Question 1

Exhibit 3-3
   Good Y
​
​
-Refer to Exhibit 3-3. A movement from point W to point Z would have been the result of

Accepted Answer

A) a reduction in the price of good Y. 
B) an increase in the number of buyers in the area where good Y is being sold. 
C) a decrease in business taxes paid by the producers of good Y. 
D) a decrease in the number of buyers in the area where good Y is being sold. 
E) an increase in the price of good Y. 
A) a reduction in the price of good Y. 
B) an increase in the number of buyers in the area where good Y is being sold. 
C) a decrease in business taxes paid by the producers of good Y. 
D) a decrease in the number of buyers in the area where good Y is being sold. 
E) an increase in the price of good Y.

Question 2

The government imposes a $2.50 per-unit tax on the production of good X. As a result the

Accepted Answer

A) supply curve for good X shifts leftward and the price of good X rises. 
B) quantity supplied of good X falls and the price of good X rises. 
C) demand curve for good X shifts leftward and the price of good X falls. 
D) supply curve for good X shifts rightward and the price of good X falls. 
E) supply curve for good X shifts leftward and the price of good X falls. 
A) supply curve for good X shifts leftward and the price of good X rises. 
B) quantity supplied of good X falls and the price of good X rises. 
C) demand curve for good X shifts leftward and the price of good X falls. 
D) supply curve for good X shifts rightward and the price of good X falls. 
E) supply curve for good X shifts leftward and the price of good X falls.

Question 3

On a supply-and-demand diagram, equilibrium is found

Accepted Answer

A) where the supply curve intercepts the vertical axis. 
B) where the demand curve intercepts the horizontal axis. 
C) where the demand and supply curves intersect. 
D) at every point on either curve 
A) where the supply curve intercepts the vertical axis. 
B) where the demand curve intercepts the horizontal axis. 
C) where the demand and supply curves intersect. 
D) at every point on either curve

Question 4

Exhibit 3-5
  
-Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point Z and the new equilibrium is now at point V, this change may have been caused by

Accepted Answer

A) a decrease in consumers' income (assuming that this is an inferior good) and a simultaneous decline in technology in the production of this good. 
B) an increase in consumers' income (assuming that this is an inferior good) and a simultaneous improvement in technology in the production of this good. 
C) a decrease in consumers' income (assuming that this is an inferior good) and no change in supply. 
D) an increase in consumers' income (assuming that this is an inferior good) and no change in supply. 
A) a decrease in consumers' income (assuming that this is an inferior good) and a simultaneous decline in technology in the production of this good. 
B) an increase in consumers' income (assuming that this is an inferior good) and a simultaneous improvement in technology in the production of this good. 
C) a decrease in consumers' income (assuming that this is an inferior good) and no change in supply. 
D) an increase in consumers' income (assuming that this is an inferior good) and no change in supply.

Question 5

Exhibit 3-3
   Good Y
​
​
-If the supply of and demand for a product decrease at the same time, then equilibrium

Accepted Answer

A) quantity and equilibrium price must both decline. 
B) quantity must decline, but equilibrium price may either rise, fall, or remain unchanged. 
C) price must fall, but equilibrium quantity may either rise, fall, or remain unchanged. 
D) quantity must fall and equilibrium price must rise. 
A) quantity and equilibrium price must both decline. 
B) quantity must decline, but equilibrium price may either rise, fall, or remain unchanged. 
C) price must fall, but equilibrium quantity may either rise, fall, or remain unchanged. 
D) quantity must fall and equilibrium price must rise.

Question 6

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 7

Exhibit 3-7
  
-Refer to Exhibit 3-7. If S1 is the relevant supply curve, a decline in technology in the production of good X causes

Accepted Answer

A) the supply of good X to shift from S1 to S2 
B) the supply of good X to shift from S1 to S3. 
C) a movement along S1 perhaps from point A to point B. 
D) a movement along S1 perhaps from point A to point C. 
E) no change in the supply of good X. 
A) the supply of good X to shift from S1 to S2 
B) the supply of good X to shift from S1 to S3. 
C) a movement along S1 perhaps from point A to point B. 
D) a movement along S1 perhaps from point A to point C. 
E) no change in the supply of good X.

Question 8

Resource X is necessary to the production of good Y. If the price of resource X falls,

Accepted Answer

A) the supply curve of Y shifts leftward. 
B) the supply curve of Y shifts rightward. 
C) the supply curve of Y is unaffected. 
D) there is a movement down the supply curve of Y. 
E) there is a movement up the supply curve of Y. 
A) the supply curve of Y shifts leftward. 
B) the supply curve of Y shifts rightward. 
C) the supply curve of Y is unaffected. 
D) there is a movement down the supply curve of Y. 
E) there is a movement up the supply curve of Y.

Question 9

Explain what it means to say that "the market" feeds Cleveland. Give an example using a specific food item to help support your answer.

Accepted Answer

People in Cleveland have a demand for fo

Question 10

One reads the following in a newspaper: "Today the president and Congress agreed to impose new restrictive quotas on Japanese cars coming into the country." As a result, an economist would predict that the

Accepted Answer

A) supply of cars in the country will remain the same and the (average) price of cars will fall. 
B) supply of cars in the country will fall and the (average) price of cars will rise. 
C) supply of cars in the country will rise and the (average) price of cars will fall. 
D) demand for cars in the country will fall and the (average) price of cars will rise. 
E) demand for cars in the country will rise and the (average) price of cars will rise. 
A) supply of cars in the country will remain the same and the (average) price of cars will fall. 
B) supply of cars in the country will fall and the (average) price of cars will rise. 
C) supply of cars in the country will rise and the (average) price of cars will fall. 
D) demand for cars in the country will fall and the (average) price of cars will rise. 
E) demand for cars in the country will rise and the (average) price of cars will rise.

Question 11

The terms scarcity and shortage are synonyms.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements best represents the law of supply?

Accepted Answer

A) Price and quantity supplied are inversely related. 
B) Price and quantity supplied are directly related. 
C) Price and quantity supplied are inversely related, ceteris paribus. 
D) Price and quantity supplied are directly related, ceteris paribus. 
E) Price and supply are directly related, ceteris paribus. 
A) Price and quantity supplied are inversely related. 
B) Price and quantity supplied are directly related. 
C) Price and quantity supplied are inversely related, ceteris paribus. 
D) Price and quantity supplied are directly related, ceteris paribus. 
E) Price and supply are directly related, ceteris paribus.

Question 13

Exhibit 3-8
  
-Refer to Exhibit 3-8. A shortage exists at any price below

Accepted Answer

A) $5.00. 
B) $4.50. 
C) $4.00. 
D) $3.50. 
E) $3.00. 
A) $5.00. 
B) $4.50. 
C) $4.00. 
D) $3.50. 
E) $3.00.

Question 14

One can determine producers' surplus if the minimum selling price and the _____________ are known.

Accepted Answer

A) price received 
B) price paid 
C) tax paid 
D) tax received 
E) a and c 
A) price received 
B) price paid 
C) tax paid 
D) tax received 
E) a and c

Question 15

If a market is in disequilibrium, economists would predict that the product's price would __________ to reach equilibrium when the quantity demanded is __________ than the quantity supplied.

Accepted Answer

A) rise; greater 
B) fall; less 
C) fall; greater 
D) rise; less 
E) a and b 
A) rise; greater 
B) fall; less 
C) fall; greater 
D) rise; less 
E) a and b

Question 16

Which of the following statements is false?

Accepted Answer

A) A change in the price of good X will usually change the quantity supplied of good X, ceteris paribus. 
B) A change in the number of sellers of a good can change the supply of that good. 
C) Price and quantity supplied are directly related. 
D) A vertical supply curve represents a direct relationship between price and quantity supplied. 
A) A change in the price of good X will usually change the quantity supplied of good X, ceteris paribus. 
B) A change in the number of sellers of a good can change the supply of that good. 
C) Price and quantity supplied are directly related. 
D) A vertical supply curve represents a direct relationship between price and quantity supplied.

Question 17

Suppose that for a given good demand decreases and supply increases at the same time. If demand decreases by a greater amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good.

Accepted Answer

A) rises; rises 
B) rises; falls 
C) falls; rises 
D) falls; falls 
A) rises; rises 
B) rises; falls 
C) falls; rises 
D) falls; falls

Question 18

In the market for good X there are three buyers, Adam, Bill, and Carolyn. Adam buys 3 units of good X at $4, Bill buys 7 units of good X at $4, and Carolyn buys 8 units of good X at $4. One point on the market demand curve for good X consists of a price of _____________ and a quantity demanded of __________________ units.

Accepted Answer

A) $4; 10 
B) $4; 18 
C) $4; 15 
D) $5; 8 
E) none of the above 
A) $4; 10 
B) $4; 18 
C) $4; 15 
D) $5; 8 
E) none of the above

Question 19

Exhibit 3-16
  
-Refer to Exhibit 3-16. Which of the following is false?

Accepted Answer

A) Graph (1): There is a shortage of this good when the price is equal to P3. 
B) Graph (2): As supply increases, equilibrium quantity remains constant. 
C) Graph (3): As demand increases, equilibrium price remains constant. 
D) Graph (4): As supply changes, equilibrium price stays the same. 
A) Graph (1): There is a shortage of this good when the price is equal to P3. 
B) Graph (2): As supply increases, equilibrium quantity remains constant. 
C) Graph (3): As demand increases, equilibrium price remains constant. 
D) Graph (4): As supply changes, equilibrium price stays the same.

Question 20

Exhibit 3-2
   Good X
​
​
-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 preferences for good X and an increase in wage rates (a relevant resource price.) 
D) There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.) 
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 preferences for good X and an increase in wage rates (a relevant resource price.) 
D) There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.)

Exam 3: Supply and Demand Theory

Exhibit 3-3 Good Y ​ ​ -Refer to Exhibit 3-3. A movement from point W to point Z would have been the result of

The government imposes a $2.50 per-unit tax on the production of good X. As a result the

On a supply-and-demand diagram, equilibrium is found

Exhibit 3-5 -Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point Z and the new equilibrium is now at point V, this change may have been caused by

Exhibit 3-3 Good Y ​ ​ -If the supply of and demand for a product decrease at the same time, then equilibrium

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.

Exhibit 3-7 -Refer to Exhibit 3-7. If S1 is the relevant supply curve, a decline in technology in the production of good X causes

Resource X is necessary to the production of good Y. If the price of resource X falls,

Explain what it means to say that "the market" feeds Cleveland. Give an example using a specific food item to help support your answer.

One reads the following in a newspaper: "Today the president and Congress agreed to impose new restrictive quotas on Japanese cars coming into the country." As a result, an economist would predict that the

The terms scarcity and shortage are synonyms.

Which of the following statements best represents the law of supply?

Exhibit 3-8 -Refer to Exhibit 3-8. A shortage exists at any price below

One can determine producers' surplus if the minimum selling price and the _____________ are known.

If a market is in disequilibrium, economists would predict that the product's price would __________ to reach equilibrium when the quantity demanded is __________ than the quantity supplied.

Which of the following statements is false?

Suppose that for a given good demand decreases and supply increases at the same time. If demand decreases by a greater amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good.

Exhibit 3-16 -Refer to Exhibit 3-16. Which of the following is false?

Exhibit 3-2 Good X ​ ​ -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)?

What Economics Is About

Production Possibilities Frontier Framework

Prices Free Controlled and Relative

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II 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

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice 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

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 3-3 Good Y -Refer to Exhibit 3-3. A movement from point W to point Z would have been the result of

Exhibit 3-3 Good Y -If the supply of and demand for a product decrease at the same time, then equilibrium

Exhibit 3-7 -Refer to Exhibit 3-7. If S₁ is the relevant supply curve, a decline in technology in the production of good X causes

If a market is in disequilibrium, economists would predict that the product's price would to reach equilibrium when the quantity demanded is than the quantity supplied.

Suppose that for a given good demand decreases and supply increases at the same time. If demand decreases by a greater amount than supply increases, then equilibrium price and equilibrium quantity for that good.

Exhibit 3-2 Good X -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)?