Question 1

What happens to equilibrium price when simultaneously demand increases and supply decreases?

Accepted Answer

A)  Equilibrium price will increase.
B)  Equilibrium price will decrease.
C)  Equilibrium price will remain the same.
D)  Equilibrium price may increase, decrease, or remain the same depending on the magnitude of the shifts in demand and supply.

Question 2

The effect on the market for heating oil of a leftward shift of supply would be

Accepted Answer

A)  a shortage of heating oil.
B)  a surplus of heating oil.
C)  a decrease in the quantity of heating oil sold and in its price.
D)  an increase in the price of heating oil and a decrease in the quantity sold.

Question 3

Use the following figure to answer the question :
-The market demand curve for most goods and services is

Accepted Answer

A)  the horizontal summation of individual demand curves.
B)  calculated by multiplying all individual demand curves by each other.
C)  not important for most analytical purposes.
D)  not related in any way to individual demand curves.

Question 4

A change in consumer taste will prompt a change in ____________.

Accepted Answer

The answer of A change in consumer taste will prompt...

Question 5

A decrease in supply will tend to cause

Accepted Answer

A)  an increase in demand.
B)  a decrease in equilibrium price.
C)  a decrease in equilibrium quantity.
D)  an increase in equilibrium quantity.

Question 6

Use the following figure to answer the question :
-Assume the economy begins at the intersection of D0 S0. Suppose that robots were introduced on the auto assembly line. How would this affect the supply curve?

Accepted Answer

A)  Move along S0.
B)  Shift to S1.
C)  Shift to S2.
D)  No change

Question 7

An increase in the price of gasoline will cause a

Accepted Answer

A)  decline in the quantity demanded for gasoline.
B)  increase in the quantity demanded for gasoline.
C)  decline in the demand for gasoline.
D)  increase in the demand for gasoline.

Question 8

The demand for a normal good is

Accepted Answer

A)  indirectly (negatively)  related to the supply of the good.
B)  directly (positively)  related to income.
C)  unaffected by changes in consumer tastes and preferences.
D)  unaffected by changes in the prices of complementary goods.

Question 9

Use the following figure to answer the question :
-A move from I to J represents a

Accepted Answer

A)  change in quantity supplied
B)  change in supply
C)  increase in supply
D)  decrease in supply

Question 10

As the price of an item goes up, the quantity demanded

Accepted Answer

A)  rises.
B)  falls.
C)  remains the same.

Question 11

In the space provided in the graph above, draw a demand curve, D1 and then draw a second demand curve, D2, that illustrates an increase in demand.

Accepted Answer

The answer of In the space provided in the graph...

Question 12

When the representatives of the OPEC countries met in March 1999 and decided to reduce the amount of oil each country would produce, the result was

Accepted Answer

A)  the world demand for oil fell.
B)  the world supply of oil fell.
C)  the price of oil fell.
D)  All of the choices were results of this meeting.

Question 13

As income falls, the demand for normal goods ____ and the demand for inferior goods ___.

Accepted Answer

A)  falls; falls
B)  rises; rises
C)  falls; rises
D)  rises; falls

Question 14

A decrease in the demand for a service means that the

Accepted Answer

A)  demand curve shifts to the right.
B)  demand curve shifts to the left.
C)  supply curve shifts to the right.
D)  supply curve shifts to the left.

Question 15

An increase in the price of fabric (an input in the production of pants)  will tend to

Accepted Answer

A)  decrease the demand for pants.
B)  cause a movement along the supply curve for pants.
C)  decrease the supply of pants.
D)  increase the supply of pants.

Question 16

A change in the demand for automobiles may be caused by a ______________.

Accepted Answer

A)  change in the price of gasoline
B)  change in income
C)  change in tastes and preferences
D)  All of the choices.

Question 17

Use the following figure to answer the question :
-A move from S1 to S2 is a(n)

Accepted Answer

A)  an increase in quantity supplied.
B)  a decrease in quantity supplied.
C)  an increase in supply.
D)  a decrease in supply.

Question 18

If beans are an inferior good, a decrease in income will

Accepted Answer

A)  cause rice to sell at a lower price.
B)  increase the production of rice.
C)  shift the demand curve for rice to the left.
D)  shift the demand curve for rice to the right.

Question 19

Which of the following can cause a change in supply?

Accepted Answer

A)  Changes in demand
B)  Changes in the number of buyers
C)  Changes in tastes and preferences
D)  Changes in the price of the good or service
E)  Technological advance

Question 20

If Pepsi increases its prices which of the following would NOT happen?

Accepted Answer

A)  The demand for Pepsi would drop.
B)  The quantity demanded of Pepsi would drop.
C)  The demand for Coke would increase.
D)  The equilibrium price of Coke would rise.
E)  The equilibrium quantity of Coke would rise.

Exam 5: Demand, Supply, and Equilibrium

A decrease in supply will tend to cause

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Use the following figure to answer the question : -A move from I to J represents a

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The demand for a normal good is

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A change in the demand for automobiles may be caused by a ______________.

Correct AnswerverifiedShow Answer

Use the following figure to answer the question : -Assume the economy begins at the intersection of D0 S0. Suppose that robots were introduced on the auto assembly line. How would this affect the supply curve?

Correct AnswerverifiedShow Answer

If beans are an inferior good, a decrease in income will

Correct AnswerverifiedShow Answer

Which of the following can cause a change in supply?

Correct AnswerverifiedShow Answer

As income falls, the demand for normal goods ____ and the demand for inferior goods ___.

Correct AnswerverifiedShow Answer

Use the following figure to answer the question : -The market demand curve for most goods and services is

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If Pepsi increases its prices which of the following would NOT happen?

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What happens to equilibrium price when simultaneously demand increases and supply decreases?

Correct AnswerverifiedShow Answer

A decrease in the demand for a service means that the

Correct AnswerverifiedShow Answer

When the representatives of the OPEC countries met in March 1999 and decided to reduce the amount of oil each country would produce, the result was

Correct AnswerverifiedShow Answer

A change in consumer taste will prompt a change in ____________.

Correct AnswerverifiedShow Answer

As the price of an item goes up, the quantity demanded

Correct AnswerverifiedShow Answer

Use the following figure to answer the question : -A move from S1 to S2 is a(n)

Correct AnswerverifiedShow Answer

The effect on the market for heating oil of a leftward shift of supply would be

Correct AnswerverifiedShow Answer

An increase in the price of gasoline will cause a

Correct AnswerverifiedShow Answer

In the space provided in the graph above, draw a demand curve, D1 and then draw a second demand curve, D2, that illustrates an increase in demand.

Correct AnswerverifiedShow Answer

An increase in the price of fabric (an input in the production of pants) will tend to

Correct AnswerverifiedShow Answer

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As income falls, the demand for normal goods __ and the demand for inferior goods _.

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