Question 1

If a legal ceiling price for gasoline is set above the equilibrium price:

Accepted Answer

A)   a shortage of the gasoline will occur.
B)   a surplus of the gasoline will occur.
C)   a black market will evolve.
D)   neither the equilibrium price nor equilibrium quantity will be affected.E) A) and D)
F) B) and D)

Question 2

The rationing function of prices refers to the:

Accepted Answer

A)   tendency of supply and demand to shift in opposite directions.
B)   fact that ration coupons are needed to alleviate wartime shortages of goods.
C)   capacity of a competitive market to equate the quantity demanded and the quantity supplied.
D)   ability of the market system to generate an equitable distribution of income.E) A) and D)
F) A) and C)

Question 3

Which is a determinant of supply?

Accepted Answer

A)   tastes and preferences
B)   technology
C)   consumer income
D)   number of consumersE) A) and B)
F) None of the above

Question 4

An increase in consumer incomes will:

Accepted Answer

A)   increase the demand for an inferior good.
B)   increase the supply of an inferior good.
C)   increase the demand for a normal good.
D)   decrease the supply of a normal good.E) All of the above
F) A) and B)

Question 5

-In this market:

Accepted Answer

A)   the equilibrium position has shifted from M to K.
B)   an increase in supply is more than the increase in demand.
C)   the new equilibrium price and quantity are both greater than originally.
D)   point M shows the new equilibrium position.E) B) and C)
F) None of the above

Question 6

1 and D1 represent the original supply and demand curves and S2 and D2 the new curves.In this market the indicated shift in demand may have been caused by: A)  a decline in the number of buyers in the market. B)  a decline in the price of a substitute good. C)  an increase in incomes if the product is a normal good. D)  an increase in incomes if the product is an inferior good." 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 demand may have been caused by:

Accepted Answer

A)   a decline in the number of buyers in the market.
B)   a decline in the price of a substitute good.
C)   an increase in incomes if the product is a normal good.
D)   an increase in incomes if the product is an inferior good.E) A) and C)
F) All of the above

Question 7

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) None of the above
F) C) and D)

Question 8

If X is a normal good,a rise in money income will shift the:

Accepted Answer

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

Question 9

Blu Ray players and Blu Ray discs are:

Accepted Answer

A)   complementary goods.
B)   substitute goods.
C)   independent goods.
D)   inferior goods.E) A) and B)
F) None of the above

Question 10

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.
-Refer to the above information.After the change in demand,the new equilibrium price is:

Accepted Answer

A)   $2
B)   $4
C)   $6
D)   $7E) A) and B)
F) A) and C)

Question 11

Refer to the diagram,which shows demand and supply conditions in the competitive market for product X.Other things equal,a shift of the supply curve from S0 to S1 might be caused by a(n) : 0 to S1 might be caused by a(n) :   A)  increase in the wage rates paid to the labours employed in the production of X. B)  government subsidy per unit of output paid to firms producing X. C)  decline in the price of the basic raw material used in producing X. D)  increase in the number of firms producing X." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)   increase in the wage rates paid to the labours employed in the production of X.
B)   government subsidy per unit of output paid to firms producing X.
C)   decline in the price of the basic raw material used in producing X.
D)   increase in the number of firms producing X.E) A) and B)
F) A) and C)

Question 12

-Refer to the above data.Equilibrium quantity will be:

Accepted Answer

A)   150
B)   220
C)   245
D)   100E) B) and D)
F) All of the above

Question 13

Refer to the table below. 
If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price,the new equilibrium price would be:

Accepted Answer

A)   $11
B)   $12
C)   $13
D)   $14E) A) and B)
F) None of the above

Question 14

An unusually bountiful crop of coffee beans might:

Accepted Answer

A)   increase the supply of coffee.
B)   increase the price of coffee.
C)   decrease the quantity of coffee consumed.
D)   increase the price of tea.E) A) and B)
F) None of the above

Question 15

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 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) C) and D)
F) None of the above

Question 16

Tennis rackets and ballpoint pens are:

Accepted Answer

A)   substitute goods.
B)   complementary goods.
C)   inferior goods.
D)   independent goods.E) C) and D)
F) B) and C)

Question 17

The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Accepted Answer

A) True 
 B)False

Question 18

1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from: A)  a decrease in consumer incomes. B)  an increase in the wages of chicken workers. C)  an increase in the price of beef products. D)  improved technology in the chicken industry." class="answers-bank-image d-inline" rel="preload" >
-Refer to the above graph,which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

Accepted Answer

A)   a decrease in consumer incomes.
B)   an increase in the wages of chicken workers.
C)   an increase in the price of beef products.
D)   improved technology in the chicken industry.E) None of the above
F) A) and B)

Question 19

A price fixed below the equilibrium price of a product will cause a shortage of that product.

Accepted Answer

A) True 
 B)False

Question 20

If products A and B are complements and the price of B decreases:

Accepted Answer

A)   the demand curves for both A and B will shift to the left.
B)   the amount of B purchased will increase,but the demand curve for A will not shift.
C)   the demand for A will increase and the quantity demanded of B will increase.
D)   the demand for A will decline and the demand for B will increase.E) A) and B)
F) None of the above

Exam 3: Demand, Supply, and Market Equilibrium

Refer to the table below. If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price,the new equilibrium price would be:

Correct Answer
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-Refer to the above graph,which shows the market for chicken where D₁ and D₂ represent different demand curves.A change from E₁ to E₂ is most likely to result from:

Correct Answer
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The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Correct Answer
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An increase in consumer incomes will:

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

Correct Answer
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Blu Ray players and Blu Ray discs are:

Correct Answer
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A price fixed below the equilibrium price of a product will cause a shortage of that product.

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

Correct Answer
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If a legal ceiling price for gasoline is set above the equilibrium price:

Correct Answer
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If products A and B are complements and the price of B decreases:

Correct Answer
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Tennis rackets and ballpoint pens are:

Correct Answer
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If X is a normal good,a rise in money income will shift the:

Correct Answer
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The rationing function of prices refers to the:

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 demand may have been caused by:

Correct Answer
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Correct Answer
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-In this market:

Correct Answer
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An unusually bountiful crop of coffee beans might:

Correct Answer
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Refer to the diagram,which shows demand and supply conditions in the competitive market for product X.Other things equal,a shift of the supply curve from S₀ to S₁ might be caused by a(n) :

Correct Answer
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The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. -Refer to the above information.After the change in demand,the new equilibrium price is:

Correct Answer
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Which is a determinant of supply?

Correct Answer
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Exam 3: Demand, Supply, and Market Equilibrium

Refer to the table below. If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price,the new equilibrium price would be:

Correct AnswerverifiedShow Answer

-Refer to the above graph,which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

Correct AnswerverifiedShow Answer

The development of a new production technique that lowers the cost of producing product X will shift the supply curve of product X to the right.

Correct AnswerverifiedShow Answer

An increase in consumer incomes will:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Blu Ray players and Blu Ray discs are:

Correct AnswerverifiedShow Answer

A price fixed below the equilibrium price of a product will cause a shortage of that product.

Correct AnswerverifiedShow Answer

-Refer to the above data.Equilibrium quantity will be:

Correct AnswerverifiedShow Answer

If a legal ceiling price for gasoline is set above the equilibrium price:

Correct AnswerverifiedShow Answer

If products A and B are complements and the price of B decreases:

Correct AnswerverifiedShow Answer

Tennis rackets and ballpoint pens are:

Correct AnswerverifiedShow Answer

If X is a normal good,a rise in money income will shift the:

Correct AnswerverifiedShow Answer

The rationing function of prices refers to the:

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 demand may have been caused by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-In this market:

Correct AnswerverifiedShow Answer

An unusually bountiful crop of coffee beans might:

Correct AnswerverifiedShow Answer

Refer to the diagram,which shows demand and supply conditions in the competitive market for product X.Other things equal,a shift of the supply curve from S0 to S1 might be caused by a(n) :

Correct AnswerverifiedShow Answer

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. -Refer to the above information.After the change in demand,the new equilibrium price is:

Correct AnswerverifiedShow Answer

Which is a determinant of supply?

Correct AnswerverifiedShow Answer

Correct Answer
verified

-Refer to the above graph,which shows the market for chicken where D₁ and D₂ represent different demand curves.A change from E₁ to E₂ is most likely to result from:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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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 demand may have been caused by:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Refer to the diagram,which shows demand and supply conditions in the competitive market for product X.Other things equal,a shift of the supply curve from S₀ to S₁ might be caused by a(n) :

Correct Answer
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Correct Answer
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Correct Answer
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