a given price is less than the quantity demanded at that price.
B)  the quantity being demanded at a given price exceeds the quantity supplied at that price.
C)  there are not enough buyers in the market.
D)  there are only inexperienced firms in the market.E) A) and C)
F) C) and D)

Question 18

An expectation of increased prices of a good 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 seller's decisions.E) A) and B)
F) A) and C)

Question 19

Shopping at a warehouse,such as Sam's Club or Costco,allows its members to pay very low prices on the goods and services they buy.Customers who shop at such a store incur:

Accepted Answer

A)  transaction costs because they must be members to shop there.
B)  no transaction costs because they pay prices that are lower than any other location.
C)  transaction costs because they must buy a product in bulk.
D)  no transaction costs because members can return any item purchased for any reason.E) B) and C)
F) A) and B)

Question 20

The supply curve:

Accepted Answer

A)  represents producers' willingness to sell.
B)  shows the minimum price producers will accept for any given quantity.
C)  visually displays the supply schedule.
D)  All of these statements are true.E) B) and C)
F) A) and B)

Exam 3: Markets

The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

Correct Answer
verified

This table shows the demand and supply schedule of a good. According to the table shown,the equilibrium in this market will occur at:

Correct Answer
verified

An increase in the price of butter is likely to cause:

Correct Answer
verified

Jan heads to the store to buy burgers for dinner.Seeing a sale on hot dogs,she buys those instead.The change in her demand for burgers is due to which factor?

Correct Answer
verified

The most likely complementary good for hot dogs would be:

Correct Answer
verified

Shopping at a warehouse,such as Sam's Club or Costco,allows its members to pay very low prices on the goods and services they buy.Customers who shop at such a store incur:

Correct Answer
verified

A shortage will occur if:

Correct Answer
verified

Some nonprice determinants of demand are:

Correct Answer
verified

An expectation of increased prices of a good in the future is likely to:

Correct Answer
verified

Correct Answer
verified

The advancement of computers has increased the productivity of a paper mill.How will this likely affect the supply of paper?

Correct Answer
verified

Supply describes how much of something producers:

Correct Answer
verified

The supply curve:

Correct Answer
verified

If producers incorrectly set the price of their product too low:

Correct Answer
verified

The term market refers to:

Correct Answer
verified

The price of dog collars,a normal good,has gone down.This change can be shown graphically as:

Correct Answer
verified

Oliver just brought home a new kitten.We could expect:

Correct Answer
verified

As part of recent cutbacks,Paul just accepted a 10% cut in pay.Now he brews coffee at home instead of stopping at Starbucks every day.Based on this behavior,we can say:

Correct Answer
verified

Correct Answer
verified

The term "shortage" refers to:

Correct Answer
verified

Exam 3: Markets

The price of chocolate chips has increased.For the producers of chocolate chip cookies,this means:

Correct AnswerverifiedShow Answer

This table shows the demand and supply schedule of a good. According to the table shown,the equilibrium in this market will occur at:

Correct AnswerverifiedShow Answer

An increase in the price of butter is likely to cause:

Correct AnswerverifiedShow Answer

Jan heads to the store to buy burgers for dinner.Seeing a sale on hot dogs,she buys those instead.The change in her demand for burgers is due to which factor?

Correct AnswerverifiedShow Answer

The most likely complementary good for hot dogs would be:

Correct AnswerverifiedShow Answer

Shopping at a warehouse,such as Sam's Club or Costco,allows its members to pay very low prices on the goods and services they buy.Customers who shop at such a store incur:

Correct AnswerverifiedShow Answer

A shortage will occur if:

Correct AnswerverifiedShow Answer

Some nonprice determinants of demand are:

Correct AnswerverifiedShow Answer

An expectation of increased prices of a good in the future is likely to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The advancement of computers has increased the productivity of a paper mill.How will this likely affect the supply of paper?

Correct AnswerverifiedShow Answer

Supply describes how much of something producers:

Correct AnswerverifiedShow Answer

The supply curve:

Correct AnswerverifiedShow Answer

If producers incorrectly set the price of their product too low:

Correct AnswerverifiedShow Answer

The term market refers to:

Correct AnswerverifiedShow Answer

The price of dog collars,a normal good,has gone down.This change can be shown graphically as:

Correct AnswerverifiedShow Answer

Oliver just brought home a new kitten.We could expect:

Correct AnswerverifiedShow Answer

As part of recent cutbacks,Paul just accepted a 10% cut in pay.Now he brews coffee at home instead of stopping at Starbucks every day.Based on this behavior,we can say:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The term "shortage" refers to:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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