Question 1

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Accepted Answer

A)  complementary goods.
B)  competitive goods.
C)  inferior goods.
D)  normal goods.E) B) and D)
F) A) and C)

Question 2

A surplus of any given commodity can be expected whenever the:

Accepted Answer

A)  prevailing price of the good is below the equilibrium price.
B)  prevailing price of the good is above the equilibrium price.
C)  prevailing price of the good is equal to the equilibrium price.
D)  amount demanded exceeds the amount supplied.E) All of the above
F) None of the above

Question 3

With a downward sloping demand curve and an upward sloping supply curve for a product, a decrease in resource prices 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) A) and B)
F) A) and D)

Question 4

If an economy produces its most wanted goods but uses outdated production methods, it is:

Accepted Answer

A)  achieving productive efficiency, but not allocative efficiency.
B)  not achieving productive efficiency.
C)  achieving both productive and allocative efficiency.
D)  achieving the least-cost method of production.E) B) and C)
F) A) and D)

Question 5

A ceiling price in a competitive market will result in persistent surpluses of a product.

Accepted Answer

A) True 
 B)False

Question 6

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Accepted Answer

A)  higher education is an exception to the law of demand.
B)  the supply of education provided by IU has also increased over the twenty-year period.
C)  school-age population, incomes, and preferences for education have changed over the twenty-year period.
D)  IU's supply curve of education is downward sloping.E) All of the above
F) A) and D)

Question 7

Refer to the diagram.A price of $60 in this market will result in:

Accepted Answer

A)  equilibrium.
B)  a shortage of 50 units.
C)  a surplus of 50 units.
D)  a surplus of 100 units.E) A) and D)
F) A) and B)

Question 8

Blu Ray players and Blu Ray discs are:

Accepted Answer

A)  complementary goods.
B)  substitute goods.
C)  independent goods.
D)  inferior goods.E) A) and C)
F) None of the above

Question 9

If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Accepted Answer

A)  price must rise, but equilibrium quantity may either rise, fall, or remain unchanged.
B)  price must rise and equilibrium quantity must fall.
C)  price and equilibrium quantity must both increase.
D)  price and equilibrium quantity must both decline.E) A) and B)
F) A) and D)

Question 10

Other things equal, the provision of a per unit subsidy for a product will:

Accepted Answer

A)  increase its supply.
B)  increase its price.
C)  decrease the quantity sold.
D)  decrease its demand.E) None of the above
F) A) and B)

Question 11

Which statement is not correct?

Accepted Answer

A)  If demand increases and supply decreases, price will rise and the quantity exchanged may either rise or fall.
B)  If supply increases and demand decreases, price will fall and the quantity exchanged may either rise or fall.
C)  If supply declines and demand remains constant, price will rise and the quantity exchanged will rise.
D)  If demand and supply increase, the quantity exchanged will rise and price may either rise or fall.E) All of the above
F) C) and D)

Question 12

There is a shortage in a market for a product when:

Accepted Answer

A)  the increase in supply is greater than the increase in demand.
B)  the increase in demand is greater than the increase in supply.
C)  quantity demanded is less than quantity supplied.
D)  quantity demanded is greater than quantity supplied.E) B) and C)
F) None of the above

Question 13

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Accepted Answer

A)  rise, the supply of bread to increase, and the demand for potatoes to increase.
B)  rise, the supply of bread to decrease, and the demand for potatoes to increase.
C)  rise, the supply of bread to decrease, and the demand for potatoes to decrease.
D)  fall, the supply of bread to increase, and the demand for potatoes to increase.E) B) and D)
F) B) and C)

Question 14

At the point where the demand and supply curves intersect:

Accepted Answer

A)  the market is in equilibrium.
B)  there is neither a surplus nor a shortage of the product.
C)  quantity demanded equals quantity supplied.
D)  all of the above hold true.E) B) and C)
F) A) and D)

Question 15

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1)  the demand (D)  for, or supply (S)  of, X, (2)  the equilibrium price (P)  of X and (3)  the equilibrium quantity (Q)  of X.Refer to the above.An increase in the prices of resources used to produce X will:

Accepted Answer

A)  increase S, increase P, and increase Q.
B)  increase D, increase P, and increase Q.
C)  decrease S, decrease P, and decrease Q.
D)  decrease S, increase P, and decrease Q.E) All of the above
F) B) and C)

Question 16

A firm's supply curve is upward sloping because:

Accepted Answer

A)  the expansion of production necessitates the use of qualitatively inferior techniques.
B)  mass production economies are associated with larger levels of output.
C)  consumers envision a positive relationship between price and quality.
D)  beyond some point the production costs of additional units of output will rise.E) None of the above
F) B) and D)

Question 17

The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following combinations of changes in supply and demand (listed in the same order)  is likely to cause an indeterminate change in quantity?

Accepted Answer

A)  Decrease/Decrease
B)  Increase/Decrease
C)  Increase/Increase
D)  Static/DecreaseE) B) and C)
F) A) and C)

Question 19

The location of the product supply curve depends on:

Accepted Answer

A)  production technology.
B)  the number of buyers in the market.
C)  the tastes of buyers.
D)  the location of the demand curve.E) A) and C)
F) All of the above

Question 20

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1)  the demand (D)  for, or supply (S)  of, X, (2)  the equilibrium price (P)  of X and (3)  the equilibrium quantity (Q)  of X.Refer to the above.An increase in income, if X is a normal good, will:

Accepted Answer

A)  increase D, increase P, and increase Q.
B)  increase D, increase P, and decrease Q.
C)  increase S, increase P, and increase Q.
D)  decrease D, increase P, and increase Q.E) B) and C)
F) B) and D)

Exam 3: Part B: Demand, Supply, and Market Equilibrium

If an economy produces its most wanted goods but uses outdated production methods, it is:

Correct Answer
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Correct Answer
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If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Correct Answer
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Blu Ray players and Blu Ray discs are:

Correct Answer
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At the point where the demand and supply curves intersect:

Correct Answer
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Refer to the diagram.A price of $60 in this market will result in:

Correct Answer
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A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct Answer
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Correct Answer
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Which of the following combinations of changes in supply and demand (listed in the same order) is likely to cause an indeterminate change in quantity?

Correct Answer
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Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Correct Answer
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The location of the product supply curve depends on:

Correct Answer
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Other things equal, the provision of a per unit subsidy for a product will:

Correct Answer
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Which statement is not correct?

Correct Answer
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A surplus of any given commodity can be expected whenever the:

Correct Answer
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With a downward sloping demand curve and an upward sloping supply curve for a product, a decrease in resource prices will:

Correct Answer
verified

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Correct Answer
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There is a shortage in a market for a product when:

Correct Answer
verified

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Correct Answer
verified

A firm's supply curve is upward sloping because:

Correct Answer
verified

The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Correct Answer
verified

Exam 3: Part B: Demand, Supply, and Market Equilibrium

If an economy produces its most wanted goods but uses outdated production methods, it is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the supply of a product decreases and the demand for that product simultaneously increases, we can conclude that equilibrium:

Correct AnswerverifiedShow Answer

Blu Ray players and Blu Ray discs are:

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves intersect:

Correct AnswerverifiedShow Answer

Refer to the diagram.A price of $60 in this market will result in:

Correct AnswerverifiedShow Answer

A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following combinations of changes in supply and demand (listed in the same order) is likely to cause an indeterminate change in quantity?

Correct AnswerverifiedShow Answer

Data from the registrar's office at Informed University indicate that over the past twenty years tuition and enrollment have both increased.From this information we can conclude that:

Correct AnswerverifiedShow Answer

The location of the product supply curve depends on:

Correct AnswerverifiedShow Answer

Other things equal, the provision of a per unit subsidy for a product will:

Correct AnswerverifiedShow Answer

Which statement is not correct?

Correct AnswerverifiedShow Answer

A surplus of any given commodity can be expected whenever the:

Correct AnswerverifiedShow Answer

With a downward sloping demand curve and an upward sloping supply curve for a product, a decrease in resource prices will:

Correct AnswerverifiedShow Answer

Assume a drought in the Great Plains reduces the supply of wheat.Noting that wheat is a basic ingredient in the production of bread and that potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Correct AnswerverifiedShow Answer

There is a shortage in a market for a product when:

Correct AnswerverifiedShow Answer

The demand for most products varies directly with changes in consumer incomes.Such products are known as:

Correct AnswerverifiedShow Answer

A firm's supply curve is upward sloping because:

Correct AnswerverifiedShow Answer

The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Correct AnswerverifiedShow Answer

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