Question 1

Exhibit 3-7
  
-Refer to Exhibit 3-7.If S? is the relevant supply curve,a decline in technology in the production of good X causes

Accepted Answer

A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X. 
A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X.

Question 2

Exhibit 3-4
  
-Refer to Exhibit 3-4.A price of $6 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.

Question 3

If computers and software are complements,then

Accepted Answer

A)  a fall in the price of computers will increase the demand for software and, ceteris paribus, the price of software will rise. 
B)  a rise in the price of computers will decrease the demand for software and, ceteris paribus, the price of software will rise. 
C)  a fall in the price of computers will decrease the demand for software and, ceteris paribus, the price of software will fall. 
D)  a rise in the price of software will increase the demand for computers and, ceteris paribus, the price of computers will rise. 
E)  a fall in the price of software will decrease the demand for computers and, ceteris paribus, the price of computers will fall. 
A)  a fall in the price of computers will increase the demand for software and, ceteris paribus, the price of software will rise. 
B)  a rise in the price of computers will decrease the demand for software and, ceteris paribus, the price of software will rise. 
C)  a fall in the price of computers will decrease the demand for software and, ceteris paribus, the price of software will fall. 
D)  a rise in the price of software will increase the demand for computers and, ceteris paribus, the price of computers will rise. 
E)  a fall in the price of software will decrease the demand for computers and, ceteris paribus, the price of computers will fall.

Question 4

Exhibit 3-7
  
-Refer to Exhibit 3-7.If S? is the relevant supply curve,a decrease in the price of a resource that is necessary for the production of good X causes

Accepted Answer

A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X. 
A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X.

Question 5

Exhibit 3-14
  
-Refer to Exhibit 3-14. At a price of $11,there is a ____________ unit ____________ of good X.

Accepted Answer

A)  290; shortage 
B)  215; shortage 
C)  40; surplus 
D)  290; surplus 
E)  230; shortage 
A)  290; shortage 
B)  215; shortage 
C)  40; surplus 
D)  290; surplus 
E)  230; shortage

Question 6

If potential buyers of good X expect the price of good X will soon fall,then the current

Accepted Answer

A)  demand for good X will rise. 
B)  demand for good X will remain unchanged. 
C)  demand for good X will fall. 
D)  quantity demanded of good X will fall. 
E)  quantity demanded of good X will rise. 
A)  demand for good X will rise. 
B)  demand for good X will remain unchanged. 
C)  demand for good X will fall. 
D)  quantity demanded of good X will fall. 
E)  quantity demanded of good X will rise.

Question 7

At a price for which the quantity supplied exceeds the quantity demanded,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

Accepted Answer

A)  surplus; downward 
B)  surplus; upward 
C)  shortage; downward 
D)  shortage; upward 
A)  surplus; downward 
B)  surplus; upward 
C)  shortage; downward 
D)  shortage; upward

Question 8

One can determine the consumers' surplus if the _______________ is known

Accepted Answer

A)  tax paid 
B)  maximum buying price 
C)  price paid 
D)  b and c 
E)  a and b 
A)  tax paid 
B)  maximum buying price 
C)  price paid 
D)  b and c 
E)  a and b

Question 9

One reason that helps to explain the law of demand is the law of

Accepted Answer

A)  diminishing marginal utility. 
B)  diminishing marginal returns. 
C)  increasing opportunity costs. 
D)  supply. 
A)  diminishing marginal utility. 
B)  diminishing marginal returns. 
C)  increasing opportunity costs. 
D)  supply.

Question 10

If a supply curve shifts rightward,this means

Accepted Answer

A)  suppliers are willing and able to offer less of the good for sale at every price. 
B)  suppliers are willing and able to offer more of the good for sale at every price. 
C)  quantity supplied is greater at every price. 
D)  suppliers are willing and able to offer more of the good for sale only at a particular price. 
E)  b and c 
A)  suppliers are willing and able to offer less of the good for sale at every price. 
B)  suppliers are willing and able to offer more of the good for sale at every price. 
C)  quantity supplied is greater at every price. 
D)  suppliers are willing and able to offer more of the good for sale only at a particular price. 
E)  b and c

Question 11

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Accepted Answer

A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand, but decrease the supply. 
D)  increase the supply, but decrease the demand. 
A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand, but decrease the supply. 
D)  increase the supply, but decrease the demand.

Question 12

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

Accepted Answer

A)  place more oil on the market this year, thus shifting the present supply curve of oil rightward. 
B)  hold some oil off the market this year, thus shifting the present supply curve of oil leftward. 
C)  place more oil on the market this year, thus increasing the quantity supplied of oil at lower but not higher prices. 
D)  hold some oil off the market this year, thus decreasing the quantity supplied of oil at lower but not higher prices. 
A)  place more oil on the market this year, thus shifting the present supply curve of oil rightward. 
B)  hold some oil off the market this year, thus shifting the present supply curve of oil leftward. 
C)  place more oil on the market this year, thus increasing the quantity supplied of oil at lower but not higher prices. 
D)  hold some oil off the market this year, thus decreasing the quantity supplied of oil at lower but not higher prices.

Question 13

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then ____________ is _______________.

Accepted Answer

A)  producers' surplus; $103 
B)  consumers' surplus; $103 
C)  consumers' surplus; $3 
D)  producers' surplus; $3 
E)  consumers' surplus; $40 
A)  producers' surplus; $103 
B)  consumers' surplus; $103 
C)  consumers' surplus; $3 
D)  producers' surplus; $3 
E)  consumers' surplus; $40

Question 14

At a price of $15 each,Marta buys 4 books per month.When the price increases to $20,Marta buys 3 books per month.Luz says that Marta's demand for books has decreased.Is Luz correct?

Accepted Answer

A)  Yes, Luz is correct. 
B)  No, Luz is incorrect. Marta's demand has increased. 
C)  No, Luz is incorrect. Marta's quantity demanded has decreased, but her demand has stayed the same. 
D)  No, Luz is incorrect. Marta's quantity demanded has increased, but her demand has stayed the same. 
E)  No, Luz is incorrect. Marta's quantity demanded has decreased and her demand has increased. 
A)  Yes, Luz is correct. 
B)  No, Luz is incorrect. Marta's demand has increased. 
C)  No, Luz is incorrect. Marta's quantity demanded has decreased, but her demand has stayed the same. 
D)  No, Luz is incorrect. Marta's quantity demanded has increased, but her demand has stayed the same. 
E)  No, Luz is incorrect. Marta's quantity demanded has decreased and her demand has increased.

Question 15

Exhibit 3-9
  
-Refer to Exhibit 3-9.Consumers view X and Y as substitutes.If the price of Y increases,you expect a movement in the market for X from

Accepted Answer

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

Question 16

Equilibrium and disequilibrium

Accepted Answer

A)  are real world states. 
B)  are mental constructs used by economists. 
C)  foreshadow what is about to happen in a market. 
D)  a and b 
E)  a, b and c 
A)  are real world states. 
B)  are mental constructs used by economists. 
C)  foreshadow what is about to happen in a market. 
D)  a and b 
E)  a, b and c

Question 17

Resource X is necessary to the production of good Y.If the price of resource X rises,the _____________ curve for good Y will shift ____________ resulting in a(n)_____________ in the equilibrium price of Y and a(n)____________ in the equilibrium quantity of Y.

Accepted Answer

A)  supply; rightward; decrease; increase. 
B)  demand; leftward; decrease; decrease 
C)  demand; rightward; increase; increase 
D)  supply; leftward; increase; decrease 
E)  supply; leftward; increase; increase 
A)  supply; rightward; decrease; increase. 
B)  demand; leftward; decrease; decrease 
C)  demand; rightward; increase; increase 
D)  supply; leftward; increase; decrease 
E)  supply; leftward; increase; increase

Question 18

Which of the following pairs of goods would be most likely to be substitutes?

Accepted Answer

A)  pasta and pasta sauce 
B)  butter and margarine 
C)  chips and salsa 
D)  tires and automobiles 
E)  all of the above 
A)  pasta and pasta sauce 
B)  butter and margarine 
C)  chips and salsa 
D)  tires and automobiles 
E)  all of the above

Question 19

If the demand curve for a good shifts leftward,

Accepted Answer

A)  quantity demanded is less at each price. 
B)  quantity demanded remains constant at each price. 
C)  quantity demanded is greater at each price. 
D)  demand is greater at each price. 
A)  quantity demanded is less at each price. 
B)  quantity demanded remains constant at each price. 
C)  quantity demanded is greater at each price. 
D)  demand is greater at each price.

Question 20

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right)?

Accepted Answer

A)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and supply, ceteris paribus. 
B)  Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and quantity supplied, ceteris paribus. 
C)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and demand, ceteris paribus. 
D)  Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and demand, ceteris paribus. 
E)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus. 
A)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and supply, ceteris paribus. 
B)  Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and quantity supplied, ceteris paribus. 
C)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and demand, ceteris paribus. 
D)  Because a demand curve is the graphical representation of the law of demand, which specifies a direct relationship between price and demand, ceteris paribus. 
E)  Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus.

Exam 3: Supply and Demand: Theory

Exhibit 3-7 -Refer to Exhibit 3-7.If S? is the relevant supply curve,a decline in technology in the production of good X causes

Exhibit 3-4 -Refer to Exhibit 3-4.A price of $6 in the market will result in a

If computers and software are complements,then

Exhibit 3-7 -Refer to Exhibit 3-7.If S? is the relevant supply curve,a decrease in the price of a resource that is necessary for the production of good X causes

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $11,there is a ____________ unit ____________ of good X.

If potential buyers of good X expect the price of good X will soon fall,then the current

At a price for which the quantity supplied exceeds the quantity demanded,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

One can determine the consumers' surplus if the _______________ is known

One reason that helps to explain the law of demand is the law of

If a supply curve shifts rightward,this means

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then ____________ is _______________.

At a price of $15 each,Marta buys 4 books per month.When the price increases to $20,Marta buys 3 books per month.Luz says that Marta's demand for books has decreased.Is Luz correct?

Exhibit 3-9 -Refer to Exhibit 3-9.Consumers view X and Y as substitutes.If the price of Y increases,you expect a movement in the market for X from

Equilibrium and disequilibrium

Resource X is necessary to the production of good Y.If the price of resource X rises,the _____________ curve for good Y will shift ____________ resulting in a(n)_____________ in the equilibrium price of Y and a(n)____________ in the equilibrium quantity of Y.

Which of the following pairs of goods would be most likely to be substitutes?

If the demand curve for a good shifts leftward,

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right)?

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

Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $11,there is a unit of good X.

At a price for which the quantity supplied exceeds the quantity demanded,a is experienced,which pushes the price toward its equilibrium value.

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then is ___.

Resource X is necessary to the production of good Y.If the price of resource X rises,the _______ curve for good Y will shift resulting in a(n)_ in the equilibrium price of Y and a(n)______ in the equilibrium quantity of Y.