Question 1

The impact of a $200 increase in income on quantity demanded would becalled an income effect.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following will not shift the market supply curve for corn?

Accepted Answer

A)  a change in the price of corn
B)  a change in the price of soybeans
C)  a change in the price of herbicides and pesticides
D)  a change in storage technology
E)  a change in the number of acres planted in cornF) B) and E)
G) None of the above

Question 3

Supply curves generally slope upward because of all of the followingreasons except one.Which is the exception?

Accepted Answer

A)  Producers are willing to offer more of a good at higher prices.
B)  A higher price attracts resources from less­valued uses.
C)  Producers must be compensated for the rising opportunity cost of additional output.
D)  Producers have a greater incentive to sell more as the price increases.
E)  The price of a good usually must fall to induce an increase in quantity supplied.F) A) and B)
G) B) and D)

Question 4

A demand curve usually has a

Accepted Answer

A)  negative slope because price and quantity demanded are inversely related
B)  negative slope because as price rises, demand falls
C)  positive slope because price and quantity demanded are positively related
D)  positive slope because price and quantity demanded are inversely related
E)  slope of zero because there is no change along a demand curve when everything else is held constantF) A) and B)
G) B) and C)

Question 5

Which of the following is most likely to be an inferior good?

Accepted Answer

A)  airline travel
B)  restaurant meals
C)  a subscription to the Wall Street Journal
D)  soft drinks
E)  used clothingF) C) and D)
G) A) and D)

Question 6

Which of the following is not true regarding a change in quantitydemanded?

Accepted Answer

A)  A change in quantity demanded is shown by a movement along a given demand curve.
B)  The demand curve shifts whenever the quantity demanded changes.
C)  A change in the price of a good, other things constant, will lead to a change in quantity demanded.
D)  The lower the price of a product, other things constant, the higher the quantity demanded.
E)  A shift of the supply curve might cause a change in quantity demanded.F) None of the above
G) A) and E)

Question 7

Sugar and honey are viewed as substitutes for each other in many cookingapplications.If the price of sugar rises, we would expect

Accepted Answer

A)  the demand for honey to increase
B)  the demand for honey to decrease
C)  the quantity demanded of honey to decrease
D)  the price of honey to decrease
E)  the quantity demanded of honey to increaseF) A) and B)
G) A) and E)

Question 8

If good B is a complement to good A, then a decrease in the price of B

Accepted Answer

A)  increases the quantity demanded of A
B)  decreases the demand for A
C)  increases the demand for A
D)  decreases the quantity demanded of A
E)  will cause the demand for B to increaseF) D) and E)
G) A) and D)

Question 9

Which of the following would not cause the demand curve for peaches toshift?

Accepted Answer

A)  an increase in the price of apricots
B)  a decrease in the price of nectarines
C)  an increase in the price of peaches
D)  a change in preferences for peaches
E)  a decrease in the income of peach buyersF) B) and D)
G) B) and E)

Question 10

For which of the following would the income effect of a price change begreatest?

Accepted Answer

A)  ballpoint pens
B)  air travel to Australia
C)  chewing gum
D)  haircuts
E)  college textbooksF) B) and E)
G) A) and C)

Question 11

Tax preparation services and IRS tax publications can be consideredsubstitutes.

Accepted Answer

A) True 
 B)False

Question 12

A surplus occurs whenever

Accepted Answer

A)  current price is greater than equilibrium price
B)  quantity supplied exceeds quantity demanded at the equilibrium price
C)  quantity demanded is greater than quantity supplied
D)  the problem of scarcity of a good is solved
E)  some buyers would be willing and able to pay even more for it than they have to at equilibriumF) A) and E)
G) A) and D)

Question 13

If demand for personal computers increases as a result of an increase inincome,

Accepted Answer

A)  personal computers must be a normal good
B)  personal computers must be an inferior good
C)  personal computers must be a complement
D)  the substitutes for personal computers must be inferior goods
E)  the substitution effect is larger than the income effectF) A) and B)
G) All of the above

Question 14

If the supply curves for the following goods were plotted, they all wouldslope upward except one.Which is the exception?

Accepted Answer

A)  red Corvettes
B)  yogurt
C)  diamond rings
D)  original copies of the Mona Lisa
E)  wine from GreeceF) A) and B)
G) A) and C)

Question 15

An increase in the price of butter, a substitute good, would be most likely tocause

Accepted Answer

A)  a rightward shift of the demand curve for margarine
B)  a leftward shift of the demand curve for margarine
C)  the quantity of margarine demanded to increase
D)  the quantity of margarine demanded to decrease
E)  a decrease in the price of margarineF) A) and D)
G) A) and C)

Question 16

Two goods are considered substitutes only if a(n)

Accepted Answer

A)  decrease in the demand for one leads to a decrease in the supply of the other
B)  increase in the demand for one leads to a decrease in the supply of the other
C)  increase in the price of one leads to an increase in the demand for the other
D)  decrease in the price of one leads to an increase in the demand for the other
E)  decrease in the supply of one leads producers to switch to production of the otherF) A) and B)
G) A) and C)

Question 17

If there is a shortage in the market for jeans,

Accepted Answer

A)  producers' inventories will increase
B)  the price should begin to rise
C)  the demand curve will shift to restore equilibrium in the market
D)  the supply curve will shift to restore equilibrium in the market
E)  producers expect government to impose a price ceilingF) B) and C)
G) A) and E)

Question 18

A shortage occurs whenever

Accepted Answer

A)  quantity demanded exceeds quantity supplied at the equilibrium price
B)  price is less than equilibrium price
C)  quantity demanded is less than quantity supplied
D)  goods are scarce
E)  some of the people who need the product are not willing and able to buy it at the equilibrium priceF) D) and E)
G) B) and D)

Question 19

Which of the following statements about demand is true?

Accepted Answer

A)  Since most college students want a Mercedes sports coupe, their demand for it is high.
B)  If price increases, the demand curve shifts to the right.
C)  The demand curve for bacon will not shift when the price of bacon changes.
D)  If a supply curve shifts, thereby changing the price, the demand curve will shift as well.
E)  If a demand curve shifts, the supply curve will shift as well, whether or not the price changes.F) B) and C)
G) A) and E)

Question 20

The demand for a product is the amount that

Accepted Answer

A)  buyers purchase in the market
B)  buyers are willing to purchase at a given price
C)  sellers are willing to sell at a particular price
D)  buyers are willing and able to purchase at alternative prices
E)  buyers are able to purchase at a specific priceF) A) and D)
G) A) and E)

Exam 4: Demand Supply and Markets

If there is a shortage in the market for jeans,

Correct AnswerverifiedShow Answer

Which of the following is not true regarding a change in quantitydemanded?

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If demand for personal computers increases as a result of an increase inincome,

Correct AnswerverifiedShow Answer

Which of the following will not shift the market supply curve for corn?

Correct AnswerverifiedShow Answer

Supply curves generally slope upward because of all of the followingreasons except one.Which is the exception?

Correct AnswerverifiedShow Answer

The impact of a $200 increase in income on quantity demanded would becalled an income effect.

Correct AnswerverifiedShow Answer

Sugar and honey are viewed as substitutes for each other in many cookingapplications.If the price of sugar rises, we would expect

Correct AnswerverifiedShow Answer

The demand for a product is the amount that

Correct AnswerverifiedShow Answer

Tax preparation services and IRS tax publications can be consideredsubstitutes.

Correct AnswerverifiedShow Answer

A surplus occurs whenever

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Which of the following would not cause the demand curve for peaches toshift?

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If good B is a complement to good A, then a decrease in the price of B

Correct AnswerverifiedShow Answer

Which of the following is most likely to be an inferior good?

Correct AnswerverifiedShow Answer

Two goods are considered substitutes only if a(n)

Correct AnswerverifiedShow Answer

If the supply curves for the following goods were plotted, they all wouldslope upward except one.Which is the exception?

Correct AnswerverifiedShow Answer

A demand curve usually has a

Correct AnswerverifiedShow Answer

A shortage occurs whenever

Correct AnswerverifiedShow Answer

An increase in the price of butter, a substitute good, would be most likely tocause

Correct AnswerverifiedShow Answer

For which of the following would the income effect of a price change begreatest?

Correct AnswerverifiedShow Answer

Which of the following statements about demand is true?

Correct AnswerverifiedShow Answer

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