Question 1

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

Accepted Answer

A)   33
B)   25
C)   22
D)   8

Question 2

An increase in price will lead to an increase in quantity supplied. This statement is

Accepted Answer

A)   the law of supply.
B)   the law of demand.
C)   untrue always.
D)   a normative statement.

Question 3

1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that A)  Good A and Good B are substitutes. B)  Good A and Good B are complements. C)  Good A is a normal good but Good B is an inferior good. D)  Good A and Good B are unrelated." class="answers-bank-image d-inline" rel="preload" >
-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

Accepted Answer

A)   Good A and Good B are substitutes.
B)   Good A and Good B are complements.
C)   Good A is a normal good but Good B is an inferior good.
D)   Good A and Good B are unrelated.

Question 4

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

Accepted Answer

A)   the number of iTunes music downloads would increase.
B)   there would be no change in the demand for iTunes music downloads.
C)   the number of iTunes music downloads would decrease.
D)   iTunes music supply would change but demand would not.

Question 5

Another name for a shortage is

Accepted Answer

A)   excess quantity supplied.
B)   excess quantity demanded.
C)   equilibrium.
D)   market clearing.

Question 6

A change in quantity demanded

Accepted Answer

A)   is a shift of the demand curve.
B)   is a movement along the demand curve.
C)   can be either a shift or a movement along the demand curve.
D)   is caused when there is a change in a ceteris paribus factor.

Question 7

When the price of a good falls, there will be

Accepted Answer

A)   an outward shift in the good's demand curve.
B)   both an outward shift in the good's demand curve and a movement along the good's demand curve.
C)   a movement along the good's demand curve.
D)   no change in quantity demanded.

Question 8

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

Accepted Answer

A)   the quantity demanded of the used textbook to increase while the quantity demanded of the new textbook to fall.
B)   the quantity demanded of both to fall.
C)   the demand for the new textbook to increase while the demand for the used textbook to decrease.
D)   the quantity demanded of the used textbook to decrease and the quantity demanded of the new textbook to increase.

Question 9

The relative price of a good is that price

Accepted Answer

A)   expressed in today's dollars.
B)   expressed in constant 2012 dollars.
C)   expressed in terms of the price of another good.
D)   that is equal to the equilibrium price.

Question 10

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Accepted Answer

A)   the demand for oranges will rise.
B)   the equilibrium quantity of oranges will rise.
C)   the amount of oranges available at various prices will decline.
D)   the price of oranges will fall.

Question 11

State the law of supply and explain it.

Accepted Answer

The law of supply indicates the direct o...

Question 12

1 to D2 in Graph A. B)  the movement from D2 to D1 in Graph A. C)  the movement along D0 from P1 to P2. D)  the movement along D0 from P2 to P1." class="answers-bank-image d-inline" rel="preload" >
-In the above figure, when the price of Good B increases, the result can be shown by

Accepted Answer

A)   the movement from D1 to D2 in Graph A.
B)   the movement from D2 to D1 in Graph A.
C)   the movement along D0 from P1 to P2.
D)   the movement along D0 from P2 to P1.

Question 13

Suppose it is discovered that consumption of butter leads to a longer life. This information would lead to

Accepted Answer

A)   an increase in quantity demanded.
B)   an increase in demand.
C)   a decrease in quantity demanded.
D)   a decrease in demand.

Question 14

1 to D2 in Graph A, if good A is a normal good. B)  shift of D2 to D1 in Graph A, if good A is a normal good. C)  movement along D0 from P1 to P2 in Graph B. D)  movement along D0 from P2 to P1 in Graph B." class="answers-bank-image d-inline" rel="preload" >
-In the above figure, an increase in income is best demonstrated by a

Accepted Answer

A)   shift of D1 to D2 in Graph A, if good A is a normal good.
B)   shift of D2 to D1 in Graph A, if good A is a normal good.
C)   movement along D0 from P1 to P2 in Graph B.
D)   movement along D0 from P2 to P1 in Graph B.

Question 15

The concept of "demand" in economics refers to

Accepted Answer

A)   the different quantities of a good or service people will buy at different possible prices.
B)   the different types of goods and services that people of different income levels want to buy.
C)   how changes in the prices of all goods affect people's buying behavior.
D)   changes in people's consumption behavior over time.

Question 16

An increase in demand is represented by a

Accepted Answer

A)   shift of the demand curve to the left.
B)   shift of the demand curve to the right.
C)   movement down the demand curve.
D)   movement up the demand curve.

Question 17

A decrease in quantity demanded of a good is caused by

Accepted Answer

A)   a decrease in income.
B)   a decrease in the price of a substitute.
C)   an increase in the price of the good.
D)   a change of tastes.

Question 18

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

Accepted Answer

A)   substitute goods.
B)   complementary goods.
C)   inferior goods.
D)   satisfying the law of supply.

Question 19

A given supply curve illustrates

Accepted Answer

A)   the relationship between price and quantity supplied.
B)   the effect of a change in resource costs on quantity supplied.
C)   the effect of a change in technology on quantity supplied.
D)   the relationship between expected future prices and quantity supplied.

Question 20

All of the following are non-price determinants of demand EXCEPT

Accepted Answer

A)   price of related goods.
B)   price of raw materials used in production of the good.
C)   income.
D)   number of consumers.

Exam 3: Demand and Supply

Suppose that because of unseasonably cold weather in Florida, a significant portion of the orange crop has been lost to freezing temperatures. This statement means that

Correct AnswerverifiedShow Answer

If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that

Correct AnswerverifiedShow Answer

A decrease in quantity demanded of a good is caused by

Correct AnswerverifiedShow Answer

Suppose it is discovered that consumption of butter leads to a longer life. This information would lead to

Correct AnswerverifiedShow Answer

Another name for a shortage is

Correct AnswerverifiedShow Answer

-In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that

Correct AnswerverifiedShow Answer

All of the following are non-price determinants of demand EXCEPT

Correct AnswerverifiedShow Answer

-In the above figure, when the price of Good B increases, the result can be shown by

Correct AnswerverifiedShow Answer

An increase in demand is represented by a

Correct AnswerverifiedShow Answer

When the price of a good falls, there will be

Correct AnswerverifiedShow Answer

-Refer to the above table. Suppose Buyer 2 leaves the market. What is the new market quantity of DVDs demanded at a price of $10?

Correct AnswerverifiedShow Answer

When a rise in the price of one item results in a decrease in the demand for another good, then the two goods are

Correct AnswerverifiedShow Answer

An increase in price will lead to an increase in quantity supplied. This statement is

Correct AnswerverifiedShow Answer

State the law of supply and explain it.

Correct AnswerverifiedThe law of supply indicates the direct o...View AnswerShow Answer

-In the above figure, an increase in income is best demonstrated by a

Correct AnswerverifiedShow Answer

A change in quantity demanded

Correct AnswerverifiedShow Answer

The price of a new textbook increases from $75 to $90 while the price of used copies of the textbook increases from $50 to $65. Other things equal, we would expect to observe

Correct AnswerverifiedShow Answer

The relative price of a good is that price

Correct AnswerverifiedShow Answer

The concept of "demand" in economics refers to

Correct AnswerverifiedShow Answer

A given supply curve illustrates

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

-In the above figure, the demand curve for Good A shifts from D₁ to D₂ in Graph A when the price of Good B changes from P₁ to P₂ in Graph B. We can conclude that

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The law of supply indicates the direct o...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified