Question 1

A decrease in wages will increase the supply of most goods.

Accepted Answer

A) True 
 B)False

Question 2

What is the difference between a change in demand and a change in quantity demanded?

Accepted Answer

A change in quantity demanded is caused ...

Question 3

The substitution effect helps to explain why demand curves are downward sloping.

Accepted Answer

A) True 
 B)False

Question 4

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

Accepted Answer

A) True 
 B)False

Question 5

Why does the quantity of a good demanded decrease when its price increases?

Accepted Answer

A)  Complements become relatively cheaper when the price of a good increases.
B)  Consumer preferences change when the price of a good changes.
C)  The nominal income of consumers falls when the price of a good increases.
D)  Substitutes become relatively cheaper when the price of a good increases.E) None of the above
F) A) and D)

Question 6

Which of the following statements about the demand curve for a typical good is the most accurate?

Accepted Answer

A)  It has an inverse slope because as the price goes up, the good has more profitability.
B)  It has a negative slope because consumer incomes fall as the price of the good rises.
C)  It has a negative slope because some consumers switch to other goods as the price rises.
D)  It has a negative slope because the good has less "snob appeal" as its price falls.E) B) and D)
F) All of the above

Question 7

Suppose we observe an increase in the price of oranges.Which of the following is the most likely cause?

Accepted Answer

A)  a scientific discovery that states that oranges cause tooth decay
B)  good growing weather in Florida
C)  a decrease in income if oranges are a normal good
D)  an increase in the price of applesE) A) and B)
F) A) and D)

Question 8

How is the market demand curve determined?

Accepted Answer

A)  by subtracting the individual demands curves from the supply curve
B)  by horizontally summing the individual demand curves
C)  by vertically summing the individual demand curves
D)  by averaging all the individual demand curvesE) C) and D)
F) A) and B)

Question 9

What does a downward-sloping demand curve illustrate?

Accepted Answer

A)  It illustrates the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases.
B)  It illustrates the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases.
C)  It illustrates the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases.
D)  It illustrates the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases.E) B) and C)
F) All of the above

Question 10

When a demand schedule is drawn in a graph,which of the following statements best describes the graph?

Accepted Answer

A)  Other variables are held constant.
B)  The resulting curve has a positive slope.
C)  Quantity is measured on the vertical axis.
D)  Price is measured on the horizontal axis.E) None of the above
F) A) and B)

Question 11

Which of the following statements about the supply curve is the most accurate?

Accepted Answer

A)  It shows how the average cost of production varies with price.
B)  It shows the same basic information as a demand curve.
C)  It shows how the quantity demanded varies with price.
D)  It shows how the quantity supplied varies with price.E) None of the above
F) A) and D)

Question 12

Is it possible for a BMW to be an inferior good? Explain.

Accepted Answer

Yes.An inferior good is defined as a goo...

Question 13

Ceteris paribus,if new manufacturers enter the computer industry,which of the following will occur?

Accepted Answer

A)  The supply curve shifts to the right.
B)  The supply curve shifts to the left.
C)  The demand curve shifts to the right.
D)  The demand curve shifts to the left.E) C) and D)
F) B) and D)

Question 14

Skateboards International of Regina,Saskatchewan,was able to sell 20 000 skateboards at a price of $60 in 2010.In 2011,it was able to sell only 12 000 of the same skateboards at a price of $60.What has Skateboards International evidently experienced?

Accepted Answer

A)  an increase in quantity supplied
B)  a decrease in demand
C)  an increase in demand
D)  an increase in supplyE) A) and D)
F) All of the above

Question 15

Which of the following would NOT cause a change in the demand for cheese?

Accepted Answer

A)  an increase in the population of cheese lovers
B)  an increase in the income of cheese consumers
C)  an increase in the price of cheese
D)  an increase in the price of crackers, which are consumed with cheeseE) A) and B)
F) None of the above

Question 16

Ceteris paribus,what effect would an increase in the price of DVD players tend to have?

Accepted Answer

A)  It would increase the demand for DVD players.
B)  It would decrease the demand for DVD players.
C)  It would increase the price of televisions, a complement to DVD players.
D)  It would increase the demand for VCRs, a substitute for DVD players.E) B) and C)
F) All of the above

Question 17

What two effects support the law of demand?

Accepted Answer

The income effect suggests that an incre...

Question 18

TABLE 3-1
 
-Refer to Table 3-1.It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,what would the quantity demanded in the market be?

Accepted Answer

A)  12
B)  22
C)  31
D)  39E) A) and B)
F) All of the above

Question 19

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week,Antonio's supplier of pepperoni informed him of a 25 percent increase in the cost of pepperoni.What variable that determines the position of the supply curve has changed?

Accepted Answer

A)  input prices
B)  future expectations
C)  number of suppliers
D)  technological changesE) C) and D)
F) All of the above

Question 20

In economics,what does the demand for a good refer to?

Accepted Answer

A)  The amount people would like to have if the good was free.
B)  The amount people need to achieve a minimum standard of living.
C)  The amount people will buy at alternative income levels.
D)  The amount people will buy at various prices.E) B) and C)
F) B) and D)

Exam 3: Supply and Demand

Suppose we observe an increase in the price of oranges.Which of the following is the most likely cause?

Correct AnswerverifiedShow Answer

Why does the quantity of a good demanded decrease when its price increases?

Correct AnswerverifiedShow Answer

When a demand schedule is drawn in a graph,which of the following statements best describes the graph?

Correct AnswerverifiedShow Answer

How is the market demand curve determined?

Correct AnswerverifiedShow Answer

What is the difference between a change in demand and a change in quantity demanded?

Correct AnswerverifiedA change in quantity demanded is caused ...View AnswerShow Answer

Is it possible for a BMW to be an inferior good? Explain.

Correct AnswerverifiedYes.An inferior good is defined as a goo...View AnswerShow Answer

Which of the following statements about the supply curve is the most accurate?

Correct AnswerverifiedShow Answer

What two effects support the law of demand?

Correct AnswerverifiedThe income effect suggests that an incre...View AnswerShow Answer

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus.Last week,Antonio's supplier of pepperoni informed him of a 25 percent increase in the cost of pepperoni.What variable that determines the position of the supply curve has changed?

Correct AnswerverifiedShow Answer

Which of the following would NOT cause a change in the demand for cheese?

Correct AnswerverifiedShow Answer

TABLE 3-1 -Refer to Table 3-1.It illustrates the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,what would the quantity demanded in the market be?

Correct AnswerverifiedShow Answer

The law of supply suggests that a decrease in the price of a product will increase the quantity supplied for that product.

Correct AnswerverifiedShow Answer

Which of the following statements about the demand curve for a typical good is the most accurate?

Correct AnswerverifiedShow Answer

Skateboards International of Regina,Saskatchewan,was able to sell 20 000 skateboards at a price of $60 in 2010.In 2011,it was able to sell only 12 000 of the same skateboards at a price of $60.What has Skateboards International evidently experienced?

Correct AnswerverifiedShow Answer

Ceteris paribus,if new manufacturers enter the computer industry,which of the following will occur?

Correct AnswerverifiedShow Answer

What does a downward-sloping demand curve illustrate?

Correct AnswerverifiedShow Answer

Ceteris paribus,what effect would an increase in the price of DVD players tend to have?

Correct AnswerverifiedShow Answer

A decrease in wages will increase the supply of most goods.

Correct AnswerverifiedShow Answer

The substitution effect helps to explain why demand curves are downward sloping.

Correct AnswerverifiedShow Answer

In economics,what does the demand for a good refer to?

Correct AnswerverifiedShow Answer

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A change in quantity demanded is caused ...
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Yes.An inferior good is defined as a goo...
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Correct Answer
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The income effect suggests that an incre...
View Answer

Correct Answer
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Correct Answer
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