NATE AC Practice 3 Exam Questions with Certified Answers Graded A+

When the price of a product increases, there is a. a shift in demand. b. movement along the demand curve. c. a change in elasticity of demand. d. no effect on quantity demanded. - Answer: b On the demand curve, price and quantity demanded are a. inversely related. b. directly related. C. unrelated. relevant. - Answer: A During the Dust Bowl of the 1930's, many farmers agricultural goods were destroyed. What happened to the market for agricultural goods? a. Increase in demand b. Decrease in demand C.Increase in supply d. Decrease in supply - Answer: D What is the Law of Supply? a. When demand goes up, supply decreases. b. Supply shifts to the right due to technology. C. When price increases, quantity supplied decreases. d. When price increases, quantity supplied increases. - Answer: D Which of the following explains the Law of Demand? a. When prices go down, people have an increased income. b. When the price of a good increases, people tend to buy substitutes instead. C. People prefer inferior goods during a recession. d. People often buy eggs and bacon together. - Answer: B Which of the following pairs of goods are substitutes? a. Jelly & Jam b. Eggs & Bacon C. Apples & Broccoli d. Mugs & Candles - Answer: A Which of the following pairs of goods are complements? a. Jelly & Jam b. Eggs & Bacon C.Apples & Broccoli d. Mugs & Candles - Answer: B When consumer income decreases, a. demand for normal goods increases. b. demand for normal goods stays constant. c. demand for inferior goods increases. d. supply for inferior goods increases. - Answer: C Assume peanut butter and jelly are complementary goods. When the price of jelly increases, what will happen to the demand for peanut butter? a. It will decrease. b. It will increase. c. It will remain constant. d. Complementary goods only affect the supply curve. - Answer: A The cost of wood increases sharply. What happens to the supply for pencils? a. It will increase due to producer expectations. b. It will decrease due to producer expectations. c. It will increase due to cost of inputs. d. It will decrease due to cost of inputs. - Answer: D War has broken out! What happens to the market for weapons? a. Supply increases due to number of producers. b. Supply increases due to changes in technology. c.Supply increases due to international events. d. Demand decreases due to government policy. - Answer: C What is market clearing price? a. Os>QD b. QD>Qs c. Os=OD d. None of the above. - Answer: C