Question 1

The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information.If demand changes from P = 10 - .2Q to P = 7 - .3Q, we can conclude that:

Accepted Answer

A)  demand has increased.
B)  demand has declined.
C)  supply will increase.
D)  supply will decrease.E) None of the above
F) A) and B)

Question 2

Which one of the following would cause a leftward shift in the supply curve for car washes?

Accepted Answer

A)  an increase in the number of cars on the street
B)  an increase in the price of car washing equipment
C)  a decrease in youth unemployment
D)  a decrease in the price of waterE) C) and D)
F) None of the above

Question 3

The rationing function of prices refers to the:

Accepted Answer

A)  tendency of supply and demand to shift in opposite directions.
B)  fact that ration coupons are needed to alleviate wartime shortages of goods.
C)  capacity of a competitive market to equate the quantity demanded and the quantity supplied.
D)  ability of the market system to generate an equitable distribution of income.E) B) and D)
F) B) and C)

Question 4

If the supply schedule for a product is upward sloping and the price of that product declines from $100 to $75, the:

Accepted Answer

A)  supply of the product will shift to the left.
B)  supply of the product will shift to the right.
C)  quantity supplied of the product will decline.
D)  quantity supplied of the product will increase.E) All of the above
F) A) and D)

Question 5

Which of the following would not shift the demand curve for beef?

Accepted Answer

A)  a widely publicized study which indicates beef increases one's cholesterol
B)  a reduction in the price of cattle feed
C)  an effective advertising campaign by pork producers
D)  a change in the incomes of beef consumersE) B) and C)
F) A) and D)

Question 6

The horizontal axis of a graph which shows a market demand curve indicates the:

Accepted Answer

A)  prices at which various levels of output can be sold.
B)  number of consumers who are in the market for this product.
C)  various quantities of output at which the market will be cleared.
D)  quantities which consumers will be willing and able to buy at various prices.E) A) and B)
F) A) and C)

Question 7

The demand curve shows the relationship between:

Accepted Answer

A)  money income and quantity demanded.
B)  price and production costs.
C)  price and quantity demanded.
D)  consumer tastes and the quantity demanded.E) C) and D)
F) None of the above

Question 8

A decrease in the price of gasoline will:

Accepted Answer

A)  cause the demand curve for gas powered cars to become vertical.
B)  shift the demand curve for gas powered cars to the right.
C)  shift the demand curve for gas powered cars to the left.
D)  not affect the demand for gas powered cars.E) B) and C)
F) A) and D)

Question 9

1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from: A) a decrease in consumer incomes. B) an increase in the wages of chicken workers. C) an increase in the price of beef products. D) improved technology in the chicken industry." class="answers-bank-image d-inline" rel="preload" > Refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

Accepted Answer

A)  a decrease in consumer incomes.
B)  an increase in the wages of chicken workers.
C)  an increase in the price of beef products.
D)  improved technology in the chicken industry.E) All of the above
F) C) and D)

Question 10

An economist predicts that in a bicycle company, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction is based on the assumption that:

Accepted Answer

A)  there are many goods which are substitutes for bicycles.
B)  there are many goods which are complementary to bicycles.
C)  there are few goods which are substitutes for bicycles.
D)  bicycles are normal goods.E) All of the above
F) C) and D)

Question 11

Refer to the above diagram.A price of $20 in this market will result in:

Accepted Answer

A)  equilibrium.
B)  a shortage of 50 units.
C)  a surplus of 50 units.
D)  a shortage of 100 units.E) A) and B)
F) A) and C)

Question 12

Which is a determinant of supply?

Accepted Answer

A)  tastes and preferences
B)  technology
C)  consumer income
D)  number of consumersE) C) and D)
F) A) and D)

Question 13

If price is above the equilibrium level, competition among sellers to reduce the resulting:

Accepted Answer

A)  surplus will increase quantity demanded and decrease quantity supplied.
B)  shortage will decrease quantity demanded and increase quantity supplied.
C)  surplus will decrease quantity demanded and increase quantity supplied.
D)  shortage will increase quantity demanded and decrease quantity supplied.E) B) and C)
F) A) and C)

Question 14

A fall in the price of milk, used in the production of ice cream, will:

Accepted Answer

A)  decrease the supply of ice cream, causing the supply curve of ice cream to shift to the left.
B)  increase the supply of ice cream, causing the supply curve of ice cream to shift to the right.
C)  cause a downward movement along the supply curve of ice cream.
D)  have no effect on the supply of ice cream.E) A) and B)
F) A) and C)

Question 15

Which of the following will not cause the supply curve to shift?

Accepted Answer

A)  a change in resource costs
B)  a technological change
C)  a change in the price of the good
D)  a change in the prices of other goodsE) A) and D)
F) All of the above

Question 16

Refer to the diagram below for the market for corn.The equilibrium price and quantity in this market are:

Accepted Answer

A)  $4 and 10,000 bushels.
B)  $3 and 8,000 bushels.
C)  $2 and 4,000 bushels.
D)  $2 and 11,000 bushels.E) None of the above
F) B) and C)

Question 17

A market supply schedule for a product indicates that:

Accepted Answer

A)  as the product's price falls, producers produce more.
B)  there is an inverse relationship between price and quantity supplied.
C)  as a product's price rises, producers produce less.
D)  there is a direct relationship between price and quantity supplied.E) A) and B)
F) A) and C)

Question 18

A decrease in supply:

Accepted Answer

A)  refers to a leftward shift in the supply curve.
B)  refers to a downward movement along a supply curve.
C)  has the same meaning as the phrase "a decrease in quantity supplied."
D)  is likely to result from the decrease in the price of a productive resource.E) C) and D)
F) A) and B)

Question 19

A decrease in demand and an increase in supply will:

Accepted Answer

A)  increase the equilibrium quantity and decrease price.
B)  decrease the equilibrium quantity and affect price in an indeterminate way.
C)  decrease price and affect the equilibrium quantity in an indeterminate way.
D)  increase price and affect the equilibrium quantity in an indeterminate way.E) A) and B)
F) A) and C)

Question 20

A product market is in equilibrium:

Accepted Answer

A)  when there is a surplus of the product.
B)  when there is a shortage of the product.
C)  when consumers want to buy more of the product than producers offer for sale.
D)  where the demand and supply curves intersect.E) None of the above
F) A) and D)

Exam 3: B: Demand, Supply, and Market Equilibrium

Which is a determinant of supply?

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The demand curve shows the relationship between:

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The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q.Refer to the above information.If demand changes from P = 10 - .2Q to P = 7 - .3Q, we can conclude that:

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Which of the following will not cause the supply curve to shift?

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A product market is in equilibrium:

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If the supply schedule for a product is upward sloping and the price of that product declines from $100 to $75, the:

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An economist predicts that in a bicycle company, other things equal, a rise in consumer incomes will increase the demand for bicycles.This prediction is based on the assumption that:

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A market supply schedule for a product indicates that:

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A decrease in the price of gasoline will:

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Refer to the above diagram.A price of $20 in this market will result in:

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Refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves.A change from E1 to E2 is most likely to result from:

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A decrease in supply:

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Refer to the diagram below for the market for corn.The equilibrium price and quantity in this market are:

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Which of the following would not shift the demand curve for beef?

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The rationing function of prices refers to the:

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If price is above the equilibrium level, competition among sellers to reduce the resulting:

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The horizontal axis of a graph which shows a market demand curve indicates the:

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A decrease in demand and an increase in supply will:

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A fall in the price of milk, used in the production of ice cream, will:

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Which one of the following would cause a leftward shift in the supply curve for car washes?

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Refer to the above graph, which shows the market for chicken where D₁ and D₂ represent different demand curves.A change from E₁to E₂is most likely to result from:

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