Question 1

What is the underlying cause of the law of supply?

Accepted Answer

The incentive to pro...

Question 2

Which of the following will not cause the demand for ice cream to change?

Accepted Answer

A)  A change in population size
B)  A change in the price of ice cream
C)  A change in consumer incomes
D)  A change in the price of yogurt
E)  A change in seasons

Question 3

A rightward shift of a supply curve represents an increase in supply.

Accepted Answer

A) True 
 B)False

Question 4

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 5

If goods X and Y are substitutes, then the demand for good X increases when the price of good Y decreases.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not held constant when constructing a supply curve for good X?

Accepted Answer

A)  Number of firms producing good X
B)  Price of inputs
C)  Price of good X
D)  Producer expectations
E)  Production technology

Question 7

What is the principle that explains the relationship between price and quantity demanded?

Accepted Answer

The answer of What is the principle that explains the...

Question 8

The term quantity demanded refers to

Accepted Answer

A)  that point where the supply and demand curves cross.
B)  the amount of a good consumers are willing to buy at a given price.
C)  a particular demand schedule.
D)  the entire demand curve.
E)  the amount of a good people must forcibly demand from a producer in order to survive.

Question 9

Use the supply and demand model to explain what happens to the equilibrium price and the equilibrium quantity for pasta in the following cases:

Accepted Answer

The answer of Use the supply and demand model to...

Question 10

An increase in supply and demand at the same time will always result in a higher equilibrium market price.

Accepted Answer

A) True 
 B)False

Question 11

The principle that producers sell more of a good or service when the price increases, all else held equal, is called the law of

Accepted Answer

A)  increasing profit.
B)  supply.
C)  demand.
D)  opportunity cost.
E)  reduced real income.

Question 12

Each supply and demand model consists of all the following three elements:

Accepted Answer

A)  math, geometry, and equations.
B)  supply, demand, and production possibilities.
C)  inputs, outputs, and production.
D)  technology, profit maximization, and government regulation.
E)  price, quantity, and equilibrium.

Question 13

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.

Question 14

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

Question 15

Which of the following statements is true?

Accepted Answer

A)  An increase in quantity demanded means a movement along a given demand curve.
B)  An increase in demand means a movement along a given demand curve.
C)  An increase in demand means that consumers will purchase less of a product at each possible price.
D)  Price and quantity demanded are positively related.
E)  An increase in demand always means the same as an increase in quantity demanded.

Question 16

Exhibit 3-2 
-In the market represented in Exhibit 3-2, if price rises from $.70 to $.80 as a result of government mandate, then

Accepted Answer

A)  a surplus of 30 units will occur.
B)  producers will not be able to sell all they are willing to produce.
C)  consumers would like to buy more than will be produced.
D)  a shortage of 15 units will occur.
E)  a new market equilibrium quantity of 25 units will result.

Question 17

When consumers expect the price of a good to go down in the future, demand will

Accepted Answer

A)  decrease in the future.
B)  decrease today.
C)  increase in the future.
D)  not change.
E)  increase today.

Question 18

An increase in the minimum wage will not affect the supply of hamburgers sold by McDonald's, which hires workers mostly at the minimum wage rate.

Accepted Answer

A) True 
 B)False

Question 19

When supply shifts right and demand shifts left at the same time, the equilibrium market price drops.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 3-5
 
-Suppose that the price of bananas has been rising while the amount sold has been falling. Which of the following is the best explanation?

Accepted Answer

The best explanation is (C) because a re...

Exam 3: The Supply and Demand Model

Exhibit 3-5 -Suppose that the price of bananas has been rising while the amount sold has been falling. Which of the following is the best explanation?

Correct AnswerverifiedThe best explanation is (C) because a re...View AnswerShow Answer

If quantity supplied is less than quantity demanded, then

Correct AnswerverifiedShow Answer

If goods X and Y are substitutes, then the demand for good X increases when the price of good Y decreases.

Correct AnswerverifiedShow Answer

Exhibit 3-2 -In the market represented in Exhibit 3-2, if price rises from $.70 to $.80 as a result of government mandate, then

Correct AnswerverifiedShow Answer

Which of the following is not held constant when constructing a supply curve for good X?

Correct AnswerverifiedShow Answer

The principle that producers sell more of a good or service when the price increases, all else held equal, is called the law of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When consumers expect the price of a good to go down in the future, demand will

Correct AnswerverifiedShow Answer

An increase in supply and demand at the same time will always result in a higher equilibrium market price.

Correct AnswerverifiedShow Answer

What is the principle that explains the relationship between price and quantity demanded?

Correct AnswerverifiedShow Answer

The term quantity demanded refers to

Correct AnswerverifiedShow Answer

When supply shifts right and demand shifts left at the same time, the equilibrium market price drops.

Correct AnswerverifiedShow Answer

Use the supply and demand model to explain what happens to the equilibrium price and the equilibrium quantity for pasta in the following cases:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

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

Each supply and demand model consists of all the following three elements:

Correct AnswerverifiedShow Answer

Which of the following will not cause the demand for ice cream to change?

Correct AnswerverifiedShow Answer

An increase in the minimum wage will not affect the supply of hamburgers sold by McDonald's, which hires workers mostly at the minimum wage rate.

Correct AnswerverifiedShow Answer

What is the underlying cause of the law of supply?

Correct AnswerverifiedThe incentive to pro...View AnswerShow Answer

A rightward shift of a supply curve represents an increase in supply.

Correct AnswerverifiedShow Answer

Correct Answer
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The best explanation is (C) because a re...
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Correct Answer
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The incentive to pro...
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Correct Answer
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