Question 1

Which of the following best represents the effects of a decrease in the price of tomato juice,other things being equal?

Accepted Answer

A)   An upward movement along the demand curve for tomato juice.
B)   A downward movement along the demand curve for tomato juice.
C)   A rightward shift in the demand curve for tomato juice.
D)   A leftward shift in the demand curve for tomato juice.E) A) and B)
F) C) and D)

Question 2

According to the law of demand,when will higher corn prices reduce the quantity demanded of corn?

Accepted Answer

A)   Always.
B)   When the supply of corn is fixed.
C)   When nonprice determinants, like income and the number of buyers, are unchanged.
D)   When there are no shortages or surpluses of corn.E) A) and C)
F) C) and D)

Question 3

If there is a surplus in the oil market,then the price of oil will:

Accepted Answer

A)   rise.
B)   fall.
C)   remain unchanged.
D)   react unpredictably.E) A) and D)
F) A) and C)

Question 4

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers.This would cause the current demand for computers to:

Accepted Answer

A)   increase.
B)   decrease.
C)   remain unchanged.
D)   increase and then decrease.E) B) and C)
F) A) and C)

Question 5

Which of the following pairs is the best example of complements?

Accepted Answer

A)   Coffee and tea.
B)   DVDs and tapes.
C)   Hiking boots and athletic shoes.
D)   Tortillas and salsa.E) C) and D)
F) None of the above

Question 6

Exhibit 3-2 Demand curves
 
-In Exhibit 3-2,which of the following could not have caused the shift in the demand curve from D1 to D2?

Accepted Answer

A)   Decrease in the number of consumers.
B)   Increase in expected future prices.
C)   Increase in the price of a substitute.
D)   Decrease in the price of a complement.
E)   Increase in income.F) A) and B)
G) B) and C)

Question 7

Which of the following is closest to the definition of demand?

Accepted Answer

A)   People's willingness to supply goods at specific prices.
B)   People's willingness to buy goods and services at given prices.
C)   People's expectations of lower prices of goods and services.
D)   Producer's expectations of selling more goods.
E)   The interaction of people's willingness to buy and sell goods.F) A) and E)
G) B) and E)

Question 8

A shift occurs in the supply curve for salt when:

Accepted Answer

A)   the price of salt increases.
B)   improvements are made in the production process.
C)   salt is found to be associated with high blood pressure.
D)   consumers expect the price of salt to increase in the future.E) C) and D)
F) A) and D)

Question 9

Which of the following would shift the demand curve for autos to the right?

Accepted Answer

A)   A fall in the price of autos.
B)   A fall in the price of auto insurance.
C)   A fall in consumers' incomes.
D)   A fall in the price of steel.E) B) and D)
F) C) and D)

Question 10

A technological improvement in the production of good X causes the:

Accepted Answer

A)   demand curve for X to shift to the right.
B)   demand curve for X to shift to the left.
C)   supply curve for X to shift to the right.
D)   supply curve for X to shift to the left.E) A) and B)
F) A) and C)

Question 11

Which of the following events would increase the supply of tomatoes?

Accepted Answer

A)   The introduction of mechanized tomato pickers, which raises the cost of production.
B)   An increase in wages for the tomato pickers.
C)   A decrease in the cost of fertilizers for the tomato plants.
D)   Unseasonably hot, dry weather in the tomato-growing regions of the nation.
E)   A decrease in the price of pasta products.F) B) and E)
G) A) and B)

Question 12

When economists say the quantity supplied of a product has increased,they mean the:

Accepted Answer

A)   supply curve has shifted to the left.
B)   supply curve has shifted to the right.
C)   price of the product has risen, and consequently, suppliers are producing more of it.
D)   price of the product has fallen, and consequently, suppliers are producing less of it.E) A) and B)
F) None of the above

Question 13

If income increases,then with regard to expensive cuts of steak,it is likely that the demand curve:

Accepted Answer

A)   shifts to the right.
B)   shifts to the left.
C)   becomes steeper.
D)   does not change.
E)   becomes flatter.F) D) and E)
G) A) and D)

Question 14

The "ceteris paribus" clause in the law of demand does not allow which of the following factors to change?

Accepted Answer

A)   Consumer tastes and preferences.
B)   The prices of other goods.
C)   Expectations.
D)   All of the above.E) A) and B)
F) A) and C)

Question 15

If the price of hot dogs increases,what will happen in the market for potato chips,a complementary good?

Accepted Answer

A)   Demand will increase.
B)   Quantity demanded will increase.
C)   Demand will decrease.
D)   Quantity demanded will decrease.
E)   Supply will decrease.F) A) and C)
G) C) and E)

Question 16

In general,supply curves slope upward because:

Accepted Answer

A)   increases in the price of a good result in lower opportunity costs.
B)   rising prices provide producers with a greater profit incentive.
C)   consumers buy a greater quantity.
D)   technology improves the ability of firms to produce more at each possible price.E) A) and C)
F) B) and D)

Question 17

Assume that Coca-Cola and Pepsi-Cola are substitutes.A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi?

Accepted Answer

A)   A movement down along the Pepsi demand curve.
B)   A rightward shift in the Pepsi demand curve.
C)   A movement up along the Pepsi demand curve.
D)   A leftward shift in the Pepsi demand curve.E) B) and C)
F) C) and D)

Question 18

In economic terms,to say that there has been an increase in demand for a product means that:

Accepted Answer

A)   the demand curve has shifted to the left.
B)   the product's price has fallen and as a result consumers are buying a larger quantity of the product.
C)   the product has become scarce for some reason.
D)   consumers are now willing to purchase more of the product at each possible price.E) A) and B)
F) A) and C)

Question 19

Assuming that beef and chicken are substitutes,an increase in the price of beef,other things being equal,will:

Accepted Answer

A)   increase the demand for chicken.
B)   decrease the demand for chicken.
C)   not change the demand for chicken.
D)   decrease the demand for beef.E) A) and B)
F) All of the above

Question 20

A surplus of wheat:

Accepted Answer

A)   is impossible if people are hungry.
B)   is impossible if the price of wheat is below equilibrium.
C)   will result when the quantity demanded exceeds the quantity supplied at the current price.
D)   is unlikely to cause any change in the price of wheat.
E)   indicates that the problem of scarcity of wheat has been solved.F) A) and D)
G) C) and D)

Exam 3: Part 1: Market Demand and Supply

Which of the following events would increase the supply of tomatoes?

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If the price of hot dogs increases,what will happen in the market for potato chips,a complementary good?

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Which of the following pairs is the best example of complements?

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If there is a surplus in the oil market,then the price of oil will:

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Assume that Coca-Cola and Pepsi-Cola are substitutes.A rise in the price of Coca-Cola will have which of the following effects on the market for Pepsi?

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When economists say the quantity supplied of a product has increased,they mean the:

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A shift occurs in the supply curve for salt when:

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Which of the following would shift the demand curve for autos to the right?

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The "ceteris paribus" clause in the law of demand does not allow which of the following factors to change?

Correct AnswerverifiedShow Answer

Assuming that beef and chicken are substitutes,an increase in the price of beef,other things being equal,will:

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According to the law of demand,when will higher corn prices reduce the quantity demanded of corn?

Correct AnswerverifiedShow Answer

In general,supply curves slope upward because:

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Which of the following is closest to the definition of demand?

Correct AnswerverifiedShow Answer

Which of the following best represents the effects of a decrease in the price of tomato juice,other things being equal?

Correct AnswerverifiedShow Answer

A technological improvement in the production of good X causes the:

Correct AnswerverifiedShow Answer

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers.This would cause the current demand for computers to:

Correct AnswerverifiedShow Answer

In economic terms,to say that there has been an increase in demand for a product means that:

Correct AnswerverifiedShow Answer

If income increases,then with regard to expensive cuts of steak,it is likely that the demand curve:

Correct AnswerverifiedShow Answer

Exhibit 3-2 Demand curves -In Exhibit 3-2,which of the following could not have caused the shift in the demand curve from D1 to D2?

Correct AnswerverifiedShow Answer

A surplus of wheat:

Correct AnswerverifiedShow Answer

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