Question 1

If demand increases by a lesser amount than supply increases,then equilibrium price __________ and equilibrium quantity __________.

Accepted Answer

A)  rises; falls 
B)  falls; falls 
C)  rises; rises 
D)  falls; rises 
A)  rises; falls 
B)  falls; falls 
C)  rises; rises 
D)  falls; rises D

Question 2

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

Accepted Answer

A) True 
 B)False  False

Question 3

The fundamental reason why most supply curves are upward sloping is that

Accepted Answer

A)  consumers substitute lower-priced goods for higher-priced goods. 
B)  the quantity supplied increases as more firms enter the market. 
C)  a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D)  higher production raises the opportunity costs of production and so price must rise to induce more output. 
A)  consumers substitute lower-priced goods for higher-priced goods. 
B)  the quantity supplied increases as more firms enter the market. 
C)  a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D)  higher production raises the opportunity costs of production and so price must rise to induce more output. D

Question 4

The terms scarcity and shortage are synonyms.

Accepted Answer

A) True 
 B)False

Question 5

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

Accepted Answer

A)  supply curve for good X shifts leftward and the price of good X rises. 
B)  quantity supplied of good X falls and the price of good X rises. 
C)  demand curve for good X shifts leftward and the price of good X falls. 
D)  supply curve for good X shifts rightward and the price of good X falls. 
E)  supply curve for good X shifts leftward and the price of good X falls. 
A)  supply curve for good X shifts leftward and the price of good X rises. 
B)  quantity supplied of good X falls and the price of good X rises. 
C)  demand curve for good X shifts leftward and the price of good X falls. 
D)  supply curve for good X shifts rightward and the price of good X falls. 
E)  supply curve for good X shifts leftward and the price of good X falls.

Question 6

Exhibit 3-9
  
-Refer to Exhibit 3-9.X is produced using input Z.If the price of Z rises,you expect a movement in the market for X from

Accepted Answer

A)  E to F. 
B)  A to B. 
C)  F to E. 
D)  B to A. 
A)  E to F. 
B)  A to B. 
C)  F to E. 
D)  B to A.

Question 7

Exhibit 3-17
  
-Refer to Exhibit 3-17. At a price of $20,the quantity demanded of good X is ____________ than the quantity supplied of good X,and economists would use this information to predict that the price of good X would soon ______________. This would push the price __________ the equilibrium price.

Accepted Answer

A)  greater; fall; toward 
B)  greater; rise; toward 
C)  less; fall; toward 
D)  less; rise; away from 
E)  less; fall; away from 
A)  greater; fall; toward 
B)  greater; rise; toward 
C)  less; fall; toward 
D)  less; rise; away from 
E)  less; fall; away from

Question 8

Demand refers to

Accepted Answer

A)  how much of a good people are willing and able to buy at a particular price. 
B)  the different quantities of a good people are willing and able to buy at different prices. 
C)  the different quantities of a good people are willing and able to buy at a particular price. 
D)  how much of a good people are willing to buy at different prices. 
E)  none of the above 
A)  how much of a good people are willing and able to buy at a particular price. 
B)  the different quantities of a good people are willing and able to buy at different prices. 
C)  the different quantities of a good people are willing and able to buy at a particular price. 
D)  how much of a good people are willing to buy at different prices. 
E)  none of the above

Question 9

__________ is the number of units that individuals are __________ to buy at a particular price during some time period.

Accepted Answer

A)  Demand; willing and able 
B)  Supply; willing and able 
C)  Quantity demanded; willing and able 
D)  Demand; able 
E)  Quantity demanded; willing 
A)  Demand; willing and able 
B)  Supply; willing and able 
C)  Quantity demanded; willing and able 
D)  Demand; able 
E)  Quantity demanded; willing

Question 10

If the workers of a firm successfully negotiate an increase in wages,which of the following is most likely to happen?

Accepted Answer

A)  The demand curve for the product the firm produces shifts rightward. 
B)  The demand curve for the product the firm produces shifts leftward. 
C)  The supply curve of the product the firm produces shifts rightward. 
D)  The supply curve of the product the firm produces shifts leftward. 
A)  The demand curve for the product the firm produces shifts rightward. 
B)  The demand curve for the product the firm produces shifts leftward. 
C)  The supply curve of the product the firm produces shifts rightward. 
D)  The supply curve of the product the firm produces shifts leftward.

Question 11

Which of the following statements represents a correct and sequentially accurate economic explanation?

Accepted Answer

A)  X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y rises. 
B)  X and Y are substitutes. The price of X rises, the demand for X falls, and the demand for Y rises. 
C)  X and Y are substitutes. The price of X falls, the demand for X rises, and the quantity demanded of Y rises. 
D)  X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y falls. 
E)  X and Y are complements. The price of X falls, the quantity demanded of X rises, and the demand for Y falls. 
A)  X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y rises. 
B)  X and Y are substitutes. The price of X rises, the demand for X falls, and the demand for Y rises. 
C)  X and Y are substitutes. The price of X falls, the demand for X rises, and the quantity demanded of Y rises. 
D)  X and Y are substitutes. The price of X falls, the quantity demanded of X rises, and the demand for Y falls. 
E)  X and Y are complements. The price of X falls, the quantity demanded of X rises, and the demand for Y falls.

Question 12

Suppose that the average price of refrigerators has fallen over the past few years,yet the refrigerator companies have offered more and more of them for sale.Does this mean that the supply curve for refrigerators is downward sloping? Explain.

Accepted Answer

The reason that refrigerator prices have

Question 13

Exhibit 3-5
  
-Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S? to S? could have been caused by

Accepted Answer

A)  a decline in the number of buyers in the market. 
B)  a decline in the price of a substitute good. 
C)  a decrease in income (assuming the good is a normal good). 
D)  the granting of a subsidy to the producer. 
E)  none of the above 
A)  a decline in the number of buyers in the market. 
B)  a decline in the price of a substitute good. 
C)  a decrease in income (assuming the good is a normal good). 
D)  the granting of a subsidy to the producer. 
E)  none of the above

Question 14

Exhibit 3-13
  
-Refer to Exhibit 3-13. Fill in blanks (C)and (D)respectively with the market quantity demanded at each given price.

Accepted Answer

A)  18.5; 15.5 
B)  74; 62 
C)  75; 64 
D)  50; 43 
E)  none of the above 
A)  18.5; 15.5 
B)  74; 62 
C)  75; 64 
D)  50; 43 
E)  none of the above

Question 15

If demand decreases by a greater amount than supply increases,then equilibrium price __________ and equilibrium quantity __________.

Accepted Answer

A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls 
A)  rises; rises 
B)  rises; falls 
C)  falls; rises 
D)  falls; falls

Question 16

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.

Accepted Answer

A)  shortage; above 
B)  shortage; below 
C)  surplus; above 
D)  surplus; below 
A)  shortage; above 
B)  shortage; below 
C)  surplus; above 
D)  surplus; below

Question 17

Supply curves are ________________ upward sloping.

Accepted Answer

A)  always 
B)  usually 
C)  rarely 
D)  never 
A)  always 
B)  usually 
C)  rarely 
D)  never

Question 18

Exhibit 3-14
  
-Refer to Exhibit 3-14. At a price of $15,there is a ____________ unit ____________ of good X.

Accepted Answer

A)  40; shortage 
B)  90; surplus 
C)  40; surplus 
D)  20; shortage 
E)  20; surplus 
A)  40; shortage 
B)  90; surplus 
C)  40; surplus 
D)  20; shortage 
E)  20; surplus

Question 19

One reads in the newspaper: "Today the president and Congress enacted a law which adds new requirements that child care providers must meet before they can offer their services for sale." As a result,an economist would predict that

Accepted Answer

A)  the supply of child care services will increase, thus lowering the price of child care services. 
B)  the supply of child care services will be unaffected by the stiffer requirements and therefore the price of child care services will not change. 
C)  the demand for child care services will fall because people who buy child care services do not want stiffer requirements placed on child care providers. 
D)  the supply of child care services will decrease, thus raising the price of child care services. 
E)  none of the above 
A)  the supply of child care services will increase, thus lowering the price of child care services. 
B)  the supply of child care services will be unaffected by the stiffer requirements and therefore the price of child care services will not change. 
C)  the demand for child care services will fall because people who buy child care services do not want stiffer requirements placed on child care providers. 
D)  the supply of child care services will decrease, thus raising the price of child care services. 
E)  none of the above

Question 20

Exhibit 3-4
  
-Refer to Exhibit 3-4.A price of $2 in the market will result in a

Accepted Answer

A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units. 
A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units.

Exam 3: Supply and Demand: Theory

If demand increases by a lesser amount than supply increases,then equilibrium price __________ and equilibrium quantity __________.

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

The fundamental reason why most supply curves are upward sloping is that

The terms scarcity and shortage are synonyms.

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

Exhibit 3-9 -Refer to Exhibit 3-9.X is produced using input Z.If the price of Z rises,you expect a movement in the market for X from

Demand refers to

__________ is the number of units that individuals are __________ to buy at a particular price during some time period.

If the workers of a firm successfully negotiate an increase in wages,which of the following is most likely to happen?

Which of the following statements represents a correct and sequentially accurate economic explanation?

Suppose that the average price of refrigerators has fallen over the past few years,yet the refrigerator companies have offered more and more of them for sale.Does this mean that the supply curve for refrigerators is downward sloping? Explain.

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S? to S? could have been caused by

Exhibit 3-13 -Refer to Exhibit 3-13. Fill in blanks (C)and (D)respectively with the market quantity demanded at each given price.

If demand decreases by a greater amount than supply increases,then equilibrium price __________ and equilibrium quantity __________.

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.

Supply curves are ________________ upward sloping.

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $15,there is a ____________ unit ____________ of good X.

One reads in the newspaper: "Today the president and Congress enacted a law which adds new requirements that child care providers must meet before they can offer their services for sale." As a result,an economist would predict that

Exhibit 3-4 -Refer to Exhibit 3-4.A price of $2 in the market will result in a

What Economics Is About

Production Possibilities Frontier Framework

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

If demand increases by a lesser amount than supply increases,then equilibrium price and equilibrium quantity .

is the number of units that individuals are to buy at a particular price during some time period.

If demand decreases by a greater amount than supply increases,then equilibrium price and equilibrium quantity .

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a at that price and the current price must be the equilibrium price.

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $15,there is a unit of good X.