Question 1

The market clearing price refers to the:

Accepted Answer

A)   equilibrium price that quantity supplied is the highest possible.
B)   price where quantity demanded and quantity supplied are the same.
C)   minimum price at which items could be sold.
D)   maximum price where all suppliers are willing to sell all their production.E) A) and B)
F) A) and C)

Question 2

The most likely complementary good for hot dogs would be:

Accepted Answer

A)   ketchup.
B)   burgers.
C)   tacos.
D)   pizza.E) B) and D)
F) C) and D)

Question 3

A change in a nonprice factor of demand will cause:

Accepted Answer

A)   a movement along the demand curve.
B)   a shift of the demand curve.
C)   the demand curve to rotate inward.
D)   the demand curve to rotate outward.E) None of the above
F) A) and B)

Question 4

Perfectly competitive markets are:

Accepted Answer

A)   the most common type of market in our economy.
B)   hard to find in a real world setting.
C)   made up principally by consumer goods.
D)   typically found in industrial sectors of our economy.E) C) and D)
F) None of the above

Question 5

An increase in the price of Heinz ketchup is likely to cause:

Accepted Answer

A)   an increase in the demand for Hunt's ketchup, due to a change in preferences.
B)   an increase in the demand for Hunt's ketchup, due to a change in the price of a substitute good.
C)   a decrease in the demand for Hunt's ketchup, due to a change in preferences.
D)   an increase in the demand for Hunt's ketchup, due to a change in the price of a complementary good.E) B) and C)
F) A) and B)

Question 6

Which of the following would not affect an individual's demand?

Accepted Answer

A)   Prices of related goods
B)   The individual's preferences
C)   The individual's income
D)   The costs of inputsE) A) and C)
F) C) and D)

Question 7

An economy where private individuals guided by the invisible hand make decisions is known as a:

Accepted Answer

A)   market economy.
B)   centrally planned economy.
C)   socialist economy.
D)   barter economy.E) None of the above
F) All of the above

Question 8

As part of recent cutbacks,Paul just accepted a 10% cut in pay.Now he brews coffee at home instead of stopping at Starbucks every day.Based on this behavior,we can say home-brewed coffee:

Accepted Answer

A)   is a normal good, and Starbucks coffee is an inferior good for Paul.
B)   and Starbucks coffee are normal goods for Paul.
C)   will become a normal good for Paul over time.
D)   is an inferior good, while Starbucks coffee is a normal good for Paul.E) None of the above
F) A) and B)

Question 9

A table which shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices is known as a supply:

Accepted Answer

A)   schedule.
B)   figure.
C)   curve.
D)   graph.E) A) and B)
F) C) and D)

Question 10

On the supply curve:

Accepted Answer

A)   quantity goes on the horizontal axis and price goes on the vertical axis.
B)   quantity goes on the vertical axis and price goes on the horizontal axis.
C)   both quantity and price go on the horizontal axis.
D)   it doesn't matter which axis price and quantity are placed on.E) None of the above
F) A) and C)

Question 11

This table shows the demand and supply schedule of a good.  According to the table shown,the equilibrium in this market will occur at:

Accepted Answer

A)   a price of $1.50 and a quantity of 62.
B)   a price of $1.50 and a quantity of 31.
C)   a price of $0.00 and a quantity of 75.
D)   Cannot be determined without more informationE) A) and B)
F) A) and C)

Question 12

This table shows individual demand schedules for a market.  According to the table shown,if the price were $0.50,what will total demand by Betty and Barney be?

Accepted Answer

A)   18
B)   36
C)   75
D)   47E) B) and C)
F) B) and D)

Question 13

If producers incorrectly set the price of their product too low a:

Accepted Answer

A)   shortage will result and consumers will bid the price down to equilibrium.
B)   surplus will result and excess goods in inventory will signal the producers to lower their prices.
C)   shortage will result and consumers will bid the price up to equilibrium.
D)   surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.E) None of the above
F) B) and C)

Question 14

This graph depicts the demand for a normal good.  A shift from A to B in the graph shown might be caused by:

Accepted Answer

A)   a decrease in the price of a substitute.
B)   a decrease in the price of a complement.
C)   an increase in the price of a complement.
D)   an increase in the good's price.E) B) and C)
F) A) and D)

Question 15

The supply curve does not:

Accepted Answer

A)   represents producers' willingness and ability to sell.
B)   show the minimum price producers will accept for any given quantity.
C)   visually display the supply schedule.
D)   illustrate how consumers want to purchase goods and services.E) A) and C)
F) C) and D)

Question 16

The term equilibrium refers to the point where:

Accepted Answer

A)   quantity supplied equals quantity demanded.
B)   buyers and sellers "agree" on the quantity of a good they are willing to exchange at all prices.
C)   the supply curve and demand curve do not intersect.
D)   every buyer and seller achieves their best possible outcome.E) A) and B)
F) All of the above

Question 17

The latest news report stated that the housing market is making a comeback and that house prices are on the rise.This information is likely to:

Accepted Answer

A)   increase demand for houses now due to a change in expectations of future prices.
B)   decrease demand for houses now due to a change in expectations of future prices.
C)   have no effect on the current housing market, but will increase demand in the future.
D)   have no effect on the current demand for housing, but will decrease current supply.E) B) and C)
F) A) and D)

Question 18

The equilibrium price is sometimes called the:

Accepted Answer

A)   market-clearing price.
B)   optimum price.
C)   maximum price.
D)   quantity-clearing price.E) All of the above
F) None of the above

Question 19

What happens to the demand curve when a nonprice determinant of demand changes?

Accepted Answer

A)   The demand curve shifts horizontally.
B)   There is a movement along the demand curve.
C)   The consumer moves to a different price point.
D)   Nothing changes with the demand curve.E) B) and C)
F) A) and B)

Question 20

There has been an increase in the demand for chicken.This change can be shown graphically as a:

Accepted Answer

A)   shift in the demand curve to the right.
B)   shift in the demand curve to the left.
C)   movement along the demand curve to the right.
D)   movement along the demand curve to the left.E) B) and C)
F) A) and D)

Exam 3: Markets

The latest news report stated that the housing market is making a comeback and that house prices are on the rise.This information is likely to:

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As part of recent cutbacks,Paul just accepted a 10% cut in pay.Now he brews coffee at home instead of stopping at Starbucks every day.Based on this behavior,we can say home-brewed coffee:

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An increase in the price of Heinz ketchup is likely to cause:

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On the supply curve:

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What happens to the demand curve when a nonprice determinant of demand changes?

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This graph depicts the demand for a normal good. A shift from A to B in the graph shown might be caused by:

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An economy where private individuals guided by the invisible hand make decisions is known as a:

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A change in a nonprice factor of demand will cause:

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The market clearing price refers to the:

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This table shows individual demand schedules for a market. According to the table shown,if the price were $0.50,what will total demand by Betty and Barney be?

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The most likely complementary good for hot dogs would be:

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Perfectly competitive markets are:

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This table shows the demand and supply schedule of a good. According to the table shown,the equilibrium in this market will occur at:

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The term equilibrium refers to the point where:

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If producers incorrectly set the price of their product too low a:

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The equilibrium price is sometimes called the:

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There has been an increase in the demand for chicken.This change can be shown graphically as a:

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Which of the following would not affect an individual's demand?

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The supply curve does not:

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A table which shows the quantities of a particular good or service that producers are willing to sell (supply) at various prices is known as a supply:

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