Question 1

If the price of inputs increases, the

Accepted Answer

A)  demand curve will shift to the right.
B)  supply curve will shift to the right
C)  demand curve will shift to the left.
D)  supply curve will shift to the left.

Question 2

If a tax (paid by producers) on a good is reduced this would

Accepted Answer

A)  move its supply curve to the right.
B)  move its supply curve to the left.
C)  cause a movement along the supply curve to a (higher price, higher quantity) point.
D)  cause a movement along the supply curve to a (lower price, lower quantity) point.

Question 3

A decrease in household income for a good that is considered normal would

Accepted Answer

A)  move its demand curve to the right.
B)  move its demand curve to the left.
C)  cause a movement along the demand curve to a (higher price, lower quantity) point.
D)  cause a movement along the demand curve to a (lower price, higher quantity) point.

Question 4

A market must be in a physical location

Accepted Answer

A)  True
B)  False

Question 5

Which of the following is true?

Accepted Answer

A)  the supply curve is downward sloping and demand curve is upward sloping.
B)  demand is downward sloping and supply is upward sloping.
C)  both the supply curve and the demand curve are downward sloping.
D)  both the supply curve and the demand curve are upward sloping.

Question 6

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in income if a good is considered normal?

Accepted Answer

A)  Figure 1
B)  Figure 2
C)  Figure 3
D)  Figure 4

Question 7

If the price is so high that vendors find too many unsold bottles remaining in inventory, they might dispose of their excess inventory by

Accepted Answer

A)  raising the price per bottle.
B)  lowering the price per bottle.
C)  closing early.
D)  creating a surplus.

Question 8

The quintessential example for the price of another potential output and the impact of the price of one good on the market for another is

Accepted Answer

A)  Hotdogs and hotdog buns
B)  Crude oil and gasoline
C)  Corn and soybeans
D)  7up and Sprite

Question 9

Unless circumstances are quite out of the ordinary, a demand curve will be

Accepted Answer

A)  vertical
B)  horizontal
C)  downward sloping
D)  upward sloping

Question 10

If a good is normal and income decreases then

Accepted Answer

A)  the demand curve will shift to the right.
B)  the demand curve will shift to the left.
C)  the supply curve will shift to the right.
D)  the supply curve will shift to the left.

Question 11

If a good is inferior and income increases then

Accepted Answer

A)  the demand curve will shift to the right.
B)  the demand curve will shift to the left.
C)  the supply curve will shift to the right.
D)  the supply curve will shift to the left.

Question 12

-From Table 2.3, at the price of $4 there is a

Accepted Answer

A)  shortage of 2.
B)  surplus of 2.
C)  neither a shortage nor a surplus.
D)  surplus of 4.

Question 13

An increase in the excise tax imposed upon consumers of gasoline

Accepted Answer

A)  shifts the demand for gasoline to the left.
B)  shifts the demand for gasoline to the right.
C)  shifts the supply of gasoline to the right.
D)  shifts the market price of gasoline.

Question 14

If the price of a typical good rises, the quantity demanded for that good will

Accepted Answer

A)  decrease.
B)  increase.
C)  remain the same.
D)  automatically decrease to zero.

Question 15

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of an increase in the price of an input in the market for anything?

Accepted Answer

A)  Figure 1
B)  Figure 2
C)  Figure 3
D)  Figure 4

Question 16

Economists know that consumers and producers are both made better off than they would be without free exchange because the exchanges are

Accepted Answer

A)  mandated by government.
B)  voluntary.
C)  able to make consumers better off by an amount that compensates producers for their losses.
D)  able to make producers better off by an amount that compensates consumers for their losses.

Question 17

On the Heritage Foundation's scale of "Economic Freedom," the least "free" country would be that one who's economic system was purely

Accepted Answer

A)  capitalist.
B)  socialist.
C)  utilitarian.
D)  communist.

Question 18

In the market for birth control devices, if the number of women of child-bearing age increases, the

Accepted Answer

A)  demand curve will shift to the right.
B)  supply curve will shift to the right.
C)  demand curve will shift to the left.
D)  supply curve will shift to the left.

Question 19

-In Figure 2.1, Box 1 would be labeled

Accepted Answer

A)  P* for equilibrium price.
B)  P for price.
C)  S for supply.
D)  D for demand.

Question 20

Which of the following goods are likely to be considered substitutes?

Accepted Answer

A)  Hot dogs and hot dog buns
B)  Gasoline and diesel fuel
C)  Peanut butter and jelly
D)  Coke and Pepsi

Exam 2: Supply and Demand

If the price of inputs increases, the

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A decrease in household income for a good that is considered normal would

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Which of the following goods are likely to be considered substitutes?

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An increase in the excise tax imposed upon consumers of gasoline

Correct AnswerverifiedShow Answer

If a good is normal and income decreases then

Correct AnswerverifiedShow Answer

On the Heritage Foundation's scale of "Economic Freedom," the least "free" country would be that one who's economic system was purely

Correct AnswerverifiedShow Answer

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in income if a good is considered normal?

Correct AnswerverifiedShow Answer

-From Table 2.3, at the price of $4 there is a

Correct AnswerverifiedShow Answer

If the price of a typical good rises, the quantity demanded for that good will

Correct AnswerverifiedShow Answer

If the price is so high that vendors find too many unsold bottles remaining in inventory, they might dispose of their excess inventory by

Correct AnswerverifiedShow Answer

-Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of an increase in the price of an input in the market for anything?

Correct AnswerverifiedShow Answer

If a good is inferior and income increases then

Correct AnswerverifiedShow Answer

Unless circumstances are quite out of the ordinary, a demand curve will be

Correct AnswerverifiedShow Answer

The quintessential example for the price of another potential output and the impact of the price of one good on the market for another is

Correct AnswerverifiedShow Answer

If a tax (paid by producers) on a good is reduced this would

Correct AnswerverifiedShow Answer

A market must be in a physical location

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

-In Figure 2.1, Box 1 would be labeled

Correct AnswerverifiedShow Answer

In the market for birth control devices, if the number of women of child-bearing age increases, the

Correct AnswerverifiedShow Answer

Economists know that consumers and producers are both made better off than they would be without free exchange because the exchanges are

Correct AnswerverifiedShow Answer

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