Question 1

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. Refer to the given information.An improvement in the technology used to produce X will:

Accepted Answer

A)   decrease S,increase P,and decrease Q.
B)   decrease S,increase P,and increase Q.
C)   increase S,decrease P,and increase Q.
D)   decrease D,decrease P,and decrease Q.E) C) and D)
F) None of the above

Question 2

Producing a good in the least costly way is known as allocative efficiency.

Accepted Answer

A) True 
 B)False

Question 3

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. Refer to the given information.An increase in the price of a product that is a complement to X will:

Accepted Answer

A)   decrease S,decrease P,and decrease Q.
B)   decrease D,decrease P,and decrease Q.
C)   increase D,increase P,and increase Q.
D)   increase D,increase P,and decrease Q.E) A) and B)
F) A) and C)

Question 4

(Advanced analysis) Answer the question on the basis of the following information.The demand for commodity X is represented by the equation P = 100 - 2Q and supply by the equation P = 10 + 4Q. Refer to the given information.If demand changed from P = 100 - 2Q to P = 130 - Q,the new equilibrium quantity is:

Accepted Answer

A)   15.
B)   20.
C)   24.
D)   32.E) A) and D)
F) B) and D)

Question 5

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

Accepted Answer

A)   A decrease in demand.
B)   An increase in demand.
C)   A decrease in supply.
D)   An increase in supply.E) B) and D)
F) B) and C)

Question 6

If there is a surplus of a product,its price:

Accepted Answer

A)   is below the equilibrium level.
B)   is above the equilibrium level.
C)   will rise in the near future.
D)   is in equilibrium.E) B) and D)
F) C) and D)

Question 7

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

Accepted Answer

A)   decrease,quantity demanded will decrease,and quantity supplied will increase.
B)   decrease and quantity demanded and quantity supplied will both decrease.
C)   increase,quantity demanded will increase,and quantity supplied will decrease.
D)   increase,quantity demanded will decrease,and quantity supplied will increase.E) All of the above
F) B) and C)

Question 8

An increase in the quantity demanded means that:

Accepted Answer

A)   given supply,the price of the product can be expected to decline.
B)   price has declined and consumers therefore want to purchase more of the product.
C)   the demand curve has shifted to the right.
D)   the demand curve has shifted to the left.E) B) and C)
F) All of the above

Question 9

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Accepted Answer

A) True 
 B)False

Question 10

If Z is an inferior good,an increase in money income will shift the:

Accepted Answer

A)   supply curve for Z to the left.
B)   supply curve for Z to the right.
C)   demand curve for Z to the left.
D)   demand curve for Z to the right.E) All of the above
F) B) and C)

Question 11

In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. Refer to the given information.An increase in the price of a product that is a close substitute for X will:

Accepted Answer

A)   decrease D,increase P,and decrease Q.
B)   increase D,increase P,and decrease Q.
C)   increase D,increase P,and increase Q.
D)   increase D,decrease P,and increase Q.E) A) and B)
F) C) and D)

Question 12

In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

Accepted Answer

A)   complementary goods and the higher price for oil increased the demand for natural gas.
B)   substitute goods and the higher price for oil increased the demand for natural gas.
C)   complementary goods and the higher price for oil decreased the supply of natural gas.
D)   substitute goods and the higher price for oil decreased the supply of natural gas.E) B) and C)
F) A) and B)

Question 13

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Accepted Answer

A)   a smaller quantity of C will be demanded.
B)   a larger quantity of C will be demanded.
C)   the demand for C will increase.
D)   the demand for C will decrease.E) None of the above
F) B) and C)

Question 14

An increase in the price of a product will reduce the amount of it purchased because:

Accepted Answer

A)   supply curves are upsloping.
B)   the higher price means that real incomes have risen.
C)   consumers will substitute other products for the one whose price has risen.
D)   consumers substitute relatively high-priced for relatively low-priced products.E) None of the above
F) All of the above

Question 15

The demand curve shows the relationship between:

Accepted Answer

A)   money income and quantity demanded.
B)   price and production costs.
C)   price and quantity demanded.
D)   consumer tastes and quantity demanded.E) A) and B)
F) B) and D)

Question 16

(Consider This) Ticket scalping refers to:

Accepted Answer

A)   the surplus of tickets that occurs when price is set below equilibrium.
B)   the shortage of tickets that occurs when price is set above equilibrium.
C)   pricing tickets so high that an athletic or artistic event will not be sold out.
D)   reselling a ticket at a price above its original purchase price.E) B) and D)
F) C) and D)

Question 17

An increase in quantity supplied might be caused by an increase in production costs.

Accepted Answer

A) True 
 B)False

Question 18

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

Accepted Answer

A)   higher education is an exception to the law of demand.
B)   the supply of education provided by GSU has also increased over the 20-year period.
C)   school-age population,incomes,and preferences for education have changed over the 20-year period.
D)   GSU's supply curve of education is downsloping.E) A) and D)
F) None of the above

Question 19

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Accepted Answer

A) True 
 B)False

Question 20

An improvement in production technology will:

Accepted Answer

A)   increase equilibrium price.
B)   shift the supply curve to the left.
C)   shift the supply curve to the right.
D)   shift the demand curve to the left.E) B) and C)
F) B) and D)

Exam 3: Demand, Supply, and Market Equilibrium

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

Correct Answer
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Producing a good in the least costly way is known as allocative efficiency.

Correct Answer
verified

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Correct Answer
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An increase in the price of a product will reduce the amount of it purchased because:

Correct Answer
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An improvement in production technology will:

Correct Answer
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Correct Answer
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The demand curve shows the relationship between:

Correct Answer
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In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

Correct Answer
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An increase in the quantity demanded means that:

Correct Answer
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An increase in quantity supplied might be caused by an increase in production costs.

Correct Answer
verified

(Consider This) Ticket scalping refers to:

Correct Answer
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If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Correct Answer
verified

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

Correct Answer
verified

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

Correct Answer
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Correct Answer
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Correct Answer
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If there is a surplus of a product,its price:

Correct Answer
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In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct Answer
verified

Correct Answer
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If Z is an inferior good,an increase in money income will shift the:

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

If producers must obtain higher prices than before to produce a given level of output,then the following has occurred:

Correct AnswerverifiedShow Answer

Producing a good in the least costly way is known as allocative efficiency.

Correct AnswerverifiedShow Answer

Assume that the demand curve for product C is downsloping.If the price of C falls from $2.00 to $1.75:

Correct AnswerverifiedShow Answer

An increase in the price of a product will reduce the amount of it purchased because:

Correct AnswerverifiedShow Answer

An improvement in production technology will:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The demand curve shows the relationship between:

Correct AnswerverifiedShow Answer

In 2007,the price of oil increased,which in turn caused the price of natural gas to rise.This can best be explained by saying that oil and natural gas are:

Correct AnswerverifiedShow Answer

An increase in the quantity demanded means that:

Correct AnswerverifiedShow Answer

An increase in quantity supplied might be caused by an increase in production costs.

Correct AnswerverifiedShow Answer

(Consider This) Ticket scalping refers to:

Correct AnswerverifiedShow Answer

If market demand increases and market supply decreases,the change in equilibrium price is unpredictable without first knowing the exact magnitudes of the demand and supply changes.

Correct AnswerverifiedShow Answer

Assume in a competitive market that price is initially below the equilibrium level.We can predict that price will:

Correct AnswerverifiedShow Answer

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased.From this information we can conclude that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If there is a surplus of a product,its price:

Correct AnswerverifiedShow Answer

In a competitive market,every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that price can sell it.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Z is an inferior good,an increase in money income will shift the:

Correct AnswerverifiedShow Answer

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