Question 1

Which is NOT a determinant of supply?

Accepted Answer

A)   the cost of resources
B)   national income
C)   prices of other commodities
D)   taxes and subsidies

Question 2

(Figure: Interpreting a Market Graph)  If the price of shoes is $60 per pair, the _____ will be 30 pairs of shoes.

Accepted Answer

A)   quantity demanded
B)   quantity supplied
C)   market demand
D)   market supply

Question 3

In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. As a result, since the drop in cable subscribers has had a bigger impact on the market, we can expect a(n)

Accepted Answer

A)   increase in the equilibrium price and quantity of cable television.
B)   unknown change in the equilibrium price but a decrease in the equilibrium quantity of cable television.
C)   decrease in the equilibrium price and quantity of cable television.
D)   unknown change in the equilibrium quantity but a decrease in the equilibrium price of cable television.

Question 4

Which circumstance will NOT cause an increase in demand?

Accepted Answer

A)   an increase in the price of a substitute good
B)   a decrease in the price of a complementary good
C)   a decrease in the product's price
D)   an increase in the number of buyers in the market

Question 5

(Figure: Market for Shoes)  The graph represents

Accepted Answer

A)   an individual's willingness-to-pay.
B)   the price system.
C)   the law of supply.
D)   the law of demand.

Question 6

(Table)  The table shows the demand of three individuals in a market. Assuming they are the only buyers, what is total market quantity demanded if the price is $20?

Accepted Answer

A)   5 units
B)   1 unit
C)   20 units
D)   7 units

Question 7

An increase in supply causes the equilibrium price to _____ and the equilibrium quantity to _____.

Accepted Answer

A)   rise; fall
B)   fall; rise
C)   rise; rise
D)   fall; fall

Question 8

In general, economic markets contain only legal activity conducted by incorporated businesses.

Accepted Answer

A) True 
 B)False

Question 9

A decrease in the quantity supplied of iPads is caused by a(n)

Accepted Answer

A)   drop in the price of iPads.
B)   increase in TV advertising for iPads.
C)   increase in the number of iPad consumers.
D)   technological advancement in iPad production.

Question 10

If the price of chocolate chips increases, Mrs. Jones's Cookie Company will increase its supply of peanut butter chocolate chip cookies.

Accepted Answer

A) True 
 B)False

Question 11

Ceteris paribus, a decrease in the number of businesses selling pizza will cause a(n)

Accepted Answer

A)   increase in the equilibrium price of pizza.
B)   decrease in the equilibrium price of pizza.
C)   increase in pizza demand.
D)   increase in the quantity of pizza demanded.

Question 12

Markets gravitate toward equilibrium levels only when government intervenes.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the price of tomatoes should cause the supply of ketchup to shift to the right.

Accepted Answer

A) True 
 B)False

Question 14

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will

Accepted Answer

A)   either rise or fall.
B)   fall initially and then rise as demand increases to meet the increased supply.
C)   rise.
D)   fall.

Question 15

A good is a normal good if

Accepted Answer

A)   normal people buy it when the price increases.
B)   the demand curve shifts to the right when income increases.
C)   the demand curve shifts to the left when income increases.
D)   the demand curve shifts to the right when the population increases.

Question 16

Suppose a union successfully raises wage rates. How would the increase lead to a decrease in supply?

Accepted Answer

Wages represent a cost to the ...

Question 17

(Table)  Using the data in the table for the market for lattes, at a price of $2, there is a _____ and the price will _____.

Accepted Answer

A)   shortage; rise
B)   shortage; fall
C)   surplus; rise
D)   surplus; fall

Question 18

A market demand curve

Accepted Answer

A)   is easy to create.
B)   shows the minimum amount of goods that a person is willing to buy.
C)   can be estimated with statistical techniques.
D)   is of no use to economists, who are concerned only with individual preferences.

Question 19

Which pair MOST likely includes substitute goods?

Accepted Answer

A)   hot dogs and mustard
B)   ramen noodles and water
C)   soft drinks and lemonade
D)   pizza and cheese

Question 20

Markets can contain legal or illegal activity conducted by any individual or business.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand

Markets can contain legal or illegal activity conducted by any individual or business.

Correct AnswerverifiedShow Answer

Suppose a union successfully raises wage rates. How would the increase lead to a decrease in supply?

Correct AnswerverifiedWages represent a cost to the ...View AnswerShow Answer

A good is a normal good if

Correct AnswerverifiedShow Answer

A market demand curve

Correct AnswerverifiedShow Answer

Ceteris paribus, a decrease in the number of businesses selling pizza will cause a(n)

Correct AnswerverifiedShow Answer

If the price of chocolate chips increases, Mrs. Jones's Cookie Company will increase its supply of peanut butter chocolate chip cookies.

Correct AnswerverifiedShow Answer

In general, economic markets contain only legal activity conducted by incorporated businesses.

Correct AnswerverifiedShow Answer

(Figure: Market for Shoes) The graph represents

Correct AnswerverifiedShow Answer

Markets gravitate toward equilibrium levels only when government intervenes.

Correct AnswerverifiedShow Answer

Which is NOT a determinant of supply?

Correct AnswerverifiedShow Answer

An increase in supply causes the equilibrium price to _____ and the equilibrium quantity to _____.

Correct AnswerverifiedShow Answer

(Table) Using the data in the table for the market for lattes, at a price of $2, there is a _____ and the price will _____.

Correct AnswerverifiedShow Answer

(Table) The table shows the demand of three individuals in a market. Assuming they are the only buyers, what is total market quantity demanded if the price is $20?

Correct AnswerverifiedShow Answer

An increase in the price of tomatoes should cause the supply of ketchup to shift to the right.

Correct AnswerverifiedShow Answer

Which circumstance will NOT cause an increase in demand?

Correct AnswerverifiedShow Answer

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will

Correct AnswerverifiedShow Answer

Which pair MOST likely includes substitute goods?

Correct AnswerverifiedShow Answer

In the market for cable television, fewer people are subscribing to cable while the cost of providing cable television has increased. As a result, since the drop in cable subscribers has had a bigger impact on the market, we can expect a(n)

Correct AnswerverifiedShow Answer

(Figure: Interpreting a Market Graph) If the price of shoes is $60 per pair, the _____ will be 30 pairs of shoes.

Correct AnswerverifiedShow Answer

A decrease in the quantity supplied of iPads is caused by a(n)

Correct AnswerverifiedShow Answer

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Wages represent a cost to the ...
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An increase in supply causes the equilibrium price to _ and the equilibrium quantity to _.

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(Table) Using the data in the table for the market for lattes, at a price of $2, there is a _ and the price will _.

Correct Answer
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