Question 1

When economists say the supply of a product has decreased, they mean that

Accepted Answer

A) the supply curve has shifted to the left. 
B) the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C) producers are now willing to sell more of this product at each possible price. 
D) the supply curve has shifted to the right. 
A) the supply curve has shifted to the left. 
B) the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C) producers are now willing to sell more of this product at each possible price. 
D) the supply curve has shifted to the right.

Question 2

A terrible storm wipes out 70 percent of the peanut crop. Explain and show graphically how this will affect the market for peanut butter and the market for jelly, a complementary good.

Accepted Answer

Higher peanut prices will shift the supp

Question 3

When economists say the quantity supplied of a product has decreased, they mean the

Accepted Answer

A) supply curve has shifted to the left. 
B) supply curve has shifted to the right. 
C) price of the product has risen, and consequently, suppliers are producing more of it. 
D) price of the product has fallen, and consequently, suppliers are producing less of it. 
A) supply curve has shifted to the left. 
B) supply curve has shifted to the right. 
C) price of the product has risen, and consequently, suppliers are producing more of it. 
D) price of the product has fallen, and consequently, suppliers are producing less of it.

Question 4

Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?

Accepted Answer

A) a decrease in the demand for oranges 
B) an increase in the supply of oranges 
C) an increase in the quantity of oranges bought and sold 
D) an increase in the price of oranges 
A) a decrease in the demand for oranges 
B) an increase in the supply of oranges 
C) an increase in the quantity of oranges bought and sold 
D) an increase in the price of oranges

Question 5

Suppose both the equilibrium price and quantity rise for a particular product. Which of the following best explains this situation?

Accepted Answer

A) Supply and demand simultaneously increased and the shift in supply was greater than the shift in demand. 
B) Supply and demand simultaneously increased and the shift in supply was less than the shift in demand. 
C) Supply and demand simultaneously decreased and the shift in supply was greater than the shift in demand. 
D) Supply and demand simultaneously decreased and the shift in supply was less than the shift in demand. 
A) Supply and demand simultaneously increased and the shift in supply was greater than the shift in demand. 
B) Supply and demand simultaneously increased and the shift in supply was less than the shift in demand. 
C) Supply and demand simultaneously decreased and the shift in supply was greater than the shift in demand. 
D) Supply and demand simultaneously decreased and the shift in supply was less than the shift in demand.

Question 6

Other things constant, an increase in consumer income will

Accepted Answer

A) shift the demand curve for automobiles to the left. 
B) shift the demand curve for automobiles to the right. 
C) cause a movement along the demand curve for automobiles, but it will not shift the demand curve. 
D) lead to a reduction in the supply of automobiles. 
A) shift the demand curve for automobiles to the left. 
B) shift the demand curve for automobiles to the right. 
C) cause a movement along the demand curve for automobiles, but it will not shift the demand curve. 
D) lead to a reduction in the supply of automobiles.

Question 7

Suppose demand decreases and supply decreases. Which of the following will happen?

Accepted Answer

A) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. 
B) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase 
C) Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. 
D) Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. 
E) The change in equilibrium price and quantity cannot be determined. 
A) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. 
B) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase 
C) Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. 
D) Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. 
E) The change in equilibrium price and quantity cannot be determined.

Question 8

Figure 3-22        
-Refer to Figure 3-22. Which of the four graphs represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

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

Question 9

Which of the following best explains the source of consumer surplus for a particular product?

Accepted Answer

A) Many consumers pay prices that are greater than the equilibrium price of the product. 
B) Many consumers would be willing to pay more than the market price for the product. 
C) Many consumers think the market price of the product is greater than its cost. 
D) Many consumers think the demand for the product is elastic. 
A) Many consumers pay prices that are greater than the equilibrium price of the product. 
B) Many consumers would be willing to pay more than the market price for the product. 
C) Many consumers think the market price of the product is greater than its cost. 
D) Many consumers think the demand for the product is elastic.

Question 10

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

Accepted Answer

A) It would shift the supply curve to the right. 
B) It would shift the supply curve to the left. 
C) It would shift the demand curve to the left. 
D) It would shift the demand curve to the right. 
A) It would shift the supply curve to the right. 
B) It would shift the supply curve to the left. 
C) It would shift the demand curve to the left. 
D) It would shift the demand curve to the right.

Question 11

If consumer purchases of a good are highly sensitive to the price of the good, economists say the demand for the good is relatively

Accepted Answer

A) inelastic. 
B) elastic. 
C) robust. 
D) inverse. 
A) inelastic. 
B) elastic. 
C) robust. 
D) inverse.

Question 12

Table 3-2
  
-Refer to Table 3-2. If the price is $775, who would be willing to supply the product?

Accepted Answer

A) Dale and Jill 
B) Dale, Jill and Denise 
C) Denise, Catherine and Jackson 
D) Catherine and Jackson 
A) Dale and Jill 
B) Dale, Jill and Denise 
C) Denise, Catherine and Jackson 
D) Catherine and Jackson

Question 13

The forces of supply and demand assure that

Accepted Answer

A) demand curves and supply curves tend to shift to the right as time goes by. 
B) the price of a good will eventually rise in response to an excess demand for that good. 
C) when the supply curve for a good shifts, the demand curve for that good shifts in response. 
D) the equilibrium price of a good will be rising more often than it will be falling. 
A) demand curves and supply curves tend to shift to the right as time goes by. 
B) the price of a good will eventually rise in response to an excess demand for that good. 
C) when the supply curve for a good shifts, the demand curve for that good shifts in response. 
D) the equilibrium price of a good will be rising more often than it will be falling.

Question 14

Use the figure below to answer the following question(s).
Figure 3-14  
-Refer to Figure 3-14. The gasoline market was initially in equilibrium at point

Accepted Answer

A) r. 
B) s. 
C) t. 
D) u. 
E) Other things constant, an increase in the popularity and use of Sport Utility Vehicles (SUVs) that consume more gasoline per mile driven than most other types of cars would likely move the equilibrium in this market toward point 
A) r. 
B) s. 
C) t. 
D) u. 
E) Other things constant, an increase in the popularity and use of Sport Utility Vehicles (SUVs) that consume more gasoline per mile driven than most other types of cars would likely move the equilibrium in this market toward point

Question 15

When economists say the demand for a product has decreased, they mean

Accepted Answer

A) the demand curve has shifted to the left. 
B) the product price has increased, and as a consequence, consumers are buying less of the product. 
C) consumers are now willing and able to buy more of this product at each possible price. 
D) the demand curve has shifted to the right. 
A) the demand curve has shifted to the left. 
B) the product price has increased, and as a consequence, consumers are buying less of the product. 
C) consumers are now willing and able to buy more of this product at each possible price. 
D) the demand curve has shifted to the right.

Question 16

If consumer tastes are changing more in favor of the consumption of a particular good the

Accepted Answer

A) market demand curve will shift to the left. 
B) consumer will move up a given demand curve, decreasing the quantity demanded. 
C) consumer would move down a given demand curve, decreasing the quantity demanded. 
D) consumer would move down a given demand curve, increasing the quantity demanded. 
E) market demand curve would shift to the right. 
A) market demand curve will shift to the left. 
B) consumer will move up a given demand curve, decreasing the quantity demanded. 
C) consumer would move down a given demand curve, decreasing the quantity demanded. 
D) consumer would move down a given demand curve, increasing the quantity demanded. 
E) market demand curve would shift to the right.

Question 17

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

Accepted Answer

A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical). 
A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical).

Question 18

Figure 3-19  
-Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

Accepted Answer

A) AC. 
B) CE. 
C) BC. 
D) CD. 
A) AC. 
B) CE. 
C) BC. 
D) CD.

Question 19

The price of a good will tend to rise when

Accepted Answer

A) there is excess demand for the good. 
B) there is excess supply of the good. 
C) demand for the good decreases. 
D) the supply of the good increases. 
A) there is excess demand for the good. 
B) there is excess supply of the good. 
C) demand for the good decreases. 
D) the supply of the good increases.

Question 20

Figure 3-18  
-Refer to Figure 3-18. Which area represents consumer surplus at a price of P1?

Accepted Answer

A) ABD 
B) ACF 
C) BCDE 
D) DEF 
A) ABD 
B) ACF 
C) BCDE 
D) DEF

When economists say the supply of a product has decreased, they mean that

A terrible storm wipes out 70 percent of the peanut crop. Explain and show graphically how this will affect the market for peanut butter and the market for jelly, a complementary good.

When economists say the quantity supplied of a product has decreased, they mean the

Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?

Suppose both the equilibrium price and quantity rise for a particular product. Which of the following best explains this situation?

Other things constant, an increase in consumer income will

Suppose demand decreases and supply decreases. Which of the following will happen?

Figure 3-22 -Refer to Figure 3-22. Which of the four graphs represents the market for cars as a result of the adoption of new technology on assembly lines?

Which of the following best explains the source of consumer surplus for a particular product?

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

If consumer purchases of a good are highly sensitive to the price of the good, economists say the demand for the good is relatively

Table 3-2 -Refer to Table 3-2. If the price is $775, who would be willing to supply the product?

The forces of supply and demand assure that

Use the figure below to answer the following question(s). Figure 3-14 -Refer to Figure 3-14. The gasoline market was initially in equilibrium at point

When economists say the demand for a product has decreased, they mean

If consumer tastes are changing more in favor of the consumption of a particular good the

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

Figure 3-19 -Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

The price of a good will tend to rise when

Figure 3-18 -Refer to Figure 3-18. Which area represents consumer surplus at a price of P₁?

The Economic Approach

Some Tools of the Economist

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Exam 3: Demand, Supply, and the Market Process

When economists say the supply of a product has decreased, they mean that

A terrible storm wipes out 70 percent of the peanut crop. Explain and show graphically how this will affect the market for peanut butter and the market for jelly, a complementary good.

When economists say the quantity supplied of a product has decreased, they mean the

Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?

Suppose both the equilibrium price and quantity rise for a particular product. Which of the following best explains this situation?

Other things constant, an increase in consumer income will

Suppose demand decreases and supply decreases. Which of the following will happen?

Figure 3-22 -Refer to Figure 3-22. Which of the four graphs represents the market for cars as a result of the adoption of new technology on assembly lines?

Which of the following best explains the source of consumer surplus for a particular product?

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

If consumer purchases of a good are highly sensitive to the price of the good, economists say the demand for the good is relatively

Table 3-2 -Refer to Table 3-2. If the price is $775, who would be willing to supply the product?

The forces of supply and demand assure that

Use the figure below to answer the following question(s). Figure 3-14 -Refer to Figure 3-14. The gasoline market was initially in equilibrium at point

When economists say the demand for a product has decreased, they mean

If consumer tastes are changing more in favor of the consumption of a particular good the

If the quantity of a good supplied is highly sensitive to the price of the good, this is illustrated by a

Figure 3-19 -Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

The price of a good will tend to rise when

Figure 3-18 -Refer to Figure 3-18. Which area represents consumer surplus at a price of P1?

The Economic Approach

Some Tools of the Economist

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Figure 3-18 -Refer to Figure 3-18. Which area represents consumer surplus at a price of P₁?