Question 1

When graphing the demand curve:

Accepted Answer

A)   quantity goes on the horizontal axis and price goes on the vertical axis.
B)   quantity goes on the vertical axis and price goes on the horizontal axis.
C)   both quantity and price go on the horizontal axis.
D)   it doesn't matter which axis price and quantity are placed on.E) C) and D)
F) A) and D)

Question 2

The amount of a particular good or service that buyers in a market will purchase at a given price during a specified period is called:

Accepted Answer

A)   quantity demanded.
B)   quantity supplied.
C)   demand.
D)   supply.E) B) and D)
F) All of the above

Question 3

The market-clearing price refers to the:

Accepted Answer

A)   price where quantity supplied is the highest possible.
B)   price where quantity demanded and quantity supplied are the same.
C)   minimum price at which items could be sold.
D)   maximum price at which all suppliers are willing to sell their production.E) A) and B)
F) None of the above

Question 4

Ren loves to go to the movies, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. The change in Ren's behavior would be shown graphically by a:

Accepted Answer

A)   rightward shift in his demand curve.
B)   leftward shift in his demand curve.
C)   movement down along his demand curve.
D)   movement up along his demand curve.E) A) and D)
F) All of the above

Question 5

A price taker is a buyer or seller who:

Accepted Answer

A)   cannot affect the market price.
B)   takes the market price and chooses to increase or decrease it.
C)   takes prices in the area and averages them together to set the price for his or her good.
D)   can affect the market price only when collaborating with other buyers or sellers.E) None of the above
F) B) and C)

Question 6

Suppose the graph shown depicts the demand for a normal good. A shift from B to A might be caused by:

Accepted Answer

A)   a decrease in the good's price.
B)   an increase in the good's price.
C)   a decrease in the price of a substitute.
D)   an increase in the price of a substitute.E) B) and C)
F) A) and B)

Question 7

An increase in the price of butter is likely to cause the demand for:

Accepted Answer

A)   olive oil to increase.
B)   olive oil to decrease.
C)   butter to increase.
D)   butter to decrease.E) B) and C)
F) C) and D)

Question 8

We say that goods are substitutes when they:

Accepted Answer

A)   serve similar-enough purposes that a consumer might purchase one in place of the other.
B)   are consumed together, so that purchasing one will make a consumer more likely to purchase the other.
C)   can replace something consumers typically purchase at a significantly lower price.
D)   change a consumer's preferences for a good or service.E) B) and C)
F) None of the above

Question 9

The table shown depicts the demand and supply schedules of a good. Equilibrium in this market will occur at:

Accepted Answer

A)   a price of $1.50 and a quantity of 85.
B)   a price of $3.00 and a quantity of 45.
C)   a price of $3.00 and a quantity of 90.
D)   a price of $4.50 and a quantity of 91.E) All of the above
F) A) 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) A) and D)
F) B) and D)

Question 11

What effect would a rise in the price of gasoline have on automakers?

Accepted Answer

A)   Automakers would produce more gas-efficient cars.
B)   Automakers would decrease the price of gas-efficient vehicles.
C)   Automakers would spend more money to market large vehicles.
D)   A rise in the price of gasoline would not affect an automaker's supply decisions.E) None of the above
F) B) and D)

Question 12

Suppose a recent epidemic of mad cow disease causes the government to mandate that thousands of cows be put down. What effect will this have on the market for leather shoes?

Accepted Answer

A)   The demand for leather shoes will increase.
B)   The supply of leather shoes will decrease.
C)   The demand and supply of leather shoes will increase.
D)   This scenario will not affect the market for leather shoes.E) None of the above
F) B) and D)

Question 13

The amount of a particular good that sellers in a market will sell at a given price during a specified period is called:

Accepted Answer

A)   quantity demanded.
B)   quantity supplied.
C)   demand.
D)   supply.E) C) and D)
F) B) and D)

Question 14

When does a shortage occur?

Accepted Answer

A)   When the quantity supplied is less than the quantity demanded
B)   When the quantity demanded is less than the quantity supplied
C)   When goods have to be sold quickly or else they may rot or expire
D)   When producers see a need to decrease the price of the goodE) B) and C)
F) All of the above

Question 15

The most likely complementary good for cereal would be:

Accepted Answer

A)   a bagel.
B)   milk.
C)   pizza.
D)   a sub sandwich.E) B) and C)
F) A) and C)

Question 16

Jan heads to the store to buy burgers for dinner. Seeing a sale on hot dogs, she buys those instead. The change in her demand for burgers is due to which factor?

Accepted Answer

A)   Consumer preferences
B)   Income
C)   Prices of related goods
D)   Number of buyersE) B) and C)
F) C) and D)

Question 17

For almost all goods, the _____ the price goes, the _____.

Accepted Answer

A)   lower; higher the quantity supplied
B)   higher; more luxurious the good becomes
C)   lower; more luxurious the good becomes
D)   higher; higher the quantity suppliedE) None of the above
F) B) and C)

Question 18

A news report states that the housing market is making a comeback and that house prices are on the rise. This information is likely to:

Accepted Answer

A)   increase the demand for houses due to a change in expectations of future prices.
B)   decrease the demand for houses due to a change in expectations of future prices.
C)   have no effect on the current housing market, but will increase the demand for houses in the future.
D)   have no effect on the demand for houses, but it will decrease the supply.E) C) and D)
F) B) and C)

Question 19

Due to above-average rainfall last year there was a plentiful supply of blueberries, which caused the price of blueberries to drop. Bakeries regularly produce and sell blueberry pie. Considering the market for blueberry pies, _____ was affected and the supply of blueberry pies will _____.

Accepted Answer

A)   the price of an input; increase
B)   the price of an input; decrease
C)   consumer preference; increase
D)   the number of sellers; increaseE) None of the above
F) A) and B)

Question 20

In a _____ economy, private individuals (as opposed to a central planner)  make decisions.

Accepted Answer

A)   market
B)   government controlled
C)   socialist
D)   barterE) B) and D)
F) B) and C)

Exam 3: Markets

An increase in the price of butter is likely to cause the demand for:

Correct AnswerverifiedShow Answer

Due to above-average rainfall last year there was a plentiful supply of blueberries, which caused the price of blueberries to drop. Bakeries regularly produce and sell blueberry pie. Considering the market for blueberry pies, _____ was affected and the supply of blueberry pies will _____.

Correct AnswerverifiedShow Answer

The amount of a particular good that sellers in a market will sell at a given price during a specified period is called:

Correct AnswerverifiedShow Answer

Suppose the graph shown depicts the demand for a normal good. A shift from B to A might be caused by:

Correct AnswerverifiedShow Answer

The most likely complementary good for cereal would be:

Correct AnswerverifiedShow Answer

We say that goods are substitutes when they:

Correct AnswerverifiedShow Answer

What effect would a rise in the price of gasoline have on automakers?

Correct AnswerverifiedShow Answer

Jan heads to the store to buy burgers for dinner. Seeing a sale on hot dogs, she buys those instead. The change in her demand for burgers is due to which factor?

Correct AnswerverifiedShow Answer

The market-clearing price refers to the:

Correct AnswerverifiedShow Answer

The table shown depicts the demand and supply schedules of a good. Equilibrium in this market will occur at:

Correct AnswerverifiedShow Answer

For almost all goods, the _____ the price goes, the _____.

Correct AnswerverifiedShow Answer

Suppose a recent epidemic of mad cow disease causes the government to mandate that thousands of cows be put down. What effect will this have on the market for leather shoes?

Correct AnswerverifiedShow Answer

A price taker is a buyer or seller who:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When does a shortage occur?

Correct AnswerverifiedShow Answer

A news report states that the housing market is making a comeback and that house prices are on the rise. This information is likely to:

Correct AnswerverifiedShow Answer

When graphing the demand curve:

Correct AnswerverifiedShow Answer

The amount of a particular good or service that buyers in a market will purchase at a given price during a specified period is called:

Correct AnswerverifiedShow Answer

In a _____ economy, private individuals (as opposed to a central planner) make decisions.

Correct AnswerverifiedShow Answer

Ren loves to go to the movies, and he just learned that he can buy a ticket at a discounted price using his student ID. Ren now sees movies at the theater even more frequently. The change in Ren's behavior would be shown graphically by a:

Correct AnswerverifiedShow Answer

Correct Answer
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Due to above-average rainfall last year there was a plentiful supply of blueberries, which caused the price of blueberries to drop. Bakeries regularly produce and sell blueberry pie. Considering the market for blueberry pies, _ was affected and the supply of blueberry pies will _.

Correct Answer
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For almost all goods, the _ the price goes, the _.

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