Question 1

A shortage will occur if:

Accepted Answer

A)   the quantity being supplied at a given price is less than the quantity demanded at that price.
B)   the quantity being supplied at a given price exceeds the quantity demanded at that price.
C)   there are not enough buyers in the market.
D)   there are only inexperienced firms in the market.E) A) and D)
F) B) and D)

Question 2

This graph depicts the demand for a normal good.  A movement from A to C in the graph shown might be caused by:

Accepted Answer

A)   an increase in price.
B)   a decrease in price.
C)   an increase in income.
D)   a decrease in income.E) B) and D)
F) B) and C)

Question 3

Ceteris paribus is:

Accepted Answer

A)   the Latin term for "all other things being the same."
B)   only necessary for the definition of the law of demand.
C)   often used by economists to isolate the effect of a multiple changes that are important.
D)   the Latin term for "as things change only consider these changes".E) C) and D)
F) All of the above

Question 4

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Accepted Answer

A)   equilibrium.
B)   optimization.
C)   maximization.
D)   market collapse.E) All of the above
F) A) and D)

Question 5

Which buyers and sellers are included in the market under consideration depends on:

Accepted Answer

A)   their physical proximity.
B)   the context.
C)   their preferences.
D)   the income levels.E) None of the above
F) B) and C)

Question 6

A decrease in the price of ice cream is likely to cause:

Accepted Answer

A)   an increase in the demand for ice cream cones due to a change in the price of a complementary good.
B)   an increase in the demand for ice cream cones due to a change in the price of a substitute good.
C)   an increase in the demand for ice cream cones due to a change in the preferences of consumers.
D)   a decrease in the demand for ice cream cones due to a change in the price of a related good.E) All of the above
F) A) and B)

Question 7

A perfectly competitive market is one in which:

Accepted Answer

A)   fully informed, price-taking buyers and sellers easily trade a standardized good or service.
B)   fully informed, price-making buyers and seller easily trade a standardized good or service.
C)   uninformed, price-taking buyers and sellers easily trade a standardized good or service.
D)   uninformed, price-making buyers and seller easily trade a standardized good or service.E) A) and B)
F) A) and C)

Question 8

This graph depicts the demand for a normal good.  Suppose Johnny was consuming a normal good at point A in the figure shown,but has just received a raise at work.Johnny's demand may:

Accepted Answer

A)  be unaffected.
B)  increase to point B.
C)  increase to point C.
D)  drop to zero.E) All of the above
F) A) and D)

Question 9

The most likely substitute good for hot dogs would be:

Accepted Answer

A)   ketchup.
B)   burgers.
C)   potato chips.
D)   a plate.E) B) and D)
F) A) and C)

Question 10

When graphing the demand 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.E) All of the above
F) None of the above

Question 11

This table shows the demand and supply schedule of a good.  According to the table shown,at a price of $2.00 quantity demanded:

Accepted Answer

A)   exceeds quantity supplied and a shortage exists.
B)   is less than quantity supplied and a shortage exists.
C)   exceeds quantity supplied and a surplus exists.
D)   is less than quantity supplied and a surplus exists.E) A) and C)
F) None of the above

Question 12

The law of demand describes the:

Accepted Answer

A)   inverse relationship between price and quantity demanded.
B)   direct relationship between price and quantity demanded.
C)   inverse relationship between income and quantity demanded.
D)   direct relationship between income and quantity demanded.E) A) and B)
F) None of the above

Question 13

Some nonprice determinants of supply are:

Accepted Answer

A)   prices of related goods, technology, prices of inputs, expectations, and the number of sellers.
B)   consumer preferences, the price of the good, and prices of related goods.
C)   expectations of sellers and number of buyers in the market.
D)   prices of related goods, technology, and consumer preferences.E) A) and B)
F) A) and C)

Question 14

The law of supply describes the:

Accepted Answer

A)   inverse relationship between price and quantity supplied.
B)   direct relationship between price and quantity supplied.
C)   inverse relationship between income and quantity supplied.
D)   direct relationship between income and quantity supplied.E) A) and D)
F) A) and B)

Question 15

The demand curve is:

Accepted Answer

A)   a downward-sloping line that reflects the inverse relationship between price and quantity.
B)   an upward-sloping line that reflects the inverse relationship between price and quantity.
C)   a downward-sloping line that reflects the positive relationship between price and quantity.
D)   an upward-sloping line that reflects the direct relationship between price and quantity.E) A) and D)
F) All of the above

Question 16

We study the simple model of competitive markets because it helps to:

Accepted Answer

A)   provide useful insights to markets that are not perfectly competitive.
B)   show how the government controls the economy.
C)   indicate whether buyers or sellers matter more.
D)   show how poorly the economy actually functions.E) None of the above
F) A) and B)

Question 17

Wendell just read an article that says scientists have proven that processed cheese food increases brain power.We would expect Wendell's demand for processed cheese food to:

Accepted Answer

A)   increase and shift to the right.
B)   increase and shift to the left.
C)   decrease and shift to the right.
D)   decrease and shift to the left.E) A) and B)
F) A) and C)

Question 18

Irregular weather patterns caused very poor yields for orange farmers.Which factor of supply would this change in the market for orange juice?

Accepted Answer

A)   Technology
B)   Price of input
C)   Number of sellers
D)   Price of related goodE) A) and D)
F) A) and C)

Exam 3: Markets

This graph depicts the demand for a normal good. Suppose Johnny was consuming a normal good at point A in the figure shown,but has just received a raise at work.Johnny's demand may:

Correct Answer
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Ceteris paribus is:

Correct Answer
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Wendell just read an article that says scientists have proven that processed cheese food increases brain power.We would expect Wendell's demand for processed cheese food to:

Correct Answer
verified

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Correct Answer
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Which buyers and sellers are included in the market under consideration depends on:

Correct Answer
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The law of demand describes the:

Correct Answer
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When graphing the demand curve:

Correct Answer
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The law of supply describes the:

Correct Answer
verified

A decrease in the price of ice cream is likely to cause:

Correct Answer
verified

This table shows the demand and supply schedule of a good. According to the table shown,at a price of $2.00 quantity demanded:

Correct Answer
verified

A perfectly competitive market is one in which:

Correct Answer
verified

Irregular weather patterns caused very poor yields for orange farmers.Which factor of supply would this change in the market for orange juice?

Correct Answer
verified

Some nonprice determinants of supply are:

Correct Answer
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A shortage will occur if:

Correct Answer
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The most likely substitute good for hot dogs would be:

Correct Answer
verified

This graph depicts the demand for a normal good. A movement from A to C in the graph shown might be caused by:

Correct Answer
verified

We study the simple model of competitive markets because it helps to:

Correct Answer
verified

The demand curve is:

Correct Answer
verified

Exam 3: Markets

This graph depicts the demand for a normal good. Suppose Johnny was consuming a normal good at point A in the figure shown,but has just received a raise at work.Johnny's demand may:

Correct AnswerverifiedShow Answer

Ceteris paribus is:

Correct AnswerverifiedShow Answer

Wendell just read an article that says scientists have proven that processed cheese food increases brain power.We would expect Wendell's demand for processed cheese food to:

Correct AnswerverifiedShow Answer

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Correct AnswerverifiedShow Answer

Which buyers and sellers are included in the market under consideration depends on:

Correct AnswerverifiedShow Answer

The law of demand describes the:

Correct AnswerverifiedShow Answer

When graphing the demand curve:

Correct AnswerverifiedShow Answer

The law of supply describes the:

Correct AnswerverifiedShow Answer

A decrease in the price of ice cream is likely to cause:

Correct AnswerverifiedShow Answer

This table shows the demand and supply schedule of a good. According to the table shown,at a price of $2.00 quantity demanded:

Correct AnswerverifiedShow Answer

A perfectly competitive market is one in which:

Correct AnswerverifiedShow Answer

Irregular weather patterns caused very poor yields for orange farmers.Which factor of supply would this change in the market for orange juice?

Correct AnswerverifiedShow Answer

Some nonprice determinants of supply are:

Correct AnswerverifiedShow Answer

A shortage will occur if:

Correct AnswerverifiedShow Answer

The most likely substitute good for hot dogs would be:

Correct AnswerverifiedShow Answer

This graph depicts the demand for a normal good. A movement from A to C in the graph shown might be caused by:

Correct AnswerverifiedShow Answer

We study the simple model of competitive markets because it helps to:

Correct AnswerverifiedShow Answer

The demand curve is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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