Question 1

Exhibit 3-4  
-When both supply and demand shift right at the same time,

Accepted Answer

A) the change in equilibrium price cannot be predicted, but the change in equilibrium quantity can be predicted. 
B) the change in both equilibrium price and equilibrium quantity can be predicted. 
C) the change in equilibrium price can be predicted, but the change in equilibrium quantity cannot be predicted. 
D) neither the change in equilibrium price nor equilibrium quantity can be predicted. 
E) either the equilibrium price or equilibrium quantity will change, but not both. 
A) the change in equilibrium price cannot be predicted, but the change in equilibrium quantity can be predicted. 
B) the change in both equilibrium price and equilibrium quantity can be predicted. 
C) the change in equilibrium price can be predicted, but the change in equilibrium quantity cannot be predicted. 
D) neither the change in equilibrium price nor equilibrium quantity can be predicted. 
E) either the equilibrium price or equilibrium quantity will change, but not both.

Question 2

What is the difference between an increase in supply and an increase in quantity supplied?

Accepted Answer

An increase in supply is a shi

Question 3

Which of the following causes a movement along the demand curve for bananas?

Accepted Answer

A) Consumers expect an increase in the price of bananas. 
B) Consumer income decreases. 
C) The price of bananas increases. 
D) The price of oranges decreases. 
E) The supply of bananas increases. 
A) Consumers expect an increase in the price of bananas. 
B) Consumer income decreases. 
C) The price of bananas increases. 
D) The price of oranges decreases. 
E) The supply of bananas increases.

Question 4

Exhibit 3-3  
-Refer to Exhibit 3-3. If the price is $27,

Accepted Answer

A) producers are willing to produce a maximum of 32 units. 
B) there is an equilibrium. 
C) there is a tendency for price to rise. 
D) consumers are willing to buy as much as 25 units. 
E) there is a shortage of 30 units. 
A) producers are willing to produce a maximum of 32 units. 
B) there is an equilibrium. 
C) there is a tendency for price to rise. 
D) consumers are willing to buy as much as 25 units. 
E) there is a shortage of 30 units.

Question 5

For each of the following markets, indicate whether the stated change causes a shift in the supply curve, a shift in the demand curve, a movement along the supply curve, and/or a movement along the demand curve.

Accepted Answer

The answer of For each of the following markets, indicate...

Question 6

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

Accepted Answer

A) demand for compact disks would decrease. 
B) quantity demanded of compact disks would decrease. 
C) demand for compact disks would increase. 
D) quantity demanded of compact disks would not change. 
E) quantity demanded of compact disks would increase. 
A) demand for compact disks would decrease. 
B) quantity demanded of compact disks would decrease. 
C) demand for compact disks would increase. 
D) quantity demanded of compact disks would not change. 
E) quantity demanded of compact disks would increase.

Question 7

With a single supply and demand diagram, illustrate a shortage and a surplus. Carefully label the diagram.

Accepted Answer

The answer of With a single supply and demand diagram,...

Question 8

The high price of gasoline in the late-2000s was likely the result of

Accepted Answer

A) an increase in both the supply of and the demand for gasoline. 
B) a decrease in both the supply of and the demand for gasoline. 
C) an increase in the supply of gasoline along with a decrease in the demand for gasoline. 
D) a decrease in the supply of gasoline along with an increase in the demand for gasoline. 
E) no change in either the supply of or the demand for gasoline. 
A) an increase in both the supply of and the demand for gasoline. 
B) a decrease in both the supply of and the demand for gasoline. 
C) an increase in the supply of gasoline along with a decrease in the demand for gasoline. 
D) a decrease in the supply of gasoline along with an increase in the demand for gasoline. 
E) no change in either the supply of or the demand for gasoline.

Question 9

The demand curve of good A is drawn by assuming that all of the following are equal except

Accepted Answer

A) the price of good A. 
B) consumer income. 
C) consumer preferences. 
D) the price of good B. 
E) the number of consumers. 
A) the price of good A. 
B) consumer income. 
C) consumer preferences. 
D) the price of good B. 
E) the number of consumers.

Question 10

The principle that consumers tend to buy less of a good or service when its price increases, all else held equal, is called the law of

Accepted Answer

A) preferences. 
B) increasing cost. 
C) demand. 
D) supply. 
E) maximum satisfaction. 
A) preferences. 
B) increasing cost. 
C) demand. 
D) supply. 
E) maximum satisfaction.

Question 11

Does the following condition violate the law of demand? Explain your answer.
"The number of iPhones sold last year was more the than the number of Nokia smartphones sold in the same period, even though the price of iPhones was more than twice of the price of Nokia smartphones."

Accepted Answer

No, the law of demand is not violated. E

Question 12

Suppose that hotdogs are inferior goods. Which of the following is true given an increase in consumer income?

Accepted Answer

A) An upward movement along the demand curve of hotdogs 
B) A downward movement along the demand curve of hotdogs 
C) A leftward shift in the demand curve of hotdogs 
D) A rightward shift in the demand curve of hotdogs 
E) No change in the demand curve of hotdogs 
A) An upward movement along the demand curve of hotdogs 
B) A downward movement along the demand curve of hotdogs 
C) A leftward shift in the demand curve of hotdogs 
D) A rightward shift in the demand curve of hotdogs 
E) No change in the demand curve of hotdogs

Question 13

When economists say that the supply of a product has decreased, they mean that

Accepted Answer

A) a greater quantity will be produced at any price. 
B) the price is too high for equilibrium. 
C) a smaller quantity will be produced at any price. 
D) demand was too high for producers to make a profit. 
E) the price is too low for equilibrium. 
A) a greater quantity will be produced at any price. 
B) the price is too high for equilibrium. 
C) a smaller quantity will be produced at any price. 
D) demand was too high for producers to make a profit. 
E) the price is too low for equilibrium.

Question 14

Consider the market for pop music played with an iPod. If there is a decrease in the number of pop music programs broadcast on radio, we can expect

Accepted Answer

A) the profits of the pop music industry to decrease. 
B) the demand for pop music to decrease. 
C) the demand for iPods to increase. 
D) less pop music to be listened to on iPods. 
E) the price of iPods to decline. 
A) the profits of the pop music industry to decrease. 
B) the demand for pop music to decrease. 
C) the demand for iPods to increase. 
D) less pop music to be listened to on iPods. 
E) the price of iPods to decline.

Question 15

Exhibit 3-3  
-Refer to Exhibit 3-3. A shortage of ____ units will result in a price of ____.

Accepted Answer

A) 42; $9 
B) 32; $18 
C) 25; $27 
D) 30; $27 
E) 30; $9 
A) 42; $9 
B) 32; $18 
C) 25; $27 
D) 30; $27 
E) 30; $9

Question 16

Exhibit 3-4  
-In Exhibit 3-4, which of the following is the most likely reason for the shift of the demand curve from D1 to D2?

Accepted Answer

A) An increase in the price of the good 
B) A decrease in the price of the good 
C) An increase in the number of consumers 
D) An increase in the supply of the good 
E) A decrease in the supply of the good 
A) An increase in the price of the good 
B) A decrease in the price of the good 
C) An increase in the number of consumers 
D) An increase in the supply of the good 
E) A decrease in the supply of the good

Question 17

Suppose all workers in the fast-food industry receive a substantial pay increase because of an increase in the minimum wage. What will happen in the fast-food industry that employs these workers?

Accepted Answer

A) Supply will decrease. 
B) Supply will increase. 
C) Output will rise. 
D) Demand will decrease. 
E) Prices will fall. 
A) Supply will decrease. 
B) Supply will increase. 
C) Output will rise. 
D) Demand will decrease. 
E) Prices will fall.

Question 18

Exhibit 3-5
  
-Refer to Exhibit 3-5 for the demand and supply model of the world oil market (in millions of barrels per day).

Accepted Answer

The answer of Exhibit 3-5
  
-Refer to Exhibit 3-5...

Question 19

Market equilibrium is determined by

Accepted Answer

A) the producers in the market. 
B) the largest consumers in the market. 
C) all producers and consumers together. 
D) the consumers in the market. 
E) the largest firms in the market. 
A) the producers in the market. 
B) the largest consumers in the market. 
C) all producers and consumers together. 
D) the consumers in the market. 
E) the largest firms in the market.

Question 20

If incomes increase, then the ____ in the market for luxury cars as normal goods ____.

Accepted Answer

A) supply; decreases 
B) supply; increases 
C) demand; increases 
D) demand; decreases 
E) both supply and demand; increase 
A) supply; decreases 
B) supply; increases 
C) demand; increases 
D) demand; decreases 
E) both supply and demand; increase

Exam 3: The Supply and Demand Model

Exhibit 3-4 -When both supply and demand shift right at the same time,

What is the difference between an increase in supply and an increase in quantity supplied?

Which of the following causes a movement along the demand curve for bananas?

Exhibit 3-3 -Refer to Exhibit 3-3. If the price is $27,

For each of the following markets, indicate whether the stated change causes a shift in the supply curve, a shift in the demand curve, a movement along the supply curve, and/or a movement along the demand curve.

According to the law of demand, if the price of compact disks decreased, ceteris paribus, the

With a single supply and demand diagram, illustrate a shortage and a surplus. Carefully label the diagram.

The high price of gasoline in the late-2000s was likely the result of

The demand curve of good A is drawn by assuming that all of the following are equal except

The principle that consumers tend to buy less of a good or service when its price increases, all else held equal, is called the law of

Does the following condition violate the law of demand? Explain your answer. "The number of iPhones sold last year was more the than the number of Nokia smartphones sold in the same period, even though the price of iPhones was more than twice of the price of Nokia smartphones."

Suppose that hotdogs are inferior goods. Which of the following is true given an increase in consumer income?

When economists say that the supply of a product has decreased, they mean that

Consider the market for pop music played with an iPod. If there is a decrease in the number of pop music programs broadcast on radio, we can expect

Exhibit 3-3 -Refer to Exhibit 3-3. A shortage of ____ units will result in a price of ____.

Exhibit 3-4 -In Exhibit 3-4, which of the following is the most likely reason for the shift of the demand curve from D1 to D2?

Suppose all workers in the fast-food industry receive a substantial pay increase because of an increase in the minimum wage. What will happen in the fast-food industry that employs these workers?

Exhibit 3-5 -Refer to Exhibit 3-5 for the demand and supply model of the world oil market (in millions of barrels per day).

Market equilibrium is determined by

If incomes increase, then the ____ in the market for luxury cars as normal goods ____.

The Central Idea

Observing and Explaining the Economy

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

Filters

Exhibit 3-3 -Refer to Exhibit 3-3. A shortage of units will result in a price of .

Exhibit 3-4 -In Exhibit 3-4, which of the following is the most likely reason for the shift of the demand curve from D₁ to D₂?

If incomes increase, then the in the market for luxury cars as normal goods .