Question 1

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

Accepted Answer

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

Question 2

To be economically successful, the entrepreneur must

Accepted Answer

A)  combine resources in a manner that increases their value. 
B)  produce a good that consumers value less than the resources used to produce it. 
C)  use only personal financial capital to avoid the interest payments that would have to be paid if the money is borrowed from the bank. 
D)  transform or rearrange resources to maximize the entrepreneur's cost of production. 
A)  combine resources in a manner that increases their value. 
B)  produce a good that consumers value less than the resources used to produce it. 
C)  use only personal financial capital to avoid the interest payments that would have to be paid if the money is borrowed from the bank. 
D)  transform or rearrange resources to maximize the entrepreneur's cost of production.

Question 3

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

Accepted Answer

This is a version of the old economics j

Question 4

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 5

All things constant, a decrease in bus, train, and airplane fares will

Accepted Answer

A)  shift the demand curve for automobiles to the left. 
B)  cause a movement along the demand curve for automobiles. 
C)  shift the demand curve for automobiles to the right. 
D)  have no impact on the demand curve for automobiles. 
A)  shift the demand curve for automobiles to the left. 
B)  cause a movement along the demand curve for automobiles. 
C)  shift the demand curve for automobiles to the right. 
D)  have no impact on the demand curve for automobiles.

Question 6

In economics, the demand for a good refers to the amount of the good people

Accepted Answer

A)  would like to have if the good were free. 
B)  are willing to buy at various prices. 
C)  need to achieve a minimum standard of living. 
D)  will buy at alternative income levels. 
A)  would like to have if the good were free. 
B)  are willing to buy at various prices. 
C)  need to achieve a minimum standard of living. 
D)  will buy at alternative income levels.

Question 7

Market prices are

Accepted Answer

A)  conveyors of information. 
B)  determined by the interactions of supply and demand in voluntary exchange. 
C)  indicators of the relative scarcity of resources and products. 
D)  all of the above. 
A)  conveyors of information. 
B)  determined by the interactions of supply and demand in voluntary exchange. 
C)  indicators of the relative scarcity of resources and products. 
D)  all of the above.

Question 8

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?

Accepted Answer

A)  The demand for beef would increase, increasing beef prices. 
B)  The demand for beef would decrease, decreasing beef prices. 
C)  The supply of beef would increase, decreasing beef prices. 
D)  The supply of beef would decrease, increasing beef prices. 
A)  The demand for beef would increase, increasing beef prices. 
B)  The demand for beef would decrease, decreasing beef prices. 
C)  The supply of beef would increase, decreasing beef prices. 
D)  The supply of beef would decrease, increasing beef prices.

Question 9

If price falls, what happens to the demand for a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain--economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain--economic theory has no answer to this question.

Question 10

Figure 3-19  
Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

Accepted Answer

A)  AC. 
B)  CE. 
C)  BC. 
D)  CD. 
A)  AC. 
B)  CE. 
C)  BC. 
D)  CD.

Question 11

Use the figure below to answer the following question(s).
Figure 3-8
 
In Figure 3-8, if the initial demand and supply for soybeans were D 1 and S 1, how would a decrease in the cost of producing soybeans affect the market for soybeans?

Accepted Answer

A)  Demand would increase to D 2, price would increase to P 2, and the quantity would increase to S . 
B)  Supply would increase to S 2, price would decrease to P 0, and the quantity would increase to S . 
C)  Both demand and supply would increase so the price would remain at P 1, but the quantity would increase to T . 
D)  None of the above would occur. 
A)  Demand would increase to D 2, price would increase to P 2, and the quantity would increase to S . 
B)  Supply would increase to S 2, price would decrease to P 0, and the quantity would increase to S . 
C)  Both demand and supply would increase so the price would remain at P 1, but the quantity would increase to T . 
D)  None of the above would occur.

Question 12

Figure 3-7  
In Figure 3-7, suppose D 1 and S 1 indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D 1 to D 2 in the market for ice cream?

Accepted Answer

A)  a decrease in the price of sugar, an ingredient used to produce ice cream 
B)  an increase in the price of frozen yogurt, a substitute for ice cream 
C)  abnormally cold weather that decreased consumer desire for ice cream 
D)  an increase in the price of milk, an ingredient used to produce ice cream 
A)  a decrease in the price of sugar, an ingredient used to produce ice cream 
B)  an increase in the price of frozen yogurt, a substitute for ice cream 
C)  abnormally cold weather that decreased consumer desire for ice cream 
D)  an increase in the price of milk, an ingredient used to produce ice cream

Question 13

Other things being equal, the effect of an increase in the price of orange juice would be illustrated by

Accepted Answer

A)  an upward movement along the demand curve for orange juice. 
B)  a leftward shift in the demand curve for orange juice. 
C)  a downward movement along the demand curve for orange juice. 
D)  a rightward shift in the demand curve for orange juice. 
A)  an upward movement along the demand curve for orange juice. 
B)  a leftward shift in the demand curve for orange juice. 
C)  a downward movement along the demand curve for orange juice. 
D)  a rightward shift in the demand curve for orange juice.

Question 14

In the textbook market, a rise in consumer income, other things being equal, will cause

Accepted Answer

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

Question 15

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly. Economic theory would suggest that the observed data could best be explained as

Accepted Answer

A)  an increase in supply, while demand remained relatively constant. 
B)  a decrease in both supply and demand. 
C)  an increase in demand, while supply remained relatively constant. 
D)  a sharp increase in both supply and demand. 
A)  an increase in supply, while demand remained relatively constant. 
B)  a decrease in both supply and demand. 
C)  an increase in demand, while supply remained relatively constant. 
D)  a sharp increase in both supply and demand.

Question 16

Which of the following is most likely to lead to an increase in the rental price of apartments near your campus?

Accepted Answer

A)  lower property taxes on apartment buildings 
B)  an unexpected increase in enrollment at your college 
C)  lower prices for the bricks used in the construction of apartments 
D)  the building of a new large dormitory on the college campus 
A)  lower property taxes on apartment buildings 
B)  an unexpected increase in enrollment at your college 
C)  lower prices for the bricks used in the construction of apartments 
D)  the building of a new large dormitory on the college campus

Question 17

Between 1994 and 2004, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

Accepted Answer

A)  an increase in consumer income between 1994 and 2004 
B)  a reduction in the price of residential phone service, a substitute for cellular phone service 
C)  an increase in the wages of workers in the cellular phone industry 
D)  technological improvements that reduced the cost of supplying cellular phone service 
A)  an increase in consumer income between 1994 and 2004 
B)  a reduction in the price of residential phone service, a substitute for cellular phone service 
C)  an increase in the wages of workers in the cellular phone industry 
D)  technological improvements that reduced the cost of supplying cellular phone service

Question 18

Consumer surplus is the area on the graph

Accepted Answer

A)  above the supply curve and below the demand curve. 
B)  below the demand curve and above the market price. 
C)  that represents the gains that producers receive when they sell a product. 
D)  that reflect the opportunity cost of producing the a good. 
A)  above the supply curve and below the demand curve. 
B)  below the demand curve and above the market price. 
C)  that represents the gains that producers receive when they sell a product. 
D)  that reflect the opportunity cost of producing the a good.

Question 19

Figure 3-19  
Refer to Figure 3-19. If the government mandated a price increase from Pe to a higher price, then

Accepted Answer

A)  total surplus would decrease. 
B)  consumer surplus would increase. 
C)  total surplus would increase, since producer surplus would increase. 
D)  total surplus would remain unchanged. 
A)  total surplus would decrease. 
B)  consumer surplus would increase. 
C)  total surplus would increase, since producer surplus would increase. 
D)  total surplus would remain unchanged.

Question 20

Figure 3-21  
Refer to Figure 3-21. At the quantity Q 2,

Accepted Answer

A)  the value to buyers and the cost to sellers are both P 2. 
B)  the value to buyers is P 2 and the cost to sellers is P 3. 
C)  the value to buyers and the cost to sellers are both P 3. 
D)  the value to buyers is P 3 and the cost to sellers is P 2. 
A)  the value to buyers and the cost to sellers are both P 2. 
B)  the value to buyers is P 2 and the cost to sellers is P 3. 
C)  the value to buyers and the cost to sellers are both P 3. 
D)  the value to buyers is P 3 and the cost to sellers is P 2.

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

To be economically successful, the entrepreneur must

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

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

All things constant, a decrease in bus, train, and airplane fares will

In economics, the demand for a good refers to the amount of the good people

Market prices are

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?

If price falls, what happens to the demand for a product?

Figure 3-19 Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

Use the figure below to answer the following question(s). Figure 3-8 In Figure 3-8, if the initial demand and supply for soybeans were D ₁ and S ₁, how would a decrease in the cost of producing soybeans affect the market for soybeans?

Figure 3-7 In Figure 3-7, suppose D ₁ and S ₁ indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D ₁ to D ₂ in the market for ice cream?

Other things being equal, the effect of an increase in the price of orange juice would be illustrated by

In the textbook market, a rise in consumer income, other things being equal, will cause

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly. Economic theory would suggest that the observed data could best be explained as

Which of the following is most likely to lead to an increase in the rental price of apartments near your campus?

Between 1994 and 2004, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

Consumer surplus is the area on the graph

Figure 3-19 Refer to Figure 3-19. If the government mandated a price increase from P_e to a higher price, then

Figure 3-21 Refer to Figure 3-21. At the quantity Q ₂,

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

If a major hurricane were to destroy the sugarcane crop in Louisiana, there would be

To be economically successful, the entrepreneur must

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

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

All things constant, a decrease in bus, train, and airplane fares will

In economics, the demand for a good refers to the amount of the good people

Market prices are

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?

If price falls, what happens to the demand for a product?

Figure 3-19 Refer to Figure 3-19. Buyers who value this good less than price are represented by which line segment?

Use the figure below to answer the following question(s). Figure 3-8 In Figure 3-8, if the initial demand and supply for soybeans were D 1 and S 1, how would a decrease in the cost of producing soybeans affect the market for soybeans?

Figure 3-7 In Figure 3-7, suppose D 1 and S 1 indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D 1 to D 2 in the market for ice cream?

Other things being equal, the effect of an increase in the price of orange juice would be illustrated by

In the textbook market, a rise in consumer income, other things being equal, will cause

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly. Economic theory would suggest that the observed data could best be explained as

Which of the following is most likely to lead to an increase in the rental price of apartments near your campus?

Between 1994 and 2004, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

Consumer surplus is the area on the graph

Figure 3-19 Refer to Figure 3-19. If the government mandated a price increase from Pe to a higher price, then

Figure 3-21 Refer to Figure 3-21. At the quantity Q 2,

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

Use the figure below to answer the following question(s). Figure 3-8 In Figure 3-8, if the initial demand and supply for soybeans were D ₁ and S ₁, how would a decrease in the cost of producing soybeans affect the market for soybeans?

Figure 3-7 In Figure 3-7, suppose D ₁ and S ₁ indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D ₁ to D ₂ in the market for ice cream?

Figure 3-19 Refer to Figure 3-19. If the government mandated a price increase from P_e to a higher price, then

Figure 3-21 Refer to Figure 3-21. At the quantity Q ₂,