Question 1

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents producer surplus.

Accepted Answer

A)  FE 
B)  FEH 
C)  EGH 
D)  DFEA 
A)  FE 
B)  FEH 
C)  EGH 
D)  DFEA

Question 2

Total producer surplus is measured by the total area under the equilibrium price and below the supply curve.

Accepted Answer

A) True 
 B)False

Question 3

At the equilibrium price, deadweight loss is minimized.

Accepted Answer

A) True 
 B)False

Question 4

​ According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 5

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price. ​

Accepted Answer

A) True 
 B)False

Question 6

Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:

Accepted Answer

A)  the demand curve for automobiles to shift to the left. 
B)  the demand curve for automobiles to shift to the right. 
C)  a downward movement along the demand curve for automobiles. 
D)  an upward movement along the demand curve for automobiles. 
A)  the demand curve for automobiles to shift to the left. 
B)  the demand curve for automobiles to shift to the right. 
C)  a downward movement along the demand curve for automobiles. 
D)  an upward movement along the demand curve for automobiles.

Question 7

A decrease in quantity demanded is given by a(n):

Accepted Answer

A)  downward shift of the demand curve. 
B)  upward shift of the demand curve. 
C)  downward movement to the right along the demand curve. 
D)  upward movement to the left along the demand curve. 
E)  downward shift of both demand and supply curves. 
A)  downward shift of the demand curve. 
B)  upward shift of the demand curve. 
C)  downward movement to the right along the demand curve. 
D)  upward movement to the left along the demand curve. 
E)  downward shift of both demand and supply curves.

Question 8

Which of the following would increase the supply of laptop computers?

Accepted Answer

A)  Higher wage rates for the workers that produce laptop computers. 
B)  A technological improvement that lowers the cost of producing laptop computers. 
C)  An increase in the price of computer chips used to produce laptop computers. 
D)  All of these. 
A)  Higher wage rates for the workers that produce laptop computers. 
B)  A technological improvement that lowers the cost of producing laptop computers. 
C)  An increase in the price of computer chips used to produce laptop computers. 
D)  All of these.

Question 9

Which of the following will cause a movement along the supply curve?

Accepted Answer

A)  An increase or decrease in the raw materials costs. 
B)  An increase in labor costs. 
C)  Changes in the cost of the machinery used to make a good. 
D)  Changes in the market price of a good, other things held constant. 
A)  An increase or decrease in the raw materials costs. 
B)  An increase in labor costs. 
C)  Changes in the cost of the machinery used to make a good. 
D)  Changes in the market price of a good, other things held constant.

Question 10

Producer surplus measures the value between the actual selling price and the profit-maximization price.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then:

Accepted Answer

A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  deadweight loss is eliminated. 
D)  all of these are true. 
A)  consumer surplus increases. 
B)  producer surplus increases. 
C)  deadweight loss is eliminated. 
D)  all of these are true.

Question 12

Assume that oranges and peaches can both be grown on the same type of land, a decrease in the price of peaches, other things being equal, will cause a(n):

Accepted Answer

A)  upward movement along the supply curve for oranges. 
B)  downward movement along the supply curve for oranges. 
C)  rightward shift of the supply curve for oranges. 
D)  leftward shift of the supply curve for oranges. 
A)  upward movement along the supply curve for oranges. 
B)  downward movement along the supply curve for oranges. 
C)  rightward shift of the supply curve for oranges. 
D)  leftward shift of the supply curve for oranges.

Question 13

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

Accepted Answer

A)  upward movement along the demand curve for Coca-Cola. 
B)  leftward shift in the demand curve for Coca-Cola. 
C)  downward movement along the demand curve for Coca-Cola. 
D)  rightward shift in the demand curve for Coca-Cola. 
A)  upward movement along the demand curve for Coca-Cola. 
B)  leftward shift in the demand curve for Coca-Cola. 
C)  downward movement along the demand curve for Coca-Cola. 
D)  rightward shift in the demand curve for Coca-Cola.

Question 14

​Exhibit 3-12 Supply and demand data
​ $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 1.00 & 250 & 150 \
1.50 & 200 & 200 \
2.00 & 150 & 250 \
2.50 & 100 & 300 \
\hline
\end{array}$$
-?In Exhibit 3-12, which of the following occurs at a price of $1.00?

Accepted Answer

A)  ? A shortage puts a downward pressure on price. 
B)  ?Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C)  ?Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D)  ?The surplus would be so small that there would be only slight upward pressure on price. 
A)  ? A shortage puts a downward pressure on price. 
B)  ?Quantity demanded exceeds quantity supplied, putting upward pressure on price. 
C)  ?Quantity supplied exceeds quantity demanded, putting upward pressure on price. 
D)  ?The surplus would be so small that there would be only slight upward pressure on price.

Question 15

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

Accepted Answer

A)  leftward shift in the demand curve for generic goods. 
B)  downward movement along the demand curve for generic goods. 
C)  rightward shift in the demand curve for generic goods. 
D)  upward movement along the demand curve for generic goods. 
A)  leftward shift in the demand curve for generic goods. 
B)  downward movement along the demand curve for generic goods. 
C)  rightward shift in the demand curve for generic goods. 
D)  upward movement along the demand curve for generic goods.

Question 16

An increase in the demand for peanut butter, a normal good, can be caused by a(n):

Accepted Answer

A)  decrease in consumer income. 
B)  increase in the price of jams, jellies, and preserves. 
C)  decrease in the price of bread. 
D)  drought in Georgia that destroyed 30 percent of the peanut crop. 
E)  decrease in the price of bologna. 
A)  decrease in consumer income. 
B)  increase in the price of jams, jellies, and preserves. 
C)  decrease in the price of bread. 
D)  drought in Georgia that destroyed 30 percent of the peanut crop. 
E)  decrease in the price of bologna.

Question 17

Suppose seller X is willing to sell one good X for $5, a second good X for $10, a third for $16, a fourth for $25, and the market price is $20. What is seller X's producer surplus?

Accepted Answer

A)  $15 
B)  $20 
C)  $22 
D)  $29 
A)  $15 
B)  $20 
C)  $22 
D)  $29

Question 18

Suppose Gizmo Inc. is willing to sell one gizmo for $10, a second gizmo for $12, a third for $14, and a fourth for $20, and the market price is $20. What is Gizmo Inc.'s producer surplus?

Accepted Answer

A)  $56 
B)  $24 
C)  $20 
D)  $10 
A)  $56 
B)  $24 
C)  $20 
D)  $10

Question 19

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):

Accepted Answer

A)  downward movement along the supply curve for wheat. 
B)  upward movement along the supply curve for wheat. 
C)  rightward shift in the supply curve for wheat. 
D)  leftward shift in the supply curve for wheat. 
A)  downward movement along the supply curve for wheat. 
B)  upward movement along the supply curve for wheat. 
C)  rightward shift in the supply curve for wheat. 
D)  leftward shift in the supply curve for wheat.

Question 20

Other things being equal, an increase in the price of aspirin will decrease the demand for aspirin.

Accepted Answer

A) True 
 B)False

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents producer surplus.

Total producer surplus is measured by the total area under the equilibrium price and below the supply curve.

At the equilibrium price, deadweight loss is minimized.

According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price.

Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:

A decrease in quantity demanded is given by a(n):

Which of the following would increase the supply of laptop computers?

Which of the following will cause a movement along the supply curve?

Producer surplus measures the value between the actual selling price and the profit-maximization price.

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then:

Assume that oranges and peaches can both be grown on the same type of land, a decrease in the price of peaches, other things being equal, will cause a(n):

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

Exhibit 3-12 Supply and demand data Price Quantity Demanded Quantity Supplied \ 1.00 250 150 1.50 200 200 2.00 150 250 2.50 100 300 -?In Exhibit 3-12, which of the following occurs at a price of $1.00?

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

An increase in the demand for peanut butter, a normal good, can be caused by a(n):

Suppose seller X is willing to sell one good X for $5, a second good X for $10, a third for $16, a fourth for $25, and the market price is $20. What is seller X's producer surplus?

Suppose Gizmo Inc. is willing to sell one gizmo for $10, a second gizmo for $12, a third for $14, and a fourth for $20, and the market price is $20. What is Gizmo Inc.'s producer surplus?

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):

Other things being equal, an increase in the price of aspirin will decrease the demand for aspirin.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 3: Market Demand and Supply

Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents producer surplus.

Total producer surplus is measured by the total area under the equilibrium price and below the supply curve.

At the equilibrium price, deadweight loss is minimized.

​ According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price. ​

Assuming that automobiles are normal goods, a rise in consumer income, other things being equal, will cause:

A decrease in quantity demanded is given by a(n):

Which of the following would increase the supply of laptop computers?

Which of the following will cause a movement along the supply curve?

Producer surplus measures the value between the actual selling price and the profit-maximization price.

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then:

Assume that oranges and peaches can both be grown on the same type of land, a decrease in the price of peaches, other things being equal, will cause a(n):

Other things being equal, the effect of an increase in the price of Coca-Cola would cause a(n):

​Exhibit 3-12 Supply and demand data ​ Price Quantity Demanded Quantity Supplied \ 1.00 250 150 1.50 200 200 2.00 150 250 2.50 100 300 -?In Exhibit 3-12, which of the following occurs at a price of $1.00?

Assuming that generic brands are inferior goods, an increase in consumer income, other things being equal, will cause a(n):

An increase in the demand for peanut butter, a normal good, can be caused by a(n):

Suppose seller X is willing to sell one good X for $5, a second good X for $10, a third for $16, a fourth for $25, and the market price is $20. What is seller X's producer surplus?

Suppose Gizmo Inc. is willing to sell one gizmo for $10, a second gizmo for $12, a third for $14, and a fourth for $20, and the market price is $20. What is Gizmo Inc.'s producer surplus?

Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n):

Other things being equal, an increase in the price of aspirin will decrease the demand for aspirin.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

According to the law of supply, price and quantity supplied are inversely related, ceteris paribus.

Excess quantity demanded for a good creates pressure to push the price of that good down toward the equilibrium price.

Exhibit 3-12 Supply and demand data Price Quantity Demanded Quantity Supplied \ 1.00 250 150 1.50 200 200 2.00 150 250 2.50 100 300 -?In Exhibit 3-12, which of the following occurs at a price of $1.00?