Question 1

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

Accepted Answer

A normal good is one for which demand in...

Question 2

-Refer to the above table.At a price of $450,there is an

Accepted Answer

A)  equilibrium.
B)  excess quantity supplied of 4,000 tablets.
C)  excess quantity demanded of 6,000 tablets.
D)  excess quantity demanded of 9,000 tablets.E) A) and D)
F) A) and B)

Question 3

If the price of margarine falls,the demand for butter will

Accepted Answer

A)  remain unchanged.
B)  increase.
C)  decrease.
D)  rise at first and then fall.E) C) and D)
F) None of the above

Question 4

If two goods,J and K,are complements,then which of the following statements is FALSE?

Accepted Answer

A)  They are consumed together.
B)  An increase in the price of J causes the demand for K to rise.
C)  When the quantity demanded of J increases,the demand for K increases.
D)  A decrease in the price of K causes an increase in the demand for J.E) C) and D)
F) A) and B)

Question 5

-Refer to the above figure.A surplus will exist when

Accepted Answer

A)  the price is between $0 and $6.
B)  the price equals $6.
C)  the price equals $10.
D)  quantity demanded equals 15.E) All of the above
F) None of the above

Question 6

The price of a first-class stamp in 1957 was 3 cents,and it is 45 cents in 2012.From this we know that

Accepted Answer

A)  both the relative and the absolute price of first-class stamps increased from 1957 to 2012.
B)  the money price of first-class stamps increased from 1957 to 2012 but the absolute price of first-class stamps stayed constant.
C)  the money price of first-class stamps increased from 1957 to 2012 and the relative price of first-class stamps decreased.
D)  the money price of first-class stamps increased from 1957 to 2012,but we can't tell if the relative price of first-class stamps increased or decreased without more information.E) B) and D)
F) None of the above

Question 7

-Refer to the above figure.Suppose that Cheerios and Apple Jacks are substitutes.Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

Accepted Answer

A)  A
B)  B
C)  neither graph
D)  both graphsE) B) and D)
F) All of the above

Question 8

A change in the price of a good causes

Accepted Answer

A)  an increase in supply.
B)  a decrease in supply.
C)  an increase in demand and a decrease in supply.
D)  a change in quantity supplied.E) A) and D)
F) B) and C)

Question 9

If two goods are substitutes,then

Accepted Answer

A)  an increase in the price of one causes the demand for the other to fall.
B)  there is an inverse relationship between changes in the price of one good and changes in the demand for the other.
C)  if the price of one good falls,the demand for the other good falls also.
D)  changes in the quantity demanded of one good will not affect the demand for the other.E) None of the above
F) A) and B)

Question 10

-Refer to the above table.What is the market quantity demanded at a price of $8?

Accepted Answer

A)  5
B)  15
C)  35
D)  44E) All of the above
F) A) and B)

Question 11

The law of demand implies that the demand curve

Accepted Answer

A)  has a negative slope.
B)  has a positive slope.
C)  shifts to the right when the price of a good increases.
D)  shifts to the left when the price of a good decreases.E) B) and D)
F) B) and C)

Question 12

-Refer to the above figure.Which panel demonstrates the law of demand?

Accepted Answer

A)  Panel A.
B)  Panel B.
C)  Panel C.
D)  Panel D.E) A) and B)
F) A) and C)

Question 13

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

Accepted Answer

A)  an increase in the price of that good.
B)  a decrease in the price of that good.
C)  an expectation of an increase in the relative price of that good.
D)  an expectation of a decrease in the relative price of that good.E) C) and D)
F) A) and B)

Question 14

Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Accepted Answer

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

Question 15

The law of demand states that

Accepted Answer

A)  consumers will exhaust their incomes as they purchase goods and services at given absolute prices.
B)  the quantity demanded of a good is higher at a lower relative price than at a higher relative price.
C)  there is a direct positive relationship between relative price and quantity demanded.
D)  if the price of a good increases both relatively and absolutely,there will be no change in quantity demanded.E) B) and C)
F) A) and B)

Question 16

The law of demand states that there is

Accepted Answer

A)  an inverse relationship between income and quantity demanded,ceteris paribus.
B)  a direct relationship between income and quantity demanded,ceteris paribus.
C)  no relationship between taste and quantity demanded,ceteris paribus.
D)  an inverse relationship between price and quantity demanded,ceteris paribus.E) A) and B)
F) C) and D)

Question 17

The law of demand tells us that people will buy more of a good if

Accepted Answer

A)  the price of that good decreases.
B)  the prices of other goods decrease.
C)  people's income increases.
D)  every factor that can affect people's buying decisions changes.E) A) and B)
F) None of the above

Question 18

Which of the following illustrates the law of demand?

Accepted Answer

A)  More people watch college basketball in March than in November.
B)  The number of long distance calls in the United States is greater on Christmas than on Valentine's Day.
C)  College enrollment increases when federal tuition grants are readily available to students.
D)  The prevailing wage rate in an industry determines how many people choose to work in the industry.E) A) and B)
F) B) and C)

Question 19

Jane has noticed that she used to pay $2 for coffee and now she pays $2.50.Which of the following statements is true?

Accepted Answer

A)  The relative price of coffee has increased compared to tea.
B)  The money price of coffee has increased.
C)  The law of supply explains why the price of coffee has increased.
D)  Jane will stop consuming coffee.E) None of the above
F) A) and D)

Question 20

The law of supply states that other things being equal,

Accepted Answer

A)  supply creates its own demand.
B)  supply will increase if productivity increases.
C)  as price increases,quantity supplied increases.
D)  supply will increase to meet demand if demand increases.E) A) and B)
F) A) and C)

Exam 3: Demand and Supply

-Refer to the above figure.A movement from point A to point B for a good is most likely a result of

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-Refer to the above table.What is the market quantity demanded at a price of $8?

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Jane has noticed that she used to pay $2 for coffee and now she pays $2.50.Which of the following statements is true?

Correct AnswerverifiedShow Answer

If two goods,J and K,are complements,then which of the following statements is FALSE?

Correct AnswerverifiedShow Answer

-Refer to the above figure.Suppose that Cheerios and Apple Jacks are substitutes.Which diagram shows the effect on the demand for Cheerios when the price of Apple Jacks cereal has decreased?

Correct AnswerverifiedShow Answer

-Refer to the above table.At a price of $450,there is an

Correct AnswerverifiedShow Answer

The price of a first-class stamp in 1957 was 3 cents,and it is 45 cents in 2012.From this we know that

Correct AnswerverifiedShow Answer

The law of demand states that

Correct AnswerverifiedShow Answer

The law of demand implies that the demand curve

Correct AnswerverifiedShow Answer

If two goods are substitutes,then

Correct AnswerverifiedShow Answer

If the price of margarine falls,the demand for butter will

Correct AnswerverifiedShow Answer

A change in the price of a good causes

Correct AnswerverifiedShow Answer

The law of demand tells us that people will buy more of a good if

Correct AnswerverifiedShow Answer

What is the difference between a normal good and an inferior good? How does this relate to the demand curve?

Correct AnswerverifiedA normal good is one for which demand in...View AnswerShow Answer

-Refer to the above figure.A surplus will exist when

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Which of the following illustrates the law of demand?

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The law of demand states that there is

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The law of supply states that other things being equal,

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Suppose that today,consumers expect the price of a gallon of gasoline to double in the future.Then today the gasoline

Correct AnswerverifiedShow Answer

-Refer to the above figure.Which panel demonstrates the law of demand?

Correct AnswerverifiedShow Answer

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A normal good is one for which demand in...
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