Question 1

Along a supply curve:

Accepted Answer

A)  ​supply changes as price changes.
B)  ​quantity supplied changes as price changes.
C)  ​supply changes as technology changes.
D)  ​quantity supplied changes as technology changes.E) A) and D)
F) None of the above

Question 2

If the demand for fast-food rises as a result of lower income, we would say fast-food is an inferior good.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would not cause a change in the supply of milk?

Accepted Answer

A)  ​an increase in government subsidies to dairy farmers
B)  ​an increase in the price of milk
C)  ​the discovery of growth hormones to stimulate the milk production of cows
D)  ​an increase in the cost of feed for cowsE) A) and B)
F) C) and D)

Question 4

Suppose roses are currently selling for $30 per dozen, but the equilibrium price of roses is $20 per dozen. We would expect a

Accepted Answer

A)  ​shortage to exist and the market price of roses to increase.
B)  ​shortage to exist and the market price of roses to decrease.
C)  ​surplus to exist and the market price of roses to increase.
D)  ​surplus to exist and the market price of roses to decrease.E) All of the above
F) A) and C)

Question 5

Pizza is a normal good if the demand

Accepted Answer

A)  ​for pizza rises when income rises.
B)  ​for pizza rises when the price of pizza falls.
C)  ​curve for pizza slopes upward.
D)  ​curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.E) A) and D)
F) A) and C)

Question 6

If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that:

Accepted Answer

A)  ​Products X and Y are complements.
B)  ​Products X and Y are substitutes.
C)  ​Products X and Y are normal goods.
D)  ​The price of Product Y will decrease.E) A) and D)
F) A) and C)

Question 7

If muffins and bagels are substitutes, a higher price for bagels would result in a(n)

Accepted Answer

A)  ​increase in the demand for bagels.
B)  ​decrease in the demand for bagels.
C)  ​increase in the demand for muffins.
D)  ​decrease in the demand for muffins.E) B) and D)
F) B) and C)

Question 8

If the price of pizza falls, the demand for pizza will rise.

Accepted Answer

A) True 
 B)False

Question 9

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)  ​prices at and above the equilibrium price.
B)  ​prices at and below the equilibrium price.
C)  ​prices above and below the equilibrium price, but not at the equilibrium price.
D)  ​the equilibrium price but not above or below the equilibrium price.E) B) and C)
F) A) and D)

Question 10

When there is an excess quantity supplied of a product at the current price, then:

Accepted Answer

A)  ​the market price must be below equilibrium price.
B)  ​the quantity demanded is greater than the equilibrium quantity.
C)  ​the market price will tend to rise.
D)  ​the market price will tend to fall.E) B) and D)
F) All of the above

Question 11

A decrease in the price of a good will

Accepted Answer

A)  ​increase supply.
B)  ​decrease supply.
C)  ​increase quantity supplied.
D)  ​decrease quantity supplied.E) A) and C)
F) A) and B)

Question 12

All of the following would shift a product's demand curve except a(n) :

Accepted Answer

A)  ​increase in the price of the product.
B)  ​decrease in consumer income.
C)  ​increase in the price of a substitute.
D)  ​increase in the price of a complement.E) A) and B)
F) A) and C)

Question 13

Which of the following is not held constant along a given demand curve?

Accepted Answer

A)  ​income
B)  ​price
C)  ​tastes
D)  ​expectationsE) A) and B)
F) B) and C)

Question 14

Other things constant, a decrease in the price of fertilizer will:

Accepted Answer

A)  ​increase the supply of wheat.
B)  ​decrease the supply of wheat.
C)  ​increase the demand for wheat.
D)  ​decrease the demand for wheat.E) A) and C)
F) A) and B)

Question 15

A downward-sloping demand curve illustrates

Accepted Answer

A)  ​that demand increases.
B)  ​that prices fall.
C)  ​the relationship between income and demand.
D)  ​the law of demand.E) B) and C)
F) C) and D)

Question 16

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

Accepted Answer

A)  ​equilibrium.
B)  ​the law of demand.
C)  ​the relationship between demand and income.
D)  ​the definition of a normal good.E) B) and D)
F) B) and C)

Question 17

Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in

Accepted Answer

A)  ​A leftward shift in the demand for tea.
B)  ​A downward movement along the demand curve for tea.
C)  ​A rightward shift in the demand for tea.
D)  ​An upward movement along the demand curve for tea.E) A) and D)
F) B) and C)

Question 18

If Bill expects to earn a higher income next month, he may choose to

Accepted Answer

A)  ​save more now and spend less of his current income on goods and services.
B)  ​save less now and spend more of his current income on goods and services.
C)  ​decrease his current demand for goods and services.
D)  ​move along his current demand curve for goods and services.E) A) and B)
F) A) and C)

Question 19

A decrease in consumer incomes will:

Accepted Answer

A)  ​decrease the demand for an inferior good.
B)  ​decrease the supply of an inferior good.
C)  ​increase the demand for a normal good.
D)  ​do none of the aboveE) A) and B)
F) C) and D)

Question 20

A supply curve slopes upward because

Accepted Answer

A)  ​as more is produced, total cost of production falls.
B)  ​many firms will experience increases in their costs of production as their output rises so they need a higher price in order to induce them to produce more output.
C)  ​the higher the price per unit, the greater the profitability generated by supplying more of that good.
D)  ​both (b)  and (c) .E) A) and B)
F) C) and D)

Exam 4: Demand, Supply, and Market Equilibrium

If an increase in the price of Product X causes an increase in the demand for Product Y, we can conclude that:

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If the demand for fast-food rises as a result of lower income, we would say fast-food is an inferior good.

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Which of the following is not held constant along a given demand curve?

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Pizza is a normal good if the demand

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If Bill expects to earn a higher income next month, he may choose to

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If muffins and bagels are substitutes, a higher price for bagels would result in a(n)

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A decrease in consumer incomes will:

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Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

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A downward-sloping demand curve illustrates

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Suppose roses are currently selling for $30 per dozen, but the equilibrium price of roses is $20 per dozen. We would expect a

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Which of the following would not cause a change in the supply of milk?

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All of the following would shift a product's demand curve except a(n) :

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A supply curve slopes upward because

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Along a supply curve:

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If the price of pizza falls, the demand for pizza will rise.

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Other things constant, a decrease in the price of fertilizer will:

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A decrease in the price of a good will

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When there is an excess quantity supplied of a product at the current price, then:

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"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

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Assuming that coffee and tea are substitutes, a decrease in the price of coffee will result in

Correct AnswerverifiedShow Answer

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