Question 1

The law of demand describes the:

Accepted Answer

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

Question 2

The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?

Accepted Answer

A)   Incomes
B)   Preferences
C)   Expectations of future prices
D)   Prices of related goodsE) A) and B)
F) A) and C)

Question 3

Transaction costs can be defined as the costs:

Accepted Answer

A)   incurred by buyer and seller in agreeing to and executing a sale of goods or services.
B)   the government must pay to allow for an exchange.
C)   incurred by the buyer and seller in agreeing to and executing a purchase of goods or services, excluding transportation costs.
D)   the government incur to create a structured market for the exchange of buyers and sellers.E) A) and B)
F) A) and C)

Question 4

If producers incorrectly set the price of their product too high a:

Accepted Answer

A)   shortage will result and consumers will bid the price down to equilibrium.
B)   surplus will result and excess goods in inventory will signal to producers to lower their prices.
C)   shortage will result and consumers will bid the price up to equilibrium.
D)   surplus will result and excess goods in inventory will signal the producers to restrict output until sales increase.E) A) and B)
F) B) and C)

Question 5

The price of dog collars has gone down, and all other variables have remained constant. This change can be shown graphically as a:

Accepted Answer

A)   shift in the demand curve to the right.
B)   shift in the demand curve to the left.
C)   movement along the demand curve to the right.
D)   movement along the demand curve to the left.E) All of the above
F) A) and B)

Question 6

An increase in the price of ice cream is likely to cause:

Accepted Answer

A)   a movement to the left along the demand curve for ice cream.
B)   an inward shift of the demand curve for ice cream.
C)   an outward shift of the demand curve for ice cream.
D)   a movement to the right along the demand curve for ice cream.E) None of the above
F) B) and C)

Question 7

When graphing the demand curve:

Accepted Answer

A)   quantity goes on the horizontal axis and price goes on the vertical axis.
B)   quantity goes on the vertical axis and price goes on the horizontal axis.
C)   both quantity and price go on the horizontal axis.
D)   it doesn't matter which axis price and quantity are placed on.E) None of the above
F) All of the above

Question 8

The latest news report stated that the housing market is making a comeback and that house prices are on the rise. This information is likely to:

Accepted Answer

A)   increase demand for houses now due to a change in expectations of future prices.
B)   decrease demand for houses now due to a change in expectations of future prices.
C)   have no effect on the current housing market, but will increase demand in the future.
D)   have no effect on the current demand for housing, but will decrease current supply.E) B) and D)
F) A) and C)

Question 9

Demand for Snickers bars will decrease if:

Accepted Answer

A)   the price of Snickers bars decreases.
B)   a news story claiming 95% of all geniuses eat at least one Snickers bar a day is released.
C)   the price of Milky Way bars (a substitute)  decreases.
D)   the price of Milky Way bars (a substitute)  increases.E) A) and D)
F) All of the above

Question 10

The best example of a standardized good would be:

Accepted Answer

A)   corn.
B)   a handbag.
C)   an autographed baseball.
D)   breakfast cerealE) All of the above
F) B) and D)

Question 11

A shortage will occur if:

Accepted Answer

A)   the quantity being supplied at a given price is less than the quantity demanded at that price.
B)   the quantity being supplied at a given price exceeds the quantity demanded at that price.
C)   there are not enough buyers in the market.
D)   there are only inexperienced firms in the market.E) B) and C)
F) B) and D)

Question 12

Perfectly competitive markets are:

Accepted Answer

A)   the most common type of market in our economy.
B)   hard to find in a real world setting.
C)   made up principally by consumer goods.
D)   typically found in industrial sectors of our economy.E) C) and D)
F) B) and C)

Question 13

The equilibrium price is sometimes called the:

Accepted Answer

A)   market-clearing price.
B)   optimum price.
C)   maximum price.
D)   quantity-clearing price.E) None of the above
F) A) and C)

Question 14

The term market refers to the:

Accepted Answer

A)   physical location where buyers and sellers meet to exchange goods for money.
B)   buyers and sellers who trade a particular good or service, not to a physical location.
C)   location where buyers go to fulfill their wants and needs.
D)   physical or virtual place of exchange.E) None of the above
F) C) and D)

Question 15

This graph depicts the demand for a normal good.  A shift from A to B in the graph shown for a normal good might be caused by:

Accepted Answer

A)   an increase in price.
B)   a decrease in price.
C)   an increase in income.
D)   a decrease in income.E) C) and D)
F) A) and B)

Question 16

A nonprice determinant of supply refers to something that:

Accepted Answer

A)   affects the price other than supply.
B)   affects supply other than the price.
C)   determines how large a role prices play in the supply decision.
D)   determines how prices are affected by the seller's income.E) All of the above
F) B) and C)

Question 17

Supply describes how much of something producers:

Accepted Answer

A)   are willing and able to buy under certain circumstances.
B)   want to sell under certain circumstances, although they may not be able to.
C)   are willing and able to offer for sale at varies prices under given circumstances.
D)   want to offer for sale under certain circumstances, although they may not be willing to.E) A) and D)
F) A) and C)

Exam 3: Markets

The best example of a standardized good would be:

Correct Answer
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Transaction costs can be defined as the costs:

Correct Answer
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A shortage will occur if:

Correct Answer
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The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?

Correct Answer
verified

Perfectly competitive markets are:

Correct Answer
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This graph depicts the demand for a normal good. A shift from A to B in the graph shown for a normal good might be caused by:

Correct Answer
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The latest news report stated that the housing market is making a comeback and that house prices are on the rise. This information is likely to:

Correct Answer
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When graphing the demand curve:

Correct Answer
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If producers incorrectly set the price of their product too high a:

Correct Answer
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Supply describes how much of something producers:

Correct Answer
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The equilibrium price is sometimes called the:

Correct Answer
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An increase in the price of ice cream is likely to cause:

Correct Answer
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A nonprice determinant of supply refers to something that:

Correct Answer
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The law of demand describes the:

Correct Answer
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Demand for Snickers bars will decrease if:

Correct Answer
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The term market refers to the:

Correct Answer
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The price of dog collars has gone down, and all other variables have remained constant. This change can be shown graphically as a:

Correct Answer
verified

Exam 3: Markets

The best example of a standardized good would be:

Correct AnswerverifiedShow Answer

Transaction costs can be defined as the costs:

Correct AnswerverifiedShow Answer

A shortage will occur if:

Correct AnswerverifiedShow Answer

The "Made in the USA" campaign was popularized by unions in an effort to influence which determinant of demand?

Correct AnswerverifiedShow Answer

Perfectly competitive markets are:

Correct AnswerverifiedShow Answer

This graph depicts the demand for a normal good. A shift from A to B in the graph shown for a normal good might be caused by:

Correct AnswerverifiedShow Answer

The latest news report stated that the housing market is making a comeback and that house prices are on the rise. This information is likely to:

Correct AnswerverifiedShow Answer

When graphing the demand curve:

Correct AnswerverifiedShow Answer

If producers incorrectly set the price of their product too high a:

Correct AnswerverifiedShow Answer

Supply describes how much of something producers:

Correct AnswerverifiedShow Answer

The equilibrium price is sometimes called the:

Correct AnswerverifiedShow Answer

An increase in the price of ice cream is likely to cause:

Correct AnswerverifiedShow Answer

A nonprice determinant of supply refers to something that:

Correct AnswerverifiedShow Answer

The law of demand describes the:

Correct AnswerverifiedShow Answer

Demand for Snickers bars will decrease if:

Correct AnswerverifiedShow Answer

The term market refers to the:

Correct AnswerverifiedShow Answer

The price of dog collars has gone down, and all other variables have remained constant. This change can be shown graphically as a:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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