Question
1. According to the law of demand, if the price of
compact disks decreased, ceteris paribus,
a) the demand for compact disks would decrease.
b) the quantity demanded of compact disks would
decrease.
c) the demand for compact disks would increase.
d) the quantity demanded of compact disks would
not change.
e) the quantity demanded of compact disks would
increase.
Answer
According to the law of demand, if the price of
compact disks decreased, ceteris paribus,
a) the demand for compact disks would decrease.
b) the quantity demanded of compact disks would
decrease.
c) the demand for compact disks would increase.
d) the quantity demanded of compact disks would
not change.
e) the quantity demanded of compact disks would
increase. (Correct)
Question
2. Which of the following is not held constant when
constructing a demand curve for digital cameras?
a) Price of digital cameras
b) Consumer preferences
c) Prices of film cameras (a substitute)
d) Consumer expectations
e) Consumer income
Answer
Which of the following is not held constant when
constructing a demand curve for digital cameras?
a) Price of cameras (Correct)
b) Consumer preferences
c) Prices of film cameras (a substitute)
d) Consumer expectations
e) Consumer income
Question
3.When incomes are rising, new car sales increase
while used car sales decrease. This indicates that
a) used cars and new cars are both normal.
b) used cars are inferior goods and new cars
are normal goods.
c) used cars and new cars are complements.
d) used cars and new cars are substitutes.
e) used cars are normal and new cars are
inferior goods.
Answer
When incomes are rising, new car sales increase
while used car sales decrease. This indicates that
a) used cars and new cars are both normal.
b) used cars are inferior goods and new cars
are normal goods. (Correct)
c) used cars and new cars are complements.
d) used cars and new cars are substitutes.
e) used cars are normal and new cars are
inferior goods.
Question
4.If the price of product X falls and this causes the
demand for product Y to shift to the right, then we
can conclude
a) X and Y are normal.
b) X and Y are inferior.
c) X and Y are complements.
d) X and Y are substitutes.
e) X and Y are not related.
Answer
If the price of product X falls and this causes the
demand for product Y to shift to the right, then we
can conclude
a) X and Y are normal.
b) X and Y are inferior.
c) X and Y are complements. (Correct)
d) X and Y are substitutes.
e) X and Y are not related.
Question
5.According to the law of supply, if the price of
personal computers increased, ceteris paribus,
a) the quantity supplied of personal computers
would not change.
b) the quantity supplied of personal computers
would decrease.
c) the supply of personal computers would
decrease.
d) the quantity supplied of personal computers
would increase.
e) the supply of personal computers would
increase.
Answer
According to the law of supply, if the price of personal
computers increased, ceteris paribus,
a) the quantity supplied of personal computers
would not change.
b) the quantity supplied of personal computers
would decrease.
c) the supply of personal computers would
decrease.
d) the quantity supplied of personal computers
would increase. (Correct)
e) the supply of personal computers would
increase.
Question
6.If a drought in Florida reduces the amount of
oranges grown, then
a) the demand curve of Florida oranges shifts
to the left.
b) the demand curve of Florida oranges shifts
to the right.
c) the supply curve of Florida oranges shifts
to the left.
d) the supply curve of Florida oranges shifts
to the right.
e) both the supply and demand curve of Florida
oranges shift to the right.
Answer
If a drought in Florida reduces the amount of oranges
grown, then
a) the demand curve of Florida oranges shifts
to the left.
b) the demand curve of Florida oranges shifts
to the right.
c) the supply curve of Florida oranges shifts
to the left. (Correct)
d) the supply curve of Florida oranges shifts
to the right.
e) both the supply and demand curve of Florida
oranges shift to the right.
Question
7.If there is a surplus of a product, we can
conclude that
a) the product’s price is above
equilibrium.
b) the product’s price is too low for equilibrium.
c) quantity demanded exceeds quantity
supplied.
d) the product’s price will rise.
e) consumers want to buy more than is being
made available by producers.
Answer
If there is a surplus of a product, we can conclude
that
a) the product’s price is above
equilibrium. (Correct)
b) the product’s price is too low for equilibrium.
c) quantity demanded exceeds quantity
supplied.
d) the product’s price will rise.
e) consumers want to buy more than is being
made available by producers.
Question
8.The U.S. surgeon general warns that animal fat in
the diet is unhealthy. With the discovery that longhorn
beef cattle have little body fat, you would expect
a) ranchers will be more willing to produce longhorn
cattle as the price rises.
b) the number of longhorn beef to dwindle as they
are slaughtered.
c) the price of longhorn beef to fall as it becomes
more popular.
d) it will become increasingly difficult to obtain
longhorn beef.
e) little in the beef market to change.
Answer
The U.S. surgeon general warns that animal fat in the
diet is unhealthy. With the discovery that longhorn beef
cattle have little body fat, you would expect
a) ranchers will be more willing to produce longhorn
cattle as the price rises. (Correct)
b) the number of longhorn beef to dwindle as they
are slaughtered.
c) the price of longhorn beef to fall as it becomes
more popular.
d) it will become increasingly difficult to obtain
longhorn beef.
e) little in the beef market to change.
Question
9.Which of the following often occurs as a result of
a price ceiling below the equilibrium?
a) More of a product offered for sale than people
are willing to buy.
b) The product becomes unavailable.
c) Long lines of consumers wanting to buy the
product.
d) Poor people find it easier to obtain the
product.
e) Black markets for the product disappear.
Answer
Which of the following often occurs as a result of a
price ceiling below the equilibrium?
a) More of a product offered for sale than people
are willing to buy.
b) The product becomes unavailable.
c) Long lines of consumers wanting to buy the
product. (Correct)
d) Poor people find it easier to obtain the
product.
e) Black markets for the product disappear.
Question
10.An increase in the price of steel will ultimately raise
the price of cars because
a) a higher price of steel will shift the demand curve
of cars to the right.
b) a higher price of steel will shift the demand curve
of cars to the left.
c) a higher price of steel will shift the supply curve
of cars to the right.
d) a higher price of steel will shift the supply curve
of cars to the left.
e) a higher price of steel will shift the demand and
supply curve of cars to the right.
Answer
An increase in the price of steel will ultimately raise the
price of cars because
a) a higher price of steel will shift the demand curve
of cars to the right.
b) a higher price of steel will shift the demand curve
of cars to the left.
c) a higher price of steel will shift the supply curve
of cars to the right.
d) a higher price of steel will shift the supply curve
of cars to the left. (Correct)
e) a higher price of steel will shift the demand and
supply curve of cars to the right.
Question
11. If the quantity supplied for oranges greatly
outweighs the quantity demanded for oranges and the
market price is freely determined,
a) then the market is in equilibrium.
b) then the market will reach equilibrium because
the demand curve will shift to the left.
c) then the market will reach equilibrium because
the demand curve will shift to the right.
d) then the market will reach equilibrium because
the price of oranges will decrease.
e) then the market will reach equilibrium because
the price of oranges will increase.
Answer
If the quantity supplied for oranges greatly outweighs
the quantity demanded for oranges and the market
price is freely determined,
a) then the market is in equilibrium.
b) then the market will reach equilibrium because
the demand curve will shift to the left.
c) then the market will reach equilibrium because
the demand curve will shift to the right.
d) then the market will reach equilibrium because
the price of oranges will decrease. (Correct)
e) then the market will reach equilibrium because
the price of oranges will increase.