Question 1

A surplus exists in a market if

Accepted Answer

A)  ​there is an excess demand for the good.
B)  ​quantity demanded exceeds quantity supplied.
C)  ​the current price is above its equilibrium price.
D)  ​All of the above are correct.E) None of the above
F) A) and B)

Question 2

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Accepted Answer

A) True 
 B)False

Question 3

If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10, that change would be described as a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 4

The law of demand asserts that:

Accepted Answer

A)  ​output prices are more important than input prices.
B)  ​when people want a good badly enough they will find a way to pay for it.
C)  ​people want to buy more of goods that are priced very high because of their prestige.
D)  ​the quantity of a good that people will buy is inversely related to the product's price.E) B) and D)
F) A) and D)

Question 5

Which of the following is true of a demand curve?

Accepted Answer

A)  ​It must remain stable over time.
B)  ​It can shift either rightward or leftward.
C)  ​It is possible to move along the curve, but the demand curve will not shift.
D)  ​None of the above are true.E) All of the above
F) C) and D)

Question 6

According to the income effect, an increase in the price of oranges will:

Accepted Answer

A)  ​cause consumers to consume more apples because of greater savings on that good.
B)  ​cause consumers to spend more on oranges because a higher price signals that oranges are better than apples.
C)  ​cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges.
D)  ​leave consumers with less real income to spend on all goods.E) C) and D)
F) None of the above

Question 7

Upward shifts are

Accepted Answer

A)  ​increases in both demand and supply.
B)  ​decreases in both demand and supply.
C)  ​increases in demand and decreases in supply.
D)  ​increases in supply and decreases in demand.E) B) and C)
F) None of the above

Question 8

The quantity of a good demanded tends to increase as its price falls because:

Accepted Answer

A)  ​a decrease in price shifts the demand curve to the right.
B)  ​a decrease in price shifts the demand curve to the left.
C)  ​a decrease in price shifts the supply curve to the right.
D)  ​a decrease in price leads consumers to substitute toward this now relatively cheaper product.E) A) and D)
F) C) and D)

Question 9

Two donut chains in your town are battling for customers. The manager of the Real Yum Donut Shop lowered donut prices. As a result, customers:

Accepted Answer

A)  ​increase the quantity demanded of Real Yum donuts.
B)  ​decrease the quantity demanded of Real Yum donuts.
C)  ​buy the same quantity of Real Yum donuts as before the price change.
D)  ​decrease their demand for Real Yum donuts.E) A) and B)
F) A) and C)

Question 10

Which of the following demonstrates the law of supply?

Accepted Answer

A)  ​When leather became more expensive, belt producers decreased their supply of belts.
B)  ​When car production technology improved, car producers increased their supply of cars.
C)  ​When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)  ​When lemon prices rose, lemon growers increased their quantity supplied of lemons.E) B) and D)
F) A) and B)

Question 11

At an equilibrium price:

Accepted Answer

A)  ​quantity demanded exceeds quantity supplied.
B)  ​quantity demanded equals quantity supplied.
C)  ​quantity demanded is less than quantity supplied.
D)  ​there is no scarcity.E) B) and D)
F) A) and B)

Question 12

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

Accepted Answer

A) True 
 B)False

Question 13

A leftward shift in supply could be caused by:

Accepted Answer

A)  ​an improvement in productive technology.
B)  ​a decrease in income.
C)  ​some firms leaving the industry.
D)  ​a fall in the price of inputs to the industry.E) B) and D)
F) A) and C)

Question 14

CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Accepted Answer

A)  ​the current market demand for chocolate will decrease.
B)  ​the current market demand for chocolate will increase.
C)  ​the current quantity demanded for chocolate will decrease.
D)  ​there is no change in the current market for chocolate, but there will be after the current crop of cocoa bean plants is processed into chocolate.E) A) and B)
F) C) and D)

Question 15

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

Accepted Answer

A)  ​a decrease in the price of DVDs
B)  ​a decrease in the price of DVD players
C)  ​a change in the tastes towards watching movies in movie theaters
D)  ​a decrease in the number of people in the market for DVDsE) None of the above
F) C) and D)

Question 16

The quantity demanded of a good is the amount that buyers are

Accepted Answer

A)  ​willing to buy.
B)  ​willing and able to buy.
C)  ​willing, able, and need to buy.
D)  ​able to buy.E) B) and C)
F) A) and B)

Question 17

To an economist, a decrease in supply means a:

Accepted Answer

A)  ​rightward shift of the supply curve.
B)  ​movement up along a supply curve.
C)  ​leftward shift of the supply curve.
D)  ​movement down along the supply curve.E) B) and C)
F) A) and C)

Question 18

A university's basketball gymnasium is never more than half-full during basketball games. This implies

Accepted Answer

A)  ​the ticket price is above the equilibrium price.
B)  ​the ticket price is below the equilibrium price.
C)  ​the ticket price is at the equilibrium price.
D)  ​nothing about the equilibrium price.E) B) and C)
F) None of the above

Question 19

Either technological progress or cost increasing new government regulations will increase supply.

Accepted Answer

A) True 
 B)False

Question 20

​Exhibit 4-5 
-Refer to Exhibit 4-5. A change from Point A to Point C represents a(n) :

Accepted Answer

A)  ​increase in supply.
B)  ​decrease in supply.
C)  ​increase in quantity supplied.
D)  ​decrease in quantity supplied.E) B) and C)
F) B) and D)

Exam 4: Demand, Supply, and Market Equilibrium

According to the income effect, an increase in the price of oranges will:

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If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10, that change would be described as a decrease in demand.

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Which of the following demonstrates the law of supply?

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The quantity of a good demanded tends to increase as its price falls because:

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To an economist, a decrease in supply means a:

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The law of demand asserts that:

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At an equilibrium price:

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A surplus exists in a market if

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A leftward shift in supply could be caused by:

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CNN announces that bad weather in Central America has greatly reduced the number of cocoa bean plants, and, as a result, it is expected that the price of chocolate will rise in the near future. As a result:

Correct AnswerverifiedShow Answer

Either technological progress or cost increasing new government regulations will increase supply.

Correct AnswerverifiedShow Answer

Two donut chains in your town are battling for customers. The manager of the Real Yum Donut Shop lowered donut prices. As a result, customers:

Correct AnswerverifiedShow Answer

Upward shifts are

Correct AnswerverifiedShow Answer

A university's basketball gymnasium is never more than half-full during basketball games. This implies

Correct AnswerverifiedShow Answer

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

​Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point C represents a(n) :

Correct AnswerverifiedShow Answer

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Correct AnswerverifiedShow Answer

Which of the following is true of a demand curve?

Correct AnswerverifiedShow Answer

The quantity demanded of a good is the amount that buyers are

Correct AnswerverifiedShow Answer

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Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point C represents a(n) :

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