Question 1

The law of demand can be stated as:

Accepted Answer

A)  all else equal,quantity demanded rises as price falls.
B)  all else equal,quantity demanded rises as price rises.
C)  all else equal,quantity demanded rises as income rises.D) A) and B)
E) A) and C)

Question 2

The baby boomer generation is just starting to retire,and waiting lists to get into nursing homes are on the rise.We could reasonably expect:

Accepted Answer

A)  the demand for geriatric care to increase due to the number of buyers increasing.
B)  the demand for geriatric care to decrease due to the number of buyers increasing.
C)  the demand for geriatric care to increase due to expectations of future prices.
D)  the demand for geriatric care to decrease due to expectations of future prices.E) A) and B)
F) None of the above

Question 3

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

Accepted Answer

A)  a shortage will result and consumers will bid the price down to equilibrium.
B)  a surplus will result and excess goods in inventory will signal the producers to lower their prices.
C)  a shortage will result and consumers will bid the price up to equilibrium.
D)  a surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.E) All of the above
F) None of the above

Question 4

An economy where private individuals who are guided by the invisible hand make decisions is known as a:

Accepted Answer

A)  market economy.
B)  centrally planned economy.
C)  socialist economy.
D)  barter economy.E) B) and C)
F) None of the above

Question 5

A decrease in the price of ice cream is likely to cause:

Accepted Answer

A)  an increase in the demand for ice cream cones due to a change in the price of a complementary good.
B)  an increase in the demand for ice cream cones due to a change in the price of a substitute good.
C)  an increase in the demand for ice cream cones due to a change in the preferences of consumers.
D)  a decrease in the demand for ice cream cones due to a change in the price of a related good.E) A) and D)
F) All of the above

Question 6

The most likely complementary good for cereal would be:

Accepted Answer

A)  a bagel.
B)  milk.
C)  shoes.
D)  a textbook.E) All of the above
F) A) and D)

Question 7

When quantity supplied equals quantity demanded:

Accepted Answer

A)  equilibrium is reached.
B)  the market forces push the economy to produce more.
C)  the market forces push the economy to produce less.
D)  the market forces cease to function.E) C) and D)
F) A) and C)

Question 8

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium?

Accepted Answer

A)  The equilibrium price and quantity will both rise.
B)  The equilibrium quantity will definitely fall,while the equilibrium price cannot be predicted.
C)  The equilibrium price will definitely fall,while the equilibrium quantity cannot be predicted.
D)  The equilibrium price and quantity will both fall.E) None of the above
F) A) and B)

Question 9

There was a bumper crop of blueberries last year due to the increased rainfall.This plentiful supply of blueberries caused their price to drop.Bakeries regularly produce and sell blueberry pie.Considering the market for blueberry pies,what factor of supply has been affected,and what was the overall effect on the supply?

Accepted Answer

A)  The price of an input has been affected;supply will increase.
B)  The price of an input has been affected;supply will decrease.
C)  The new technology has been affected;supply will increase.
D)  The number of sellers has been affected;supply will increase.E) C) and D)
F) B) and D)

Question 10

The buyers and sellers who trade a particular good or service make up what we call a:

Accepted Answer

A)  market.
B)  store.
C)  mall.
D)  barterers.E) B) and C)
F) A) and C)

Question 11

This graph depicts the demand for a normal good. 
A movement from B to A in the graph shown might be caused by:

Accepted Answer

A)  a decrease in the good's price.
B)  an increase in the good's price.
C)  a decrease in the price of a substitute.
D)  an increase in the price of a substitute.E) All of the above
F) B) and D)

Question 12

Some nonprice determinants of supply are:

Accepted Answer

A)  prices of related goods,technology,prices of inputs,expectations,and the number of sellers.
B)  consumer preferences,the price of the good,and prices of related goods.
C)  expectations and number of buyers in the market.
D)  prices of related goods,technology,and consumer preferences.E) None of the above
F) A) and B)

Question 13

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

Accepted Answer

A)  a shortage will result.
B)  a surplus will result.
C)  equilibrium will result.
D)  the industry will soon die out.E) None of the above
F) A) and B)

Question 14

An increase in the price of ice cream is likely to cause:

Accepted Answer

A)  a movement along the demand curve.
B)  an inward shift of the demand curve.
C)  an outward shift of the demand curve.
D)  a rotation of the demand curve around the price-point change.E) A) and C)
F) C) and D)

Question 15

Ray's company just announced everyone will be getting their pay cut by 5% in order to avoid having to close down.Ray's demand for coffee,a normal good,will likely:

Accepted Answer

A)  decrease,and his demand curve will shift to the right.
B)  decrease,and his demand curve will shift to the left.
C)  increase,and his demand curve will shift to the right.
D)  increase,and his demand curve will shift to the left.E) A) and B)
F) None of the above

Question 16

Demand describes how much of something people:

Accepted Answer

A)  are willing and able to buy under certain circumstances.
B)  want,but may not necessarily be able,to buy under certain circumstances.
C)  are willing and able to sell under certain circumstances.
D)  want,but may not necessarily be able,to sell under certain circumstances.E) B) and D)
F) B) and C)

Question 17

Darren loves to go to the movies,and he just learned that he can buy a ticket at a discounted price if he shows his student ID.Darren now attends the movies even more often.Which of the following factors of demand caused the change in Darren's behavior?

Accepted Answer

A)  Income
B)  Price
C)  Preferences
D)  Number of buyersE) A) and C)
F) A) and B)

Question 18

The equilibrium price is sometimes called:

Accepted Answer

A)  the market-clearing price.
B)  the optimum price.
C)  the maximum.
D)  the quantity-clearing price.E) None of the above
F) A) and D)

Question 19

For almost all goods,the:

Accepted Answer

A)  lower the price goes,the higher the quantity demanded.
B)  higher the price goes,the more luxurious it is.
C)  lower the price goes,the lower the quantity demanded.
D)  higher the price goes,the higher the quantity demanded.E) None of the above
F) All of the above

Question 20

Apple just announced it will be coming out with the newest model iPhone in the next six months.One could reasonably expect demand for the current model of iPhone to:

Accepted Answer

A)  decrease due to a change in expectations of future prices.
B)  increase due to a change in expectations of future prices.
C)  increase due to limited supply of the current model.
D)  decrease due to the change in price of a substitute good.E) A) and B)
F) B) and C)

Exam 3: Markets

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

Correct Answer
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An increase in the price of ice cream is likely to cause:

Correct Answer
verified

Ray's company just announced everyone will be getting their pay cut by 5% in order to avoid having to close down.Ray's demand for coffee,a normal good,will likely:

Correct Answer
verified

Demand describes how much of something people:

Correct Answer
verified

Darren loves to go to the movies,and he just learned that he can buy a ticket at a discounted price if he shows his student ID.Darren now attends the movies even more often.Which of the following factors of demand caused the change in Darren's behavior?

Correct Answer
verified

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium?

Correct Answer
verified

Apple just announced it will be coming out with the newest model iPhone in the next six months.One could reasonably expect demand for the current model of iPhone to:

Correct Answer
verified

An economy where private individuals who are guided by the invisible hand make decisions is known as a:

Correct Answer
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Some nonprice determinants of supply are:

Correct Answer
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For almost all goods,the:

Correct Answer
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The most likely complementary good for cereal would be:

Correct Answer
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Correct Answer
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A decrease in the price of ice cream is likely to cause:

Correct Answer
verified

The baby boomer generation is just starting to retire,and waiting lists to get into nursing homes are on the rise.We could reasonably expect:

Correct Answer
verified

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

Correct Answer
verified

The law of demand can be stated as:

Correct Answer
verified

The equilibrium price is sometimes called:

Correct Answer
verified

The buyers and sellers who trade a particular good or service make up what we call a:

Correct Answer
verified

When quantity supplied equals quantity demanded:

Correct Answer
verified

This graph depicts the demand for a normal good. A movement from B to A in the graph shown might be caused by:

Correct Answer
verified

Exam 3: Markets

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

Correct AnswerverifiedShow Answer

An increase in the price of ice cream is likely to cause:

Correct AnswerverifiedShow Answer

Ray's company just announced everyone will be getting their pay cut by 5% in order to avoid having to close down.Ray's demand for coffee,a normal good,will likely:

Correct AnswerverifiedShow Answer

Demand describes how much of something people:

Correct AnswerverifiedShow Answer

Darren loves to go to the movies,and he just learned that he can buy a ticket at a discounted price if he shows his student ID.Darren now attends the movies even more often.Which of the following factors of demand caused the change in Darren's behavior?

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium.If it experiences both a decrease in demand and an increase in supply,what can be said of the new equilibrium?

Correct AnswerverifiedShow Answer

Apple just announced it will be coming out with the newest model iPhone in the next six months.One could reasonably expect demand for the current model of iPhone to:

Correct AnswerverifiedShow Answer

An economy where private individuals who are guided by the invisible hand make decisions is known as a:

Correct AnswerverifiedShow Answer

Some nonprice determinants of supply are:

Correct AnswerverifiedShow Answer

For almost all goods,the:

Correct AnswerverifiedShow Answer

The most likely complementary good for cereal would be:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A decrease in the price of ice cream is likely to cause:

Correct AnswerverifiedShow Answer

The baby boomer generation is just starting to retire,and waiting lists to get into nursing homes are on the rise.We could reasonably expect:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The law of demand can be stated as:

Correct AnswerverifiedShow Answer

The equilibrium price is sometimes called:

Correct AnswerverifiedShow Answer

The buyers and sellers who trade a particular good or service make up what we call a:

Correct AnswerverifiedShow Answer

When quantity supplied equals quantity demanded:

Correct AnswerverifiedShow Answer

This graph depicts the demand for a normal good. A movement from B to A in the graph shown might be caused by:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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