Question 1

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the above table. At a price of $15 per unit, which of the following would exist?

Accepted Answer

A)   A shortage of 1,600 units
B)   A surplus of 1,000 units
C)   A shortage of 1,000 units
D)   A surplus of 600 unitsE) B) and D)
F) B) and C)

Question 3

An increase in demand for oil along with a simultaneous increase in supply of oil will:

Accepted Answer

A)   Decrease price and increase quantity
B)   Increase price and decrease quantity
C)   Increase quantity, but whether it increases price depends on how much each curve shifts
D)   Increase price, but whether it increases quantity depends on how much each curve shiftsE) B) and C)
F) C) and D)

Question 4

A higher price reduces the quantity demanded for a product because:

Accepted Answer

A)   The purchasing power of individuals increases
B)   The financial assets of individuals increase
C)   Individuals will buy more of the product and less of its substitutes
D)   Individuals can afford less of the product and will switch to substitutesE) A) and D)
F) None of the above

Question 5

The law of demand states that if price increases, other things being equal, the demand for the product will decrease.

Accepted Answer

A) True 
 B)False

Question 6

The scalping of tickets for an event is a sign that the stated price on the ticket is:

Accepted Answer

A)   Equal to the quantity demanded
B)   Equal to the market clearing price
C)   Below the market clearing price
D)   Above the market clearing priceE) A) and B)
F) A) and C)

Question 7

If we observe the price of a good in a competitive market rising, then we can conclude that there had been a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would cause a leftward shift in the supply curve for car washes?

Accepted Answer

A)   An increase in the number of cars in the city
B)   A decrease in taxes on car washes
C)   An increase in the price of car washing equipment
D)   A decrease in the price of waterE) B) and D)
F) B) and C)

Question 9

In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease.

Accepted Answer

A) True 
 B)False

Question 10

A television station reports that the price of coffee has increased but the quantity traded in the market has decreased. This situation would be caused by a(n) :

Accepted Answer

A)   Increase in demand
B)   Increase in supply
C)   Decrease in demand
D)   Decrease in supplyE) B) and D)
F) C) and D)

Question 11

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:

Accepted Answer

A)   Inferior goods
B)   Direct goods
C)   Average goods
D)   Normal goodsE) All of the above
F) A) and B)

Question 12

An "increase in the quantity supplied" suggests a:

Accepted Answer

A)   Rightward shift of the supply curve
B)   Movement down along the supply curve
C)   Movement up along the supply curve
D)   Leftward shift of the supply curveE) A) and B)
F) A) and C)

Question 13

Use the following graph of the demand for coffee: 1 to D3? A)  A decrease in the cost of producing coffee B)  A scientific report stating that coffee improves memory C)  A decrease in the prices of cream and sugar D)  A decrease in the price of tea" class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

Accepted Answer

A)   A decrease in the cost of producing coffee
B)   A scientific report stating that coffee improves memory
C)   A decrease in the prices of cream and sugar
D)   A decrease in the price of teaE) B) and C)
F) A) and B)

Question 14

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event.  Refer to the above graph for the event-ticket market. A scalpers' market will exist if the event organizers set the official ticket price at:

Accepted Answer

A)   $50
B)   $20
C)   $40
D)   $60E) None of the above
F) A) and D)

Question 15

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Accepted Answer

A)   The increase in demand was greater than the decrease in supply
B)   The decrease in demand was greater than the decrease in supply
C)   The increase in supply was greater than the decrease in demand
D)   The decrease in supply was greater than the increase in demandE) A) and B)
F) All of the above

Question 16

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain:

Accepted Answer

A)   Productive efficiency
B)   Allocative efficiency
C)   Minimum opportunity costs
D)   Maximum process and revenuesE) A) and D)
F) A) and C)

Question 17

Refer to the above table. In this competitive market, the price and quantity will settle at:

Accepted Answer

A)   $10 and 2,000 units
B)   $15 and 1,600 units
C)   $20 and 900 units
D)   $25 and 1,200 unitsE) None of the above
F) All of the above

Question 18

Which statement is true about supply?

Accepted Answer

A)   There is an inverse relationship between price and quantity supplied
B)   Supply refers to the amount of inventory that sellers have in their warehouses
C)   As price decreases, producers are willing to put more of the good on the market for sale
D)   To entice producers to offer more of a good on the market for sale, price must riseE) A) and B)
F) None of the above

Question 19

If a competitive market were allowed and developed for human organs, then the price for organs would:

Accepted Answer

A)   Increase and the quantity of organs available would decrease
B)   Decrease and the quantity of organs available would increase
C)   Increase and the quantity of organs available would increase
D)   Decrease and the quantity of organs available would decreaseE) None of the above
F) A) and C)

Question 20

Refer to the above graph. A decrease in supply would best be reflected by a change from:

Accepted Answer

A)   Point 2 to point 1
B)   Point 5 to point 1
C)   Point 5 to point 2
D)   Point 3 to point 6E) None of the above
F) A) and C)

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the above table. At a price of $15 per unit, which of the following would exist?

Correct AnswerverifiedShow Answer

If we observe the price of a good in a competitive market rising, then we can conclude that there had been a shortage in the market.

Correct AnswerverifiedShow Answer

A television station reports that the price of coffee has increased but the quantity traded in the market has decreased. This situation would be caused by a(n) :

Correct AnswerverifiedShow Answer

A higher price reduces the quantity demanded for a product because:

Correct AnswerverifiedShow Answer

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Correct AnswerverifiedShow Answer

An "increase in the quantity supplied" suggests a:

Correct AnswerverifiedShow Answer

When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain:

Correct AnswerverifiedShow Answer

If a competitive market were allowed and developed for human organs, then the price for organs would:

Correct AnswerverifiedShow Answer

The scalping of tickets for an event is a sign that the stated price on the ticket is:

Correct AnswerverifiedShow Answer

Which of the following would cause a leftward shift in the supply curve for car washes?

Correct AnswerverifiedShow Answer

The law of demand states that if price increases, other things being equal, the demand for the product will decrease.

Correct AnswerverifiedShow Answer

In the market for crude oil, if the change in demand due to falling price of natural gas (a substitute for oil) is greater than the change in supply due to disruptions in oil-well operations in the Middle East, then the equilibrium price of oil will decrease.

Correct AnswerverifiedShow Answer

Refer to the above table. In this competitive market, the price and quantity will settle at:

Correct AnswerverifiedShow Answer

Which statement is true about supply?

Correct AnswerverifiedShow Answer

For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:

Correct AnswerverifiedShow Answer

Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D1 to D3?

Correct AnswerverifiedShow Answer

Refer to the above graph. A decrease in supply would best be reflected by a change from:

Correct AnswerverifiedShow Answer

What would best explain why the equilibrium price of pink salmon decreased and the equilibrium quantity increased?

Correct AnswerverifiedShow Answer

An increase in demand for oil along with a simultaneous increase in supply of oil will:

Correct AnswerverifiedShow Answer

The graph below shows the market for tickets to a "Final Four" sports event. Assume that there is only one kind of ticket to the event. Refer to the above graph for the event-ticket market. A scalpers' market will exist if the event organizers set the official ticket price at:

Correct AnswerverifiedShow Answer

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Use the following graph of the demand for coffee: Refer to the above diagram of three demand curves for coffee. Which of the following would cause a shift in coffee demand from D₁ to D₃?

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