Question 1

Deadweight loss is not the result of:

Accepted Answer

A)  an efficient market. 
B)  an inefficient market. 
C)  zero consumer surplus. 
D)  zero producer surplus. 
A)  an efficient market. 
B)  an inefficient market. 
C)  zero consumer surplus. 
D)  zero producer surplus.

Question 2

Substitute goods are goods that are:

Accepted Answer

A)  jointly consumed. 
B)  competing for consumer spending. 
C)  used late in the game. 
D)  inferior. 
E)  normal. 
A)  jointly consumed. 
B)  competing for consumer spending. 
C)  used late in the game. 
D)  inferior. 
E)  normal.

Question 3

A supply schedule shows the relationship between:

Accepted Answer

A)  demand and supply. 
B)  supply and income. 
C)  price and income. 
D)  quantity supplied and price. 
E)  income and quantity supplied. 
A)  demand and supply. 
B)  supply and income. 
C)  price and income. 
D)  quantity supplied and price. 
E)  income and quantity supplied.

Question 4

Consumers buy less of a good as its price increases because:

Accepted Answer

A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer. 
A)  production costs have risen. 
B)  substitute goods are now relatively cheaper. 
C)  the income of consumers has effectively risen. 
D)  the higher price will make the good more valuable to each consumer.

Question 5

At $30 each, Jack will buy 1 Blu-ray and at $25, he will purchase 2. If the price is $25, Jack's consumer surplus is:

Accepted Answer

A)  ​$5. 
B)  ​$10. 
C)  ​$15. 
D)  ​$20. 
A)  ​$5. 
B)  ​$10. 
C)  ​$15. 
D)  ​$20.

Question 6

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)  total surplus increases. 
B)  deadweight loss increases. 
C)  overproduction increases. 
D)  underproduction decreases. 
A)  total surplus increases. 
B)  deadweight loss increases. 
C)  overproduction increases. 
D)  underproduction decreases.

Question 7

Demand curves slope downward to the right.​

Accepted Answer

A) True 
 B)False

Question 8

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

Accepted Answer

A)  The number of sellers. 
B)  Resource prices. 
C)  Consumer income. 
D)  Prices of other goods that firms could produce. 
A)  The number of sellers. 
B)  Resource prices. 
C)  Consumer income. 
D)  Prices of other goods that firms could produce.

Question 10

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

Accepted Answer

A)  demand at various prices. 
B)  produce at various costs. 
C)  hold back from the market when competition is reduced. 
D)  provide at different prices. 
E)  demand at various costs. 
A)  demand at various prices. 
B)  produce at various costs. 
C)  hold back from the market when competition is reduced. 
D)  provide at different prices. 
E)  demand at various costs.

Question 11

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

Accepted Answer

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

Question 12

​
Exhibit 3-7 Demand and supply curves
​
​   ​
​
​
-In Exhibit 3-7, if price happened to currently be $25 in this market, a _______ would result, causing a _______ in price.​

Accepted Answer

A)  ​shortage; increase 
B)  ​shortage; decrease 
C)  ​surplus; increase 
D)  ​surplus; decrease 
E)  ​scarcity; stabilization 
A)  ​shortage; increase 
B)  ​shortage; decrease 
C)  ​surplus; increase 
D)  ​surplus; decrease 
E)  ​scarcity; stabilization

Question 13

A baby boom will have what immediate effect on the disposable diaper market?

Accepted Answer

A)  Supply decreases. 
B)  Supply increases. 
C)  Demand decreases. 
D)  Demand increases. 
E)  Supply and demand remains the same. 
A)  Supply decreases. 
B)  Supply increases. 
C)  Demand decreases. 
D)  Demand increases. 
E)  Supply and demand remains the same.

Question 14

​Exhibit 3-10 Demand and supply curves
​   ​
​
-In Exhibit 3-10, what do you expect to happen in this market at point C?

Accepted Answer

A)  Competition among demanders will drive the price down. 
B)  Competition among demanders will drive the price up. 
C)  Competition among suppliers will drive the price up. 
D)  Competition among suppliers will drive the price down. 
E)  ​The equilibrium price A is not attainable.
​ 
A)  Competition among demanders will drive the price down. 
B)  Competition among demanders will drive the price up. 
C)  Competition among suppliers will drive the price up. 
D)  Competition among suppliers will drive the price down. 
E)  ​The equilibrium price A is not attainable.
​

Question 15

Deadweight loss is the net loss of:

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  disequilibrium surplus. 
D)  both a and b 
A)  consumer surplus. 
B)  producer surplus. 
C)  disequilibrium surplus. 
D)  both a and b

Question 16

Assuming peaches are a normal good and consumer incomes rise, producer surplus in the peach market:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  equals the deadweight loss increase. 
A)  increases. 
B)  decreases. 
C)  remains unchanged. 
D)  equals the deadweight loss increase.

Question 17

Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:

Accepted Answer

A)  the price of the tickets must be very high or else people would not consider them valuable. 
B)  the price is set below the equilibrium level. 
C)  the Indiana basketball stadium is relatively small. 
D)  everyone who attends the game will enjoy it. 
A)  the price of the tickets must be very high or else people would not consider them valuable. 
B)  the price is set below the equilibrium level. 
C)  the Indiana basketball stadium is relatively small. 
D)  everyone who attends the game will enjoy it.

Question 18

​ The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 19

Demand curves are negatively sloped when people buy:

Accepted Answer

A)  less as the price decreases. 
B)  more as the price increases. 
C)  the same amount as the price changes. 
D)  more as the price decreases. 
E)  less as incomes decrease. 
A)  less as the price decreases. 
B)  more as the price increases. 
C)  the same amount as the price changes. 
D)  more as the price decreases. 
E)  less as incomes decrease.

Question 20

​Exhibit 3-14 Supply and demand curves  
-In Exhibit 3-14, assume that the market price of compact discs is $15 each. This price is:

Accepted Answer

A)  ​an equilibrium price. 
B)  ​not an equilibrium price because there is an excess quantity demanded at a price of $15. 
C)  ​an equilibrium price because suppliers can store inventories in their warehouses. 
D)  ​not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded. 
A)  ​an equilibrium price. 
B)  ​not an equilibrium price because there is an excess quantity demanded at a price of $15. 
C)  ​an equilibrium price because suppliers can store inventories in their warehouses. 
D)  ​not an equilibrium price because the quantity supplied of compact discs is greater than the quantity demanded.

Deadweight loss is not the result of:

Substitute goods are goods that are:

A supply schedule shows the relationship between:

Consumers buy less of a good as its price increases because:

At $30 each, Jack will buy 1 Blu-ray and at $25, he will purchase 2. If the price is $25, Jack's consumer surplus is:

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:

Demand curves slope downward to the right.

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7, if price happened to currently be $25 in this market, a _ would result, causing a _ in price.

A baby boom will have what immediate effect on the disposable diaper market?

Exhibit 3-10 Demand and supply curves -In Exhibit 3-10, what do you expect to happen in this market at point C?

Deadweight loss is the net loss of:

Assuming peaches are a normal good and consumer incomes rise, producer surplus in the peach market:

Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Demand curves are negatively sloped when people buy:

Exhibit 3-14 Supply and demand curves -In Exhibit 3-14, assume that the market price of compact discs is $15 each. This price is:

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

Deadweight loss is not the result of:

Substitute goods are goods that are:

A supply schedule shows the relationship between:

Consumers buy less of a good as its price increases because:

At $30 each, Jack will buy 1 Blu-ray and at $25, he will purchase 2. If the price is $25, Jack's consumer surplus is:

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:

Demand curves slope downward to the right.​

If renting videos is an inferior good, demand for this service will rise when consumer income falls.

Which of the following has a direct relationship rather than an inverse relationship with the supply curve?

The supply schedule shows the specific quantity of a good that suppliers are willing and able to:

Other things being equal, the effects of an increase in the price of crackers on the market for soup is represented by a(n):

​ Exhibit 3-7 Demand and supply curves ​ ​ ​ ​ ​ -In Exhibit 3-7, if price happened to currently be $25 in this market, a _______ would result, causing a _______ in price.​

A baby boom will have what immediate effect on the disposable diaper market?

​Exhibit 3-10 Demand and supply curves ​ ​ ​ -In Exhibit 3-10, what do you expect to happen in this market at point C?

Deadweight loss is the net loss of:

Assuming peaches are a normal good and consumer incomes rise, producer surplus in the peach market:

Tickets to the Indiana-Purdue basketball game are usually sold out in advance of game day. This suggests:

​ The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Demand curves are negatively sloped when people buy:

​Exhibit 3-14 Supply and demand curves -In Exhibit 3-14, assume that the market price of compact discs is $15 each. This price is:

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

Demand curves slope downward to the right.

Exhibit 3-7 Demand and supply curves -In Exhibit 3-7, if price happened to currently be $25 in this market, a _ would result, causing a _ in price.

Exhibit 3-10 Demand and supply curves -In Exhibit 3-10, what do you expect to happen in this market at point C?

The law of supply indicates that an increase in price will cause an increase in supply which is reflected graphically as a rightward shift of the supply curve.

Exhibit 3-14 Supply and demand curves -In Exhibit 3-14, assume that the market price of compact discs is $15 each. This price is: