Question 1

Which of the following statements is false?

Accepted Answer

A)   The supply and demand model serves to illustrate market behavior.
B)   Supply and demand must be combined for either to be useful in explaining and predicting market behavior.
C)   Supply illustrates the behavior of firms in a market.
D)   Demand illustrates the behavior of consumers in a market.
E)   Market equilibrium is not an important element of the supply and demand model.F) C) and D)
G) B) and C)

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

As a result of an increase in supply, ceteris paribus, the equilibrium price decreases and the equilibrium quantity increases.

Accepted Answer

A) True 
 B)False

Question 5

Exhibit 3-4 2 and D2 are the original supply and demand curves and, ceteris paribus, supply shifts to S1, A)  the quantity demanded decreases from Q4 to Q2. B)  supply decreases. C)  the quantity demanded increases from Q2 to Q4. D)  the quantity supplied increases from Q3 to Q4. E)  the equilibrium price falls from P2 to P1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 3-4. If S2 and D2 are the original supply and demand curves and, ceteris paribus, supply shifts to S1,

Accepted Answer

A)   the quantity demanded decreases from Q4 to Q2.
B)   supply decreases.
C)   the quantity demanded increases from Q2 to Q4.
D)   the quantity supplied increases from Q3 to Q4.
E)   the equilibrium price falls from P2 to P1.F) A) and E)
G) B) and D)

Question 6

Which of the following statements is false?

Accepted Answer

A)   A demand curve is a visual representation of a demand schedule.
B)   A demand curve is typically drawn with quantity demanded on the horizontal axis.
C)   A demand curve is derived from different quantities produced.
D)   A demand curve is typically drawn with price on the vertical axis.
E)   A demand curve is always downward sloping.F) A) and C)
G) None of the above

Question 7

Why does the law of demand hold?

Accepted Answer

First, when price rises, real income, or...

Question 8

In which of the following statements are the terms demand, supply, quantity demanded, and/or quantity supplied used correctly?

Accepted Answer

A)   When the quantity demanded exceeds supply, the equilibrium price will rise.
B)   Changes in demand and supply cause changes in the equilibrium price.
C)   If the demand rises, supply rises.
D)   Oranges are cheaper in Florida; therefore, the demand is greater in Florida.
E)   Decreases in quantity demanded and quantity supplied often occur simultaneously.F) A) and B)
G) B) and D)

Question 9

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...

Question 10

When economists say that the demand for a product has increased, they mean that consumers are willing to buy more of the product at any given price.

Accepted Answer

A) True 
 B)False

Question 11

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.F) D) and E)
G) B) and E)

Question 12

Which of the following will not cause the supply of long-distance telephone service to increase?

Accepted Answer

A)   A reduction in the number of long-distance companies
B)   A reduction in space shuttle fees to launch telecommunications satellites
C)   A decrease in the price of computer electronics used to route long-distance calls
D)   A decrease in the number of government regulations on long-distance telephoning services
E)   A reduction in the price of fiber-optic cables over which phone messages are sentF) B) and C)
G) B) and E)

Question 13

Why does supply slope upward?

Accepted Answer

As more of a good is produced, per-unit ...

Question 14

Exhibit 3-4 1 and D1 are the original supply and demand curves and, ceteris paribus, demand shifts to D2, A)  the quantity supplied increases from Q3 to Q4. B)  the quantity supplied increases from Q2 to Q3. C)  supply decreases from Q3 to Q2. D)  the quantity supplied increases from Q2 to Q4. E)  the quantity demanded increases from Q3 to Q2." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 3-4. If S1 and D1 are the original supply and demand curves and, ceteris paribus, demand shifts to D2,

Accepted Answer

A)   the quantity supplied increases from Q3 to Q4.
B)   the quantity supplied increases from Q2 to Q3.
C)   supply decreases from Q3 to Q2.
D)   the quantity supplied increases from Q2 to Q4.
E)   the quantity demanded increases from Q3 to Q2.F) B) and E)
G) A) and C)

Question 15

Suppose more firms enter the computer market. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Accepted Answer

Supply increases but demand do...

Question 16

Which of the following will not increase the demand for a good?

Accepted Answer

A)   An expectation of a decline in the product price in the future
B)   The product price falls, ceteris paribus.
C)   An increase in the price of a substitute
D)   A decrease in the price of a complement
E)   A foreign country opens its markets to imports from others.F) B) and D)
G) B) and C)

Question 17

An increase in the minimum wage will not affect the supply of goods such as McDonald's hamburgers.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 3-3 
-Refer to Exhibit 3-3. If the price in this market is $9,

Accepted Answer

A)   equilibrium is achieved because producers are able to sell all that they make available in the market.
B)   price will rise because consumers want to buy more than producers are willing to sell.
C)   quantity supplied exceeds the quantity demanded.
D)   price will fall because consumers will not buy as much as producers are willing to sell.
E)   producers are unable to sell all that they are willing to sell.F) C) and E)
G) All of the above

Question 19

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

Accepted Answer

A)   demand for compact disks would decrease.
B)   quantity demanded of compact disks would decrease.
C)   demand for compact disks would increase.
D)   quantity demanded of compact disks would not change.
E)   quantity demanded of compact disks would increase.F) A) and E)
G) A) and B)

Question 20

Exhibit 3-4 1 and D1 are the original supply and demand curves and they shift to S2 and D2, respectively, then the new equilibrium price and quantity will be A)  P2 and Q4. B)  P4 and Q2. C)  P1 and Q3. D)  P3 and Q1. E)  P4 and Q1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 3-4. If S1 and D1 are the original supply and demand curves and they shift to S2 and D2, respectively, then the new equilibrium price and quantity will be

Accepted Answer

A)   P2 and Q4.
B)   P4 and Q2.
C)   P1 and Q3.
D)   P3 and Q1.
E)   P4 and Q1.F) B) and E)
G) A) and D)

Exam 3: The Supply and Demand Model

Which of the following will not increase the demand for a good?

Correct AnswerverifiedShow Answer

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

As a result of an increase in supply, ceteris paribus, the equilibrium price decreases and the equilibrium quantity increases.

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Why does the law of demand hold?

Correct AnswerverifiedFirst, when price rises, real income, or...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Exhibit 3-4 -Refer to Exhibit 3-4. If S2 and D2 are the original supply and demand curves and, ceteris paribus, supply shifts to S1,

Correct AnswerverifiedShow Answer

Exhibit 3-4 -Refer to Exhibit 3-4. If S1 and D1 are the original supply and demand curves and they shift to S2 and D2, respectively, then the new equilibrium price and quantity will be

Correct AnswerverifiedShow Answer

Why does supply slope upward?

Correct AnswerverifiedAs more of a good is produced, per-unit ...View AnswerShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

When economists say that the demand for a product has increased, they mean that consumers are willing to buy more of the product at any given price.

Correct AnswerverifiedShow Answer

Suppose more firms enter the computer market. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Correct AnswerverifiedSupply increases but demand do...View AnswerShow Answer

Which of the following will not cause the supply of long-distance telephone service to increase?

Correct AnswerverifiedShow Answer

In which of the following statements are the terms demand, supply, quantity demanded, and/or quantity supplied used correctly?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Exhibit 3-3 -Refer to Exhibit 3-3. If the price in this market is $9,

Correct AnswerverifiedShow Answer

An increase in the minimum wage will not affect the supply of goods such as McDonald's hamburgers.

Correct AnswerverifiedShow Answer

Exhibit 3-4 -Refer to Exhibit 3-4. If S1 and D1 are the original supply and demand curves and, ceteris paribus, demand shifts to D2,

Correct AnswerverifiedShow Answer

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

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First, when price rises, real income, or...
View Answer

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Exhibit 3-4 -Refer to Exhibit 3-4. If S₂ and D₂ are the original supply and demand curves and, ceteris paribus, supply shifts to S₁,

Correct Answer
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Exhibit 3-4 -Refer to Exhibit 3-4. If S₁ and D₁ are the original supply and demand curves and they shift to S₂ and D₂, respectively, then the new equilibrium price and quantity will be

Correct Answer
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Correct Answer
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As more of a good is produced, per-unit ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Supply increases but demand do...
View Answer

Correct Answer
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Correct Answer
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Exhibit 3-4 -Refer to Exhibit 3-4. If S₁ and D₁ are the original supply and demand curves and, ceteris paribus, demand shifts to D₂,

Correct Answer
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