Question 1

Assume peanut butter and jelly are complements.Ceteris paribus,an increase in the price of peanut butter will cause the equilibrium price of jelly to

Accepted Answer

A) Increase and the equilibrium quantity of jelly to decrease. 
B) Increase and the equilibrium quantity of jelly to increase. 
C) Decrease and the equilibrium quantity of jelly to decrease. 
D) Decrease and the equilibrium quantity of jelly to increase. 
A) Increase and the equilibrium quantity of jelly to decrease. 
B) Increase and the equilibrium quantity of jelly to increase. 
C) Decrease and the equilibrium quantity of jelly to decrease. 
D) Decrease and the equilibrium quantity of jelly to increase. C

Question 2

When the demand for coffee increases,ceteris paribus,the equilibrium price will also increase because

Accepted Answer

A) A shortage exists at the old equilibrium price. 
B) There must be a surplus of the good. 
C) The market supply and demand curves do not intersect. 
D) Market demand must be upward-sloping. 
A) A shortage exists at the old equilibrium price. 
B) There must be a surplus of the good. 
C) The market supply and demand curves do not intersect. 
D) Market demand must be upward-sloping. A

Question 3

The supply curve shifts to the right when a seller sells a good.

Accepted Answer

A) True 
 B)False  False

Question 4

According to the law of demand,a demand curve

Accepted Answer

A) Has a negative slope. 
B) Is a horizontal or flat line. 
C) Has a positive slope. 
D) Exceeds the economy's ability to produce. 
A) Has a negative slope. 
B) Is a horizontal or flat line. 
C) Has a positive slope. 
D) Exceeds the economy's ability to produce.

Question 5

A market shortage is

Accepted Answer

A) The amount by which the quantity demanded exceeds the quantity supplied at a given price. 
B) The result of a price floor. 
C) A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell. 
D) The amount by which the cost of production exceeds the price of a good. 
A) The amount by which the quantity demanded exceeds the quantity supplied at a given price. 
B) The result of a price floor. 
C) A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell. 
D) The amount by which the cost of production exceeds the price of a good.

Question 6

An increase in the equilibrium price of electricity can be caused by

Accepted Answer

A) An increase in the supply of electricity. 
B) An increase in the demand for electricity. 
C) A decrease in the demand for electricity. 
D) An increase in the quantity demanded of electricity. 
A) An increase in the supply of electricity. 
B) An increase in the demand for electricity. 
C) A decrease in the demand for electricity. 
D) An increase in the quantity demanded of electricity.

Question 7

One In the News article in the text titled "The Real March Madness: Ticket Prices " described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events.When scalpers resell tickets at prices closer to equilibrium,

Accepted Answer

A) A market shortage is made larger,and the scalpers reap a profit. 
B) A market shortage is made smaller,and the scalpers reap a profit. 
C) A market shortage is made larger,and the original sellers reap a profit. 
D) A market surplus is made smaller,and the scalpers reap a profit. 
A) A market shortage is made larger,and the scalpers reap a profit. 
B) A market shortage is made smaller,and the scalpers reap a profit. 
C) A market shortage is made larger,and the original sellers reap a profit. 
D) A market surplus is made smaller,and the scalpers reap a profit.

Question 8

Which of the following is not held constant along a given demand curve for a good?

Accepted Answer

A) Price of the good itself (own price). 
B) Consumer's income. 
C) The price of substitute goods. 
D) Consumer tastes. 
A) Price of the good itself (own price). 
B) Consumer's income. 
C) The price of substitute goods. 
D) Consumer tastes.

Question 9

When the number of buyers in a market changes,the market demand curve shifts even if individual demand curves do not shift.

Accepted Answer

A) True 
 B)False

Question 10

When a surplus exists for a product,

Accepted Answer

A) Producers increase supply. 
B) Consumers increase demand. 
C) Government purchases decrease. 
D) Producers reduce the level of output and reduce price. 
A) Producers increase supply. 
B) Consumers increase demand. 
C) Government purchases decrease. 
D) Producers reduce the level of output and reduce price.

Question 11

A decrease in the price of bubble gum below equilibrium will

Accepted Answer

A) Shift the bubble gum supply curve to the right. 
B) Shift the bubble gum demand curve to the right. 
C) Cause a surplus of bubble gum. 
D) Cause a shortage of bubble gum. 
A) Shift the bubble gum supply curve to the right. 
B) Shift the bubble gum demand curve to the right. 
C) Cause a surplus of bubble gum. 
D) Cause a shortage of bubble gum.

Question 12

A leftward shift of the market demand curve for HDTVs,ceteris paribus,causes equilibrium price to

Accepted Answer

A) Increase and quantity to decrease. 
B) Decrease and quantity to decrease. 
C) Increase and quantity to increase. 
D) Decrease and quantity to increase. 
A) Increase and quantity to decrease. 
B) Decrease and quantity to decrease. 
C) Increase and quantity to increase. 
D) Decrease and quantity to increase.

Question 13

If there is a surplus at a given price,then

Accepted Answer

A) The market is in equilibrium at that price. 
B) That price is greater than the equilibrium price. 
C) That price is lower than the equilibrium price. 
D) The price is zero. 
A) The market is in equilibrium at that price. 
B) That price is greater than the equilibrium price. 
C) That price is lower than the equilibrium price. 
D) The price is zero.

Question 14

If the government required the actual market price to be fixed at $6 per unit in,   Shifts of Supply and Demand

Accepted Answer

A) A binding or effective price floor would result. 
B) A binding or effective price ceiling would result. 
C) A nonbinding or noneffective price ceiling would result. 
D) The market would reach equilibrium. 
A) A binding or effective price floor would result. 
B) A binding or effective price ceiling would result. 
C) A nonbinding or noneffective price ceiling would result. 
D) The market would reach equilibrium.

Question 15

If a price ceiling is to be effective,it should be set

Accepted Answer

A) Below the equilibrium price,and it will create a market shortage. 
B) Below the equilibrium price,and it will create a market surplus. 
C) Above the equilibrium price,and it will create a market shortage. 
D) Above the equilibrium price,and it will create a market surplus. 
A) Below the equilibrium price,and it will create a market shortage. 
B) Below the equilibrium price,and it will create a market surplus. 
C) Above the equilibrium price,and it will create a market shortage. 
D) Above the equilibrium price,and it will create a market surplus.

Question 16

When the market mechanism is allowed to operate freely,prices will determine

Accepted Answer

A) Only the mix of output to be produced and the resources to be used in the production process. 
B) Only the resources to be used in the production process and for whom the output is produced. 
C) The mix of output to be produced,the resources to be used in the production process,and for whom the output is produced. 
D) Only for whom the output is produced and the mix of output to be produced. 
A) Only the mix of output to be produced and the resources to be used in the production process. 
B) Only the resources to be used in the production process and for whom the output is produced. 
C) The mix of output to be produced,the resources to be used in the production process,and for whom the output is produced. 
D) Only for whom the output is produced and the mix of output to be produced.

Question 17

One In the News article in the text titled "The Real March Madness: Ticket Prices " described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events.Apparently the initial price of the tickets being scalped was too

Accepted Answer

A) Low for equilibrium,resulting in a surplus of tickets. 
B) Low for equilibrium,resulting in a shortage of tickets. 
C) High for equilibrium,resulting in a surplus of tickets. 
D) High for equilibrium,resulting in a shortage of tickets. 
A) Low for equilibrium,resulting in a surplus of tickets. 
B) Low for equilibrium,resulting in a shortage of tickets. 
C) High for equilibrium,resulting in a surplus of tickets. 
D) High for equilibrium,resulting in a shortage of tickets.

Question 18

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$ $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$
  In Table 3.1,if the price is $2,the market will

Accepted Answer

A) Experience a shortage of 22 units. 
B) Be in equilibrium. 
C) Experience a surplus of 56 units. 
D) Experience a surplus of 30 units. 
A) Experience a shortage of 22 units. 
B) Be in equilibrium. 
C) Experience a surplus of 56 units. 
D) Experience a surplus of 30 units.

Question 19

Which panel of Figure 3.3 represents the changes in the market for student housing when university enrollment increases and at the same time the university destroys several older residence halls and apartment buildings?

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 20

A lower quantity demanded of a good reflects,ceteris paribus,

Accepted Answer

A) Lower income. 
B) A downward shift of the supply curve. 
C) A higher price of the good. 
D) Fewer units actually purchased. 
A) Lower income. 
B) A downward shift of the supply curve. 
C) A higher price of the good. 
D) Fewer units actually purchased.

Exam 3: Supply and Demand

Assume peanut butter and jelly are complements.Ceteris paribus,an increase in the price of peanut butter will cause the equilibrium price of jelly to

When the demand for coffee increases,ceteris paribus,the equilibrium price will also increase because

The supply curve shifts to the right when a seller sells a good.

According to the law of demand,a demand curve

A market shortage is

An increase in the equilibrium price of electricity can be caused by

One In the News article in the text titled "The Real March Madness: Ticket Prices " described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events.When scalpers resell tickets at prices closer to equilibrium,

Which of the following is not held constant along a given demand curve for a good?

When the number of buyers in a market changes,the market demand curve shifts even if individual demand curves do not shift.

When a surplus exists for a product,

A decrease in the price of bubble gum below equilibrium will

A leftward shift of the market demand curve for HDTVs,ceteris paribus,causes equilibrium price to

If there is a surplus at a given price,then

If the government required the actual market price to be fixed at $6 per unit in, Shifts of Supply and Demand

If a price ceiling is to be effective,it should be set

When the market mechanism is allowed to operate freely,prices will determine

One In the News article in the text titled "The Real March Madness: Ticket Prices " described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events.Apparently the initial price of the tickets being scalped was too

Which panel of Figure 3.3 represents the changes in the market for student housing when university enrollment increases and at the same time the university destroys several older residence halls and apartment buildings?

A lower quantity demanded of a good reflects,ceteris paribus,

Economics: the Core Issues

The Useconomy: a Global View

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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