Question 1

The high price of gasoline in the late-2000s was likely the result of

Accepted Answer

A)  an increase in both the supply of and the demand for gasoline.
B)  a decrease in both the supply of and the demand for gasoline.
C)  an increase in the supply of gasoline along with a decrease in the demand for gasoline.
D)  a decrease in the supply of gasoline along with an increase in the demand for gasoline.
E)  no change in either the supply of or the demand for gasoline.F) A) and C)
G) B) and D)

Question 2

Exhibit 3-2 
-In the market represented in Exhibit 3-2,if price is $.50,

Accepted Answer

A)  producers are not able to sell all they are willing to sell.
B)  a surplus of 30 units results.
C)  producers are willing to produce more than is being purchased.
D)  consumers are willing to buy more than is being produced.
E)  consumers are willing to buy the same amount as that being produced.F) A) and B)
G) A) and C)

Question 3

Draw a supply and demand diagram with supply and demand both increasing and market equilibrium price increasing as well.

Accepted Answer

The answer of Draw a supply and demand diagram with...

Question 4

Which of the following will not increase the demand for a good?

Accepted Answer

A)  An expectation of a decline in the product price in the future
B)  The product price falls,ceteris paribus.
C)  An increase in the price of a substitute
D)  A decrease in the price of a complement
E)  A foreign country opens its markets to imports from others.F) All of the above
G) B) and D)

Question 5

The law of demand states that

Accepted Answer

A)  as price decreases,demand increases.
B)  as price increases,quantity demanded increases.
C)  there is a direct relationship between price and quantity supplied.
D)  there is an inverse relationship between price and quantity demanded.
E)  there is an inverse relationship between price and quantity supplied.F) D) and E)
G) A) and B)

Question 6

The law of demand is violated when the demand for a product is high at a high price.

Accepted Answer

A) True 
 B)False

Question 7

Coffee and tea are substitutes so that if the price of tea increases,the

Accepted Answer

A)  quantity demanded for coffee increases.
B)  quantity demanded for coffee decreases.
C)  demand for coffee increases.
D)  demand for coffee decreases.
E)  demand for coffee remains the same.F) A) and B)
G) A) and C)

Question 8

Suppose demand and supply in a market can be expressed by these equations:
QD = 40 - 0.5P
QS = 15 + 2P
If the prevailing market price is $30,what are the quantity demanded and the quantity supplied?

Accepted Answer

Substitute 30 for P in each eq...

Question 9

When a surplus exists in a market,the actual price will begin to decrease.

Accepted Answer

A) True 
 B)False

Question 10

All else held equal,if the price of sirloin steak increases from $4.25 to $8.60 per pound,a greater quantity of sirloin steak will be supplied.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following will not cause the supply of long-distance telephone service to increase?

Accepted Answer

A)  A reduction in the number of long-distance companies
B)  A reduction in space shuttle fees to launch telecommunications satellites
C)  A decrease in the price of computer electronics used to route long-distance calls
D)  A decrease in the number of government regulations on long-distance telephoning services
E)  A reduction in the price of fiber-optic cables over which phone messages are sentF) None of the above
G) C) and D)

Question 12

The demand curve of good X is drawn by assuming that all of the following are equal except

Accepted Answer

A)  the price of good X.
B)  consumer income.
C)  consumer preferences.
D)  the price of good Y.
E)  the number of consumers.F) A) and D)
G) B) and E)

Question 13

Which of the following causes a movement along the supply curve for a product?

Accepted Answer

A)  An increase in the production cost
B)  An increase in the number of sellers
C)  An expectation of a higher future price
D)  An increase in the tax on production
E)  An increase in the price of that productF) B) and E)
G) B) and C)

Question 14

The demand curve for a particular good shifts when any factor other than the price of that good changes.

Accepted Answer

A) True 
 B)False

Question 15

An increase in the minimum wage will not affect the supply of goods such as McDonald's hamburgers.

Accepted Answer

A) True 
 B)False

Question 16

More television sets are being sold today than one year ago,and the selling price has increased.This could have been caused by a(n)

Accepted Answer

A)  increase in demand.
B)  decrease in supply.
C)  decrease in demand.
D)  increase in supply.
E)  exception to the law of demand.F) C) and E)
G) C) and D)

Question 17

When there is a decrease in supply,all else held equal,

Accepted Answer

A)  equilibrium price falls,demand increases,and equilibrium quantity increases.
B)  equilibrium price falls,demand does not change,and equilibrium quantity increases.
C)  equilibrium price rises,quantity demanded decreases,and equilibrium quantity decreases.
D)  equilibrium price falls,quantity demanded decreases,and equilibrium quantity decreases.
E)  equilibrium price rises,demand does not change,and equilibrium quantity increases.F) A) and E)
G) A) and D)

Question 18

If quantity supplied is less than quantity demanded,then

Accepted Answer

A)  there is a shortage in the market.
B)  prices will fall.
C)  equilibrium has been achieved.
D)  consumer incomes will increase.
E)  there is a surplus in the market.F) All of the above
G) B) and D)

Question 19

A shortage occurs when quantity demanded exceeds quantity supplied.

Accepted Answer

A) True 
 B)False

Question 20

The law of supply states that the quantity supplied of a good is positively related to the price of that good.

Accepted Answer

A) True 
 B)False

Exam 3: The Supply and Demand Model

The demand curve of good X is drawn by assuming that all of the following are equal except

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More television sets are being sold today than one year ago,and the selling price has increased.This could have been caused by a(n)

Correct AnswerverifiedShow Answer

Which of the following causes a movement along the supply curve for a product?

Correct AnswerverifiedShow Answer

Which of the following will not cause the supply of long-distance telephone service to increase?

Correct AnswerverifiedShow Answer

The demand curve for a particular good shifts when any factor other than the price of that good changes.

Correct AnswerverifiedShow Answer

The law of supply states that the quantity supplied of a good is positively related to the price of that good.

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When a surplus exists in a market,the actual price will begin to decrease.

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The law of demand is violated when the demand for a product is high at a high price.

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Coffee and tea are substitutes so that if the price of tea increases,the

Correct AnswerverifiedShow Answer

Draw a supply and demand diagram with supply and demand both increasing and market equilibrium price increasing as well.

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Suppose demand and supply in a market can be expressed by these equations: QD = 40 - 0.5P QS = 15 + 2P If the prevailing market price is $30,what are the quantity demanded and the quantity supplied?

Correct AnswerverifiedSubstitute 30 for P in each eq...View AnswerShow Answer

The high price of gasoline in the late-2000s was likely the result of

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When there is a decrease in supply,all else held equal,

Correct AnswerverifiedShow Answer

A shortage occurs when quantity demanded exceeds quantity supplied.

Correct AnswerverifiedShow Answer

The law of demand states that

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Which of the following will not increase the demand for a good?

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An increase in the minimum wage will not affect the supply of goods such as McDonald's hamburgers.

Correct AnswerverifiedShow Answer

If quantity supplied is less than quantity demanded,then

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All else held equal,if the price of sirloin steak increases from $4.25 to $8.60 per pound,a greater quantity of sirloin steak will be supplied.

Correct AnswerverifiedShow Answer

Exhibit 3-2 -In the market represented in Exhibit 3-2,if price is $.50,

Correct AnswerverifiedShow Answer

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Suppose demand and supply in a market can be expressed by these equations: Q_D = 40 - 0.5P Q_S = 15 + 2P If the prevailing market price is $30,what are the quantity demanded and the quantity supplied?

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Substitute 30 for P in each eq...
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