# EXAM ONE PRACTICE QUESTIONS

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question
In January, buyers of gold expect that the price of gold will rise in February. What happens in the gold market in January, holding all else constant?
The demand curve shifts to the right
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In presenting the idea of a demand curve, economists presume that the most important variable in determining the quantity demanded is:
the price of the product itself
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The table below shows the weekly demand for hamburgers in a market where there are just three buyers. Price Buyer 1. Buyer 2 Buyer 3 6. 7. 4. 6 5. 9. 7 8 4. 15. 10. 12 3. 21. 15. 16 At a price of \$6, the weekly market quantity demanded for hamburgers is:
17
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Which of the following would shift the supply curve for MP3 players to the right? A. a decrease in the price of an input used to produce MP3's B. an increase in consumer income C. an increase in the price of a substitute in production D. a decrease in the number of firms that produce MP3'S
A. a decrease in the price of an input used to produce MP3's
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Who determines the price and quantity traded in a market?
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what is the difference between an increase in supply and an increase in quantity supplied?
an increase in supply means the supply curve has shifted to the right while an increase in quantity supplied refers to the movement along a supply curve in response to an increase in price
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a decrease in the demand for recreational fishing boats might be caused by: A. a decrease in the number of sport fishers B. an increase in the price of fishing boats C. a decrease in the price of fishing boats D. an increase in the number of sport fishers
A. a decrease in the number of sport fishers
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If a price ceiling is set below the equilibrium price in a market: A. the quantity demanded will exceed quantity supplied B. surpluses of the commodity will develop C. rationing will be unnecessary D. the quantity supplied will exceed the quantity demanded
A. quantity demanded will exceed quantity supplied
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If a price ceiling of \$4 is set in a market with the equilibrium price of \$3, then there will be: A. shortage and the price will tend to fall B. shortage and the price will tend to rise C. surplus and the price will tend to rise D. surplus and the price will tend to fall
D. surplus and the price will tend to fall
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In understanding and analyzing market demand, we focus on how much all buyers are A. actually buying now and in the recent past B. willing and able to buy C. willing and wanting to buy D. able to buy given their income
B. willing and able to buy
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The law of supply indicates that, other things equal: A. producers will offer more of a product at high prices than at low prices. B. the product supply curve is downsloping. C. consumers will purchase less of a good at high prices than at low prices. D. producers will offer more of a product at low prices than at high prices.
A. producers will offer more of a product at high prices than at low prices
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If price is above the equilibrium level, competition among sellers to reduce the resulting: A. surplus will decrease quantity demanded and increase quantity supplied B. shortage will increase quantity demanded and decrease quantity supplied C. shortage will decrease quantity demanded and increase quantity supplied D. surplus will increase quantity demanded and increase quantity supplied
D. surplus will increase quantity demanded and decrease quantity supplied
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If a tax is placed on the production of good X, this will shift the A. supply curve for X to the right B. demand curve for X to the right C. supply curve for X to the left D. demand curve for X to the left
C. supply curve for X to the left
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What combination of changes would most likely decrease the equilibrium price? A. demand decreases and supply decreases B. demand increases and supply increases C. supply increase and demand decreases D. supply decreases and demand increases
C. supply increases and demand decreases
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Prediction that a rise in consumer incomes will increase the demand for bikes. This prediction assumes that A. there are many goods that are substitutes for bikes B. bikes are normal goods C. there are few substitutes for bikes D. there are many compliments for bikes
B. bikes are a normal good
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At the current price, there is a shortage. We would expect price to: A. increase, quantity demanded to increase, quantity supplied to decrease B. decrease, quan demanded to increase, quan supplied to decrease C. increase, quan demanded to decrease, quan supplied to increase D. decrease, quan demanded to decrease, quan supplied to increase
C. increase, quan demanded to decrease, quan supplied to increase
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Mia wants to buy a book. The economic perspective suggests that Mia will buy the book if: A. marginal cost of the book is affordable B. MB of book > MC of book C. MB of book is positive value D. MC of book > MB of book
B. MB > MC
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Which of the following statements is true? A. price increase, then demand will decrease B. demand decreases, then price will decrease C. demand increases, then price will decrease D. price decreases, then demand will decrease
B. demand decreases, then price will decrease
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As a result of a decrease in the price of online streaming movies, consumers download more movies online and buy fewer DVDs. This is an illustration of: A. income effect B. consumer sovereignty C. diminishing marginal utility D. substitution effect
D. substitution effect
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A point or combination of goods on the production possibilities curve is A. attainable but inefficient B. attainable and efficient C. unattainable and efficient D. unattainable but efficient
B. attainable and efficient
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Tom enjoys Diet Coke, but his enjoyment decreases after each bottle consumed and he is willing to pay less for the next bottle. This is an illustration of: A. income effect B. consumer sovereignty C. diminishing marginal utility D. substitution effect
C. diminishing marginal utility
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If the US placed an embargo on Swedish products, what would happen in the US market for Swedish furniture? A. supply curve shift to left B. demand curve shift to left C. supply curve shift to right D. demand curve shift to right
A. supply curve shift to left
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Last year, the Pottery Palace supplied 8,000 ceramic pots at \$40 each. This year, the company supplied the same quantity of ceramic pots at \$55 each. Based on this evidence, The Pottery Palace has experienced A. a decrease in quantity supplied B. an increase in quantity supplied C. decrease in supply D. increase in supply
C. decrease in supply
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Prices usually allocate resources efficiently because they allocate A. consumption to the highest cost good/service B. resources to the highest value good/service C. consumption to the lowest value good/service d. resources to the lowest value good/service
B. resources to the highest value good/service
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If in the market for peaches the supply curve has shifted to the left: A. the supply of peaches has increased B. supply of peaches has decreased C. quantity of peaches supplied has increased D. quantity of peaches supplied has decreased
B. supply of peaches has decreased
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From an economic perspective, when consumers leave a fast food restaurant bc the lines to be served is too long, they have concluded that the...
marginal cost of waiting is greater than the marginal benefit of being served MC > MB = don't do it
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Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium? A. supply curve shifts to right bc change in preferences for calcium B. demand curve shifts to left bc this new info will increase the price of calcium C. demand curve shifts to right bc change in preferences for calcium D. supply curve shifts to left bc new info will increase price of calcium
C. demand curve shifts to right bc change in preferences for calcium
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Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement: A. constitutes an exception to the law of demand B. suggests that the supply of Blu Rays has increased C. suggests that the demand of Blu Rays has increased D. constitutes an exception to the law of supply
B. suggests that the supply of Blu Rays has increased
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Because successive units of a good produce less additional satisfaction, the price must fall to encourage a buyer to purchase more unites of the good. This statement is most consistent with which explanation for the law of demand? A. substitution effect B. diminishing marginal utility C. income effect D. rationing function of prices