Question 1

After getting a raise at work, Gustavo now regularly buys steak instead of chicken. Which factor of demand has influenced Gustavo's demand for steak?

Accepted Answer

A)   Price of a substitute good
B)   Price of a complementary good
C)   Income
D)   PreferencesE) None of the above
F) All of the above

Question 2

Consider a market that is in equilibrium. If the market experiences both an increase in demand and an increase in supply:

Accepted Answer

A)   the equilibrium price and quantity will rise.
B)   the equilibrium quantity will rise, but the change in the equilibrium price cannot be predicted.
C)   the equilibrium price will rise, but the change in the equilibrium quantity cannot be predicted.
D)   the equilibrium price and quantity will fall.E) C) and D)
F) All of the above

Question 3

The term market refers to:

Accepted Answer

A)   a physical location where buyers and sellers meet to exchange goods for money.
B)   the buyers and sellers who trade a particular good or service, not to a physical location.
C)   a location where buyers go to fulfill their wants and needs.
D)   a hypothetical place of exchange.E) A) and D)
F) All of the above

Question 4

The graph shown depicts the market for a good. At a price of $5, there is:

Accepted Answer

A)   a shortage (excess demand)  of 10 units.
B)   a shortage (excess demand)  of 20 units.
C)   a shortage (excess demand)  of 30 units.
D)   a surplus (excess supply)  of 20 units.E) B) and C)
F) C) and D)

Question 5

Upon Apple's announcement that the newest iPhone model will be released in the next six months, we could reasonably expect that demand for the current iPhone model will _____ due to a change in _____.

Accepted Answer

A)   decrease; expectations of future prices
B)   increase; expectations of future prices
C)   increase; the supply of the current model
D)   decrease; the price of a substitute goodE) A) and D)
F) C) and D)

Question 6

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _____ and his demand curve to shift to the _____.

Accepted Answer

A)   increase; right
B)   increase; left
C)   decrease; right
D)   decrease; leftE) A) and B)
F) All of the above

Question 7

What assumption does the supply schedule make?

Accepted Answer

A)   Factors other than price remain the same.
B)   All factors except price must change.
C)   Factors other than supply remain the same.
D)   All factors except supply must change.E) C) and D)
F) None of the above A

Question 8

Ray's company just announced that all employees will be receiving a 5 percent pay cut in order to avoid the company shutting down. Ray's demand for coffee, a normal good, will likely _____ and his demand curve will _____.

Accepted Answer

A)   decrease; shift to the right
B)   decrease; shift to the left
C)   increase; shift to the right
D)   increase; shift to the leftE) None of the above
F) All of the above

Question 9

Consider the market for pecans, which is currently in equilibrium. Now, suppose a hurricane destroys a large number of pecan trees. How will the market for pecans change as a result of the hurricane?

Accepted Answer

A)   The equilibrium price will decrease and the equilibrium quantity will increase due to an increase in supply.
B)   The equilibrium price will increase and the equilibrium quantity will decrease due to a decrease in supply.
C)   The equilibrium price and quantity will fall due to a decrease in supply and demand.
D)   The equilibrium price will increase and the equilibrium quantity will decrease due to a decrease in supply and an increase in demand.E) A) and D)
F) C) and D)

Question 10

Suppose a factory recently removed robots from its production line, decreasing productivity. This will likely cause a:

Accepted Answer

A)   rightward shift of the supply curve.
B)   leftward shift of the supply curve.
C)   downward shift of the supply curve.
D)   movement up along the supply curve.E) B) and D)
F) None of the above

Question 11

The best example of a perfectly competitive market would be the market for:

Accepted Answer

A)   grain.
B)   shoes.
C)   computers.
D)   cameras.E) A) and B)
F) A) and D)

Question 12

Suppose a lawn care company adopts a new scheduling software to replace its old system of filling out paper calendars. Which factor of supply does this scenario exemplify?

Accepted Answer

A)   Technology
B)   Price of input
C)   Number of sellers
D)   Expectation of the futureE) C) and D)
F) All of the above

Question 13

When quantity supplied equals quantity demanded:

Accepted Answer

A)   equilibrium is reached.
B)   the market pushes the economy to produce more.
C)   the market pushes the economy to produce less.
D)   the market ceases to function.E) None of the above
F) A) and B)

Question 14

Suppose the demand for chicken has increased. This change can be shown graphically as a:

Accepted Answer

A)   shift in the demand curve to the right.
B)   shift in the demand curve to the left.
C)   movement along the demand curve to the right.
D)   movement along the demand curve to the left.E) A) and B)
F) A) and C)

Question 15

What is likely to happen if a producer incorrectly sets the price of its product too low?

Accepted Answer

A)   A shortage (excess demand)  will result, and consumers will bid the price down to equilibrium.
B)   A surplus (excess supply)  will result, and the additional goods in inventory will prompt the producer to raise the price.
C)   A shortage (excess demand)  will result, and consumers will bid the price up to equilibrium.
D)   A surplus (excess supply)  will result, and the additional goods in inventory will prompt the producer to restrict output until sales increase.E) C) and D)
F) All of the above

Question 16

Suppose the graph shown depicts the demand for a normal good. Pasua was originally consuming at point A, but after receiving a raise at work her demand may:

Accepted Answer

A)   be unaffected.
B)   increase to point B.
C)   increase to point C.
D)   drop to zero.E) B) and D)
F) All of the above

Question 17

Suppose the price of oil has recently increased, making it more expensive to manufacture ride-on lawn mowers. This oil price increase also makes it more expensive to run a ride-on mower. What factors of demand and/or supply are affected by the changing price of oil?

Accepted Answer

A)   Price of related good, expectations of future prices
B)   Price of related good, price of input
C)   Price of input, income
D)   Price of input, number of buyersE) None of the above
F) A) and C)

Question 18

Consider the market for wheat, which is currently in equilibrium. Now, suppose a pest destroys most of this year's wheat crop. How will the market for wheat change as a result of the destruction?Supply will shift to the right.The equilibrium price will increase.The equilibrium quantity will decrease.The equilibrium price may or may not change.

Accepted Answer

A)   II only
B)   I and IV only
C)   I, III, and IV only
D)   II and III onlyE) None of the above
F) A) and B)

Question 19

A non-price determinant of demand refers to something:

Accepted Answer

A)   other than demand that affects the price.
B)   other than the price that affects demand.
C)   that determines how large a role price plays in the demand decision.
D)   that determines how prices are affected by income.E) B) and C)
F) None of the above B

Question 20

Consider a market that is in equilibrium. If the market experiences a decrease in supply:

Accepted Answer

A)   the equilibrium price and quantity will rise.
B)   the equilibrium price will rise and the equilibrium quantity will fall.
C)   the equilibrium price and quantity will fall.
D)   the equilibrium price will fall and the equilibrium quantity will rise.E) B) and C)
F) A) and D) B

Exam 3: Markets

After getting a raise at work, Gustavo now regularly buys steak instead of chicken. Which factor of demand has influenced Gustavo's demand for steak?

Correct Answer
verified

Consider a market that is in equilibrium. If the market experiences both an increase in demand and an increase in supply:

Correct Answer
verified

The term market refers to:

Correct Answer
verified

The graph shown depicts the market for a good. At a price of $5, there is:

Correct Answer
verified

Upon Apple's announcement that the newest iPhone model will be released in the next six months, we could reasonably expect that demand for the current iPhone model will _ due to a change in _.

Correct Answer
verified

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _ and his demand curve to shift to the _.

Correct Answer
verified

What assumption does the supply schedule make?

Correct Answer
verified
A

Ray's company just announced that all employees will be receiving a 5 percent pay cut in order to avoid the company shutting down. Ray's demand for coffee, a normal good, will likely _ and his demand curve will _.

Correct Answer
verified

Consider the market for pecans, which is currently in equilibrium. Now, suppose a hurricane destroys a large number of pecan trees. How will the market for pecans change as a result of the hurricane?

Correct Answer
verified

Suppose a factory recently removed robots from its production line, decreasing productivity. This will likely cause a:

Correct Answer
verified

The best example of a perfectly competitive market would be the market for:

Correct Answer
verified

Suppose a lawn care company adopts a new scheduling software to replace its old system of filling out paper calendars. Which factor of supply does this scenario exemplify?

Correct Answer
verified

When quantity supplied equals quantity demanded:

Correct Answer
verified

Suppose the demand for chicken has increased. This change can be shown graphically as a:

Correct Answer
verified

What is likely to happen if a producer incorrectly sets the price of its product too low?

Correct Answer
verified

Suppose the graph shown depicts the demand for a normal good. Pasua was originally consuming at point A, but after receiving a raise at work her demand may:

Correct Answer
verified

Suppose the price of oil has recently increased, making it more expensive to manufacture ride-on lawn mowers. This oil price increase also makes it more expensive to run a ride-on mower. What factors of demand and/or supply are affected by the changing price of oil?

Correct Answer
verified

Correct Answer
verified

A non-price determinant of demand refers to something:

Correct Answer
verified
B

Consider a market that is in equilibrium. If the market experiences a decrease in supply:

Correct Answer
verified
B

Exam 3: Markets

After getting a raise at work, Gustavo now regularly buys steak instead of chicken. Which factor of demand has influenced Gustavo's demand for steak?

Correct AnswerverifiedShow Answer

Consider a market that is in equilibrium. If the market experiences both an increase in demand and an increase in supply:

Correct AnswerverifiedShow Answer

The term market refers to:

Correct AnswerverifiedShow Answer

The graph shown depicts the market for a good. At a price of $5, there is:

Correct AnswerverifiedShow Answer

Upon Apple's announcement that the newest iPhone model will be released in the next six months, we could reasonably expect that demand for the current iPhone model will _____ due to a change in _____.

Correct AnswerverifiedShow Answer

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _____ and his demand curve to shift to the _____.

Correct AnswerverifiedShow Answer

What assumption does the supply schedule make?

Correct AnswerverifiedA

Ray's company just announced that all employees will be receiving a 5 percent pay cut in order to avoid the company shutting down. Ray's demand for coffee, a normal good, will likely _____ and his demand curve will _____.

Correct AnswerverifiedShow Answer

Consider the market for pecans, which is currently in equilibrium. Now, suppose a hurricane destroys a large number of pecan trees. How will the market for pecans change as a result of the hurricane?

Correct AnswerverifiedShow Answer

Suppose a factory recently removed robots from its production line, decreasing productivity. This will likely cause a:

Correct AnswerverifiedShow Answer

The best example of a perfectly competitive market would be the market for:

Correct AnswerverifiedShow Answer

Suppose a lawn care company adopts a new scheduling software to replace its old system of filling out paper calendars. Which factor of supply does this scenario exemplify?

Correct AnswerverifiedShow Answer

When quantity supplied equals quantity demanded:

Correct AnswerverifiedShow Answer

Suppose the demand for chicken has increased. This change can be shown graphically as a:

Correct AnswerverifiedShow Answer

What is likely to happen if a producer incorrectly sets the price of its product too low?

Correct AnswerverifiedShow Answer

Suppose the graph shown depicts the demand for a normal good. Pasua was originally consuming at point A, but after receiving a raise at work her demand may:

Correct AnswerverifiedShow Answer

Suppose the price of oil has recently increased, making it more expensive to manufacture ride-on lawn mowers. This oil price increase also makes it more expensive to run a ride-on mower. What factors of demand and/or supply are affected by the changing price of oil?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A non-price determinant of demand refers to something:

Correct AnswerverifiedB

Consider a market that is in equilibrium. If the market experiences a decrease in supply:

Correct AnswerverifiedB

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Upon Apple's announcement that the newest iPhone model will be released in the next six months, we could reasonably expect that demand for the current iPhone model will _ due to a change in _.

Correct Answer
verified

Wendell just read an article claiming scientists have proven that processed cheese food increases brain power. We would expect Wendell's demand for processed cheese food to _ and his demand curve to shift to the _.

Correct Answer
verified

Correct Answer
verified
A

Ray's company just announced that all employees will be receiving a 5 percent pay cut in order to avoid the company shutting down. Ray's demand for coffee, a normal good, will likely _ and his demand curve will _.

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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B