Question 1

A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n) :

Accepted Answer

A)  increase in the demand for and the supply of gasoline.
B)  decrease in the demand for and the supply of gasoline.
C)  increase in the supply of gasoline and a decrease in the demand for gasoline.
D)  decrease in the supply of gasoline and an increase in the demand for gasoline.E) A) and B)
F) All of the above

Question 2

Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D1 to D2? 1 to D2?   A) a decrease in the price of tea B) an increase in consumer incomes C) an increase in the price of sugar D) a technological improvement in the production of coffee" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  a decrease in the price of tea
B)  an increase in consumer incomes
C)  an increase in the price of sugar
D)  a technological improvement in the production of coffeeE) C) and D)
F) A) and B)

Question 3

Which of the following statements is correct about the determinants of supply and demand?

Accepted Answer

A)  A majority of the determinants of demand and supply are the same.
B)  All the determinants of demand and supply are the same.
C)  A minority of the determinants of demand and supply are the same.
D)  None of the determinants of demand and supply are the same.E) None of the above
F) A) and D)

Question 4

An increase in 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 5

Assume the demand curve for product X shifts to the right.This might be caused by:

Accepted Answer

A)  a decline in income if X is an inferior good.
B)  a decline in the price of Z if X and Z are substitute goods.
C)  a change in consumer tastes which is unfavourable to X.
D)  an increase in the price of Y if X and Y are complementary goods.E) A) and B)
F) B) and D)

Question 6

A result of a fall in the price of gasoline, consumers buy more gasoline and take more driving vacations.This situation is an illustration of:

Accepted Answer

A)  the income effect.
B)  the substitution effect.
C)  diminishing marginal utility.
D)  the demand for inferior goods.E) All of the above
F) B) and C)

Question 7

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (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.Refer to the above.An improvement in the technology used to produce X will:

Accepted Answer

A)  decrease S, increase P, and decrease Q.
B)  decrease S, increase P, and increase Q.
C)  increase S, decrease P, and increase Q.
D)  decrease D, decrease P, and decrease Q.E) All of the above
F) None of the above

Question 8

Refer to the above 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)  $.50.E) C) and D)
F) A) and C)

Question 9

A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Accepted Answer

A)  increase in the price of lettuce and quantity purchased.
B)  decrease in the price of lettuce and quantity purchased.
C)  increase in the price of lettuce and decrease in quantity purchased.
D)  decrease in the price of lettuce and increase in quantity purchased.E) A) and C)
F) A) and B)

Question 10

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) C) and D)
F) All of the above

Question 11

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n) : 0 to S1 might be caused by a(n) :   A) increase in the wage rates paid to the labours employed in the production of X. B) government subsidy per unit of output paid to firms producing X. C) decline in the price of the basic raw material used in producing X. D) increase in the number of firms producing X." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  increase in the wage rates paid to the labours employed in the production of X.
B)  government subsidy per unit of output paid to firms producing X.
C)  decline in the price of the basic raw material used in producing X.
D)  increase in the number of firms producing X.E) A) and D)
F) A) and B)

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

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

Correct Answer
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A result of a fall in the price of gasoline, consumers buy more gasoline and take more driving vacations.This situation is an illustration of:

Correct Answer
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Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.Other things equal, a shift of the supply curve from S₀ to S₁ might be caused by a(n) :

Correct Answer
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Assume the demand curve for product X shifts to the right.This might be caused by:

Correct Answer
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Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

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

Correct Answer
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A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n) :

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

Correct Answer
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A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Correct Answer
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Which of the following statements is correct about the determinants of supply and demand?

Correct Answer
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Correct Answer
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Exam 3: Part B: Demand, Supply, and Market Equilibrium

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

Correct AnswerverifiedShow Answer

A result of a fall in the price of gasoline, consumers buy more gasoline and take more driving vacations.This situation is an illustration of:

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n) :

Correct AnswerverifiedShow Answer

Assume the demand curve for product X shifts to the right.This might be caused by:

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D1 to D2?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n) :

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A headline reads "Storms destroy half of the lettuce crop." This situation would lead to a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements is correct about the determinants of supply and demand?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Refer to the diagram, which shows demand and supply conditions in the competitive market for product X.Other things equal, a shift of the supply curve from S₀ to S₁ might be caused by a(n) :

Correct Answer
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Correct Answer
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Refer to the diagram, which shows three demand curves for coffee.Which of the following would cause the change in the demand for coffee illustrated by the shift from D₁ to D₂?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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