COBA UPDATED ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS
●● The demand curve for a normal good is
A) Upward sloping because firms produce more at higher prices
B) Upward sloping because higher-priced goods are of higher quality
C) Vertical
D) Downward sloping because of the income and substitution effects of
price changes
Answer: D) Downward sloping because of the income and substitution
effects of price changes
●● A decrease in the price of a complementary good will
A) Shift the demand curve of the other commodity to the left
B) Increase the price paid for a substitute good
C) Shift the supply curve of the other commodity to the left
D) Shift the demand curve of the other commodity to the right
Answer: D) Shift the demand curve of the other commodity to the right
●● Which one of the following changes will cause the demand curve for
gasoline to shift to the left
A) The price of gasoline increases
,B) The supply of gasoline decreases
C) The price of cars increase
D) The price of cars decrease
Answer: C) The price of cars increase
●● Tennis rackets and tennis balls are
A)Substitute goods
B) Independent goods
C) Inferior goods
D) Complementary goods
Answer: D) Complementary goods
●● A supply curve illustrates the relationship between
A) Price and quantity supplied
B)Price and consumer tastes
C) price and quantity demanded
D) Supply and demand
Answer: A) Price and quantity supplied
●● In relation to the laws of supply and demand, an increase in supply
will
A) Increase the equilibrium price and the equilibrium quantity
exchanged
, B) Decrease the equilibrium price and the equilibrium quantity
exchanged
C) Increase the equilibrium price and decrease the equilibrium quantity
exchanged
D) Decrease the equilibrium price and increase the equilibrium quantity
exchanged
Answer: D) Decrease the equilibrium price and increase the equilibrium
quantity exchanged
●● An increase in the market supply of beef would result in a(n)
A) increase in the price of beef
B) Decrease in the price of beef
C) Increase in the price of pork
D) Increase in the quantity of the beef demanded
Answer: D) Increase in the quantity of the beef demanded
●● In any competitive market, an increase in both demand and supply
can be expected to always
A) Increase both price and market-clearing quantity
B) Decrease both price and market-clearing quantity
C) Increase market-clearing quantity
D) Increase price
Answer: C) Increase market-clearing quantity
QUESTIONS AND CORRECT ANSWERS
●● The demand curve for a normal good is
A) Upward sloping because firms produce more at higher prices
B) Upward sloping because higher-priced goods are of higher quality
C) Vertical
D) Downward sloping because of the income and substitution effects of
price changes
Answer: D) Downward sloping because of the income and substitution
effects of price changes
●● A decrease in the price of a complementary good will
A) Shift the demand curve of the other commodity to the left
B) Increase the price paid for a substitute good
C) Shift the supply curve of the other commodity to the left
D) Shift the demand curve of the other commodity to the right
Answer: D) Shift the demand curve of the other commodity to the right
●● Which one of the following changes will cause the demand curve for
gasoline to shift to the left
A) The price of gasoline increases
,B) The supply of gasoline decreases
C) The price of cars increase
D) The price of cars decrease
Answer: C) The price of cars increase
●● Tennis rackets and tennis balls are
A)Substitute goods
B) Independent goods
C) Inferior goods
D) Complementary goods
Answer: D) Complementary goods
●● A supply curve illustrates the relationship between
A) Price and quantity supplied
B)Price and consumer tastes
C) price and quantity demanded
D) Supply and demand
Answer: A) Price and quantity supplied
●● In relation to the laws of supply and demand, an increase in supply
will
A) Increase the equilibrium price and the equilibrium quantity
exchanged
, B) Decrease the equilibrium price and the equilibrium quantity
exchanged
C) Increase the equilibrium price and decrease the equilibrium quantity
exchanged
D) Decrease the equilibrium price and increase the equilibrium quantity
exchanged
Answer: D) Decrease the equilibrium price and increase the equilibrium
quantity exchanged
●● An increase in the market supply of beef would result in a(n)
A) increase in the price of beef
B) Decrease in the price of beef
C) Increase in the price of pork
D) Increase in the quantity of the beef demanded
Answer: D) Increase in the quantity of the beef demanded
●● In any competitive market, an increase in both demand and supply
can be expected to always
A) Increase both price and market-clearing quantity
B) Decrease both price and market-clearing quantity
C) Increase market-clearing quantity
D) Increase price
Answer: C) Increase market-clearing quantity
