Question 1

By an "increase in demand," economists mean that

Accepted Answer

A)  product price has fallen, so consumers move down to a new point on the demand curve.
B)  the quantity demanded at each price in a set of prices is greater.
C)  the quantity demanded at each price in a set of prices is smaller.
D)  a leftward shift of the demand curve has occurred.E) C) and D)
F) None of the above

Question 2

Refer to the diagram. A decrease in quantity demanded is depicted by a

Accepted Answer

A)  move from point x to point y.
B)  shift from D₁ to D₂.
C)  shift from D₂ to D₁.
D)  move from point y to point x.E) B) and D)
F) None of the above

Question 3

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Accepted Answer

A) True 
 B)False

Question 4

Describe and give a reason for the law of supply.

Accepted Answer

The law of supply states that as the pri...

Question 5

Refer to the diagram. A shortage of 160 units would be encountered if price was

Accepted Answer

A)  $1.10, that is, $1.60 minus $.50.
B)  $1.60.
C)  $1.00.
D)  $0.50.E) None of the above
F) A) and B)

Question 6

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Accepted Answer

A) True 
 B)False

Question 7

State the law of demand, and explain why the other-things-equal assumption is critical to it.

Accepted Answer

The law of demand states that as price r...

Question 8

A government subsidy per unit of output increases supply.

Accepted Answer

A) True 
 B)False

Question 9

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2 Q and supply by the equation P = 2 + 0.2 Q. The equilibrium price for X is

Accepted Answer

A)  $2.
B)  $4.
C)  $6.
D)  $7.E) B) and D)
F) B) and C)

Question 10

An increase in both supply and demand will lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 11

A leftward shift of a product supply curve might be caused by

Accepted Answer

A)  an improvement in the relevant technique of production.
B)  a decline in the prices of needed inputs.
C)  an increase in consumer incomes.
D)  some firms leaving an industry.E) A) and C)
F) B) and D)

Question 12

Refer to the above table. A shortage of 500 units will occur when the price is

Accepted Answer

A)  $20.
B)  $10.
C)  $25.
D)  $5.
E)  $15.F) C) and D)
G) All of the above

Question 13

What is the difference between a change in supply and a change in quantity supplied?

Accepted Answer

A change in supply is a shift of the sup...

Question 14

A ceiling price in a competitive market will result in persistent surpluses of a product.

Accepted Answer

A) True 
 B)False

Question 15

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.Removing the subsidy placed on product X years ago will

Accepted Answer

A)  decrease S, increase P, and decrease Q.
B)  increase S, increase P, and increase Q.
C)  decrease S, increase P, and increase Q.
D)  increase D, decrease P, and increase Q.E) A) and B)
F) A) and C)

Question 16

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

Accepted Answer

A)  a widely publicized study that indicates beef consumption 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) All of the above
F) C) and D)

Question 17

The following are explanations of the Law of Demand, except

Accepted Answer

A)  expectations effect.
B)  diminishing marginal utility.
C)  income effect.
D)  substitution effect.E) B) and D)
F) B) and C)

Question 18

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other. This indicates that the two goods are complements.

Accepted Answer

A) True 
 B)False

Question 19

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Accepted Answer

A) True 
 B)False

Question 20

What are some of the ways that Uber has been innovative?

Accepted Answer

Uber is innovative in many ways, includi...

Exam 3: Demand, Supply, and Market Equilibrium

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2 Q and supply by the equation P = 2 + 0.2 Q. The equilibrium price for X is

Correct Answer
verified

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Correct Answer
verified

State the law of demand, and explain why the other-things-equal assumption is critical to it.

Correct Answer
verified
The law of demand states that as price r...
View Answer

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other. This indicates that the two goods are complements.

Correct Answer
verified

Correct Answer
verified

The following are explanations of the Law of Demand, except

Correct Answer
verified

What is the difference between a change in supply and a change in quantity supplied?

Correct Answer
verified
A change in supply is a shift of the sup...
View Answer

A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct Answer
verified

A leftward shift of a product supply curve might be caused by

Correct Answer
verified

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Correct Answer
verified

Refer to the diagram. A decrease in quantity demanded is depicted by a

Correct Answer
verified

An increase in both supply and demand will lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity.

Correct Answer
verified

A government subsidy per unit of output increases supply.

Correct Answer
verified

Refer to the diagram. A shortage of 160 units would be encountered if price was

Correct Answer
verified

By an "increase in demand," economists mean that

Correct Answer
verified

Refer to the above table. A shortage of 500 units will occur when the price is

Correct Answer
verified

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Correct Answer
verified

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

Correct Answer
verified

What are some of the ways that Uber has been innovative?

Correct Answer
verified
Uber is innovative in many ways, includi...
View Answer

Describe and give a reason for the law of supply.

Correct Answer
verified
The law of supply states that as the pri...
View Answer

Exam 3: Demand, Supply, and Market Equilibrium

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2 Q and supply by the equation P = 2 + 0.2 Q. The equilibrium price for X is

Correct AnswerverifiedShow Answer

"Price" in the statement of the Law of Demand refers to the same concept as the cost of producing the product.

Correct AnswerverifiedShow Answer

State the law of demand, and explain why the other-things-equal assumption is critical to it.

Correct AnswerverifiedThe law of demand states that as price r...View AnswerShow Answer

Two goods are considered to be related goods by many buyers: if the price of one increases, buyers buy more of the other. This indicates that the two goods are complements.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following are explanations of the Law of Demand, except

Correct AnswerverifiedShow Answer

What is the difference between a change in supply and a change in quantity supplied?

Correct AnswerverifiedA change in supply is a shift of the sup...View AnswerShow Answer

A ceiling price in a competitive market will result in persistent surpluses of a product.

Correct AnswerverifiedShow Answer

A leftward shift of a product supply curve might be caused by

Correct AnswerverifiedShow Answer

In the market for gasoline, if the change in demand due to the start of the summer driving season is greater than the change in supply due to disruptions in the refinery operations in the Gulf, then the equilibrium quantity will increase.

Correct AnswerverifiedShow Answer

Refer to the diagram. A decrease in quantity demanded is depicted by a

Correct AnswerverifiedShow Answer

An increase in both supply and demand will lead to an increase in the equilibrium price and an indeterminate change in the equilibrium quantity.

Correct AnswerverifiedShow Answer

A government subsidy per unit of output increases supply.

Correct AnswerverifiedShow Answer

Refer to the diagram. A shortage of 160 units would be encountered if price was

Correct AnswerverifiedShow Answer

By an "increase in demand," economists mean that

Correct AnswerverifiedShow Answer

Refer to the above table. A shortage of 500 units will occur when the price is

Correct AnswerverifiedShow Answer

If the government subsidizes the car makers in the production of cars, then the supply of steel increases.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are some of the ways that Uber has been innovative?

Correct AnswerverifiedUber is innovative in many ways, includi...View AnswerShow Answer

Describe and give a reason for the law of supply.

Correct AnswerverifiedThe law of supply states that as the pri...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The law of demand states that as price r...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A change in supply is a shift of the sup...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Uber is innovative in many ways, includi...
View Answer

Correct Answer
verified
The law of supply states that as the pri...
View Answer