Question 1

The supply curve for iPhones is upward-sloping because

Accepted Answer

A) when the price of an iPhone rises, it must be due to increased costs in producing iPhones, so producers must charge more. 
B) a higher iPhone price gives shoe producers incentive to produce more iPhones. 
C) iPhones are produced by only a few producers. 
D) iPhone producers always want to satisfy the demand for iPhones by consumers. 
E) as the price of an iPhone rises, per-unit costs of production fall. 
A) when the price of an iPhone rises, it must be due to increased costs in producing iPhones, so producers must charge more. 
B) a higher iPhone price gives shoe producers incentive to produce more iPhones. 
C) iPhones are produced by only a few producers. 
D) iPhone producers always want to satisfy the demand for iPhones by consumers. 
E) as the price of an iPhone rises, per-unit costs of production fall.

Question 2

List four factors that affect willingness to buy and that shift the demand curve.

Accepted Answer

Income, prices of su

Question 3

The demand for goods sold in discount stores increases when consumer incomes fall in a recession. We can conclude that goods sold in discount stores

Accepted Answer

A) are normal goods. 
B) are luxury goods. 
C) are inferior goods. 
D) are complements of goods sold in department stores. 
E) have no substitutes. 
A) are normal goods. 
B) are luxury goods. 
C) are inferior goods. 
D) are complements of goods sold in department stores. 
E) have no substitutes.

Question 4

A change in the quantity supplied is reflected by a shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 5

The supply curve

Accepted Answer

A) has quantity produced on the vertical axis. 
B) is a graph of a supply schedule. 
C) represents production quotas. 
D) sometimes slopes downward. 
E) is always a straight line. 
A) has quantity produced on the vertical axis. 
B) is a graph of a supply schedule. 
C) represents production quotas. 
D) sometimes slopes downward. 
E) is always a straight line.

Question 6

The law of demand states that

Accepted Answer

A) as price decreases, demand increases. 
B) as price increases, quantity demanded increases. 
C) there is a direct relationship between price and quantity supplied. 
D) there is an inverse relationship between price and quantity demanded. 
E) there is an inverse relationship between price and quantity supplied. 
A) as price decreases, demand increases. 
B) as price increases, quantity demanded increases. 
C) there is a direct relationship between price and quantity supplied. 
D) there is an inverse relationship between price and quantity demanded. 
E) there is an inverse relationship between price and quantity supplied.

Question 7

Which of the following statements is false?

Accepted Answer

A) A demand curve is a visual representation of a demand schedule. 
B) A demand curve is typically drawn with quantity demanded on the horizontal axis. 
C) A demand curve is derived from different quantities produced. 
D) A demand curve is typically drawn with price on the vertical axis. 
E) A demand curve is always downward sloping. 
A) A demand curve is a visual representation of a demand schedule. 
B) A demand curve is typically drawn with quantity demanded on the horizontal axis. 
C) A demand curve is derived from different quantities produced. 
D) A demand curve is typically drawn with price on the vertical axis. 
E) A demand curve is always downward sloping.

Question 8

Exhibit 3-3  
-Refer to Exhibit 3-3. If the price in this market is $9,

Accepted Answer

A) equilibrium is achieved because producers are able to sell all that they make available in the market. 
B) price will rise because consumers want to buy more than producers are willing to sell. 
C) quantity supplied exceeds the quantity demanded. 
D) price will fall because consumers will not buy as much as producers are willing to sell. 
E) producers are unable to sell all that they are willing to sell. 
A) equilibrium is achieved because producers are able to sell all that they make available in the market. 
B) price will rise because consumers want to buy more than producers are willing to sell. 
C) quantity supplied exceeds the quantity demanded. 
D) price will fall because consumers will not buy as much as producers are willing to sell. 
E) producers are unable to sell all that they are willing to sell.

Question 9

It is impossible to use a supply and demand model to analyze the effects of a decrease in both market supply and market demand on market price.

Accepted Answer

A) True 
 B)False

Question 10

In which of the following statements are the terms demand, supply, quantity demanded, and/or quantity supplied used correctly?

Accepted Answer

A) When the quantity demanded exceeds supply, the equilibrium price will rise. 
B) Changes in demand and supply cause changes in the equilibrium price. 
C) If the demand rises, supply rises. 
D) Oranges are cheaper in Florida; therefore, the demand is greater in Florida. 
E) Decreases in quantity demanded and quantity supplied often occur simultaneously. 
A) When the quantity demanded exceeds supply, the equilibrium price will rise. 
B) Changes in demand and supply cause changes in the equilibrium price. 
C) If the demand rises, supply rises. 
D) Oranges are cheaper in Florida; therefore, the demand is greater in Florida. 
E) Decreases in quantity demanded and quantity supplied often occur simultaneously.

Question 11

Market equilibrium occurs when the

Accepted Answer

A) quantity supplied equals quantity demanded. 
B) quantity supplied is greater than quantity demanded. 
C) quantity supplied is less than quantity demanded. 
D) quantity supplied is fixed by the government. 
E) quantity demanded equals zero. 
A) quantity supplied equals quantity demanded. 
B) quantity supplied is greater than quantity demanded. 
C) quantity supplied is less than quantity demanded. 
D) quantity supplied is fixed by the government. 
E) quantity demanded equals zero.

Question 12

Suppose it is observed in a market that price has fallen but more product is being produced and sold. This could be caused by a(n)

Accepted Answer

A) decrease in supply and demand. 
B) decrease in demand. 
C) decrease in supply. 
D) increase in supply. 
E) increase in demand. 
A) decrease in supply and demand. 
B) decrease in demand. 
C) decrease in supply. 
D) increase in supply. 
E) increase in demand.

Question 13

The supply curve slopes downward because sellers attempt to sell more when price drops.

Accepted Answer

A) True 
 B)False

Question 14

Suppose mobile app engineers have been making earning a high wage rate and the number of individuals becoming mobile app engineers doubles. Then, in the market for mobile app engineers,

Accepted Answer

A) the equilibrium wage rate for mobile app engineers fall and the number of mobile app engineers hired falls. 
B) demand increases because there are so many more mobile app engineers available. 
C) because demand is not changing, no more mobile app engineers are hired. 
D) the number of mobile app engineers employed falls as the market becomes saturated. 
E) the equilibrium wage rate for mobile app engineers falls. 
A) the equilibrium wage rate for mobile app engineers fall and the number of mobile app engineers hired falls. 
B) demand increases because there are so many more mobile app engineers available. 
C) because demand is not changing, no more mobile app engineers are hired. 
D) the number of mobile app engineers employed falls as the market becomes saturated. 
E) the equilibrium wage rate for mobile app engineers falls.

Question 15

Suppose a decrease in consumers' incomes causes a decrease in the demand for chicken and an increase in the demand for potatoes. Which good is inferior and which good is normal? How will the equilibrium price and equilibrium quantity change for each good?

Accepted Answer

In this case, chicken is a normal good a

Question 16

Suppose in a financial crisis, major automakers reduce their production of autos while consumers reduce their demand for autos. We can conclude with certainty that in the market of autos,

Accepted Answer

A) both the equilibrium price and equilibrium quantity will increase. 
B) the equilibrium price will decrease and the equilibrium quantity will increase. 
C) the equilibrium price will decrease, but the equilibrium quantity will increase, decrease or remain unchanged. 
D) the equilibrium quantity will decrease, but the equilibrium price will increase, decrease or remain unchanged. 
E) both the equilibrium price and equilibrium quantity will decrease. 
A) both the equilibrium price and equilibrium quantity will increase. 
B) the equilibrium price will decrease and the equilibrium quantity will increase. 
C) the equilibrium price will decrease, but the equilibrium quantity will increase, decrease or remain unchanged. 
D) the equilibrium quantity will decrease, but the equilibrium price will increase, decrease or remain unchanged. 
E) both the equilibrium price and equilibrium quantity will decrease.

Question 17

The supply curve represents the relationship between the quantities of a good that sellers are willing and able to supply and different prices of that good.

Accepted Answer

A) True 
 B)False

Question 18

If a drought in Florida reduces the amount of oranges grown, then

Accepted Answer

A) the demand curve of Florida oranges shifts to the left. 
B) the demand curve of Florida oranges shifts to the right. 
C) the supply curve of Florida oranges shifts to the left. 
D) the supply curve of Florida oranges shifts to the right. 
E) both the supply and demand curve of Florida oranges shift to the right. 
A) the demand curve of Florida oranges shifts to the left. 
B) the demand curve of Florida oranges shifts to the right. 
C) the supply curve of Florida oranges shifts to the left. 
D) the supply curve of Florida oranges shifts to the right. 
E) both the supply and demand curve of Florida oranges shift to the right.

Question 19

When incomes are rising, new SUV sales increase while used SUV sales decrease. This indicates that

Accepted Answer

A) used SUVs and new SUVs are both normal goods. 
B) used SUVs are inferior goods and new SUVs are normal goods. 
C) used SUVs and new SUVs are complements. 
D) used SUVs and new SUVs are substitutes. 
E) used SUVs are normal goods and new SUVs are inferior goods. 
A) used SUVs and new SUVs are both normal goods. 
B) used SUVs are inferior goods and new SUVs are normal goods. 
C) used SUVs and new SUVs are complements. 
D) used SUVs and new SUVs are substitutes. 
E) used SUVs are normal goods and new SUVs are inferior goods.

Question 20

Peanut butter and jelly are complements so that if the price of peanut butter increases, the

Accepted Answer

A) quantity demanded for jelly increases. 
B) quantity demanded for jelly decreases. 
C) demand for jelly increases. 
D) demand for jelly decreases. 
E) demand for jelly remains the same. 
A) quantity demanded for jelly increases. 
B) quantity demanded for jelly decreases. 
C) demand for jelly increases. 
D) demand for jelly decreases. 
E) demand for jelly remains the same.

Exam 3: The Supply and Demand Model

The supply curve for iPhones is upward-sloping because

List four factors that affect willingness to buy and that shift the demand curve.

The demand for goods sold in discount stores increases when consumer incomes fall in a recession. We can conclude that goods sold in discount stores

A change in the quantity supplied is reflected by a shift of the supply curve.

The supply curve

The law of demand states that

Which of the following statements is false?

Exhibit 3-3 -Refer to Exhibit 3-3. If the price in this market is $9,

It is impossible to use a supply and demand model to analyze the effects of a decrease in both market supply and market demand on market price.

In which of the following statements are the terms demand, supply, quantity demanded, and/or quantity supplied used correctly?

Market equilibrium occurs when the

Suppose it is observed in a market that price has fallen but more product is being produced and sold. This could be caused by a(n)

The supply curve slopes downward because sellers attempt to sell more when price drops.

Suppose mobile app engineers have been making earning a high wage rate and the number of individuals becoming mobile app engineers doubles. Then, in the market for mobile app engineers,

Suppose a decrease in consumers' incomes causes a decrease in the demand for chicken and an increase in the demand for potatoes. Which good is inferior and which good is normal? How will the equilibrium price and equilibrium quantity change for each good?

Suppose in a financial crisis, major automakers reduce their production of autos while consumers reduce their demand for autos. We can conclude with certainty that in the market of autos,

The supply curve represents the relationship between the quantities of a good that sellers are willing and able to supply and different prices of that good.

If a drought in Florida reduces the amount of oranges grown, then

When incomes are rising, new SUV sales increase while used SUV sales decrease. This indicates that

Peanut butter and jelly are complements so that if the price of peanut butter increases, the

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

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