Question 1

A decrease 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 2

Graph the information in the following table and find equilibrium price and quantity.Suppose that the demand for good XYZ rises by 5 units at every price because of clever advertising.What happens to equilibrium price and quantity? Under what conditions would it be profitable to advertise?
Price
Quantity Demanded
Quantity Supplied
$0
100
0
$0.50
95
20
$1.00
90
40
$1.50
85
60
$2.00
80
80
$2.50
75
100
$3.00
70
120
$3.50
65
140
$4.00
60
160
$4.50
55
180

Accepted Answer

The graph of the data follows and is sho...

Question 3

A decrease in the supply of a good causes a(n) :

Accepted Answer

A)   increase in the equilibrium price and a decrease in equilibrium quantity.
B)   increase in equilibrium quantity and a decrease in equilibrium price.
C)   increase in equilibrium price and quantity.
D)   decrease in equilibrium price and quantity.

Question 4

A change in the quantity demanded of hamburgers occurs only when the price of hamburgers changes.

Accepted Answer

A) True 
 B)False

Question 5

If the number of tomato growers in the market increases,the supply:

Accepted Answer

A)   of tomatoes increases.
B)   of tomatoes decreases.
C)   tomatoes remains constant.
D)   curve for tomatoes shifts to the left.

Question 6

The law of supply states that as the price of a good increases,quantity supplied decreases,ceteris paribus.

Accepted Answer

A) True 
 B)False  False

Question 7

Prices provide no information other than a simple dollars and cents number.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions 
Figure: Interpreting Supply Shifts 3 0 to S1 (a leftward shift of the supply curve) ,the equilibrium price changes from: A)  $60 to $40. B)  $40 to $60. C)  20 to 15. D)  15 to 20." class="answers-bank-image d-inline" rel="preload" >
-(Figure: Interpreting Supply Shifts 3) When the supply shifts from S0 to S1 (a leftward shift of the supply curve) ,the equilibrium price changes from:

Accepted Answer

A)   $60 to $40.
B)   $40 to $60.
C)   20 to 15.
D)   15 to 20. B

Question 9

Taxes and subsidies and prices of other commodities are both determinants of supply.

Accepted Answer

A) True 
 B)False

Question 10

Suppose that quantity supplied of a product equals 8 and quantity demanded equals 5.This market MOST likely is:

Accepted Answer

A)   experiencing a shortage of this product.
B)   experiencing a surplus of this product.
C)   experiencing a decrease in supply.
D)   in equilibrium with neither a surplus nor a shortage. B

Question 11

Demand refers to:

Accepted Answer

A)   consumers wanting a product so much that they insist on it.
B)   the goods and services buyers are willing and able to purchase at various prices in a given period of time.
C)   the amount consumers wish they could consume.
D)   the relationship between price and quantity that sellers bring to the market.

Question 12

Over the last 10 years,laptop computer prices have moved down while the quantity has increased.This indicates that:

Accepted Answer

A)   demand has increased more than supply.
B)   supply has increased more than demand.
C)   demand and supply have increased proportionately.
D)   increased demand has created a market incentive to reduce the price.

Question 13

Use the following to answer question 
Figure: Interpreting Supply Shifts 2 
-(Figure: Interpreting Supply Shifts 2) A shift to the right of the supply curve could be caused by a(n) :

Accepted Answer

A)   improvement in production technology.
B)   increase in the costs of resources.
C)   increase in the price of a complement.
D)   decrease in the number of sellers.

Question 14

Which of the following will NOT cause the supply curve for kayaks to shift to the left?

Accepted Answer

A)   an increase in the costs of materials to build a kayak
B)   a decrease in the number of sellers of kayaks
C)   an decrease in the price of a kayak
D)   an increase in the taxes on kayaks

Question 15

In the free market,the main signal to the market that brings price to equilibrium comes from:

Accepted Answer

A)   government regulators.
B)   the surplus or shortage of output for sale.
C)   professional middlemen and traders.
D)   the trading computer network.

Question 16

An increase in the price of a good will cause a decrease in the demand for a complementary good.

Accepted Answer

A) True 
 B)False

Question 17

Suppose in the market for iPhones,the following two changes take place: (1) the cost of making iPhones rises and (2) customers begin to prefer Android-platform smart phones over iPhones.What happens to equilibrium price and equilibrium quantity?

Accepted Answer

A)   Equilibrium price and equilibrium quantity fall.
B)   Equilibrium price falls but equilibrium quantity is indeterminate.
C)   Equilibrium price is indeterminate and equilibrium quantity falls.
D)   Equilibrium price rises but equilibrium quantity is indeterminate.

Question 18

The fundamental reason why supply curves slope upward is:

Accepted Answer

A)   decreasing benefits.
B)   decreasing costs.
C)   increasing benefits.
D)   increasing costs.

Question 19

An individual's valuation of a good or service:

Accepted Answer

A)   can be expressed in the marketplace.
B)   is generally the same for most people.
C)   is known as the "market price."
D)   is lower than the maximum that the individual will pay.

Question 20

When production technology improves,supply increases and the equilibrium:

Accepted Answer

A)   price and quantity increase.
B)   price and quantity decrease.
C)   quantity rises,and the equilibrium price falls.
D)   quantity falls,and the equilibrium price rises.

Exam 3: Supply and Demand

A decrease in supply causes the equilibrium price to _ and the equilibrium quantity to _.

Correct Answer
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Correct Answer
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The graph of the data follows and is sho...
View Answer

A decrease in the supply of a good causes a(n) :

Correct Answer
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A change in the quantity demanded of hamburgers occurs only when the price of hamburgers changes.

Correct Answer
verified

If the number of tomato growers in the market increases,the supply:

Correct Answer
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The law of supply states that as the price of a good increases,quantity supplied decreases,ceteris paribus.

Correct Answer
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False

Prices provide no information other than a simple dollars and cents number.

Correct Answer
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Use the following to answer questions Figure: Interpreting Supply Shifts 3 -(Figure: Interpreting Supply Shifts 3) When the supply shifts from S₀to S₁ (a leftward shift of the supply curve) ,the equilibrium price changes from:

Correct Answer
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B

Taxes and subsidies and prices of other commodities are both determinants of supply.

Correct Answer
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Suppose that quantity supplied of a product equals 8 and quantity demanded equals 5.This market MOST likely is:

Correct Answer
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B

Demand refers to:

Correct Answer
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Over the last 10 years,laptop computer prices have moved down while the quantity has increased.This indicates that:

Correct Answer
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Use the following to answer question Figure: Interpreting Supply Shifts 2 -(Figure: Interpreting Supply Shifts 2) A shift to the right of the supply curve could be caused by a(n) :

Correct Answer
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Which of the following will NOT cause the supply curve for kayaks to shift to the left?

Correct Answer
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In the free market,the main signal to the market that brings price to equilibrium comes from:

Correct Answer
verified

An increase in the price of a good will cause a decrease in the demand for a complementary good.

Correct Answer
verified

Suppose in the market for iPhones,the following two changes take place: (1) the cost of making iPhones rises and (2) customers begin to prefer Android-platform smart phones over iPhones.What happens to equilibrium price and equilibrium quantity?

Correct Answer
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The fundamental reason why supply curves slope upward is:

Correct Answer
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An individual's valuation of a good or service:

Correct Answer
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When production technology improves,supply increases and the equilibrium:

Correct Answer
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Exam 3: Supply and Demand

A decrease in supply causes the equilibrium price to ___________ and the equilibrium quantity to ___________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe graph of the data follows and is sho...View AnswerShow Answer

A decrease in the supply of a good causes a(n) :

Correct AnswerverifiedShow Answer

A change in the quantity demanded of hamburgers occurs only when the price of hamburgers changes.

Correct AnswerverifiedShow Answer

If the number of tomato growers in the market increases,the supply:

Correct AnswerverifiedShow Answer

The law of supply states that as the price of a good increases,quantity supplied decreases,ceteris paribus.

Correct AnswerverifiedFalse

Prices provide no information other than a simple dollars and cents number.

Correct AnswerverifiedShow Answer

Use the following to answer questions Figure: Interpreting Supply Shifts 3 -(Figure: Interpreting Supply Shifts 3) When the supply shifts from S0 to S1 (a leftward shift of the supply curve) ,the equilibrium price changes from:

Correct AnswerverifiedB

Taxes and subsidies and prices of other commodities are both determinants of supply.

Correct AnswerverifiedShow Answer

Suppose that quantity supplied of a product equals 8 and quantity demanded equals 5.This market MOST likely is:

Correct AnswerverifiedB

Demand refers to:

Correct AnswerverifiedShow Answer

Over the last 10 years,laptop computer prices have moved down while the quantity has increased.This indicates that:

Correct AnswerverifiedShow Answer

Use the following to answer question Figure: Interpreting Supply Shifts 2 -(Figure: Interpreting Supply Shifts 2) A shift to the right of the supply curve could be caused by a(n) :

Correct AnswerverifiedShow Answer

Which of the following will NOT cause the supply curve for kayaks to shift to the left?

Correct AnswerverifiedShow Answer

In the free market,the main signal to the market that brings price to equilibrium comes from:

Correct AnswerverifiedShow Answer

An increase in the price of a good will cause a decrease in the demand for a complementary good.

Correct AnswerverifiedShow Answer

Suppose in the market for iPhones,the following two changes take place: (1) the cost of making iPhones rises and (2) customers begin to prefer Android-platform smart phones over iPhones.What happens to equilibrium price and equilibrium quantity?

Correct AnswerverifiedShow Answer

The fundamental reason why supply curves slope upward is:

Correct AnswerverifiedShow Answer

An individual's valuation of a good or service:

Correct AnswerverifiedShow Answer

When production technology improves,supply increases and the equilibrium:

Correct AnswerverifiedShow Answer

A decrease in supply causes the equilibrium price to _ and the equilibrium quantity to _.

Correct Answer
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Correct Answer
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The graph of the data follows and is sho...
View Answer

Correct Answer
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False

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Use the following to answer questions Figure: Interpreting Supply Shifts 3 -(Figure: Interpreting Supply Shifts 3) When the supply shifts from S₀to S₁ (a leftward shift of the supply curve) ,the equilibrium price changes from:

Correct Answer
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B

Correct Answer
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B

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