Question 1

One reason the supply of cell phones has increased is:

Accepted Answer

A)   cell phone towers are much more common.
B)   better technology allows them to be produced more cheaply.
C)   consumer preferences for cell phones has increased.
D)   expectations of the near future are that no landlines will exist.

Question 2

Which factor of supply would the introduction of e-mail into places of businesses be?

Accepted Answer

A)   Technology
B)   Price of input
C)   Number of sellers
D)   Expectation of the future A

Question 3

The supply curve represents the relationship between:

Accepted Answer

A)   price and quantity supplied with everything else held constant.
B)   income and quantity supplied with everything else held constant.
C)   consumer preferences and quantity supplied with everything else held constant.
D)   income and price supplied with everything else held constant.

Question 4

Assume the graph shown represents the market for pizzas sold in an hour. If the original equilibrium was D and S1. Which of the following could be a reason S1 shifted to S2?

Accepted Answer

A)   The price of pizza sauce has increased.
B)   The price of pizza went down.
C)   The price of labor for pizza shops went down.
D)   None of these things would cause such a shift.

Question 5

2. What might have caused such a shift? A)  The good became more popular. B)  People expect the price of this good to drop in the near future. C)  The good became cheaper to produce. D)  Substitutes for this good became less expensive." class="answers-bank-image d-inline" rel="preload" > Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. Suppose Demand shifts and becomes D2. What might have caused such a shift?

Accepted Answer

A)   The good became more popular.
B)   People expect the price of this good to drop in the near future.
C)   The good became cheaper to produce.
D)   Substitutes for this good became less expensive.

Question 6

Consider a market that is in equilibrium. If it experiences an increase in demand, what will happen? The demand curve will shift to the:

Accepted Answer

A)   right, and the equilibrium price and quantity will rise.
B)   right, and the equilibrium price will increase and the equilibrium quantity will decrease.
C)   right, and the equilibrium price and quantity will fall.
D)   left, and the equilibrium price and quantity will fall.

Question 7

The city of Burlington gets very hot each summer and very cold each winter. We would expect the demand for lemonade to:

Accepted Answer

A)   increase constantly.
B)   decrease each summer and increase each winter.
C)   increase each summer and decrease each winter.
D)   decrease constantly.

Question 8

Consider a market that is in equilibrium. If it experiences both a decrease in demand and a decrease in supply, what can be said of the new equilibrium? The equilibrium:

Accepted Answer

A)   price and quantity will both fall.
B)   quantity will definitely fall, while the equilibrium price cannot be predicted.
C)   price will definitely fall, while the equilibrium quantity cannot be predicted.
D)   price and quantity will both rise. B

Question 9

Apple just announced it will be coming out with the newest model iPhone in the next six months. One could reasonably expect demand for the current model of iPhone to:

Accepted Answer

A)   decrease due to a change in expectations of future prices.
B)   increase due to a change in expectations of future prices.
C)   increase due to limited supply of the current model.
D)   decrease due to the change in price of a substitute good.

Question 10

If producers incorrectly set the price of their product too low a:

Accepted Answer

A)   shortage will result and consumers will bid the price down to equilibrium.
B)   surplus will result and excess goods in inventory will signal the producers to lower their prices.
C)   shortage will result and consumers will bid the price up to equilibrium.
D)   surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.

Question 11

The law of supply can be stated as all else equal:

Accepted Answer

A)   quantity supplied rises as price falls.
B)   quantity supplied rises as price rises.
C)   quantity supplied rises as income rises.
D)   quantity supplied rises as income falls. B

Question 12

Consider a market that is in equilibrium. If it experiences a decrease in demand, what will happen? The demand curve will shift to the:

Accepted Answer

A)   left, and the equilibrium price and quantity will rise.
B)   left, and the equilibrium price will increase and the equilibrium quantity will decrease.
C)   left, and the equilibrium price and quantity will fall.
D)   right, and the equilibrium price and quantity will fall.

Question 13

Tom was out shopping for a sweater and learned that they will all go on sale tomorrow. We would expect Tom's demand for sweaters today to:

Accepted Answer

A)   increase.
B)   shift to the left.
C)   move down along his demand curve.
D)   shift to the right.

Question 14

A demand schedule is a:

Accepted Answer

A)   table which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.
B)   graph which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.
C)   table which shows the quantities of a particular good or service that consumers are willing to purchase at various income levels.
D)   line which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.

Question 15

The most likely substitute good for cereal would be:

Accepted Answer

A)   a bagel.
B)   milk.
C)   pizza.
D)   a hot dog.

Question 16

On the supply curve:

Accepted Answer

A)   quantity goes on the horizontal axis and price goes on the vertical axis.
B)   quantity goes on the vertical axis and price goes on the horizontal axis.
C)   both quantity and price go on the horizontal axis.
D)   it doesn't matter which axis price and quantity are placed on.

Question 17

A nonprice determinant of demand refers to something that:

Accepted Answer

A)   affects the price other than demand.
B)   affects demand other than the price.
C)   determines how large a role prices play in the demand decision.
D)   determines how prices are affected by income.

Question 18

Consider a market that is in equilibrium. If it experiences an increase in supply, what will happen? The supply curve will shift to the:

Accepted Answer

A)   right and the equilibrium price and quantity will rise.
B)   right and the equilibrium price will decrease and the equilibrium quantity will increase.
C)   right and the equilibrium price and quantity will fall.
D)   left and the equilibrium price and quantity will fall.

Question 19

Demand describes how much of something people:

Accepted Answer

A)   are willing and able to buy at alternative prices under certain circumstances.
B)   want, but may not necessarily be able, to buy under certain circumstances.
C)   are willing and able to sell under certain circumstances.
D)   be able to buy, but might not want to buy under certain circumstances.

Question 20

The advancement of computers has increased the productivity of a paper mill. How will this likely affect the supply of paper? It will likely cause:

Accepted Answer

A)   a rightward shift in the supply of paper.
B)   a leftward shift in the supply of paper.
C)   a shift straight up in the supply of paper.
D)   no shift, but a movement along the supply curve.

Exam 3: Markets

One reason the supply of cell phones has increased is:

Correct AnswerverifiedShow Answer

Which factor of supply would the introduction of e-mail into places of businesses be?

Correct AnswerverifiedA

The supply curve represents the relationship between:

Correct AnswerverifiedShow Answer

Assume the graph shown represents the market for pizzas sold in an hour. If the original equilibrium was D and S1. Which of the following could be a reason S1 shifted to S2?

Correct AnswerverifiedShow Answer

Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. Suppose Demand shifts and becomes D2. What might have caused such a shift?

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium. If it experiences an increase in demand, what will happen? The demand curve will shift to the:

Correct AnswerverifiedShow Answer

The city of Burlington gets very hot each summer and very cold each winter. We would expect the demand for lemonade to:

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium. If it experiences both a decrease in demand and a decrease in supply, what can be said of the new equilibrium? The equilibrium:

Correct AnswerverifiedB

Apple just announced it will be coming out with the newest model iPhone in the next six months. One could reasonably expect demand for the current model of iPhone to:

Correct AnswerverifiedShow Answer

If producers incorrectly set the price of their product too low a:

Correct AnswerverifiedShow Answer

The law of supply can be stated as all else equal:

Correct AnswerverifiedB

Consider a market that is in equilibrium. If it experiences a decrease in demand, what will happen? The demand curve will shift to the:

Correct AnswerverifiedShow Answer

Tom was out shopping for a sweater and learned that they will all go on sale tomorrow. We would expect Tom's demand for sweaters today to:

Correct AnswerverifiedShow Answer

A demand schedule is a:

Correct AnswerverifiedShow Answer

The most likely substitute good for cereal would be:

Correct AnswerverifiedShow Answer

On the supply curve:

Correct AnswerverifiedShow Answer

A nonprice determinant of demand refers to something that:

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium. If it experiences an increase in supply, what will happen? The supply curve will shift to the:

Correct AnswerverifiedShow Answer

Demand describes how much of something people:

Correct AnswerverifiedShow Answer

The advancement of computers has increased the productivity of a paper mill. How will this likely affect the supply of paper? It will likely cause:

Correct AnswerverifiedShow Answer

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A

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Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. Suppose Demand shifts and becomes D₂. What might have caused such a shift?

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B

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B

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