Question 1

The rationing function of prices refers to the:

Accepted Answer

A)   tendency of supply and demand to shift in opposite directions.
B)   fact that ration coupons are needed to alleviate wartime shortages of goods.
C)   capacity of a competitive market to equate the quantity demanded and the quantity supplied.
D)   ability of the market system to generate an equitable distribution of income.E) All of the above
F) None of the above

Question 2

Over time,the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased.Based on this we can conclude that:

Accepted Answer

A)   decreases in the demand for computer memory have exceeded increases in supply.
B)   decreases in the supply of computer memory have exceeded increases in demand.
C)   increases in the demand for computer memory have exceeded increases in supply.
D)   increases in the supply of computer memory have exceeded increases in demand.E) A) and D)
F) B) and D)

Question 3

Increasing marginal cost of production explains:

Accepted Answer

A)   the law of demand.
B)   the income effect.
C)   why the supply curve is upsloping.
D)   why the demand curve is downsloping.E) B) and C)
F) A) and D)

Question 4

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (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. A decrease in the number of consumers of product X will:

Accepted Answer

A)   decrease S,decrease P,and decrease Q.
B)   increase D,increase P,and increase Q.
C)   decrease D,decrease P,and decrease Q.
D)   decrease D,decrease P,and increase Q.E) A) and C)
F) None of the above

Question 5

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

Accepted Answer

A)   consumer incomes have declined and they now want to buy less of A at each possible price.
B)   the price of A has increased and,as a result,consumers want to purchase less of it.
C)   consumer preferences have changed in favor of A so that they now want to buy more at each possible price.
D)   the price of A has decreased and,as a result,consumers want to purchase more of it.E) None of the above
F) A) and D)

Question 6

Consumers buy more of normal goods as their incomes rise.

Accepted Answer

A) True 
 B)False

Question 7

An effective price ceiling will:

Accepted Answer

A)   induce new firms to enter the industry.
B)   result in a product surplus.
C)   result in a product shortage.
D)   clear the market.E) All of the above
F) B) and C)

Question 8

Which of the above diagrams illustrate(s) the effect of a decrease in incomes on the market for secondhand clothing?

Accepted Answer

A)   A and C
B)   A only
C)   B only
D)   C onlyE) None of the above
F) A) and B)

Question 9

A price ceiling set by government will increase the equilibrium price and quantity in a market.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the above table.In relation to column (3) ,a change from column (4) to column (5) would most likely be caused by:

Accepted Answer

A)   government placing an excise tax on the good.
B)   an improvement in production technology.
C)   an increase in consumer income.
D)   an increase in input prices.E) B) and C)
F) All of the above

Question 11

Which of the following will cause the demand curve for product A to shift to the left?

Accepted Answer

A)   Population growth that causes an expansion in the number of persons consuming A
B)   An increase in money income if A is a normal good
C)   A decrease in the price of complementary product C
D)   An increase in money income if A is an inferior goodE) C) and D)
F) A) and C)

Question 12

Digital cameras and memory cards are:

Accepted Answer

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

Question 13

A price floor in a competitive market will result in persistent shortages of a product.

Accepted Answer

A) True 
 B)False

Question 14

If consumers are willing to pay a higher price than previously for each level of output,we can say that the following has occurred:

Accepted Answer

A)   a decrease in demand.
B)   an increase in demand.
C)   a decrease in supply.
D)   an increase in supply.E) A) and C)
F) C) and D)

Question 15

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Accepted Answer

A) True 
 B)False

Question 16

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (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. If X is an inferior good,a decrease in income will:

Accepted Answer

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

Question 17

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (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. An increase in the tastes and preferences for X will:

Accepted Answer

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

Question 18

Refer to the above table.In relation to column (3) ,a change from column (5) to column (4) would indicate a(n) :

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   increase in supply.
D)   decrease in supply.E) A) and D)
F) None of the above

Question 19

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) B) and C)
F) C) and D)

Question 20

Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Accepted Answer

A)   B only
B)   C only
C)   B and C
D)   D onlyE) All of the above
F) B) and C)

Exam 3: Demand, Supply, and Market Equilibrium

An effective price floor will:

Correct Answer
verified

Which of the following will cause the demand curve for product A to shift to the left?

Correct Answer
verified

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct Answer
verified

Which of the above diagrams illustrate(s) the effect of a decrease in incomes on the market for secondhand clothing?

Correct Answer
verified

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

Correct Answer
verified

Increasing marginal cost of production explains:

Correct Answer
verified

Correct Answer
verified

A price ceiling set by government will increase the equilibrium price and quantity in a market.

Correct Answer
verified

Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Correct Answer
verified

An effective price ceiling will:

Correct Answer
verified

The rationing function of prices refers to the:

Correct Answer
verified

Correct Answer
verified

A price floor in a competitive market will result in persistent shortages of a product.

Correct Answer
verified

Correct Answer
verified

Refer to the above table.In relation to column (3) ,a change from column (5) to column (4) would indicate a(n) :

Correct Answer
verified

Digital cameras and memory cards are:

Correct Answer
verified

If consumers are willing to pay a higher price than previously for each level of output,we can say that the following has occurred:

Correct Answer
verified

Over time,the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased.Based on this we can conclude that:

Correct Answer
verified

Consumers buy more of normal goods as their incomes rise.

Correct Answer
verified

Refer to the above table.In relation to column (3) ,a change from column (4) to column (5) would most likely be caused by:

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

An effective price floor will:

Correct AnswerverifiedShow Answer

Which of the following will cause the demand curve for product A to shift to the left?

Correct AnswerverifiedShow Answer

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct AnswerverifiedShow Answer

Which of the above diagrams illustrate(s) the effect of a decrease in incomes on the market for secondhand clothing?

Correct AnswerverifiedShow Answer

A shift to the right in the demand curve for product A can be most reasonably explained by saying that:

Correct AnswerverifiedShow Answer

Increasing marginal cost of production explains:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A price ceiling set by government will increase the equilibrium price and quantity in a market.

Correct AnswerverifiedShow Answer

Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn?

Correct AnswerverifiedShow Answer

An effective price ceiling will:

Correct AnswerverifiedShow Answer

The rationing function of prices refers to the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A price floor in a competitive market will result in persistent shortages of a product.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the above table.In relation to column (3) ,a change from column (5) to column (4) would indicate a(n) :

Correct AnswerverifiedShow Answer

Digital cameras and memory cards are:

Correct AnswerverifiedShow Answer

If consumers are willing to pay a higher price than previously for each level of output,we can say that the following has occurred:

Correct AnswerverifiedShow Answer

Over time,the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased.Based on this we can conclude that:

Correct AnswerverifiedShow Answer

Consumers buy more of normal goods as their incomes rise.

Correct AnswerverifiedShow Answer

Refer to the above table.In relation to column (3) ,a change from column (4) to column (5) would most likely be caused by:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified