Question 1

Ceteris paribus , an increase in the price of a good will cause the

Accepted Answer

A)  quantity demanded of the good to increase. 
B)  quantity supplied of the good to decrease. 
C)  producer surplus derived from the good to increase. 
D)  supply of the good to decrease. 
A)  quantity demanded of the good to increase. 
B)  quantity supplied of the good to decrease. 
C)  producer surplus derived from the good to increase. 
D)  supply of the good to decrease.

Question 2

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by

Accepted Answer

A)  an increase in the supply of the good. 
B)  an increase in the demand for the good. 
C)  a decrease in the demand for the good. 
D)  a decrease in the supply of the good. 
A)  an increase in the supply of the good. 
B)  an increase in the demand for the good. 
C)  a decrease in the demand for the good. 
D)  a decrease in the supply of the good.

Question 3

A hurricane damaged much of the housing in Miami. Shortly thereafter, the price of plywood rose significantly. The events suggest that

Accepted Answer

A)  a decrease in the supply of plywood caused the price of plywood to rise. 
B)  an increase in the supply of plywood caused the price of plywood to rise. 
C)  a decrease in the demand for plywood caused the price of plywood to rise. 
D)  an increase in the demand for plywood caused the price of plywood to rise. 
A)  a decrease in the supply of plywood caused the price of plywood to rise. 
B)  an increase in the supply of plywood caused the price of plywood to rise. 
C)  a decrease in the demand for plywood caused the price of plywood to rise. 
D)  an increase in the demand for plywood caused the price of plywood to rise.

Question 4

The efficiency of market organization is dependent on which of the following?

Accepted Answer

A)  well-regulated supply and demand 
B)  the availability of low cost resources and high tariffs on foreign imports 
C)  competitive markets and well-defined and enforced private property rights 
D)  Government establishment of the invisible hand principle and the inelasticity of certain goods. 
A)  well-regulated supply and demand 
B)  the availability of low cost resources and high tariffs on foreign imports 
C)  competitive markets and well-defined and enforced private property rights 
D)  Government establishment of the invisible hand principle and the inelasticity of certain goods.

Question 5

Suppose both the equilibrium price and quantity fall 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

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 7

Other things constant, which of the following would most likely cause the supply of garden hoses to decrease?

Accepted Answer

A)  an increase in the price of plastic used to make garden hoses 
B)  a technological advance that lowers the cost of producing garden hoses 
C)  the occurrence of a very dry year with little rain 
D)  a decrease in the price of grass seed 
A)  an increase in the price of plastic used to make garden hoses 
B)  a technological advance that lowers the cost of producing garden hoses 
C)  the occurrence of a very dry year with little rain 
D)  a decrease in the price of grass seed

Question 8

Figure 3-17  
Refer to Figure 3-17. Area C represents

Accepted Answer

A)  the decrease in consumer surplus that results from a downward-sloping demand curve. 
B)  consumer surplus to new consumers who enter the market when the price falls from P 2 to P 1. 
C)  the increase in producer surplus when quantity sold increases from Q 2 to Q 1. 
D)  the decrease in consumer surplus to each consumer in the market when the price increases from P 1 to P 2. 
A)  the decrease in consumer surplus that results from a downward-sloping demand curve. 
B)  consumer surplus to new consumers who enter the market when the price falls from P 2 to P 1. 
C)  the increase in producer surplus when quantity sold increases from Q 2 to Q 1. 
D)  the decrease in consumer surplus to each consumer in the market when the price increases from P 1 to P 2.

Question 9

Figure 3-16  
Refer to Figure 3-16. When the price falls from P 2 to P 1, producer surplus

Accepted Answer

A)  decreases by an amount equal to C. 
B)  decreases by an amount equal to A + B. 
C)  decreases by an amount equal to A + C. 
D)  increases by an amount equal to A + B. 
A)  decreases by an amount equal to C. 
B)  decreases by an amount equal to A + B. 
C)  decreases by an amount equal to A + C. 
D)  increases by an amount equal to A + B.

Question 10

Two goods are considered substitutes only if

Accepted Answer

A)  a decrease in the demand for one leads to a decrease in the supply of the other 
B)  an increase in the demand for one leads to a decrease in the supply of the other 
C)  an increase in the price of one leads to an increase in the demand for the other 
D)  a decrease in the price of one leads to an increase in the demand for the other 
E)  a decrease in the supply of one leads producers to switch to production of the other 
A)  a decrease in the demand for one leads to a decrease in the supply of the other 
B)  an increase in the demand for one leads to a decrease in the supply of the other 
C)  an increase in the price of one leads to an increase in the demand for the other 
D)  a decrease in the price of one leads to an increase in the demand for the other 
E)  a decrease in the supply of one leads producers to switch to production of the other

Question 11

Figure 3-17  
Refer to Figure 3-17. When the price is P 1, consumer surplus is

Accepted Answer

A)  A. 
B)  A + B. 
C)  A + B + C. 
D)  A + B + D. 
A)  A. 
B)  A + B. 
C)  A + B + C. 
D)  A + B + D.

Question 12

Figure 3-17  
Refer to Figure 3-17. When the price rises from P 1 to P 2, consumer surplus

Accepted Answer

A)  increases by an amount equal to A. 
B)  decreases by an amount equal to B + C. 
C)  increases by an amount equal to B + C. 
D)  decreases by an amount equal to C. 
A)  increases by an amount equal to A. 
B)  decreases by an amount equal to B + C. 
C)  increases by an amount equal to B + C. 
D)  decreases by an amount equal to C.

Question 13

When competition is present and property rights protected and enforced, market prices will

Accepted Answer

A)  discourage profit-seeking business firms from producing efficiently. 
B)  direct entrepreneurs toward production of goods that are inferior in quality. 
C)  encourage self-interested individuals to develop skills that are expected to be valuable in the future. 
D)  always decrease. 
A)  discourage profit-seeking business firms from producing efficiently. 
B)  direct entrepreneurs toward production of goods that are inferior in quality. 
C)  encourage self-interested individuals to develop skills that are expected to be valuable in the future. 
D)  always decrease.

Question 14

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 15

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 16

Noah drinks Dr. Pepper. He can buy as many cans of Dr. Pepper as he wishes at a price of $0.50 per can. On a particular day, he is willing to pay $0.95 for the first can, $0.80 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Noah is rational in deciding how many cans to buy. His consumer surplus is

Accepted Answer

A)  $0.50. 
B)  $0.85. 
C)  $1.05. 
D)  $1.20. 
A)  $0.50. 
B)  $0.85. 
C)  $1.05. 
D)  $1.20.

Question 17

If price rises, what happens to quantity supplied of a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Quantity supplied is constant, but supply increases. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Quantity supplied is constant, but supply increases.

Question 18

Patrice buys a new cell phone for $80. She receives consumer surplus of $35 on her purchase if her willingness to pay is

Accepted Answer

A)  $35. 
B)  $45. 
C)  $80. 
D)  $115. 
A)  $35. 
B)  $45. 
C)  $80. 
D)  $115.

Question 19

Graphically, the area that represents the difference between the maximum price consumers were willing to pay for a good and the market price is called

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  marginal cost. 
D)  triangular arbitrage. 
A)  consumer surplus. 
B)  producer surplus. 
C)  marginal cost. 
D)  triangular arbitrage.

Question 20

Which of the following would most likely cause the demand for inkjet printers to decrease?

Accepted Answer

A)  a decrease in consumer income 
B)  an increase in the price of laser printers, a substitute for inkjet printers 
C)  a decrease in the price of printer paper used with inkjet printers 
D)  a decrease in the price of inkjet printer cartridges used in inkjet printers 
A)  a decrease in consumer income 
B)  an increase in the price of laser printers, a substitute for inkjet printers 
C)  a decrease in the price of printer paper used with inkjet printers 
D)  a decrease in the price of inkjet printer cartridges used in inkjet printers

Ceteris paribus , an increase in the price of a good will cause the

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by

A hurricane damaged much of the housing in Miami. Shortly thereafter, the price of plywood rose significantly. The events suggest that

The efficiency of market organization is dependent on which of the following?

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

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?

Other things constant, which of the following would most likely cause the supply of garden hoses to decrease?

Figure 3-17 Refer to Figure 3-17. Area C represents

Figure 3-16 Refer to Figure 3-16. When the price falls from P ₂ to P ₁, producer surplus

Two goods are considered substitutes only if

Figure 3-17 Refer to Figure 3-17. When the price is P ₁, consumer surplus is

Figure 3-17 Refer to Figure 3-17. When the price rises from P ₁ to P ₂, consumer surplus

When competition is present and property rights protected and enforced, market prices will

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

Other things constant, an increase in consumer income will

If price rises, what happens to quantity supplied of a product?

Patrice buys a new cell phone for $80. She receives consumer surplus of $35 on her purchase if her willingness to pay is

Graphically, the area that represents the difference between the maximum price consumers were willing to pay for a good and the market price is called

Which of the following would most likely cause the demand for inkjet printers to decrease?

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

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Exam 3: Demand, Supply, and the Market Process

Ceteris paribus , an increase in the price of a good will cause the

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by

A hurricane damaged much of the housing in Miami. Shortly thereafter, the price of plywood rose significantly. The events suggest that

The efficiency of market organization is dependent on which of the following?

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

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?

Other things constant, which of the following would most likely cause the supply of garden hoses to decrease?

Figure 3-17 Refer to Figure 3-17. Area C represents

Figure 3-16 Refer to Figure 3-16. When the price falls from P 2 to P 1, producer surplus

Two goods are considered substitutes only if

Figure 3-17 Refer to Figure 3-17. When the price is P 1, consumer surplus is

Figure 3-17 Refer to Figure 3-17. When the price rises from P 1 to P 2, consumer surplus

When competition is present and property rights protected and enforced, market prices will

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

Other things constant, an increase in consumer income will

If price rises, what happens to quantity supplied of a product?

Patrice buys a new cell phone for $80. She receives consumer surplus of $35 on her purchase if her willingness to pay is

Graphically, the area that represents the difference between the maximum price consumers were willing to pay for a good and the market price is called

Which of the following would most likely cause the demand for inkjet printers to decrease?

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

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters

Figure 3-16 Refer to Figure 3-16. When the price falls from P ₂ to P ₁, producer surplus

Figure 3-17 Refer to Figure 3-17. When the price is P ₁, consumer surplus is

Figure 3-17 Refer to Figure 3-17. When the price rises from P ₁ to P ₂, consumer surplus