Exam Name___________________________________ MULTIPLECHOICE.Choosetheonealternativethatbestcompletesthestatementoranswers thequestion. 1) ndividualeconomicdecisionsarecoordinatedby I 1)_______ A) overnmentthroughadjustmentsinincometaxes. g B) overnmentthroughadjustmentsinsalestaxes. g C) arketsthroughadjustmentsinsaleslevels. m D) arketsthroughadjustmentsinprices. m 2) heopportunitycostofagoodisthesameasits T 2)_______ A) riceindex. p B) elativeprice. r C) oneyprice.

e. m D) oneoftheabove n 3) ants,asopposedtodemands, W 3)_______ A) ependontheprice. d B) retheunlimiteddesiresoftheconsumer a C) rethegoodstheconsumerhasacquired. a D) rethegoodstheconsumerplanstoacquire. a 4) hequantitydemandedis T 4)_______ A) lwaysequaltotheequilibriumquantity. a B) heamountofagoodthatconsumersplantopurchaseata t particularprice. C) ndependentofthepriceofthegood. i D) ndependentofconsumersbuyingplans. i 5) helawofdemandstatesthat,otherthingsremainingthesame,the T 5)_______ higherthepriceofagood,the A) argeristhedemandforthegood. l B) argeristhequantityofthegooddemanded.. l C) malleristhequantityofthegooddemanded. s D) malleristhedemandforthegood. s 6) helawofdemandimpliesthatifnothingelsechanges,thereis T 6)_______ A) linearrelationshipbetweenpriceofagoodandthequantity a demanded. B) nexponentialrelationshipbetweenpriceofagoodandthe a quantitydemanded. C) positiverelationshipbetweenthepriceofagoodandthe a quantitydemanded. D) negativerelationshipbetweenthepriceofagoodandthe a quantitydemanded. 7) hichofthefollowinginfluencespeoplesbuyingplansanddoesnot W 7)_______ shiftthedemandcurve? A) hepricesofrelatedgoods t B) hepriceofthegood t C) references p D) ncome i 8) achpointonthedemandcurvereflects E 8)_______ A) hehighestpriceconsumersarewillingandabletopayforthat t

particularunit ofagood. B) llthewantsofagivenhousehold. a C) hehighestpricesellerswillacceptforallunitstheyareproducing. t D) helowest-costtechnologyavailabletoproduceagood. t 9) eoplecometoexpectthatthepriceofagallonofgasolinewillrisenext P week.Asaresult, A) extweekssupplyofgasolinedecreases. n B) odayssupplyofgasolineincreases. t C) hepriceofagallonofgasolinefallstoday. t D) odaysdemandforgasolineincreases. t 10) nunusuallywarmwintershiftsthe A A) emandcurveforglovesrightward. d B) upplycurveofglovesleftward. s C) emandcurveforglovesleftward. d D) upplycurveofglovesrightward. s 11) changeinthepriceofagood A A) oesnotshiftthegoodsdemandcurvebutdoescausea d movementalongit. B) eithershiftsthegoodsdemandcurvenorcausesamovement n alongit. C) hiftsthegoodsdemandcurvebutdoesnotcauseamovement s alongit. D) hiftsthegoodsdemandcurveandalsocausesamovementalong s it. 12) decreaseinquantitydemandedbecauseofanincreaseinpriceis A representedbya A) ovementupandtotheleftalongthedemandcurve. m B) ovementdownandtotherightalongthedemandcurve. m C) ightwardshiftofthedemandcurve. r D) eftwardshiftofthedemandcurve. l 13) henwesaydemandincreases,wemeanthatthereisa W A) eftwardshiftofthedemandcurve. l B) ightwardshiftofthedemandcurve. r C) ovementtotherightalongademandcurve. m D) ovementtotheleftalongademandcurve. m

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 14) nthefigureabove,whichmovementreflectsanincreaseindemand? I A) rompointatopointe f B) rompointatopointc f C) rompointatopointb f D) rompointatopointd f 15) nthefigureabove,whichmovementreflectsadecreaseinquantity I demandedbutNOTadecreaseindemand? A) rompointatopointd f B) rompointatopointe f C) rompointatopointc f D) rompointatopointb f 16) emandisthe D A) bilitytopayforagood. a B) illingnesstopayforagoodifincomeislargeenough. w C) nlimitedwantsofconsumers. u D) ntirerelationshipbetweenthequantitydemandedandtheprice e ofagood. 17) hequantitysuppliedofagoodis T A) heamountthattheproducersareplanningtosellataparticular t priceduringagiventimeperiod. B) heamountthefirmwouldsellifitfacednoresourceconstraints. t C) qualtothedifferencebetweenthequantityavailableandthe e quantitydesiredbyallconsumersandproducers. D) hesamethingasthequantitydemandedateachprice. t 18) fallinthepriceofagoodcausesproducerstoreducethequantityof A thegoodtheyarewillingtoproduce.Thisfactillustrates A) helawofsupply. t B) helawofdemand. t C) henatureofaninferiorgood. t D) changeinsupply. a 19) achpointonasupplycurverepresents E A) helowestpriceforwhichasuppliercanprofitablysellanother t unit. B) hehighestpricesellerscangetforeachunitovertime. t

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C) hehighestpricebuyerswillpayforthegood. t D) helowestpricebuyerswillacceptperunitofthegood. t 20) ecauseofincreasingmarginalcost,mostsupplycurves B A) rehorizontal. a B) aveapositiveslope. h C) aveanegativeslope. h D) revertical. a 21) hesupplycurveisgraphedwiththe T A) uantityofonegoodontheverticalaxisandthequantityof q anothergoodonthehorizontalaxis. B) uantityofagoodonthehorizontalaxisanditspriceonthe q verticalaxis. C) uantityofagoodontheverticalaxisanditspriceonthe q horizontalaxis. D) uantityofonegoodontheverticalaxisandthepriceofanother q goodonthehorizontalaxis. 20)______

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22) ntheabovefigure,whatistheminimumsupplypriceforthefourth I gallonoficecream? A) 4.00 $ B) 2.00 $ C) 3.00 $ D) 5.00 $ 23) hichofthefollowingshiftsthesupplycurveforgasolinerightward? W A) nincreaseinthepriceofgasoline a B) situationinwhichthequantitydemandedexceedsthequantity a supplied C) decreaseinthepriceofaresourceusedtoproducegasoline,such a ascrudeoil D) nincreaseinthedemandforgas-guzzling,sportutilityvehicles a 24) utoworkersnegotiateawageincrease;howdoesthischangeaffectthe A supplyofcars? A) thasnoeffect. I B) tincreasethesupply. I C) tdecreasesthesupply. I

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D) hereisnotenoughinformationtotellifthechangeincreases, T decreases,orhasnoeffectonthesupplyofcars 25) nincreaseintechnologyforproducingpersonalcomputersleadsto A A) nincreaseinthesupplyofpersonalcomputers. a B) decreaseinthedemandforpersonalcomputers. a C) decreaseinthesupplyofpersonalcomputers. a D) nincreaseinthedemandforpersonalcomputers. a 26) hichofthefollowingshiftsthesupplycurveforgoodXleftward? W A) technologicaladvanceintheproductionofX a B) situationinwhichquantitydemandedexceedsquantitysupplied a C) nincreaseinthecostofthemachineryusedtoproduceX a D) decreaseinthewagesofworkersemployedtoproduceX a 27) hichofthefollowingdoesNOTshiftthesupplycurve? W A) nincreaseinthepriceofthegood a B) decreaseinthewagesoflaborusedinproductionofthegood a C) fallinthepriceofasubstituteinproduction a D) technologicaladvance a 28) decreaseinthequantitysuppliedisrepresentedbya A A) ovementdownthesupplycurve. m B) eftwardshiftinthesupplycurve. l C) ightwardshiftinthesupplycurve. r D) ovementupthesupplycurve. m 25)______

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29) nthefigureabove,anincreaseinthesupplyofoilwouldresultina I movementfrom A) ointatopointd. p B) ointatopointc. p C) ointatopointb. p D) ointatopointe. p 30) nthefigureabove,anincreaseinthequantityofoilsuppliedbutNOT I inthesupplyofoilisshownbyamovementfrom

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A) ointatopointd. p C) ointatopointc. p

B) ointatopointe. p D) ointatopointb. p 31)______

31) nthefigureabove,whichmovementcouldbetheresultofthe I developmentofanew,moreefficientrefiningtechnology? A) ointatopointc p B) ointatopointe p C) ointatopointb p D) ointatopointd p

32) heabovefigurerepresentsthemarketforoil.Whenahurricane T destroysamajorrefinerythe A) emandcurveforoildoesnotshift,andthesupplycurveforoil d shiftsfromS2toS1. B) emandcurveforoildoesnotshift,andthesupplycurveforoil d shiftsfromS1toS2. C) emandcurveforoilshiftsfromD1toD2andthesupplycurvefor d oildoesnotshift. D) emandcurveforoilshiftsfromD1toD2andthesupplycurvefor d oilshiftsfromS2toS1. 33) upplyisthe S A) illingnesstoproduceagoodifthetechnologytoproduceit w becomesavailable. B) ostofproducingagood. c C) imitedresourcesavailable. l D) ntirerelationshipbetweenthequantitysuppliedandthepriceof e agood. 34) heinteractionofsupplyanddemandexplains T A) eitherthepricesnorthequantitiesofgoodsandservices. n B) oththepricesandthequantitiesofgoodsandservices. b C) hequantitiesofgoodsandservicesbutnottheirprices. t D) hepricesofgoodsandservicesbutnottheirquantities. t

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35) henthequantitydemandedequalsquantitysupplied W A) hereisasurplus. t B) hereisashortage. t C) hegovernmentmustbeinterveninginthemarket. t D) oneoftheabove n

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36) ntheabovefigure,ifthedemandcurveisD2,then I A) nincreaseinpricewillshiftthedemandcurvetoD3. a B) heequilibriumpricewillbeP1andtheequilibriumquantitywill t beQ1. C) herewillbeashortageequaltoQ2-Q1. t D) heequilibriumpricewillbeP1andtheequilibriumquantitywill t beQ2.

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37) henthepriceisbelowtheequilibriumprice,thequantitydemanded W 37)______ A) xceedstheequilibriumquantityandthequantitysuppliedalso e exceedstheequilibriumquantity. B) slessthantheequilibriumquantityandthequantitysuppliedalso i islessthantheequilibriumquantity. C) xceedstheequilibriumquantitybutthequantitysuppliedisless e thantheequilibriumquantity. D) slessthantheequilibriumquantitybutthequantitysupplied i exceedstheequilibriumquantity. 38) famarketisNOTinequilibrium,thenwhichofthefollowingislikely I 38)______ tooccur? A) hedemandcurvewillshifttobringthemarkettoequilibrium. T B) hepricewilladjusttobringthemarkettoequilibrium. T C) hesupplycurvewillshifttobringthemarkettoequilibrium. T D) othAandBarecorrect. B 39) pricebelowtheequilibriumpriceresultsin A 39)______

A) xcesssupply. e C) furtherpricefall. a

B) shortage. a D) surplus. a 40)______

40) hichofthefollowingcorrectlydescribeshowpriceadjustments W eliminateashortage? A) sthepricefalls,thequantitydemandedincreaseswhilethe A quantitysupplieddecreases. B) sthepricerises,thequantitydemandedincreaseswhilethe A quantitysupplieddecreases. C) sthepricerises,thequantitydemandeddecreaseswhilethe A quantitysuppliedincreases. D) sthepricefalls,thequantitydemandeddecreaseswhilethe A quantitysuppliedincreases. 41) shortagecausesthe A A) ricetofall. p B) upplycurvetoshiftrightward. s C) emandcurvetoshiftleftward. d D) ricetorise. p 42) surplusoccurswhenthepriceis A A) reaterthantheequilibriumprice. g B) qualtotheequilibriumprice. e C) essthantheequilibriumprice. l D) oneoftheabovebecausetheexistenceofasurplusis N independentofthepriceofthegood.

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43) heequilibriumpriceintheabovefigureis T A) 6. $ B) 8. $ C) 4. $ 44) tapriceof$4intheabovefigure, A A) heequilibriumquantityis400units. t B) hereisashortageof200units. t C) hequantitysuppliedis400units. t 43)______ D) 2. $ 44)______

D) hereisasurplusof200units. t 45) heinitialsupplyanddemandcurvesforagoodareillustratedinthe T abovefigure.Ifthereisariseinthepriceoftheresourcesusedto producethegood,thenthenewequilibriumprice A) s$6. i B) slessthan$6. i C) smorethan$6. i D) ouldbelessthan,equalto,ormorethan$6. c 46) henthedemandforagooddecreases,itsequilibriumprice________ W andequilibriumquantity________. A) alls;decreases f B) alls;increases f C) ises;increases r D) ises;decreases r 47) ouobservethatthepriceofagoodrisesandthequantitydecreases. Y Theseobservationscanbetheresultofthe A) emandcurveshiftingleftward. d B) emandcurveshiftingrightward. d C) upplycurveshiftingleftward. s D) upplycurveshiftingrightward. s 48) fbothdemandandsupplyincrease,whatwillbetheeffectonthe I equilibriumpriceandquantity? A) hepricewillrisebutthequantitycouldeitherincrease,decrease, T orremainthesame. B) hequantitywillincreasebutthepricecouldeitherrise,fall,or T remainthesame. C) oththepriceandthequantitywillincrease. B D) hepricewillfallbutthequantitywillincrease. T 49) hichofthefollowingdefinitelyleadstoafallintheequilibriumprice? W A) nincreaseindemandcombinedwithadecreaseinsupply a B) decreaseinbothdemandandsupply a C) decreaseindemandcombinedwithanincreaseinsupply a D) nincreaseinbothdemandandsupply a 50) nincreaseinthepriceofjetfuelwill________airflightsandthe A equilibriumquantityofairflightswill________. A) ecreasethesupplyof;decrease d B) ecreasethedemandfor;decrease d C) ecreasethesupplyof;increase d D) ncreasethedemandfor;increase i

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 1) D 2) B 3) B 4) B 5) C 6) D 7) B 8) A 9) D 10) C 11) A 12) A 13) B 14) D 15) B 16) D 17) A 18) A 19) A 20) B 21) B 22) D 23) C 24) C 25) A 26) C 27) A 28) A 29) C 30) B 31) C 32) A 33) D 34) B 35) D 36) D 37) C 38) B 39) B 40) C 41) D 42) A 43) A 44) B 45) C 46) A 47) C 48) B 49) C 50) A