Question 1

-According to the above table, at a price of $2 per unit, which of the following would exist?

Accepted Answer

A)  A shortage of 800 units
B)  A surplus of 800 units
C)  A shortage of 200 units
D)  A shortage of 400 units

Question 2

There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are

Accepted Answer

A)  substitute goods.
B)  inferior goods.
C)  independent goods.
D)  complementary goods.

Question 3

According to the above figure, a shortage will occur at a price at which

Accepted Answer

A)  quantity demanded equals quantity supplied.
B)  quantity demanded exceeds quantity supplied.
C)  quantity supplied exceeds quantity demanded.
D)  government sets a price above equilibrium.

Question 4

A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

Accepted Answer

A)  decrease; increase
B)  decrease; decrease
C)  increase; decrease
D)  increase; increase

Question 5

-In the above figure, what would result if the price was $40?

Accepted Answer

A)  a surplus
B)  a shortage
C)  equilibrium
D)  excess demand

Question 6

-Refer to the above figure. Which panel best demonstrates the demand curve?

Accepted Answer

A)  Panel A.
B)  Panel B.
C)  Panel C.
D)  Panel D.

Question 7

A shortage will occur when

Accepted Answer

A)  the price equals the market clearing level.
B)  the price is above the market clearing level.
C)  there is an excess quantity supplied.
D)  the price is below the market clearing level.

Question 8

The "real" price of a good is known as

Accepted Answer

A)  the absolute price of the good.
B)  the dollar price of the good since we use dollars in the United States.
C)  relative price of the good.
D)  the price actually paid for a good instead of the sticker price.

Question 9

-In the above figure, if the price is equal to $50, there is

Accepted Answer

A)  a surplus of 200 units.
B)  a shortage of 100 units.
C)  an excess quantity demanded of 50 units.
D)  an inadequate supply of 100 units.

Question 10

Which of the following are substitute goods?

Accepted Answer

A)  margarine and butter
B)  peanut butter and jelly
C)  pizza and beer
D)  sports utility vehicles and gasoline

Question 11

A subsidy to carrot farmers will

Accepted Answer

A)  increase the quantity of carrots demanded.
B)  decrease the quantity of carrots supplied.
C)  increase the supply of carrots.
D)  leave both the supply and demand of carrots unchanged.

Question 12

Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

Accepted Answer

A)  Good X and Good Y are substitutes.
B)  Good X and Good Y are complements.
C)  Good X is an inferior good.
D)  Good Y is an inferior good.

Question 13

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

Accepted Answer

A)  substitutes.
B)  complements.
C)  normal.
D)  inferior.

Question 14

A market demand schedule for a product indicates that

Accepted Answer

A)  as the product's price falls, consumers buy less of the good.
B)  there is a positive relationship between price and quantity demanded.
C)  as a product's price rises, consumers buy more of the good.
D)  there is a negative relationship between price and quantity demanded.

Question 15

A direct or positive relationship between price and quantity supplied is

Accepted Answer

A)  the market clearing price.
B)  a change in demand.
C)  a supply curve.
D)  a demand curve.

Question 16

-According to the above table, the equilibrium price of DVDs is

Accepted Answer

A)  $16.
B)  $14.
C)  $12.
D)  $10.

Question 17

A shortage will occur whenever

Accepted Answer

A)  price is below the equilibrium price.
B)  price is above the equilibrium price.
C)  price is equal to the equilibrium price.
D)  the supply curve is upward sloping.

Question 18

If the price of apples goes down, then the demand for pears will

Accepted Answer

A)  increase, assuming apples and pears are substitutes.
B)  decrease, assuming apples and pears are substitutes.
C)  decrease, assuming apples and pears are complements.
D)  remain constant, assuming apples and pears are related goods.

Question 19

The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

Accepted Answer

A)  increased from 0.25 to 0.6.
B)  decreased from 4.0 to 3.0.
C)  stayed constant at 0.25.
D)  stayed constant at 4.0.

Question 20

Which of the following does NOT cause a shift in demand?

Accepted Answer

A)  Change in income
B)  Change in tastes
C)  Change in the price of the good
D)  Change in the price of a related good

Exam 3: Demand and Supply

-In the above figure, if the price is equal to $50, there is

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A market demand schedule for a product indicates that

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If the price of apples goes down, then the demand for pears will

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The "real" price of a good is known as

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-Refer to the above figure. Which panel best demonstrates the demand curve?

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-In the above figure, what would result if the price was $40?

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A subsidy to carrot farmers will

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A shortage will occur whenever

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-According to the above table, at a price of $2 per unit, which of the following would exist?

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-According to the above table, the equilibrium price of DVDs is

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A shortage will occur when

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A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________.

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If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

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Mary increases her consumption of Good X after the price of Good Y decreased. For Mary

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There is an increase in the demand for cream when the price of coffee falls. Other things constant, we can conclude that coffee and cream are

Correct AnswerverifiedShow Answer

A direct or positive relationship between price and quantity supplied is

Correct AnswerverifiedShow Answer

Which of the following does NOT cause a shift in demand?

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According to the above figure, a shortage will occur at a price at which

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The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus

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Which of the following are substitute goods?

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A shortage creates a situation that forces prices to while a surplus creates a situation that forces prices to .

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