Question 1

In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by

Accepted Answer

A)   an increase in the cost of making donuts.
B)   an increase in the price of coffee.
C)   consumers expecting donut prices to fall.
D)   a change in buyer tastes.E) None of the above
F) All of the above

Question 2

Which would cause an increase in the supply curve of cell-phone services?

Accepted Answer

A)   a decrease in the wages of cell-phone company workers
B)   an increase in the price of cell-phone services
C)   an increase in the taxes paid by cell-phone service providers
D)   a decrease in a subsidy given to cell-phone service providersE) None of the above
F) B) and C)

Question 3

Which of the following goods would most probably be an inferior good?

Accepted Answer

A)   French wines
B)   generic beer
C)   theater tickets
D)   steakE) All of the above
F) B) and D)

Question 4

The supply curve shows the relationship between

Accepted Answer

A)   price and quantity supplied.
B)   production costs and the amount demanded.
C)   total business revenues and quantity supplied.
D)   physical inputs of resources and the resulting units of output.E) None of the above
F) B) and C)

Question 5

Which would be a likely cause of an increase in the demand for pizza?

Accepted Answer

A)   a reduced desire for take-out and fast-food dining
B)   a decrease in the price of hamburger sandwiches
C)   a decrease in the prices of cheese, pepperoni, and mushrooms
D)   a health report stating that eating pizza reduces stressE) A) and C)
F) A) and D)

Question 6

Which of the following factors will decrease the current demand for a product?

Accepted Answer

A)   an expected increase in the future price of the product
B)   a decrease in the current price of a substitute product
C)   a decrease in the current price of a complementary product
D)   an increase in the current price of a substitute productE) A) and D)
F) All of the above

Question 7

Graphically, the market demand curve is

Accepted Answer

A)   steeper than any individual demand curve that is part of it.
B)   greater than the sum of the individual demand curves.
C)   the horizontal sum of individual demand curves.
D)   the vertical sum of individual demand curves.E) B) and D)
F) All of the above

Question 8

The construction of demand and supply curves assumes that the primary variable inﬂuencing decisions to produce and purchase goods is

Accepted Answer

A)   price.
B)   expectations.
C)   preferences.
D)   incomes.E) B) and D)
F) A) and B)

Question 9

An effective price ﬂoor will

Accepted Answer

A)   force some ﬁrms in this industry to go out of business.
B)   result in a product surplus.
C)   result in a product shortage.
D)   clear the market.E) A) and B)
F) B) and C)

Question 10

(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. In relation to column (3) , a change from column (1)  to column (2)  would mostly likely be caused by

Accepted Answer

A)   reduced taste for the good.
B)   an increase in input prices.
C)   consumers expecting that prices will be higher in the future.
D)   government subsidizing production of the good. E) B) and D)
F) A) and C)

Question 11

Digital cameras and memory cards are

Accepted Answer

A)   substitute goods.
B)   complementary goods.
C)   independent goods.
D)   inferior goods.E) B) and C)
F) All of the above

Question 12

If Z is an inferior good, an increase in money income will shift the

Accepted Answer

A)   supply curve for Z to the left.
B)   supply curve for Z to the right.
C)   demand curve for Z to the left.
D)   demand curve for Z to the right.E) B) and D)
F) A) and C)

Question 13

Refer to the above graph. A decrease in supply would best be reﬂected by a change from

Accepted Answer

A)   point 2 to point 1.
B)   point 5 to point 1.
C)   point 5 to point 2.
D)   point 3 to point 6.E) A) and D)
F) None of the above

Question 14

Refer to the diagram above, which shows three supply curves for corn. A movement from point a to point b is caused by a change in the

Accepted Answer

A)   price of resources used to produce corn.
B)   number of corn farmers.
C)   price of corn in the market.
D)   technology of corn farming.E) C) and D)
F) None of the above

Question 15

If market demand increases and market supply decreases, the change in equilibrium price is
unpredictable without ﬁrst knowing the exact magnitudes of the demand and supply changes.

Accepted Answer

A) True 
 B)False

Question 16

A decrease in the price of digital cameras would lead to a(n)

Accepted Answer

A)   increase in the price and quantity sold of memory cards.
B)   decrease in the price and quantity sold of memory cards.
C)   increase in the price and a decrease in quantity sold of memory cards.
D)   decrease in the price and an increase in quantity sold of memory cards.E) A) and B)
F) None of the above

Question 17

Refer to the diagram. An effective government-set price ceiling is best illustrated by

Accepted Answer

A)   price A.
B)   quantity E.
C)   price C.
D)   price B.E) A) and B)
F) A) and D)

Question 18

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents?

Accepted Answer

A)   Poor people will be able to ﬁnd adequate housing.
B)   Homeowners will reduce their own use of housing space, making more available to others.
C)   Those whose needs for housing are most urgent will be able to obtain the space they want.
D)   People moving into the community will have diﬃculty locating residential space to rent.E) None of the above
F) B) and C)

Question 19

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 is most likely to result from

Accepted Answer

A)   a decrease in consumer incomes.
B)   an increase in the cost of cattle feed.
C)   an increase in the price of pork.
D)   a decrease in the tax on beef products.E) A) and C)
F) C) and D)

Question 20

Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will

Accepted Answer

A)   decrease, quantity demanded will decrease, and quantity supplied will increase.
B)   decrease and quantity demanded and quantity supplied will both decrease.
C)   increase, quantity demanded will increase, and quantity supplied will decrease.
D)   increase, quantity demanded will decrease, and quantity supplied will increase.E) B) and C)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the diagram. An effective government-set price ceiling is best illustrated by

Correct Answer
verified

The construction of demand and supply curves assumes that the primary variable inﬂuencing decisions to produce and purchase goods is

Correct Answer
verified

Refer to the diagram above, which shows three supply curves for corn. A movement from point a to point b is caused by a change in the

Correct Answer
verified

Which would be a likely cause of an increase in the demand for pizza?

Correct Answer
verified

A decrease in the price of digital cameras would lead to a(n)

Correct Answer
verified

Digital cameras and memory cards are

Correct Answer
verified

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents?

Correct Answer
verified

Which would cause an increase in the supply curve of cell-phone services?

Correct Answer
verified

Graphically, the market demand curve is

Correct Answer
verified

Which of the following goods would most probably be an inferior good?

Correct Answer
verified

Which of the following factors will decrease the current demand for a product?

Correct Answer
verified

If market demand increases and market supply decreases, the change in equilibrium price is unpredictable without ﬁrst knowing the exact magnitudes of the demand and supply changes.

Correct Answer
verified

Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will

Correct Answer
verified

The supply curve shows the relationship between

Correct Answer
verified

In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by

Correct Answer
verified

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 is most likely to result from

Correct Answer
verified

If Z is an inferior good, an increase in money income will shift the

Correct Answer
verified

Correct Answer
verified

Refer to the above graph. A decrease in supply would best be reﬂected by a change from

Correct Answer
verified

An effective price ﬂoor will

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the diagram. An effective government-set price ceiling is best illustrated by

Correct AnswerverifiedShow Answer

The construction of demand and supply curves assumes that the primary variable inﬂuencing decisions to produce and purchase goods is

Correct AnswerverifiedShow Answer

Refer to the diagram above, which shows three supply curves for corn. A movement from point a to point b is caused by a change in the

Correct AnswerverifiedShow Answer

Which would be a likely cause of an increase in the demand for pizza?

Correct AnswerverifiedShow Answer

A decrease in the price of digital cameras would lead to a(n)

Correct AnswerverifiedShow Answer

Digital cameras and memory cards are

Correct AnswerverifiedShow Answer

Which is most likely to be observed in a community where legal ceilings are imposed on residential rents?

Correct AnswerverifiedShow Answer

Which would cause an increase in the supply curve of cell-phone services?

Correct AnswerverifiedShow Answer

Graphically, the market demand curve is

Correct AnswerverifiedShow Answer

Which of the following goods would most probably be an inferior good?

Correct AnswerverifiedShow Answer

Which of the following factors will decrease the current demand for a product?

Correct AnswerverifiedShow Answer

If market demand increases and market supply decreases, the change in equilibrium price is unpredictable without ﬁrst knowing the exact magnitudes of the demand and supply changes.

Correct AnswerverifiedShow Answer

Assume in a competitive market that price is initially below the equilibrium level. We can predict that price will

Correct AnswerverifiedShow Answer

The supply curve shows the relationship between

Correct AnswerverifiedShow Answer

In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained by

Correct AnswerverifiedShow Answer

Refer to the above graph, which shows the market for beef where demand shifted from D1 to D2. The change in equilibrium from E1 to E2 is most likely to result from

Correct AnswerverifiedShow Answer

If Z is an inferior good, an increase in money income will shift the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above graph. A decrease in supply would best be reﬂected by a change from

Correct AnswerverifiedShow Answer

An effective price ﬂoor will

Correct AnswerverifiedShow Answer

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