Question 1

Which factor will NOT cause a change in demand?

Accepted Answer

A)   an increase in the price of a complement
B)   a decrease in income
C)   a decrease in the price of a good
D)   an increase in the number of consumersE) A) and C)
F) All of the above

Question 2

The law of supply states that if prices fall, consumers will purchase fewer products in the market.

Accepted Answer

A) True 
 B)False

Question 3

Which factor would shift the supply of skateboards to the right?

Accepted Answer

A)   a new rule banning all skateboards on college campuses
B)   an increase in incomes among skateboard enthusiasts
C)   a decrease in the price of skateboards
D)   a large reduction in the price of wheels used to produce skateboardsE) None of the above
F) B) and C)

Question 4

(Table)  Using the data for the market for lattes in the table, at a price of $6:  P$10$8$6$4$2$0Qd3710142030Qs201510730\begin{array} { l c c c c c c } \mathbf { P } & \mathbf { \$ 1 0 } & \mathbf { \$ 8 } & \mathbf { \$ 6 } & \mathbf { \$ 4 } & \mathbf { \$ 2 } & \mathbf { \$ 0 } \\mathbf { Q } _ { d } & 3 & 7 & 10 & 14 & 20 & 30 \\boldsymbol { Q } _ { s } & 20 & 15 & 10 & 7 & 3 & 0\end{array}PQd​Qs​​$10320​$8715​$61010​$4147​$2203​$0300​

Accepted Answer

A)   there is a surplus of lattes.
B)   there is a shortage of lattes.
C)   consumers want to buy exactly seven lattes.
D)   there is no incentive for any market participants to change their behavior. E) C) and D)
F) B) and C)

Question 5

The development of solar panels for home installation has improved due to technological advances and subsidies. These factors shift the supply curve to the _____ and result in the equilibrium price of solar panel installations to _____.

Accepted Answer

A)   left; fall
B)   left; rise
C)   right; fall
D)   right; riseE) B) and C)
F) A) and B)

Question 6

Which statement is CORRECT with respect to determining the price of a product?

Accepted Answer

A)   Demand is more important than supply.
B)   Supply is more important than demand.
C)   Demand and supply are equally important.
D)   Neither demand nor supply is an important factor.E) A) and C)
F) A) and D)

Question 7

One reason that buyers purchase less of a product when its price rises is that they have switched to substitute items.

Accepted Answer

A) True 
 B)False

Question 8

During the recent recession, consumer spending on dogs and cats:

Accepted Answer

A)   fell because national income declined.
B)   fell, even though national income increased.
C)   rose because national income increased.
D)   rose, even though national income declined.E) B) and C)
F) B) and D)

Question 9

(Figure: Market for Shoes)  If the price of shoes is $40 per pair, the quantity demanded will be _____ pairs of shoes.

Accepted Answer

A)   5
B)   10
C)   15
D)   20E) B) and C)
F) B) and D)

Question 10

When quantity demanded exceeds quantity supplied, a shortage occurs and prices are pushed down toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 11

If the market price of Beanie Babies increases, then the supply curve of Beanie Babies will shift to the right.

Accepted Answer

A) True 
 B)False

Question 12

If the number of tomato growers in the market increases, the supply:

Accepted Answer

A)   of tomatoes increases.
B)   of tomatoes decreases.
C)   of tomatoes remains constant.
D)   curve for tomatoes shifts to the left.E) A) and B)
F) All of the above

Question 13

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

Accepted Answer

A)   either rise or fall.
B)   fall initially and then rise as demand increases to meet the increased supply.
C)   rise.
D)   fall.E) A) and B)
F) A) and D)

Question 14

The supply curve slopes up and to the right because:

Accepted Answer

A)   due to steady opportunity costs, producers feel that people will buy more if they charge a higher price.
B)   due to efficiencies, producers feel that people will buy more if they charge a higher price.
C)   due to increasing opportunity costs, producers must charge more to produce additional units in order to cover their costs.
D)   The supply curve actually slopes down and to the right.E) A) and D)
F) B) and D)

Question 15

When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will:

Accepted Answer

A)   either rise or fall.
B)   fall initially and then rise as demand increases to meet the increased supply.
C)   rise.
D)   fall.E) A) and B)
F) C) and D)

Question 16

When people cannot buy all of a good they demand at the going price, there is a:

Accepted Answer

A)   price floor.
B)   lack of technological progress.
C)   monopoly profit for suppliers.
D)   shortage.E) None of the above
F) All of the above

Question 17

If the producers of cotton shirts face higher cotton prices, which scenario is likely to occur?

Accepted Answer

A)   The supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls.
B)   The supply of cotton shirts decreases, the equilibrium price of cotton shirts rises, and the equilibrium quantity rises.
C)   The supply of cotton shirts increases, the equilibrium price of cotton shirts rises, and the equilibrium quantity falls.
D)   The supply of cotton shirts increases, the equilibrium price of cotton shirts falls, and the equilibrium quantity rises.E) A) and D)
F) All of the above

Question 18

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _____ and equilibrium output _____.

Accepted Answer

A)   falls; falls
B)   may rise, fall, or stay the same; falls
C)   may rise, fall, or stay the same; rises
D)   falls; may rise, fall, or stay the sameE) B) and D)
F) A) and B)

Question 19

(Figure: Demand for Shoes)  A shift to the right of the demand curve could be caused by a(n) :

Accepted Answer

A)   decrease in tastes or preferences.
B)   increase in income if the good is a normal good.
C)   increase in the price of a complement.
D)   decrease in the price of a substitute.E) A) and B)
F) B) and C)

Question 20

The father of modern demand-and-supply analysis is:

Accepted Answer

A)   Adam Smith.
B)   David Ricardo.
C)   Karl Marx.
D)   Alfred Marshall.E) None of the above
F) All of the above

Exam 3: Supply and Demand

The supply curve slopes up and to the right because:

Correct Answer
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If the producers of cotton shirts face higher cotton prices, which scenario is likely to occur?

Correct Answer
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The law of supply states that if prices fall, consumers will purchase fewer products in the market.

Correct Answer
verified

(Figure: Demand for Shoes) A shift to the right of the demand curve could be caused by a(n) :

Correct Answer
verified

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _ and equilibrium output _.

Correct Answer
verified

The father of modern demand-and-supply analysis is:

Correct Answer
verified

(Figure: Market for Shoes) If the price of shoes is $40 per pair, the quantity demanded will be _____ pairs of shoes.

Correct Answer
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The development of solar panels for home installation has improved due to technological advances and subsidies. These factors shift the supply curve to the _ and result in the equilibrium price of solar panel installations to _.

Correct Answer
verified

Which factor will NOT cause a change in demand?

Correct Answer
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Which factor would shift the supply of skateboards to the right?

Correct Answer
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Correct Answer
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If the number of tomato growers in the market increases, the supply:

Correct Answer
verified

If the market price of Beanie Babies increases, then the supply curve of Beanie Babies will shift to the right.

Correct Answer
verified

When people cannot buy all of a good they demand at the going price, there is a:

Correct Answer
verified

One reason that buyers purchase less of a product when its price rises is that they have switched to substitute items.

Correct Answer
verified

During the recent recession, consumer spending on dogs and cats:

Correct Answer
verified

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

Correct Answer
verified

Which statement is CORRECT with respect to determining the price of a product?

Correct Answer
verified

When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will:

Correct Answer
verified

When quantity demanded exceeds quantity supplied, a shortage occurs and prices are pushed down toward equilibrium.

Correct Answer
verified

Exam 3: Supply and Demand

The supply curve slopes up and to the right because:

Correct AnswerverifiedShow Answer

If the producers of cotton shirts face higher cotton prices, which scenario is likely to occur?

Correct AnswerverifiedShow Answer

The law of supply states that if prices fall, consumers will purchase fewer products in the market.

Correct AnswerverifiedShow Answer

(Figure: Demand for Shoes) A shift to the right of the demand curve could be caused by a(n) :

Correct AnswerverifiedShow Answer

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _____ and equilibrium output _____.

Correct AnswerverifiedShow Answer

The father of modern demand-and-supply analysis is:

Correct AnswerverifiedShow Answer

(Figure: Market for Shoes) If the price of shoes is $40 per pair, the quantity demanded will be _____ pairs of shoes.

Correct AnswerverifiedShow Answer

The development of solar panels for home installation has improved due to technological advances and subsidies. These factors shift the supply curve to the _____ and result in the equilibrium price of solar panel installations to _____.

Correct AnswerverifiedShow Answer

Which factor will NOT cause a change in demand?

Correct AnswerverifiedShow Answer

Which factor would shift the supply of skateboards to the right?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the number of tomato growers in the market increases, the supply:

Correct AnswerverifiedShow Answer

If the market price of Beanie Babies increases, then the supply curve of Beanie Babies will shift to the right.

Correct AnswerverifiedShow Answer

When people cannot buy all of a good they demand at the going price, there is a:

Correct AnswerverifiedShow Answer

One reason that buyers purchase less of a product when its price rises is that they have switched to substitute items.

Correct AnswerverifiedShow Answer

During the recent recession, consumer spending on dogs and cats:

Correct AnswerverifiedShow Answer

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

Correct AnswerverifiedShow Answer

Which statement is CORRECT with respect to determining the price of a product?

Correct AnswerverifiedShow Answer

When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will:

Correct AnswerverifiedShow Answer

When quantity demanded exceeds quantity supplied, a shortage occurs and prices are pushed down toward equilibrium.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _ and equilibrium output _.

Correct Answer
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Correct Answer
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The development of solar panels for home installation has improved due to technological advances and subsidies. These factors shift the supply curve to the _ and result in the equilibrium price of solar panel installations to _.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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