Question 1

The high price of gasoline in the late-2000s was likely the result of

Accepted Answer

A)   an increase in both the supply of and the demand for gasoline.
B)   a decrease in both the supply of and the demand for gasoline.
C)   an increase in the supply of gasoline along with a decrease in the demand for gasoline.
D)   a decrease in the supply of gasoline along with an increase in the demand for gasoline.
E)   no change in either the supply of or the demand for gasoline.F) All of the above
G) C) and E)

Question 2

The supply and demand model consists of the following three elements:

Accepted Answer

A)   math, geometry, and simultaneous equations.
B)   supply, demand, and production possibilities.
C)   inputs, outputs, and production.
D)   utility, profit maximization, and regulation.
E)   price, quantity, and equilibrium.F) B) and D)
G) A) and E)

Question 3

Suppose that Sunny D is an inferior good. Which of the following is true given an increase in consumer income?

Accepted Answer

A)   An upward movement along the demand curve of Sunny D
B)   A downward movement along the demand curve of Sunny D
C)   A leftward shift in the demand curve of Sunny D
D)   A rightward shift in the demand curve of Sunny D
E)   No change in the demand curve of Sunny DF) C) and D)
G) B) and E)

Question 4

If quantity supplied is less than quantity demanded, then

Accepted Answer

A)   there is a shortage in the market.
B)   prices will fall.
C)   equilibrium has been achieved.
D)   consumer incomes will increase.
E)   there is a surplus in the market.F) A) and E)
G) D) and E)

Question 5

The demand curve for apples is downward-sloping because

Accepted Answer

A)   when fewer apples are produced, the money in people's apple budgets does not have to stretch as far.
B)   there must have been an apple blight, so there must be fewer apples to buy.
C)   when apple prices rise, the price of other goods must also be rising, so people cannot afford to buy as much.
D)   at higher apple prices, people will seek other, relatively cheaper alternatives, like pears, oranges, or plums.
E)   at higher prices, apples are more expensive to produce, so fewer are grown.F) A) and B)
G) D) and E)

Question 6

Suppose consumer incomes increase, and we are looking at a market for a normal good. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Accepted Answer

Demand increases, but supply d...

Question 7

A demand curve represents the relationship between consumer income and the quantity demanded.

Accepted Answer

A) True 
 B)False

Question 8

The demand curve is a relationship between the price of a good and the quantity consumers are willing to buy at that price.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following leads to a leftward shift of the demand curve?

Accepted Answer

A)   An expectation of a decline in the product price in the future
B)   A decrease in the good's own price
C)   An increase in the price of a substitute
D)   A decrease in the price of a complement
E)   An increase in the number of consumersF) C) and D)
G) A) and E)

Question 10

When economists say that the demand for a product has decreased, they mean that

Accepted Answer

A)   consumers are going to purchase less at any given price.
B)   the price has increased and consumers will purchase less of the product.
C)   the demand curve has shifted to the right.
D)   the product has become more abundant and consumers therefore want it less.
E)   consumers would be willing to pay less to receive the same quantity.F) A) and D)
G) None of the above

Question 11

A demand schedule is a table of prices and

Accepted Answer

A)   minimum quantities people have purchased at each price.
B)   quantities people are able to purchase at each price.
C)   quantities people are willing to buy at each price.
D)   quantities people have purchased at each price.
E)   quantities people are willing to produce at each price.F) C) and E)
G) D) and E)

Question 12

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

Accepted Answer

A decrease in demand is a shif...

Question 13

The supply curve

Accepted Answer

A)   has quantity produced on the vertical axis.
B)   is a graph of a supply schedule.
C)   represents production quotas.
D)   sometimes slopes downward.
E)   is always a straight line.F) C) and D)
G) A) and B)

Question 14

Exhibit 3-1 
-Consider the market described by the schedule in Exhibit 3-1. Which of the following is true?

Accepted Answer

A)   The law of supply is violated.
B)   There is no equilibrium.
C)   At $5 per unit, people will purchase 100 units.
D)   At $2 per unit, people will purchase 700 units.
E)   The law of demand is violated.F) C) and D)
G) B) and C)

Question 15

Which of the following statements is true?

Accepted Answer

A)   An increase in quantity demanded means a movement along a given demand curve.
B)   An increase in demand means a movement along a given demand curve.
C)   An increase in demand means that consumers will purchase less of a product at each possible price.
D)   Price and quantity demanded are positively related.
E)   An increase in demand always means the same as an increase in quantity demanded.F) A) and E)
G) D) and E)

Question 16

An increase in consumer income causes a movement up along the demand curve.

Accepted Answer

A) True 
 B)False

Question 17

Peanut butter and jelly are complements so that if the price of peanut butter increases, the

Accepted Answer

A)   quantity demanded for jelly increases.
B)   quantity demanded for jelly decreases.
C)   demand for jelly increases.
D)   demand for jelly decreases.
E)   demand for jelly remains the same.F) A) and D)
G) D) and E)

Question 18

If an increase in the price of product X causes an increase in the demand for product Y, we can conclude that

Accepted Answer

A)   they are inferior goods.
B)   the price of Y will decrease.
C)   they are complements.
D)   they are substitutes.
E)   the quantity supplied for Y will decrease.F) None of the above
G) B) and C)

Question 19

When a shortage exists in a market, the actual price is greater than the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 20

The demand for goods sold in Dollar Stores increases when consumer incomes fall in a recession. We can conclude that goods sold in Dollar Stores

Accepted Answer

A)   are normal goods.
B)   are luxury goods.
C)   are inferior goods.
D)   are complements of goods sold in department stores.
E)   have no substitutes.F) A) and E)
G) B) and E)

Exam 3: The Supply and Demand Model

The demand for goods sold in Dollar Stores increases when consumer incomes fall in a recession. We can conclude that goods sold in Dollar Stores

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The supply and demand model consists of the following three elements:

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A demand curve represents the relationship between consumer income and the quantity demanded.

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If an increase in the price of product X causes an increase in the demand for product Y, we can conclude that

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

Correct AnswerverifiedA decrease in demand is a shif...View AnswerShow Answer

Suppose that Sunny D is an inferior good. Which of the following is true given an increase in consumer income?

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Exhibit 3-1 -Consider the market described by the schedule in Exhibit 3-1. Which of the following is true?

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Peanut butter and jelly are complements so that if the price of peanut butter increases, the

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A demand schedule is a table of prices and

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The supply curve

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The demand curve is a relationship between the price of a good and the quantity consumers are willing to buy at that price.

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An increase in consumer income causes a movement up along the demand curve.

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If quantity supplied is less than quantity demanded, then

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Suppose consumer incomes increase, and we are looking at a market for a normal good. What will happen to demand, quantity demanded, supply, and quantity supplied as a result of this market change?

Correct AnswerverifiedDemand increases, but supply d...View AnswerShow Answer

When a shortage exists in a market, the actual price is greater than the equilibrium price.

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The demand curve for apples is downward-sloping because

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Which of the following statements is true?

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The high price of gasoline in the late-2000s was likely the result of

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Which of the following leads to a leftward shift of the demand curve?

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When economists say that the demand for a product has decreased, they mean that

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A decrease in demand is a shif...
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Demand increases, but supply d...
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