Question 1

The most likely substitute good for cereal would be:

Accepted Answer

A)  a bagel.
B)  milk.
C)  shoes.
D)  a textbook.E) C) and D)
F) B) and C)

Question 2

You just heard about Burton's annual tent sale going on next week.This will likely cause your demand for a Burton jacket today to:

Accepted Answer

A)  increase because of your income constraint.
B)  increase because of your expectations of the price of Burton jackets next week.
C)  decrease because of your income constraint.
D)  decrease because of your expectations of the price of Burton jackets next week.E) A) and D)
F) B) and C)

Question 3

A decrease in the price of spaghetti is likely to cause:

Accepted Answer

A)  an increase in the demand for penne pasta due to a change in the price of a complementary good.
B)  an increase in the demand for penne pasta due to a change in the price of a substitute good.
C)  a decrease in the demand for penne pasta due to a change in the price of a complementary good.
D)  a decrease in the demand for penne pasta due to a change in the price of a substitute good.E) B) and C)
F) A) and B)

Question 4

After getting a raise at work,Jennie now regularly buys steak instead of hamburger.Based on this behavior,we can assume:

Accepted Answer

A)  steak is a normal good,and hamburger is an inferior good for Jennie.
B)  steak is an inferior good,and hamburger is a normal good for Jennie.
C)  steak and hamburger are complementary goods to Jennie.
D)  We cannot make any of these assumptions about Jennie.E) B) and C)
F) B) and D)

Question 5

Buyers and sellers are included in the market under consideration by:

Accepted Answer

A)  their physical proximity.
B)  the context.
C)  their preferences.
D)  the income levels.E) B) and C)
F) B) and D)

Question 6

The demand curve:

Accepted Answer

A)  represents consumers' willingness to buy.
B)  shows the highest amount consumers will pay for any given quantity.
C)  visually displays the demand schedule.
D)  All of these statements are true.E) C) and D)
F) None of the above

Question 7

In order to sell certified diamonds,the seller must be a certified gemologist.This means the diamond market therefore:

Accepted Answer

A)  has incomplete information.
B)  has transaction costs.
C)  has price-makers.
D)  All of these statements are true.E) A) and D)
F) B) and C)

Question 8

A drought causes most fruit crops to fail,decreasing the amount of available fruit.The fruitcake market would see:

Accepted Answer

A)  an increase in the supply of fruitcake.
B)  a decrease in the supply of fruitcake.
C)  no change in the supply of fruitcake,but the demand would increase.
D)  no change in the supply of fruitcake,but the demand would decrease.E) B) and D)
F) A) and B)

Question 9

The most likely substitute good for hot dogs would be:

Accepted Answer

A)  ketchup.
B)  burgers.
C)  a grill.
D)  a plate.E) None of the above
F) B) and D)

Question 10

Wendell just read an article that says scientists have proven that processed cheese food increases brain power.We would expect Wendell's demand for processed cheese food to:

Accepted Answer

A)  increase and shift to the right.
B)  increase and shift to the left.
C)  decrease and shift to the right.
D)  decrease and shift to the left.E) B) and C)
F) A) and B)

Question 11

The supply curve and the demand curve intersect at the point where:

Accepted Answer

A)  at equilibrium.
B)  where supply is highest.
C)  where demand is highest.
D)  where prices are maximized.E) A) and B)
F) A) and C)

Question 12

A factory recently adds new robots to their production line,increasing productivity.This will likely cause:

Accepted Answer

A)  a rightward shift of the supply curve.
B)  a leftward shift of the supply curve.
C)  a shift straight up of the supply curve.
D)  a movement up along the supply curve.E) All of the above
F) A) and C)

Question 13

Roy just got a big promotion at work which includes a sizable pay increase.Roy's demand for Ramen Noodles,an inferior good,will likely:

Accepted Answer

A)  decrease,and his demand curve will shift to the right.
B)  decrease,and his demand curve will shift to the left.
C)  decrease,and his demand curve will shift straight down.
D)  decrease,causing a movement down along his demand curve.E) A) and B)
F) A) and C)

Question 14

A demand schedule is:

Accepted Answer

A)  a table which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.
B)  a graph which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.
C)  a curve which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.
D)  a line which shows the quantities of a particular good or service that consumers are willing to purchase at various prices.E) A) and B)
F) A) and C)

Question 15

The term "surplus" refers to:

Accepted Answer

A)  a situation in which the quantity supplied is less than the quantity demanded.
B)  a situation in which the quantity demanded is less than the quantity supplied.
C)  a market that sells secondary goods.
D)  a signal that producers need to increase the price of the good.E) A) and B)
F) A) and D)

Question 16

The law of supply describes the:

Accepted Answer

A)  inverse relationship between price and quantity supplied.
B)  direct relationship between price and quantity supplied.
C)  inverse relationship between income and quantity supplied.
D)  direct relationship between income and quantity supplied.E) B) and D)
F) A) and D)

Question 17

The city of Burlington gets very hot each summer and very cold each winter.We would expect:

Accepted Answer

A)  the demand for lemonade to increase constantly.
B)  the demand for lemonade to decrease each summer and increase each winter.
C)  the demand for lemonade to increase each summer and decrease each winter.
D)  the demand for lemonade to decrease constantly.E) All of the above
F) A) and B)

Question 18

Jackie notices everyone wearing Converse sneakers on the first day of school.Ever the fashionista,this will likely affect:

Accepted Answer

A)  Jackie's income,as she now needs to buy Converse and will have less to spend on other goods.
B)  Jackie's preferences for shoes,since she feels as though she needs them now.
C)  Jackie's expectations of future prices,since the price of Converse will likely go up because they're getting so popular.
D)  the prices of related goods,since other shoes will be less popular and cost less now.E) A) and B)
F) A) and C)

Question 19

A perfectly competitive market is one in which:

Accepted Answer

A)  fully informed,price-taking buyers and sellers easily trade a standardized good or service.
B)  fully informed,price-making buyers and seller easily trade a standardized good or service.
C)  uninformed,price-taking buyers and sellers easily trade a standardized good or service.
D)  uninformed,price-making buyers and seller easily trade a standardized good or service.E) All of the above
F) A) and B)

Question 20

The supply schedule assumes that:

Accepted Answer

A)  factors other than price remain the same.
B)  factors other than price must change.
C)  factors other than supply remain the same.
D)  factors other than supply must change.E) B) and C)
F) A) and B)

Exam 3: Markets

Jackie notices everyone wearing Converse sneakers on the first day of school.Ever the fashionista,this will likely affect:

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A perfectly competitive market is one in which:

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You just heard about Burton's annual tent sale going on next week.This will likely cause your demand for a Burton jacket today to:

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Buyers and sellers are included in the market under consideration by:

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The most likely substitute good for hot dogs would be:

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The term "surplus" refers to:

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Roy just got a big promotion at work which includes a sizable pay increase.Roy's demand for Ramen Noodles,an inferior good,will likely:

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The demand curve:

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In order to sell certified diamonds,the seller must be a certified gemologist.This means the diamond market therefore:

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The law of supply describes the:

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Wendell just read an article that says scientists have proven that processed cheese food increases brain power.We would expect Wendell's demand for processed cheese food to:

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A factory recently adds new robots to their production line,increasing productivity.This will likely cause:

Correct AnswerverifiedShow Answer

The city of Burlington gets very hot each summer and very cold each winter.We would expect:

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A demand schedule is:

Correct AnswerverifiedShow Answer

A decrease in the price of spaghetti is likely to cause:

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A drought causes most fruit crops to fail,decreasing the amount of available fruit.The fruitcake market would see:

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The most likely substitute good for cereal would be:

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After getting a raise at work,Jennie now regularly buys steak instead of hamburger.Based on this behavior,we can assume:

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The supply curve and the demand curve intersect at the point where:

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The supply schedule assumes that:

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