Question 1

An inferior good is one for which an increase in income causes a(n)

Accepted Answer

A)   decrease in supply.
B)   increase in demand.
C)   increase in supply.
D)   decrease in demand.E) A) and B)
F) None of the above

Question 2

If the same dairy can produce either full cream milk or skimmed milk, an increase in the profitability of full cream milk results in

Accepted Answer

A)   a decrease in the quantity supplied of full cream milk.
B)   an increase in the supply of full cream milk.
C)   a decrease in the supply of skimmed milk.
D)   an increase in the supply of skimmed milk.E) A) and B)
F) All of the above

Question 3

A perfectly competitive market consists of products that are all slightly different from one another.

Accepted Answer

A) True 
 B)False  False

Question 4

A decrease in supply is represented by a

Accepted Answer

A)   movement downward and to the left along a supply curve.
B)   movement upward and to the right along a supply curve.
C)   rightward shift of a supply curve.
D)   leftward shift of a supply curve.E) None of the above
F) A) and D) D

Question 5

a. What is the difference between a "change in supply" and a "change in quantity 
 supplied?" Graph your answer.
b. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.
 i. a change in input costs
 ii a change in producer expectations
 iii. a change in price
 iv. a change in technology
 v. a change in the number of sellers

Accepted Answer

a. A change in supply refers to a shift ...

Question 6

All of the following shift the supply of watches to the right except

Accepted Answer

A)   an advance in the technology used to manufacture watches.
B)   an increase in the price of watches.
C)   a fall in the cost of metals used in watch production.
D)   a decrease in the wage of workers employed to manufacture watches.
E)   manufacturers' expectation of lower watch prices in the future.F) None of the above
G) D) and E)

Question 7

Consider a market in equilibrium. Firms who advertise in this market are attempting to shift the

Accepted Answer

A)   supply curve to the right.
B)   supply curve to the left.
C)   demand curve to the left.
D)   demand curve to the right.E) C) and D)
F) B) and C)

Question 8

When a market is in equilibrium,

Accepted Answer

A)   quantity demanded will equal quantity supplied.
B)   a shortage will be present.
C)   a surplus will be present.
D)   sellers will continue to expand production to increase revenues.E) A) and C)
F) B) and C)

Question 9

Suppose there is an increase in both the supply and demand for laptops. In the market for laptops, we would expect

Accepted Answer

A)   the equilibrium quantity to rise and the equilibrium price to rise.
B)   the equilibrium quantity to rise and the equilibrium price to fall.
C)   the equilibrium quantity to rise and the equilibrium price to remain constant.
D)   the change in the equilibrium quantity to be ambiguous and the equilibrium price to rise.
E)   the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.F) A) and B)
G) A) and C)

Question 10

If the price of a good is below the equilibrium price,

Accepted Answer

A)   there is a shortage and the price will rise.
B)   the quantity demanded is equal to the quantity supplied and the price remains unchanged.
C)   there is a shortage and the price will fall.
D)   there is a surplus and the price will rise.
E)   there is a surplus and the price will fall.F) A) and B)
G) All of the above

Question 11

An increase in the price of steel will shift the supply of cars to the right.

Accepted Answer

A) True 
 B)False

Question 12

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously.
 $\begin{array}{|l|l|l|l|} 
\hline& \text { No Change in Supply } & \begin{array}{l}
\text { An Increase in } \
\text { Supply }
\end{array} & \text { A Decrease in Supply } \
\hline \begin{array}{l}
\text { No Change in } \
\text { Demand }
\end{array} & & & \
\hline \begin{array}{l}
\text { An Increase in } \
\text { Demand }
\end{array} & & & \
\hline \begin{array}{l}
\text { A Decrease in } \
\text { Demand }
\end{array} & & & \
\hline
\end{array}$

Accepted Answer

\[\begin{array} { | l | c | c | c| }
\h...

Question 13

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Accepted Answer

A)   The impact on both price and quantity is ambiguous.
B)   Price will decrease; quantity is ambiguous.
C)   Price will increase; quantity will decrease.
D)   Price will increase; quantity is ambiguous.
E)   Price will increase; quantity will increase.F) A) and D)
G) C) and E)

Question 14

The demand curve for iPhones shows the quantity of iPhones demanded

Accepted Answer

A)   by suppliers of those phones.
B)   at the equilibrium price for iPhones.
C)   at each level of income.
D)   at each possible price of iPhones.E) A) and C)
F) A) and B)

Question 15

The market supply curve is the horizontal summation of the individual supply curves.

Accepted Answer

A) True 
 B)False

Question 16

Suppose that a large dairy farmer is able to raise the market price of milk by withholding milk supply from the market. In this instance,

Accepted Answer

A)   the milk market is perfectly competitive.
B)   buyers will decrease their demand for milk.
C)   buyers will increase their demand for milk.
D)   the milk market is imperfectly competitive.E) B) and D)
F) None of the above

Question 17

What is the difference between a "change in demand" and a "change in quantity 
 demanded?" Graph your answer.
b. For each of the following changes, determine whether there will be a change in 
quantity demanded or a change in demand:
 i. a change in input costs
 ii a change in producer expectations
 iii. a change in price
 iv. a change in technology
 v. a change in the number of buyers

Accepted Answer

a. A change in demand refers to a shift ...

Question 18

Which of the following sets of goods are most likely to be complementary goods?

Accepted Answer

A)   Shoes and pizza.
B)   Cars and computers.
C)   Soccer balls and soccer boots.
D)   Rugby tickets and soccer tickets.E) C) and D)
F) A) and B)

Question 19

In a perfectly competitive market, both buyers and sellers have ________ knowledge and so are able to make decisions independently.

Accepted Answer

A)   perfect
B)   imperfect
C)   little
D)   a fair amount ofE) None of the above
F) All of the above A

Question 20

If Coke and Pepsi are substitutes, an increase in the price of Coke will cause an increase in the equilibrium price and quantity bought and sold in the market for Pepsi.

Accepted Answer

A) True 
 B)False

Exam 3: The Market Forces of Supply and Demand

An inferior good is one for which an increase in income causes a(n)

Correct Answer
verified

If the same dairy can produce either full cream milk or skimmed milk, an increase in the profitability of full cream milk results in

Correct Answer
verified

A perfectly competitive market consists of products that are all slightly different from one another.

Correct Answer
verified
False

A decrease in supply is represented by a

Correct Answer
verified
D

Correct Answer
verified
a. A change in supply refers to a shift ...
View Answer

All of the following shift the supply of watches to the right except

Correct Answer
verified

Consider a market in equilibrium. Firms who advertise in this market are attempting to shift the

Correct Answer
verified

When a market is in equilibrium,

Correct Answer
verified

Suppose there is an increase in both the supply and demand for laptops. In the market for laptops, we would expect

Correct Answer
verified

If the price of a good is below the equilibrium price,

Correct Answer
verified

An increase in the price of steel will shift the supply of cars to the right.

Correct Answer
verified

Correct Answer
verified
\[\begin{array} { | l | c | c | c| }
\h...
View Answer

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Correct Answer
verified

The demand curve for iPhones shows the quantity of iPhones demanded

Correct Answer
verified

The market supply curve is the horizontal summation of the individual supply curves.

Correct Answer
verified

Suppose that a large dairy farmer is able to raise the market price of milk by withholding milk supply from the market. In this instance,

Correct Answer
verified

Correct Answer
verified
a. A change in demand refers to a shift ...
View Answer

Which of the following sets of goods are most likely to be complementary goods?

Correct Answer
verified

In a perfectly competitive market, both buyers and sellers have ________ knowledge and so are able to make decisions independently.

Correct Answer
verified
A

If Coke and Pepsi are substitutes, an increase in the price of Coke will cause an increase in the equilibrium price and quantity bought and sold in the market for Pepsi.

Correct Answer
verified

Exam 3: The Market Forces of Supply and Demand

An inferior good is one for which an increase in income causes a(n)

Correct AnswerverifiedShow Answer

If the same dairy can produce either full cream milk or skimmed milk, an increase in the profitability of full cream milk results in

Correct AnswerverifiedShow Answer

A perfectly competitive market consists of products that are all slightly different from one another.

Correct AnswerverifiedFalse

A decrease in supply is represented by a

Correct AnswerverifiedD

Correct Answerverifieda. A change in supply refers to a shift ...View AnswerShow Answer

All of the following shift the supply of watches to the right except

Correct AnswerverifiedShow Answer

Consider a market in equilibrium. Firms who advertise in this market are attempting to shift the

Correct AnswerverifiedShow Answer

When a market is in equilibrium,

Correct AnswerverifiedShow Answer

Suppose there is an increase in both the supply and demand for laptops. In the market for laptops, we would expect

Correct AnswerverifiedShow Answer

If the price of a good is below the equilibrium price,

Correct AnswerverifiedShow Answer

An increase in the price of steel will shift the supply of cars to the right.

Correct AnswerverifiedShow Answer

Correct Answerverified\[\begin{array} { | l | c | c | c| } \h...View AnswerShow Answer

Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today?

Correct AnswerverifiedShow Answer

The demand curve for iPhones shows the quantity of iPhones demanded

Correct AnswerverifiedShow Answer

The market supply curve is the horizontal summation of the individual supply curves.

Correct AnswerverifiedShow Answer

Suppose that a large dairy farmer is able to raise the market price of milk by withholding milk supply from the market. In this instance,

Correct AnswerverifiedShow Answer

Correct Answerverifieda. A change in demand refers to a shift ...View AnswerShow Answer

Which of the following sets of goods are most likely to be complementary goods?

Correct AnswerverifiedShow Answer

In a perfectly competitive market, both buyers and sellers have ________ knowledge and so are able to make decisions independently.

Correct AnswerverifiedA

If Coke and Pepsi are substitutes, an increase in the price of Coke will cause an increase in the equilibrium price and quantity bought and sold in the market for Pepsi.

Correct AnswerverifiedShow Answer

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False

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D

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a. A change in supply refers to a shift ...
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a. A change in demand refers to a shift ...
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A

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