Question 1

The demand curve for a product might shift as the result of a change in:

Accepted Answer

A)  consumer tastes.
B)  consumer incomes.
C)  the prices of related goods.
D)  all of the above.E) A) and B)
F) B) and D)

Question 2

Refer to the above graph.X and Y are unrelated products.Which one of the lines in the graph best illustrates this relationship?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) A) and B)
F) B) and D)

Question 3

In a competitive market, if the existing price is below the equilibrium price, market forces will drive the price:

Accepted Answer

A)  up and quantity supplied up.
B)  up and quantity supplied down.
C)  up and supply up.
D)  down and demand down.E) A) and C)
F) None of the above

Question 4

The law of demand states that:

Accepted Answer

A)  price and quantity demanded are inversely related.
B)  the larger the number of buyers in a market, the lower will be product price.
C)  price and quantity demanded are directly related.
D)  consumers will buy more of a product at high prices than at low prices.E) B) and D)
F) A) and B)

Question 5

1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in supply may have been caused by: A) an increase in the wages paid to workers producing this good. B) the development of more efficient machinery for producing this commodity. C) this product becoming less fashionable. D) an increase in consumer incomes." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in supply may have been caused by:

Accepted Answer

A)  an increase in the wages paid to workers producing this good.
B)  the development of more efficient machinery for producing this commodity.
C)  this product becoming less fashionable.
D)  an increase in consumer incomes.E) C) and D)
F) A) and C)

Question 6

The law of demand is illustrated by a demand curve that is:

Accepted Answer

A)  vertical.
B)  horizontal.
C)  upward sloping.
D)  downward sloping.E) B) and C)
F) A) and D)

Question 7

Refer to the above data.If price was initially $14, we would expect:

Accepted Answer

A)  quantity supplied to continue to exceed quantity demanded.
B)  the quantity of wheat supplied to decline as a result of the subsequent price change.
C)  the quantity of wheat demanded to fall as a result of the subsequent price change.
D)  the price of wheat to rise.E) A) and C)
F) B) and D)

Question 8

The horizontal axis of a graph which shows a market demand curve indicates the:

Accepted Answer

A)  prices at which various levels of output can be sold.
B)  number of consumers who are in the market for this product.
C)  various quantities of output at which the market will be cleared.
D)  quantities which consumers will be willing and able to buy at various prices.E) None of the above
F) All of the above

Question 9

In recent years, there has been a rapid increase in consumption of sushi in Canada and yet, the price of sushi has remained relatively stable.An explanation for this phenomenon could be:

Accepted Answer

A)  although the demand for sushi has gone up, the supply of fish (an input in the production of sushi)  has declined as well.
B)  while the demand for sushi has gone up, the supply of sushi has increase by about the same magnitude and therefore, the price has stayed relatively stable.
C)  while the demand for sushi has gone up, the supply of sushi has decreased by about the same magnitude and therefore, the price has stayed relatively stable.
D)  while the demand for sushi has gone up, the supply of sushi has not changed and therefore, the price has stayed relatively stable.E) C) and D)
F) B) and C)

Question 10

If L and M are complementary goods, an increase in the price of L will result in:

Accepted Answer

A)  an increase in the sales of L.
B)  no change in either the price or sales of M.
C)  a decrease in the sales of M.
D)  an increase in the sales of M.E) B) and D)
F) None of the above

Question 11

Refer to the above data.Equilibrium quantity will be:

Accepted Answer

A)  150
B)  220
C)  245
D)  100E) A) and C)
F) B) and C)

Question 12

If the price of a product increases, we would expect:

Accepted Answer

A)  demand to decrease.
B)  quantity supplied to increase.
C)  supply to decrease.
D)  quantity demanded to increase.E) All of the above
F) C) and D)

Question 13

Which diagram above illustrates the effect on the peanut butter market as a result of a technological advance which reduces the costs of harvesting peanuts?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) All of the above
F) None of the above

Question 14

1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at: A) P1 and there would be a shortage of rental housing. B) P2 and there would be a shortage of rental housing. C) P3 and there would be a surplus of rental housing. D) P4 and there would be a surplus of rental housing." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Accepted Answer

A)  P1 and there would be a shortage of rental housing.
B)  P2 and there would be a shortage of rental housing.
C)  P3 and there would be a surplus of rental housing.
D)  P4 and there would be a surplus of rental housing.E) A) and B)
F) None of the above

Question 15

Assuming an economy has fixed quantities of resources, that economy:

Accepted Answer

A)  is more efficient, the larger the amount of goods and services it produces.
B)  is able to satisfy all consumer wants.
C)  will produce the same output whether or not resources are used efficiently.
D)  is able to produce the same amount of output regardless of the production technologies it chooses.E) A) and B)
F) A) and C)

Question 16

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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 above.An increase in the price of a product which is a complement (in consumption)  to X will:

Accepted Answer

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

Question 17

What combination of changes in supply and demand would most likely increase the equilibrium quantity?

Accepted Answer

A)  when supply increases and demand increases
B)  when supply decreases and demand decreases
C)  when supply decreases and demand increases
D)  when supply increases and demand decreasesE) B) and D)
F) A) and C)

Question 18

In the corn market, demand often exceeds supply and supply sometimes exceeds demand"."The price of corn rises and falls in response to changes in supply and demand.In which of these two statements are the terms "demand" and "supply" being used correct

Accepted Answer

A)  in neither statement
B)  in the second statement
C)  in the first statement
D)  in both statementsE) C) and D)
F) A) and D)

Question 19

Productive efficiency refers to:

Accepted Answer

A)  the use of the least-cost method of production.
B)  the production of the product-mix most wanted by society.
C)  the full employment of all available resources.
D)  production at some point inside of the production possibilities curve.E) B) and C)
F) A) and D)

Question 20

Refer to the graph below.The graph shows the market for a good.  Identify a correct statement about the market.

Accepted Answer

A)  The market equilibrium has shifted from point M to point K.
B)  An increase in the supply of the good is more than the increase in the demand for the good.
C)  The new market equilibrium price and quantity are both greater than the original market equilibrium price and quantity.
D)  Point M is the new market equilibrium.E) B) and D)
F) B) and C)

Exam 3: Part B: Demand, Supply, and Market Equilibrium

Productive efficiency refers to:

Correct Answer
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Refer to the above graph.X and Y are unrelated products.Which one of the lines in the graph best illustrates this relationship?

Correct Answer
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The horizontal axis of a graph which shows a market demand curve indicates the:

Correct Answer
verified

In recent years, there has been a rapid increase in consumption of sushi in Canada and yet, the price of sushi has remained relatively stable.An explanation for this phenomenon could be:

Correct Answer
verified

If the price of a product increases, we would expect:

Correct Answer
verified

In a competitive market, if the existing price is below the equilibrium price, market forces will drive the price:

Correct Answer
verified

The law of demand states that:

Correct Answer
verified

Which diagram above illustrates the effect on the peanut butter market as a result of a technological advance which reduces the costs of harvesting peanuts?

Correct Answer
verified

If L and M are complementary goods, an increase in the price of L will result in:

Correct Answer
verified

The law of demand is illustrated by a demand curve that is:

Correct Answer
verified

Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D₁ and the supply S₁ for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Correct Answer
verified

Refer to the graph below.The graph shows the market for a good. Identify a correct statement about the market.

Correct Answer
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Correct Answer
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What combination of changes in supply and demand would most likely increase the equilibrium quantity?

Correct Answer
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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market the indicated shift in supply may have been caused by:

Correct Answer
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Refer to the above data.Equilibrium quantity will be:

Correct Answer
verified

The demand curve for a product might shift as the result of a change in:

Correct Answer
verified

Refer to the above data.If price was initially $14, we would expect:

Correct Answer
verified

In the corn market, demand often exceeds supply and supply sometimes exceeds demand"."The price of corn rises and falls in response to changes in supply and demand.In which of these two statements are the terms "demand" and "supply" being used correct

Correct Answer
verified

Assuming an economy has fixed quantities of resources, that economy:

Correct Answer
verified

Exam 3: Part B: Demand, Supply, and Market Equilibrium

Productive efficiency refers to:

Correct AnswerverifiedShow Answer

Refer to the above graph.X and Y are unrelated products.Which one of the lines in the graph best illustrates this relationship?

Correct AnswerverifiedShow Answer

The horizontal axis of a graph which shows a market demand curve indicates the:

Correct AnswerverifiedShow Answer

In recent years, there has been a rapid increase in consumption of sushi in Canada and yet, the price of sushi has remained relatively stable.An explanation for this phenomenon could be:

Correct AnswerverifiedShow Answer

If the price of a product increases, we would expect:

Correct AnswerverifiedShow Answer

In a competitive market, if the existing price is below the equilibrium price, market forces will drive the price:

Correct AnswerverifiedShow Answer

The law of demand states that:

Correct AnswerverifiedShow Answer

Which diagram above illustrates the effect on the peanut butter market as a result of a technological advance which reduces the costs of harvesting peanuts?

Correct AnswerverifiedShow Answer

If L and M are complementary goods, an increase in the price of L will result in:

Correct AnswerverifiedShow Answer

The law of demand is illustrated by a demand curve that is:

Correct AnswerverifiedShow Answer

Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D1 and the supply S1 for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Correct AnswerverifiedShow Answer

Refer to the graph below.The graph shows the market for a good. Identify a correct statement about the market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What combination of changes in supply and demand would most likely increase the equilibrium quantity?

Correct AnswerverifiedShow Answer

Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in supply may have been caused by:

Correct AnswerverifiedShow Answer

Refer to the above data.Equilibrium quantity will be:

Correct AnswerverifiedShow Answer

The demand curve for a product might shift as the result of a change in:

Correct AnswerverifiedShow Answer

Refer to the above data.If price was initially $14, we would expect:

Correct AnswerverifiedShow Answer

In the corn market, demand often exceeds supply and supply sometimes exceeds demand"."The price of corn rises and falls in response to changes in supply and demand.In which of these two statements are the terms "demand" and "supply" being used correct

Correct AnswerverifiedShow Answer

Assuming an economy has fixed quantities of resources, that economy:

Correct AnswerverifiedShow Answer

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Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D₁ and the supply S₁ for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves.In this market the indicated shift in supply may have been caused by:

Correct Answer
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Correct Answer
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