Question 1

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

Accepted Answer

A) True 
 B)False

Question 2

Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Accepted Answer

A)  raise the equilibrium price of frozen yogurt. 
B)  increase the quantity supplied of frozen yogurt. 
C)  increase the supply of ice cream. 
D)  increase the demand for frozen yogurt. 
A)  raise the equilibrium price of frozen yogurt. 
B)  increase the quantity supplied of frozen yogurt. 
C)  increase the supply of ice cream. 
D)  increase the demand for frozen yogurt.

Question 3

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Accepted Answer

A) True 
 B)False

Question 4

Exhibit 3-15
  
-Refer to Exhibit 3-15.In Exhibit 3-15,

Accepted Answer

A)  there is a shortage of doctors at fee F1. 
B)  there is a surplus of doctors at fee F1. 
C)  Q3 doctors are employed at fee F1. 
D)  Q2 doctors are employed at fee F1. 
E)  both a and c 
A)  there is a shortage of doctors at fee F1. 
B)  there is a surplus of doctors at fee F1. 
C)  Q3 doctors are employed at fee F1. 
D)  Q2 doctors are employed at fee F1. 
E)  both a and c

Question 5

Explain the difference between a change in demand and a change in quantity demanded. Be sure to specify what causes each to change and how they differ when graphed.

Accepted Answer

A change in demand results from a change

Question 6

Consider a point on a market demand curve.The point represents

Accepted Answer

A)  a single price and the quantity demanded by an individual buyer. 
B)  a single price and the sum of the quantities demanded by all buyers. 
C)  various prices and various quantities demanded. 
D)  a single price and the quantity demanded by an individual buyer at that price and all other prices. 
E)  a and c 
A)  a single price and the quantity demanded by an individual buyer. 
B)  a single price and the sum of the quantities demanded by all buyers. 
C)  various prices and various quantities demanded. 
D)  a single price and the quantity demanded by an individual buyer at that price and all other prices. 
E)  a and c

Question 7

Exhibit 3-4
  
-Refer to Exhibit 3-4.If this is a competitive market,price and quantity will gravitate toward

Accepted Answer

A)  $6 and 10 units, respectively. 
B)  $6 and 20 units, respectively. 
C)  $4 and 15 units, respectively. 
D)  $2 and 15 units, respectively. 
A)  $6 and 10 units, respectively. 
B)  $6 and 20 units, respectively. 
C)  $4 and 15 units, respectively. 
D)  $2 and 15 units, respectively.

Question 8

Exhibit 3-3
  
-Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

Accepted Answer

A)  a increase in the price of good Y. 
B)  an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C)  an increase in the price of a complement to good Y. 
D)  a decrease in the number of buyers of good Y. 
E)  a decrease in good Y buyers' income (assuming that good Y is a normal good). 
A)  a increase in the price of good Y. 
B)  an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C)  an increase in the price of a complement to good Y. 
D)  a decrease in the number of buyers of good Y. 
E)  a decrease in good Y buyers' income (assuming that good Y is a normal good).

Question 9

An "increase in demand" means that

Accepted Answer

A)  the demand curve has shifted to the left. 
B)  price has declined and consumers want to purchase more of the good. 
C)  the demand curve has shifted to the right. 
D)  the price of the good can be expected to decline, assuming supply stays constant. 
A)  the demand curve has shifted to the left. 
B)  price has declined and consumers want to purchase more of the good. 
C)  the demand curve has shifted to the right. 
D)  the price of the good can be expected to decline, assuming supply stays constant.

Question 10

A "decrease in the quantity demanded" means that

Accepted Answer

A)  the demand curve has shifted to the right. 
B)  the supply curve has shifted to the left. 
C)  price has declined and consumers therefore want to purchase more of the good. 
D)  price has increased and consumers therefore want to purchase less of the good. 
A)  the demand curve has shifted to the right. 
B)  the supply curve has shifted to the left. 
C)  price has declined and consumers therefore want to purchase more of the good. 
D)  price has increased and consumers therefore want to purchase less of the good.

Question 11

Exhibit 3-2
  
-Refer to Exhibit 3-2.Suppose equilibrium is at point B.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point B to C (assuming that good X is a normal good)?

Accepted Answer

A)  There was an increase in resource prices and income stayed constant. 
B)  There was a decrease in resource prices and income stayed constant. 
C)  There was an increase in resource prices and income decreased. 
D)  There was an increase in resource prices and income increased. 
A)  There was an increase in resource prices and income stayed constant. 
B)  There was a decrease in resource prices and income stayed constant. 
C)  There was an increase in resource prices and income decreased. 
D)  There was an increase in resource prices and income increased.

Question 12

Exhibit 3-16
  
-Refer to Exhibit 3-16.Which of the graphs best represents the market for theater tickets that are already sold out on the day of the performance?

Accepted Answer

A)  (1) 
B)  (2) 
C)  (3) 
D)  (4) 
A)  (1) 
B)  (2) 
C)  (3) 
D)  (4)

Question 13

Exhibit 3-6
  
-Refer to Exhibit 3-6.If D? is the relevant demand curve,a decrease in the price of good X may cause

Accepted Answer

A)  demand to shift from D1 to D2. 
B)  demand to shift from D1 to D3. 
C)  a movement along D1 from point A to point B. 
D)  a movement along D1 from point A to point C. 
A)  demand to shift from D1 to D2. 
B)  demand to shift from D1 to D3. 
C)  a movement along D1 from point A to point B. 
D)  a movement along D1 from point A to point C.

Question 14

Supply curves are always upward sloping.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 3-2
  
-Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

Accepted Answer

A)  There was an increase in income and production technology advanced. 
B)  There was a decrease in income and production technology advanced. 
C)  There was an increase in the price of a substitute and an increase in wages. 
D)  There was a decrease in the price of a complement and an increase in wages. 
A)  There was an increase in income and production technology advanced. 
B)  There was a decrease in income and production technology advanced. 
C)  There was an increase in the price of a substitute and an increase in wages. 
D)  There was a decrease in the price of a complement and an increase in wages.

Question 16

At a price above the equilibrium price,there is

Accepted Answer

A)  a shortage. 
B)  a surplus. 
C)  excess demand. 
D)  super-equilibrium. 
E)  none of the above 
A)  a shortage. 
B)  a surplus. 
C)  excess demand. 
D)  super-equilibrium. 
E)  none of the above

Question 17

Exhibit 3-8
  
-Refer to Exhibit 3-8.A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

Accepted Answer

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

Question 18

Exhibit 3-9
  
-Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.You expect a movement in the market for X from

Accepted Answer

A)  S2 to S1. 
B)  D2 to D1. 
C)  D1 to D2. 
D)  S1 to S2. 
A)  S2 to S1. 
B)  D2 to D1. 
C)  D1 to D2. 
D)  S1 to S2.

Question 19

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve is shorter than 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 20

An economic concept that explains why Disney World charges more for the first day of admission than they do for each additional day is the law of

Accepted Answer

A)  supply. 
B)  demand and supply. 
C)  diminishing marginal utility. 
D)  diminishing returns. 
E)  none of the above 
A)  supply. 
B)  demand and supply. 
C)  diminishing marginal utility. 
D)  diminishing returns. 
E)  none of the above

Exam 3: Supply and Demand: Theory

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Exhibit 3-15 -Refer to Exhibit 3-15.In Exhibit 3-15,

Explain the difference between a change in demand and a change in quantity demanded. Be sure to specify what causes each to change and how they differ when graphed.

Consider a point on a market demand curve.The point represents

Exhibit 3-4 -Refer to Exhibit 3-4.If this is a competitive market,price and quantity will gravitate toward

Exhibit 3-3 -Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

An "increase in demand" means that

A "decrease in the quantity demanded" means that

Exhibit 3-2 -Refer to Exhibit 3-2.Suppose equilibrium is at point B.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point B to C (assuming that good X is a normal good)?

Exhibit 3-16 -Refer to Exhibit 3-16.Which of the graphs best represents the market for theater tickets that are already sold out on the day of the performance?

Exhibit 3-6 -Refer to Exhibit 3-6.If D? is the relevant demand curve,a decrease in the price of good X may cause

Supply curves are always upward sloping.

Exhibit 3-2 -Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

At a price above the equilibrium price,there is

Exhibit 3-8 -Refer to Exhibit 3-8.A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

Exhibit 3-9 -Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.You expect a movement in the market for X from

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

An economic concept that explains why Disney World charges more for the first day of admission than they do for each additional day is the law of

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 3-8 -Refer to Exhibit 3-8.A price of $1 will result in a ___ in this market which will cause the price of the product to gravitate .

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