Question 1

Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect the:

Accepted Answer

A)  demand for honey to increase. 
B)  demand for honey to decrease. 
C)  quantity demanded of honey to decrease. 
D)  price of honey to decrease. 
E)  quantity demanded of honey to increase. 
A)  demand for honey to increase. 
B)  demand for honey to decrease. 
C)  quantity demanded of honey to decrease. 
D)  price of honey to decrease. 
E)  quantity demanded of honey to increase.

Question 2

According to the law of supply:

Accepted Answer

A)  producers are willing to supply larger amounts of a good as its price increases. 
B)  a direct relationship exists between the price of a good and the amount buyers choose to buy. 
C)  an inverse relationship exists between the price of a good and the amount buyers wish to buy. 
D)  an inverse relationship exists between the price of a good and the amount producers supply. 
A)  producers are willing to supply larger amounts of a good as its price increases. 
B)  a direct relationship exists between the price of a good and the amount buyers choose to buy. 
C)  an inverse relationship exists between the price of a good and the amount buyers wish to buy. 
D)  an inverse relationship exists between the price of a good and the amount producers supply.

Question 3

Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4. The consumer surplus is:

Accepted Answer

A)  $16. 
B)  $6. 
C)  ​$1. 
D)  ​$23. 
A)  $16. 
B)  $6. 
C)  ​$1. 
D)  ​$23.

Question 4

​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, at a price of $2.00 the market will experience a (an): ?

Accepted Answer

A)  ? shortage of 150 units. 
B)  ? surplus of 100 units. 
C)  ? shortage of 100 units. 
D)  ? equilibrium. 
A)  ? shortage of 150 units. 
B)  ? surplus of 100 units. 
C)  ? shortage of 100 units. 
D)  ? equilibrium.

Question 5

How will an increase in lumber prices influence the home construction market?

Accepted Answer

A)  The demand for newly constructed homes will increase. 
B)  The demand for newly constructed homes will decrease. 
C)  The supply of newly constructed homes will increase. 
D)  The supply of newly constructed homes will decrease. 
A)  The demand for newly constructed homes will increase. 
B)  The demand for newly constructed homes will decrease. 
C)  The supply of newly constructed homes will increase. 
D)  The supply of newly constructed homes will decrease.

Question 6

A change in supply cannot be caused by a change in:

Accepted Answer

A)  resource prices. 
B)  technology. 
C)  prices of other goods. 
D)  the price of the good itself. 
E)  the number of suppliers. 
A)  resource prices. 
B)  technology. 
C)  prices of other goods. 
D)  the price of the good itself. 
E)  the number of suppliers.

Question 7

Which of the following is not true concerning consumer surplus?

Accepted Answer

A)  It is qraphically the area under the demand curve and above the market price. 
B)  It does not exist in equilibrium. 
C)  A leftward shift of the supply curve will decrease consumer surplus. 
D)  A rightward shift of the supply curve will increase consumer surplus. 
A)  It is qraphically the area under the demand curve and above the market price. 
B)  It does not exist in equilibrium. 
C)  A leftward shift of the supply curve will decrease consumer surplus. 
D)  A rightward shift of the supply curve will increase consumer surplus.

Question 8

​Exhibit 3-9 Demand and supply curves
​   ​
-In Exhibit 3-9, if the market price is $50,

Accepted Answer

A)  ​this market will be in equilibrium. 
B)  a shortage of 27 units would result. 
C)  ​the price is below the equilibrium price. 
D)  ​a surplus of 26 units would result. 
E)  ​a surplus of 27 units would result. 
A)  ​this market will be in equilibrium. 
B)  a shortage of 27 units would result. 
C)  ​the price is below the equilibrium price. 
D)  ​a surplus of 26 units would result. 
E)  ​a surplus of 27 units would result.

Question 9

Which of the following will not shift the demand curve for grapefruit?

Accepted Answer

A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  An announcement that eating lots of grapefruit causes skin problems. 
D)  A newspaper story reporting that the preference for oranges has skyrocketed. 
E)  An announcement that grapefruit will definitely cost more next week. 
A)  An announcement that eating a grapefruit before every meal will induce weight loss. 
B)  A technical development that allows machines to replace the workers who harvest grapefruit. 
C)  An announcement that eating lots of grapefruit causes skin problems. 
D)  A newspaper story reporting that the preference for oranges has skyrocketed. 
E)  An announcement that grapefruit will definitely cost more next week.

Question 10

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Accepted Answer

A)  not change; only quantity demanded will change. 
B)  increase, because the goods are substitutes. 
C)  decrease, because the goods are substitutes. 
D)  decrease, because the goods are complements. 
E)  increase, because the goods are complements. 
A)  not change; only quantity demanded will change. 
B)  increase, because the goods are substitutes. 
C)  decrease, because the goods are substitutes. 
D)  decrease, because the goods are complements. 
E)  increase, because the goods are complements.

Question 11

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the quantity supplied is 6 million pounds of ground beef per year, the result is:

Accepted Answer

A)  deadweight loss. 
B)  inefficiency. 
C)  overproduction. 
D)  all of the above are true. 
E)  none of the above are true. 
A)  deadweight loss. 
B)  inefficiency. 
C)  overproduction. 
D)  all of the above are true. 
E)  none of the above are true.

Question 12

Which of the following would shift the demand curve for autos to the right?

Accepted Answer

A)  A fall in the price of autos. 
B)  A fall in the price of auto insurance. 
C)  A fall in consumers' incomes. 
D)  A fall in the price of steel. 
A)  A fall in the price of autos. 
B)  A fall in the price of auto insurance. 
C)  A fall in consumers' incomes. 
D)  A fall in the price of steel.

Question 13

The law of demand refers to the:

Accepted Answer

A)  inverse relationship between the price of a good and the willingness of consumers to buy it. 
B)  price increase that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity offered for sale. 
D)  increase in the quantity of a good available when its price increases. 
A)  inverse relationship between the price of a good and the willingness of consumers to buy it. 
B)  price increase that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity offered for sale. 
D)  increase in the quantity of a good available when its price increases.

Question 14

Total surplus equals:

Accepted Answer

A)  consumer surplus + producer surplus − deadweight loss. 
B)  consumer surplus − producer surplus − deadweight loss. 
C)  consumer surplus − producer surplus + deadweight loss. 
D)  consumer surplus + producer surplus. 
A)  consumer surplus + producer surplus − deadweight loss. 
B)  consumer surplus − producer surplus − deadweight loss. 
C)  consumer surplus − producer surplus + deadweight loss. 
D)  consumer surplus + producer surplus.

Question 15

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

Accepted Answer

A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good. 
A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  Y is a normal good and Z is an inferior good.

Question 16

The horizontal summation of all individual demands at different given prices results in the:

Accepted Answer

A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve. 
A)  market supply curve. 
B)  individual supply curve. 
C)  individual demand curve. 
D)  equilibrium demand and supply curves. 
E)  market demand curve.

Question 17

Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is:

Accepted Answer

A)  ​consumer surplus. 
B)  ​producer surplus. 
C)  ​ marginal cost. 
D)  ​deadweight loss. ​ 
A)  ​consumer surplus. 
B)  ​producer surplus. 
C)  ​ marginal cost. 
D)  ​deadweight loss. ​

Question 18

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

Accepted Answer

A)  DFEBC 
B)  AEBC 
C)  DEA 
D)  BEG 
A)  DFEBC 
B)  AEBC 
C)  DEA 
D)  BEG

Question 19

A decrease in supply means that:

Accepted Answer

A)  demand will increase by the same amount. 
B)  the quantity demanded will increase. 
C)  there is a movement down and to the left along the supply curve. 
D)  the quantity supplied at every price will decrease. 
E)  the supply curve will shift out and to the right. 
A)  demand will increase by the same amount. 
B)  the quantity demanded will increase. 
C)  there is a movement down and to the left along the supply curve. 
D)  the quantity supplied at every price will decrease. 
E)  the supply curve will shift out and to the right.

Question 20

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss  
-As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then area ____ appears.

Accepted Answer

A)  ABEFD 
B)  ABEC 
C)  EGF 
D)  BEF 
A)  ABEFD 
B)  ABEC 
C)  EGF 
D)  BEF

Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect the:

According to the law of supply:

Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4. The consumer surplus is:

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, at a price of $2.00 the market will experience a (an): ?

How will an increase in lumber prices influence the home construction market?

A change in supply cannot be caused by a change in:

Which of the following is not true concerning consumer surplus?

Exhibit 3-9 Demand and supply curves -In Exhibit 3-9, if the market price is $50,

Which of the following will not shift the demand curve for grapefruit?

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the quantity supplied is 6 million pounds of ground beef per year, the result is:

Which of the following would shift the demand curve for autos to the right?

The law of demand refers to the:

Total surplus equals:

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

The horizontal summation of all individual demands at different given prices results in the:

Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is:

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

A decrease in supply means that:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then area ____ appears.

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

Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect the:

According to the law of supply:

Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4. The consumer surplus is:

​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, at a price of $2.00 the market will experience a (an): ?

How will an increase in lumber prices influence the home construction market?

A change in supply cannot be caused by a change in:

Which of the following is not true concerning consumer surplus?

​Exhibit 3-9 Demand and supply curves ​ ​ -In Exhibit 3-9, if the market price is $50,

Which of the following will not shift the demand curve for grapefruit?

If the price of potato chips increases, other things constant, demand for potato-chip dip will:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the quantity supplied is 6 million pounds of ground beef per year, the result is:

Which of the following would shift the demand curve for autos to the right?

The law of demand refers to the:

Total surplus equals:

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that:

The horizontal summation of all individual demands at different given prices results in the:

Using supply and demand curve analysis, the triangular area below the equilibrium price and above the supply curve is:

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

A decrease in supply means that:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss -As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then area ____ appears.

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

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, at a price of $2.00 the market will experience a (an): ?

Exhibit 3-9 Demand and supply curves -In Exhibit 3-9, if the market price is $50,