Question 1

The demand curve for ice cream will shift if there is a change in the price of ice cream.

Accepted Answer

A) True 
 B)False

Question 2

More television sets are being sold today than one year ago, and the selling price has increased. This could have been caused by a(n)

Accepted Answer

A)   decrease in supply.
B)   increase in demand.
C)   decrease in demand.
D)   increase in supply.
E)   exception to the law of demand.

Question 3

Ryan is on a limited budget. He constantly takes money from the office coffee jar to pay for his meals. Ryan is utilizing a free market as it is intended to be used.

Accepted Answer

A) True 
 B)False

Question 4

Economists use the term supply to refer to the quantity of a good that is supplied at various price levels, that is, a set of price and quantity-supplied combinations, everything else held constant.

Accepted Answer

A) True 
 B)False

Question 5

The Federal Reserve and economists concerned about inflation monitor changes in technology, knowing improvements in technology tend to

Accepted Answer

A)   decrease demand for technology.
B)   increase the quantity supplied as prices decrease.
C)   increase supply and lower prices.
D)   reduce offshoring and increase gainsharing.
E)   do all of these.

Question 6

The development of a low-cost synthetic fuel is expected to affect the market for crude oil in which of the following ways?

Accepted Answer

A)   Decrease the demand for oil
B)   Decrease the price of oil
C)   Decrease the quantity demanded and quantity supplied of oil
D)   Decrease the equilibrium quantity of oil
E)   All of these

Question 7

The following is an example of the market allocation mechanism

Accepted Answer

A)   Long lines of people waiting to purchase the new Apple iPad
B)   The raffle drawing for a trip to Hawaii
C)   The American interstate freeway system
D)   The $5 pizza special at the nearby-campus pizzeria
E)   None of these is an example of the market allocation mechanism.

Question 8

According to the law of demand, when the price of a BMW or a Gucci purse increases, the quantity demanded of these goods will also increase because the goods have become more prestigious.

Accepted Answer

A) True 
 B)False

Question 9

-Beginning with equilibrium in Table 2.3, an increase in price of $1 would

Accepted Answer

A)   cause a shortage of 36.
B)   cause a surplus of 36.
C)   cause a shortage of 72.
D)   cause a surplus of 72.
E)   lead to an increase in demand.

Question 10

If consumers are willing and able to pay a higher price to obtain any particular quantity, then

Accepted Answer

A)   demand has increased.
B)   supply has increased.
C)   demand has decreased.
D)   supply has decreased.
E)   both demand and supply have decreased.

Question 11

If the demand curve for product J shifts to the left as the price of product K increases, then

Accepted Answer

A)   the number of consumers of product K has increased.
B)   the income of consumers of product K has increased.
C)   products J and K are substitute goods.
D)   products J and K are complementary goods.
E)   products J and K are not related.

Question 12

Figure 2.3
 1 and the supply curve is S1. If consumers become optimistic about their future economic well-being, the most likely consequence is a shift from A)  S1 to S2. B)  D1 to D2. C)  D1 to D3. D)  D3 to D1. E)  D2 to D1." class="answers-bank-image d-inline" rel="preload" >
-In Figure 2.3, the initial demand curve is D1 and the supply curve is S1. If consumers become optimistic about their future economic well-being, the most likely consequence is a shift from

Accepted Answer

A)   S1 to S2.
B)   D1 to D2.
C)   D1 to D3.
D)   D3 to D1.
E)   D2 to D1.

Question 13

According to the law of supply, if the price of electric ranges increased, everything else held constant, the

Accepted Answer

A)   supply of electric ranges would decrease.
B)   demand for gas ranges would increase.
C)   demand for electric ranges would decrease.
D)   supply of electric ranges would increase.
E)   quantity supplied of electric ranges would increase.

Question 14

Assume an increase in the profitability of firms in a product market. Over time, we can expect

Accepted Answer

A)   market supply to decrease.
B)   the demand for resources to increase.
C)   the equilibrium price of the product to rise.
D)   firms to leave this market.
E)   the equilibrium price of the product to fall.

Question 15

Which of the following statements is true of any market?

Accepted Answer

A)   The interaction of demand and supply determines the price and quantity in that market.
B)   There must be a supply of the item but not necessarily a demand for the item.
C)   Demand and supply are always equal for an item.
D)   There must be a demand for the item but not necessarily a supply of the item.
E)   The market will always be in equilibrium.

Question 16

When a new pest destroys the coffee trees in Latin America, which of the following is correct?

Accepted Answer

A)   The demand for coffee decreases, the price of coffee increases, less coffee will be sold.
B)   The supply of coffee decreases, the price of coffee increases, the price of tea will increase.
C)   The demand for coffee increases, the price of coffee increases, more coffee will be sold.
D)   The supply of coffee increases, the price of coffee decreases, more coffee will be sold.
E)   The supply of coffee decreases, the price of coffee decreases, more tea will be sold.

Question 17

If three gasoline stations are located at the same intersection, their prices are often identical because they are complementary goods.

Accepted Answer

A) True 
 B)False

Question 18

Figure 2.1
 
-Consider the market described by the demand and supply curves in Figure 2.1. Which of the following is true if the current market price is $40 per unit?

Accepted Answer

A)   The quantity demanded is 400 units.
B)   There is a shortage of 200 units.
C)   The quantity sold is 200 units.
D)   The quantity supplied is 200 units.
E)   There is an excess demand of 200 units.

Question 19

At the equilibrium price,

Accepted Answer

A)   there is a tendency for the price to rise.
B)   there is no pressure on price to rise or fall.
C)   quantity demanded exceeds quantity supplied.
D)   quantity supplied exceeds quantity demanded.
E)   there is a tendency for the price to fall.

Question 20

Which of the following would most likely cause an increase in the demand for personal computers?

Accepted Answer

A)   A reduction in the price of personal computers, other things being equal
B)   An increase in the supply of personal computers, other things being equal
C)   A requirement by universities that all students buy personal computers
D)   An increase in the number of computer manufacturers, other things being equal
E)   An increase in the cost of computer paper

Exam 2: Markets and the Market Process

More television sets are being sold today than one year ago, and the selling price has increased. This could have been caused by a(n)

Correct AnswerverifiedShow Answer

The following is an example of the market allocation mechanism

Correct AnswerverifiedShow Answer

Economists use the term supply to refer to the quantity of a good that is supplied at various price levels, that is, a set of price and quantity-supplied combinations, everything else held constant.

Correct AnswerverifiedShow Answer

The demand curve for ice cream will shift if there is a change in the price of ice cream.

Correct AnswerverifiedShow Answer

The Federal Reserve and economists concerned about inflation monitor changes in technology, knowing improvements in technology tend to

Correct AnswerverifiedShow Answer

The development of a low-cost synthetic fuel is expected to affect the market for crude oil in which of the following ways?

Correct AnswerverifiedShow Answer

Ryan is on a limited budget. He constantly takes money from the office coffee jar to pay for his meals. Ryan is utilizing a free market as it is intended to be used.

Correct AnswerverifiedShow Answer

If three gasoline stations are located at the same intersection, their prices are often identical because they are complementary goods.

Correct AnswerverifiedShow Answer

-Beginning with equilibrium in Table 2.3, an increase in price of $1 would

Correct AnswerverifiedShow Answer

Which of the following would most likely cause an increase in the demand for personal computers?

Correct AnswerverifiedShow Answer

Which of the following statements is true of any market?

Correct AnswerverifiedShow Answer

Figure 2.1 -Consider the market described by the demand and supply curves in Figure 2.1. Which of the following is true if the current market price is $40 per unit?

Correct AnswerverifiedShow Answer

According to the law of supply, if the price of electric ranges increased, everything else held constant, the

Correct AnswerverifiedShow Answer

At the equilibrium price,

Correct AnswerverifiedShow Answer

When a new pest destroys the coffee trees in Latin America, which of the following is correct?

Correct AnswerverifiedShow Answer

Assume an increase in the profitability of firms in a product market. Over time, we can expect

Correct AnswerverifiedShow Answer

If consumers are willing and able to pay a higher price to obtain any particular quantity, then

Correct AnswerverifiedShow Answer

According to the law of demand, when the price of a BMW or a Gucci purse increases, the quantity demanded of these goods will also increase because the goods have become more prestigious.

Correct AnswerverifiedShow Answer

If the demand curve for product J shifts to the left as the price of product K increases, then

Correct AnswerverifiedShow Answer

Figure 2.3 -In Figure 2.3, the initial demand curve is D1 and the supply curve is S1. If consumers become optimistic about their future economic well-being, the most likely consequence is a shift from

Correct AnswerverifiedShow Answer

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Figure 2.3 -In Figure 2.3, the initial demand curve is D₁ and the supply curve is S₁. If consumers become optimistic about their future economic well-being, the most likely consequence is a shift from

Correct Answer
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