Question 1

Market price is the same thing as equilibrium price.

Accepted Answer

A) True 
 B)False

Question 2

In 2007 a company sold 35,000 drones at $150 each.In 2008 the same company sold 40,000 drones at $170 each.This information suggests that

Accepted Answer

A) The supply of drones increased from 2007 to 2008. 
B) The demand for drones increased from 2007 to 2008. 
C) The price of drones increased because the costs of production increased from 2007 to 2008. 
D) From 2007 to 2008,the demand curve for drones was upward-sloping because of improved technology. 
A) The supply of drones increased from 2007 to 2008. 
B) The demand for drones increased from 2007 to 2008. 
C) The price of drones increased because the costs of production increased from 2007 to 2008. 
D) From 2007 to 2008,the demand curve for drones was upward-sloping because of improved technology.

Question 3

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

Accepted Answer

A) The cost of factors of production. 
B) Price. 
C) Technology. 
D) Taxes. 
A) The cost of factors of production. 
B) Price. 
C) Technology. 
D) Taxes.

Question 4

The term market mechanism refers to

Accepted Answer

A) The use of market prices and sales to determine resource allocation. 
B) The establishment of a ceiling price in a market. 
C) Supply curves but not demand curves. 
D) Government laws and regulations concerning how the market should operate. 
A) The use of market prices and sales to determine resource allocation. 
B) The establishment of a ceiling price in a market. 
C) Supply curves but not demand curves. 
D) Government laws and regulations concerning how the market should operate.

Question 5

Jessie's demand schedule for candy bars indicates

Accepted Answer

A) Her opportunity cost of buying candy bars. 
B) How much she likes candy bars. 
C) How many candy bars she will actually buy. 
D) Why she likes candy bars. 
A) Her opportunity cost of buying candy bars. 
B) How much she likes candy bars. 
C) How many candy bars she will actually buy. 
D) Why she likes candy bars.

Question 6

The most desired goods or services that are given up when a choice is made are called the

Accepted Answer

A) Rationing device. 
B) Economic profit. 
C) Opportunity cost. 
D) Utility cost. 
A) Rationing device. 
B) Economic profit. 
C) Opportunity cost. 
D) Utility cost.

Question 7

If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7,the unemployment rate will

Accepted Answer

A) Increase as quantity of labor supplied increases and quantity of labor demanded decreases. 
B) Increase as quantity of labor supplied decreases and quantity of labor demanded increases. 
C) Increase as quantity of labor supplied increases and quantity of labor demanded increases. 
D) Not be affected by the minimum wage. 
A) Increase as quantity of labor supplied increases and quantity of labor demanded decreases. 
B) Increase as quantity of labor supplied decreases and quantity of labor demanded increases. 
C) Increase as quantity of labor supplied increases and quantity of labor demanded increases. 
D) Not be affected by the minimum wage.

Question 8

The basic goals of total utility maximization,total profit maximization,and total welfare maximization explain most market activity.

Accepted Answer

A) True 
 B)False

Question 9

Ceteris paribus,if the subsidies given to corn syrup producers decrease,then we can expect

Accepted Answer

A) A decrease in the demand for corn syrup. 
B) A decrease in the supply of corn syrup. 
C) An increase in the demand for corn syrup. 
D) An increase in the supply of corn syrup. 
A) A decrease in the demand for corn syrup. 
B) A decrease in the supply of corn syrup. 
C) An increase in the demand for corn syrup. 
D) An increase in the supply of corn syrup.

Question 10

Which panel of Figure 3.3 represents the changes in the market for beef when the price of corn (cattle feed)rises and the people become more fearful of mad cow disease?

Accepted Answer

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

Question 11

A factor market is any place or process where

Accepted Answer

A) Finished goods are bought and sold. 
B) Land,labor,or capital is bought and sold. 
C) Finished services are bought and sold. 
D) None of the choices are correct. 
A) Finished goods are bought and sold. 
B) Land,labor,or capital is bought and sold. 
C) Finished services are bought and sold. 
D) None of the choices are correct.

Question 12

An increase in the supply of gasoline,ceteris paribus,will cause equilibrium price

Accepted Answer

A) To rise and equilibrium quantity to fall. 
B) To fall and equilibrium quantity to rise. 
C) And equilibrium quantity to rise. 
D) And equilibrium quantity to fall. 
A) To rise and equilibrium quantity to fall. 
B) To fall and equilibrium quantity to rise. 
C) And equilibrium quantity to rise. 
D) And equilibrium quantity to fall.

Question 13

The In the news article titled "Gas Prices Jump in Matthew's Wake" suggests gasoline prices increased a s a result of damage caused by Hurricane Matthew.When the availability of gasoline decreases as a result of this damage the supply curve shifts to the left,causing

Accepted Answer

A) A surplus to exist at the original equilibrium price. 
B) Consumers pay lower prices as they decide to drive less. 
C) The price of gasoline to move up along the market demand curve. 
D) The price of gasoline to move up along the market supply curve 
A) A surplus to exist at the original equilibrium price. 
B) Consumers pay lower prices as they decide to drive less. 
C) The price of gasoline to move up along the market demand curve. 
D) The price of gasoline to move up along the market supply curve

Question 14

Which panel of Figure 3.3 represents the changes in the market for cigarettes when the government increases subsidies for the production of tobacco and at the same time bans smoking in public buildings?

Accepted Answer

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

Question 15

If the prices of the factors used to produce a good change,both the demand curve and the supply curve of the good will shift.

Accepted Answer

A) True 
 B)False

Question 16

According to the law of demand,during a given period of time,the quantity of a good demanded

Accepted Answer

A) Increases as its price rises,ceteris paribus. 
B) Increases as its price falls,ceteris paribus. 
C) Decreases as its price falls,ceteris paribus. 
D) Does not change when price changes. 
A) Increases as its price rises,ceteris paribus. 
B) Increases as its price falls,ceteris paribus. 
C) Decreases as its price falls,ceteris paribus. 
D) Does not change when price changes.

Question 17

The market supply curve is a statement of actual sales by suppliers.

Accepted Answer

A) True 
 B)False

Question 18

If there is a shortage at a given price,then

Accepted Answer

A) That price is the equilibrium price. 
B) That price is greater than the equilibrium price. 
C) That price is less than the equilibrium price. 
D) There is no equilibrium price in the market. 
A) That price is the equilibrium price. 
B) That price is greater than the equilibrium price. 
C) That price is less than the equilibrium price. 
D) There is no equilibrium price in the market.

Question 19

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand for Flat-screen TVs: the technology required for flat-screen TV production becomes cheaper.

Accepted Answer

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

Question 20

Which of the following statements about markets is not true?

Accepted Answer

A) Markets necessarily have a physical location. 
B) Markets have both a demand side and a supply side. 
C) The two types of markets include the factor and product markets. 
D) Every market transaction involves an exchange of money for goods or resources or a direct exchange of goods or resources without money called barter. 
A) Markets necessarily have a physical location. 
B) Markets have both a demand side and a supply side. 
C) The two types of markets include the factor and product markets. 
D) Every market transaction involves an exchange of money for goods or resources or a direct exchange of goods or resources without money called barter.

Exam 3: Supply and Demand

Market price is the same thing as equilibrium price.

In 2007 a company sold 35,000 drones at $150 each.In 2008 the same company sold 40,000 drones at $170 each.This information suggests that

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

The term market mechanism refers to

Jessie's demand schedule for candy bars indicates

The most desired goods or services that are given up when a choice is made are called the

If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7,the unemployment rate will

The basic goals of total utility maximization,total profit maximization,and total welfare maximization explain most market activity.

Ceteris paribus,if the subsidies given to corn syrup producers decrease,then we can expect

Which panel of Figure 3.3 represents the changes in the market for beef when the price of corn (cattle feed)rises and the people become more fearful of mad cow disease?

A factor market is any place or process where

An increase in the supply of gasoline,ceteris paribus,will cause equilibrium price

The In the news article titled "Gas Prices Jump in Matthew's Wake" suggests gasoline prices increased a s a result of damage caused by Hurricane Matthew.When the availability of gasoline decreases as a result of this damage the supply curve shifts to the left,causing

Which panel of Figure 3.3 represents the changes in the market for cigarettes when the government increases subsidies for the production of tobacco and at the same time bans smoking in public buildings?

If the prices of the factors used to produce a good change,both the demand curve and the supply curve of the good will shift.

According to the law of demand,during a given period of time,the quantity of a good demanded

The market supply curve is a statement of actual sales by suppliers.

If there is a shortage at a given price,then

Which of the following statements about markets is not true?

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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