Question 1

At the market clearing price,

Accepted Answer

A)   there is neither a shortage nor a surplus.
B)   quantity supplied equals quantity demanded.
C)   the supply and demand curves intersect.
D)   All of the above are correct.

Question 2

-Refer to the above figure. Which panel best demonstrates the demand curve?

Accepted Answer

A)   Panel A.
B)   Panel B.
C)   Panel C.
D)   Panel D.

Question 3

Which of the following is a determinant of supply?

Accepted Answer

A)   Tastes and preferences of consumers
B)   Technology
C)   Consumer income
D)   Number of consumers

Question 4

A change in the ceteris paribus conditions for supply will lead to a

Accepted Answer

A)   change in quantity supplied.
B)   change in supply.
C)   change in quantity supplied and a change in supply.
D)   change in how consumers view the quality of the good.

Question 5

A surplus exists

Accepted Answer

A)   in equilibrium.
B)   when quantity supplied is greater than quantity demanded.
C)   when quantity supplied is less that quantity demanded.
D)   at the market clearing price.

Question 6

Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?

Accepted Answer

A)   Income
B)   Tastes and preferences
C)   Expectations of the future price of a good
D)   none of the above

Question 7

When there is an excess quantity of a product supplied, there will be

Accepted Answer

A)   a tendency for price of the product to increase.
B)   a tendency for price of the product to fall.
C)   incentives for consumers to leave the market.
D)   upward pressure on the price of labor.

Question 8

The relationship between quantity supplied and the price of output is such that

Accepted Answer

A)   an increase in quantity will automatically lead to a reduction in price.
B)   an increase in price will lead to an increase in quantity supplied.
C)   an increase in price will produce an inward shift in the supply curve.
D)   quantity will decrease as the number of firms increases.

Question 9

Graphically, the market supply curve is obtained by

Accepted Answer

A)   changing the ceteris paribus conditions.
B)   a change in quantity supplied.
C)   horizontally summing quantity supplied at various prices for individual producers.
D)   vertically summing quantity supplied at various prices for individual producers.

Question 10

The fact that when the price of a good goes up, people buy less of it is known as the

Accepted Answer

A)   law of supply.
B)   law of demand.
C)   concept of market equilibrium.
D)   need for inferior goods.

Question 11

In economic terminology, a normal good is a good

Accepted Answer

A)   on which a monetary value cannot be placed.
B)   that is liked only by normal people.
C)   for which demand increases when price increases.
D)   for which demand increases when income increases.

Question 12

Other things being constant, the only way to move along a given supply curve for a product is for

Accepted Answer

A)   the product's relative price to change.
B)   the future relative price of related goods to change.
C)   the number of sellers to change.
D)   technological changes to occur.

Question 13

Briefly discuss the determinants of demand other than price.

Accepted Answer

An increase in income causes demand of a...

Question 14

1 B)  P2 C)  P3 D)  none of these" class="answers-bank-image d-inline" rel="preload" >
-Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?

Accepted Answer

A)   P1
B)   P2
C)   P3
D)   none of these

Question 15

Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result,

Accepted Answer

A)   the supply curve for sugar will shift to the right.
B)   the supply curve for sugar will shift to the left.
C)   the supply curve for cereal will shift to the right.
D)   the supply curve for cereal will shift to the left.

Question 16

An increase in the price of corn will lead to

Accepted Answer

A)   an upward (and leftward)  movement along the demand curve for corn.
B)   a leftward shift in the demand curve for corn.
C)   a rightward shift in the supply curve for corn.
D)   an increase in the quantity of corn consumed.

Question 17

What information is provided by a demand curve? What variables are measured along the axes of the graph?

Accepted Answer

The demand curve is a graphical represen...

Question 18

What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?

Accepted Answer

A)   Prescription medications will become an inferior good.
B)   There is an upward movement along the demand curve for prescription medications.
C)   There is a downward movement along the demand curve for prescription medications.
D)   The demand for prescription medications will decrease.

Question 19

A market demand schedule for a product indicates that

Accepted Answer

A)   as the product's price falls, consumers buy less of the good.
B)   there is a positive relationship between price and quantity demanded.
C)   as a product's price rises, consumers buy more of the good.
D)   there is a negative relationship between price and quantity demanded.

Question 20

A supply curve

Accepted Answer

A)   has an indirect or negative relationship between price and quantity supplied.
B)   has a direct or positive relationship between price and quantity supplied.
C)   shows the relationship between quantity supplied and income.
D)   shows the relationship between complements.

Exam 3: Demand and Supply

Other things being constant, the only way to move along a given supply curve for a product is for

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Graphically, the market supply curve is obtained by

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A supply curve

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A surplus exists

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In economic terminology, a normal good is a good

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A change in the ceteris paribus conditions for supply will lead to a

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Which of the following will cause a movement along the demand curve instead of a shift of the demand curve?

Correct AnswerverifiedShow Answer

The fact that when the price of a good goes up, people buy less of it is known as the

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-Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?

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What information is provided by a demand curve? What variables are measured along the axes of the graph?

Correct AnswerverifiedThe demand curve is a graphical represen...View AnswerShow Answer

When there is an excess quantity of a product supplied, there will be

Correct AnswerverifiedShow Answer

A market demand schedule for a product indicates that

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Which of the following is a determinant of supply?

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At the market clearing price,

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-Refer to the above figure. Which panel best demonstrates the demand curve?

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The relationship between quantity supplied and the price of output is such that

Correct AnswerverifiedShow Answer

Sugar is an input used to produce cereal. Suppose that the price of sugar rises. As a result,

Correct AnswerverifiedShow Answer

What would happen in the market for prescription drugs if people begin to view over-the-counter remedies as a good substitute for prescription medications?

Correct AnswerverifiedShow Answer

Briefly discuss the determinants of demand other than price.

Correct AnswerverifiedAn increase in income causes demand of a...View AnswerShow Answer

An increase in the price of corn will lead to

Correct AnswerverifiedShow Answer

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The demand curve is a graphical represen...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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An increase in income causes demand of a...
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Correct Answer
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