Question 1

Answer the question on the basis of the given supply and demand data for wheat:   Bushels Demanded  Bushels Supplied Per  Per Month  Price Per Bushel  Month 45$57750473563686126167157\begin{array} { c c c } 	ext { Bushels Demanded }&&	ext { Bushels Supplied Per }\	ext { Per Month } & 	ext { Price Per Bushel } & 	ext { Month } \ \hline45 & \$ 5 & 77 \ 50 & 4 & 73 \ 56 & 3 & 68 \ 61 & 2 & 61 \ 67 & 1 & 57 \end{array} Bushels Demanded  Per Month 4550566167​ Price Per Bushel $54321​ Bushels Supplied Per  Month 7773686157​​  Refer to the data.Equilibrium price will be:

Accepted Answer

A)   $4.
B)   $3.
C)   $2.
D)   $1. E) B) and D)
F) B) and C)

Question 2

If we say that a price is too high to clear the market,we mean that:

Accepted Answer

A)   quantity demanded exceeds quantity supplied.
B)   the equilibrium price is above the current price.
C)   quantity supplied exceeds quantity demanded.
D)   the price of the good is likely to rise.E) A) and C)
F) B) and D)

Question 3

If the price of product L increases,the demand curve for close-substitute product J will:

Accepted Answer

A)   shift downward toward the horizontal axis.
B)   shift to the left.
C)   shift to the right.
D)   remain unchanged.E) A) and B)
F) A) and C)

Question 4

If an economy produces its most wanted goods but uses outdated production methods,it is:

Accepted Answer

A)   achieving productive efficiency but not allocative efficiency.
B)   not achieving productive efficiency.
C)   achieving both productive and allocative efficiency.
D)   engaged in roundabout production.E) B) and C)
F) A) and C)

Question 5

Suppose an excise tax is imposed on product X.We expect this tax to:

Accepted Answer

A)   increase the demand for complementary good Y and decrease the demand for substitute product Z.
B)   decrease the demand for complementary good Y and increase the demand for substitute product Z.
C)   increase the demands for both complementary good Y and substitute product Z.
D)   decrease the demands for both complementary good Y and substitute product Z.E) A) and B)
F) C) and D)

Question 6

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A)   a decline in income if X is an inferior good.
B)   a decline in the price of Z if X and Z are substitute goods.
C)   a change in consumer tastes that is unfavorable to X.
D)   an increase in the price of Y if X and Y are complementary goods.E) A) and D)
F) A) and C)

Question 7

Given a downsloping demand curve and an upsloping supply curve for a product,an increase in the price of a substitute good (from the buyer's perspective) will:

Accepted Answer

A)   increase equilibrium price and quantity.
B)   decrease equilibrium price and quantity.
C)   increase equilibrium price and decrease equilibrium quantity.
D)   decrease equilibrium price and increase equilibrium quantity.E) B) and C)
F) A) and D)

Question 8

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Accepted Answer

A)   An increase in supply.
B)   An increase in demand.
C)   A decrease in supply.
D)   A decrease in demand.E) All of the above
F) B) and C)

Question 9

An inferior good is:

Accepted Answer

A)   one whose demand curve will shift rightward as incomes rise.
B)   one whose price and quantity demanded vary directly.
C)   one that has not been approved by the Federal Food and Drug Administration.
D)   not accurately defined by any of these statements.E) A) and B)
F) None of the above

Question 10

Suppose that at prices of $1,$2,$3,$4,and $5 for product Z,the corresponding quantities supplied are 3,4,5,6,and 7 units,respectively.Which of the following would increase the quantities supplied of Z to,say,6,8,10,12,and 14 units at these prices?

Accepted Answer

A)   Improved technology for producing Z.
B)   An increase in the prices of the resources used to make Z.
C)   An increase in the excise tax on product Z.
D)   Increases in the incomes of the buyers of Z.E) A) and D)
F) A) and B)

Question 11

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Accepted Answer

A) True 
 B)False

Question 12

When an economist says that the demand for a product has increased,this means that:

Accepted Answer

A)   consumers are now willing to purchase more of this product at each possible price.
B)   the product has become particularly scarce for some reason.
C)   product price has fallen and,as a consequence,consumers are buying a larger quantity of the product.
D)   the demand curve has shifted to the left.E) None of the above
F) A) and D)

Question 13

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

Accepted Answer

A)   income of sports fishers.
B)   price of outboard motors.
C)   size and number of fish available.
D)   price of sailing boats.E) All of the above
F) B) and D)

Question 14

With a downsloping demand curve and an upsloping supply curve for a product,placing an excise tax on this product will:

Accepted Answer

A)   increase equilibrium price and quantity.
B)   decrease equilibrium price and quantity.
C)   decrease equilibrium price and increase equilibrium quantity.
D)   increase equilibrium price and decrease equilibrium quantity.E) None of the above
F) A) and B)

Question 15

One can say with certainty that equilibrium price will decline when supply:

Accepted Answer

A)   and demand both decrease.
B)   increases and demand decreases.
C)   decreases and demand increases.
D)   and demand both increase.E) All of the above
F) A) and D)

Question 16

The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Accepted Answer

A)   price.
B)   expectations.
C)   preferences.
D)   incomes.E) B) and C)
F) All of the above

Question 17

A surplus of a product will arise when price is:

Accepted Answer

A)   above equilibrium,with the result that quantity demanded exceeds quantity supplied.
B)   above equilibrium,with the result that quantity supplied exceeds quantity demanded.
C)   below equilibrium,with the result that quantity demanded exceeds quantity supplied.
D)   below equilibrium,with the result that quantity supplied exceeds quantity demanded.E) A) and B)
F) None of the above

Question 18

(Consider This) Ticket scalping:

Accepted Answer

A)   imposes economic losses on both buyers and sellers.
B)   creates economic gains for both buyers and sellers.
C)   imposes losses on buyers but creates gains for sellers.
D)   imposes losses on sellers but creates gains for buyers.E) None of the above
F) A) and D)

Question 19

At the point where the demand and supply curves for a product intersect:

Accepted Answer

A)   the selling price and the buying price need not be equal.
B)   the market may,or may not,be in equilibrium.
C)   either a shortage or a surplus of the product might exist,depending on the degree of competition.
D)   the quantity that consumers want to purchase and the amount producers choose to sell are the same.E) B) and C)
F) A) and B)

Question 20

Suppose that corn prices rise significantly.If farmers expect the price of corn to continue rising relative to other crops,then we would expect:

Accepted Answer

A)   the supply of ethanol,a corn-based product,to increase.
B)   consumer demand for wheat to fall.
C)   the supply to increase as farmers plant more corn.
D)   the supply to fall as farmers plant more of other crops.E) None of the above
F) All of the above

Exam 3: Demand, Supply, and Market Equilibrium

Given a downsloping demand curve and an upsloping supply curve for a product,an increase in the price of a substitute good (from the buyer's perspective) will:

Correct Answer
verified

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

Correct Answer
verified

Suppose an excise tax is imposed on product X.We expect this tax to:

Correct Answer
verified

Assume the demand curve for product X shifts to the right.This might be caused by:

Correct Answer
verified

At the point where the demand and supply curves for a product intersect:

Correct Answer
verified

Suppose that corn prices rise significantly.If farmers expect the price of corn to continue rising relative to other crops,then we would expect:

Correct Answer
verified

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct Answer
verified

If the price of product L increases,the demand curve for close-substitute product J will:

Correct Answer
verified

If an economy produces its most wanted goods but uses outdated production methods,it is:

Correct Answer
verified

An inferior good is:

Correct Answer
verified

When an economist says that the demand for a product has increased,this means that:

Correct Answer
verified

With a downsloping demand curve and an upsloping supply curve for a product,placing an excise tax on this product will:

Correct Answer
verified

One can say with certainty that equilibrium price will decline when supply:

Correct Answer
verified

A surplus of a product will arise when price is:

Correct Answer
verified

Suppose that at prices of $1,$2,$3,$4,and $5 for product Z,the corresponding quantities supplied are 3,4,5,6,and 7 units,respectively.Which of the following would increase the quantities supplied of Z to,say,6,8,10,12,and 14 units at these prices?

Correct Answer
verified

If we say that a price is too high to clear the market,we mean that:

Correct Answer
verified

(Consider This) Ticket scalping:

Correct Answer
verified

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Correct Answer
verified

Correct Answer
verified

The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Given a downsloping demand curve and an upsloping supply curve for a product,an increase in the price of a substitute good (from the buyer's perspective) will:

Correct AnswerverifiedShow Answer

A decrease in the demand for recreational fishing boats might be caused by an increase in the:

Correct AnswerverifiedShow Answer

Suppose an excise tax is imposed on product X.We expect this tax to:

Correct AnswerverifiedShow Answer

Assume the demand curve for product X shifts to the right.This might be caused by:

Correct AnswerverifiedShow Answer

At the point where the demand and supply curves for a product intersect:

Correct AnswerverifiedShow Answer

Suppose that corn prices rise significantly.If farmers expect the price of corn to continue rising relative to other crops,then we would expect:

Correct AnswerverifiedShow Answer

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?

Correct AnswerverifiedShow Answer

If the price of product L increases,the demand curve for close-substitute product J will:

Correct AnswerverifiedShow Answer

If an economy produces its most wanted goods but uses outdated production methods,it is:

Correct AnswerverifiedShow Answer

An inferior good is:

Correct AnswerverifiedShow Answer

When an economist says that the demand for a product has increased,this means that:

Correct AnswerverifiedShow Answer

With a downsloping demand curve and an upsloping supply curve for a product,placing an excise tax on this product will:

Correct AnswerverifiedShow Answer

One can say with certainty that equilibrium price will decline when supply:

Correct AnswerverifiedShow Answer

A surplus of a product will arise when price is:

Correct AnswerverifiedShow Answer

Suppose that at prices of $1,$2,$3,$4,and $5 for product Z,the corresponding quantities supplied are 3,4,5,6,and 7 units,respectively.Which of the following would increase the quantities supplied of Z to,say,6,8,10,12,and 14 units at these prices?

Correct AnswerverifiedShow Answer

If we say that a price is too high to clear the market,we mean that:

Correct AnswerverifiedShow Answer

(Consider This) Ticket scalping:

Correct AnswerverifiedShow Answer

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,but the effect on equilibrium price will be indeterminate.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

Correct AnswerverifiedShow Answer

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

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

Correct Answer
verified

Correct Answer
verified