Question 1

The graph shown depicts the market for a good. At a price of $18, there is:

Accepted Answer

A)  a shortage (excess demand) of 9,000 units.
B)  a shortage (excess demand) of 5,000 units.
C)  a shortage (excess demand) of 4,000 units.
D)  a surplus (excess supply) of 5,000 units.E) B) and C)
F) All of the above

Question 2

The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D) and supply curve (S2) intersect. Something changes in the market, and the supply curve shifts to S1. What could have caused this shift?

Accepted Answer

A)  The price of pizza sauce increased.
B)  The price of pizza decreased.
C)  The price of labor for pizza shops decreased.
D)  Consumers no longer prefer to eat pizza.E) None of the above
F) B) and C)

Question 3

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

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 D)
F) None of the above

Question 4

Consider the market for roses, which is currently in equilibrium. However, Valentine's Day is coming up, and the rose is the most popular flower to gift to a significant other on this holiday. How will the market for roses change on Valentine's Day?

Accepted Answer

A)  The equilibrium price and quantity will increase due to an increase in supply.
B)  The equilibrium price and quantity will increase due to an increase in demand.
C)  The quantity demanded will increase because the price increases.
D)  The quantity supplied will decrease because the price decreases.E) A) and C)
F) B) and C)

Question 5

Supply describes how much of something producers:

Accepted Answer

A)  are willing and able to buy under certain circumstances.
B)  want to sell under certain circumstances, although they may not be able to.
C)  are willing and able to offer for sale at various prices under given circumstances.
D)  are able to sell under certain circumstances, although they may not be willing to.E) None of the above
F) B) and C)

Question 6

Demand describes how much of something people:

Accepted Answer

A)  are willing and able to buy at alternative prices under certain circumstances.
B)  want, but may not necessarily be able, to buy under certain circumstances.
C)  are willing and able to sell under certain circumstances.
D)  are able to buy, but might not want to buy under certain circumstances.E) None of the above
F) A) and C)

Question 7

Suppose a drought causes most fruit crops to fail, decreasing the amount of available fruit. What changes could we expect to see in the market for fruitcake?

Accepted Answer

A)  An increase in the supply of fruitcake
B)  A decrease in the supply of fruitcake
C)  An increase in the demand for fruitcake, but no change in the supply of fruitcake
D)  A decrease in the demand for fruitcake, but no change in the supply of fruitcakeE) All of the above
F) C) and D)

Question 8

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) B) and C)
F) C) and D)

Question 9

Which of the following describes one reason the supply of cell phones has increased?

Accepted Answer

A)  More cell phone towers have been built.
B)  Better technology allows cell phones to be produced for less money.
C)  Consumer preference for cell phones has increased.
D)  Consumers expect that land lines will cease to exist in the near future.E) A) and C)
F) A) and B)

Question 10

The buyers and sellers who trade a particular good or service make up what we call a:

Accepted Answer

A)  market.
B)  store.
C)  mall.
D)  negotiators.E) A) and D)
F) C) and D)

Question 11

The table shown depicts the demand and supply schedules of a good. At a price of $1.50:

Accepted Answer

A)  the market is in equilibrium.
B)  a surplus (excess supply) will exist.
C)  more is being supplied than demanded.
D)  a shortage (excess demand) will exist.E) C) and D)
F) None of the above

Question 12

The demand curve:

Accepted Answer

A)  represents consumers' willingness, but not ability, to buy.
B)  shows the highest amount consumers are able to pay for a specific quantity.
C)  visually displays the demand schedule.
D)  represents consumers' ability, but not willingness, to buy.E) B) and C)
F) A) and D)

Question 13

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) A) and D)
F) A) and C)

Question 14

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

Accepted Answer

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

Question 15

The table shows individual demand schedules for a market. If the price of the good is $0.50, total demand by Betty and Barney will be:

Accepted Answer

A)  18 units.
B)  36 units.
C)  75 units.
D)  47 units.E) None of the above
F) A) and C)

Question 16

A department store announces that its annual tent sale is happening next week. What affect will this have on your current demand for a coat from that department store?

Accepted Answer

A)  Your demand will increase because of an income constraint.
B)  Your demand will increase because of your expectations about the price of the coat next week.
C)  Your demand will decrease because of an income constraint.
D)  Your demand will decrease because of your expectations about the price of the coat next week.E) C) and D)
F) B) and D)

Question 17

After getting a raise at work, Tiana now regularly buys steak instead of hamburger. Based on this behavior, what can we assume about these goods for Tiana?

Accepted Answer

A)  Steak is a normal good and hamburger is an inferior good.
B)  Steak is an inferior good and hamburger is a normal good.
C)  Steak and hamburger are complementary goods.
D)  Steak and hamburger are normal goods.E) B) and D)
F) B) and C)

Question 18

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) None of the above
F) A) and B)

Question 19

Perfectly competitive markets are:

Accepted Answer

A)  the most common type of market in our economy.
B)  hard to find in a real-world setting.
C)  made up principally by consumer goods.
D)  typically found in industrial sectors of our economy.E) C) and D)
F) B) and D)

Question 20

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Accepted Answer

A)  equilibrium.
B)  optimization.
C)  maximization.
D)  market collapse.E) All of the above
F) A) and B)

Exam 3: Markets

A department store announces that its annual tent sale is happening next week. What affect will this have on your current demand for a coat from that department store?

Correct AnswerverifiedShow Answer

Supply describes how much of something producers:

Correct AnswerverifiedShow Answer

Consider the market for roses, which is currently in equilibrium. However, Valentine's Day is coming up, and the rose is the most popular flower to gift to a significant other on this holiday. How will the market for roses change on Valentine's Day?

Correct AnswerverifiedShow Answer

The graph shown depicts the market for a good. Assume the market was originally in equilibrium where the demand curve (D) and supply curve (S2) intersect. Something changes in the market, and the supply curve shifts to S1. What could have caused this shift?

Correct AnswerverifiedShow Answer

Perfectly competitive markets are:

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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

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

Correct AnswerverifiedShow Answer

The buyers and sellers who trade a particular good or service make up what we call a:

Correct AnswerverifiedShow Answer

The graph shown depicts the market for a good. At a price of $18, there is:

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

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

After getting a raise at work, Tiana now regularly buys steak instead of hamburger. Based on this behavior, what can we assume about these goods for Tiana?

Correct AnswerverifiedShow Answer

The table shown depicts the demand and supply schedules of a good. At a price of $1.50:

Correct AnswerverifiedShow Answer

The point at which buyers and sellers "agree" on the quantity of a good they are willing to exchange at a given price is called:

Correct AnswerverifiedShow Answer

The demand curve:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Demand describes how much of something people:

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The table shows individual demand schedules for a market. If the price of the good is $0.50, total demand by Betty and Barney will be:

Correct AnswerverifiedShow Answer

Which of the following describes one reason the supply of cell phones has increased?

Correct AnswerverifiedShow Answer

Suppose a drought causes most fruit crops to fail, decreasing the amount of available fruit. What changes could we expect to see in the market for fruitcake?

Correct AnswerverifiedShow Answer

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