Question 1

A decrease in the expected future price of a good will cause the current demand for the good to

Accepted Answer

A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve. 
A)  decrease, which is a shift to the left of the demand curve. 
B)  decrease, which is a shift to the right of the demand curve. 
C)  increase, which is a shift to the left of the demand curve. 
D)  increase, which is a shift to the right of the demand curve.

Question 2

Table 3-1   Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

Accepted Answer

A)  $−10. 
B)  $−6. 
C)  $20. 
D)  $30. 
A)  $−10. 
B)  $−6. 
C)  $20. 
D)  $30.

Question 3

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

Accepted Answer

A)  It would shift the supply curve to the right. 
B)  It would shift the supply curve to the left. 
C)  It would shift the demand curve to the left. 
D)  It would shift the demand curve to the right. 
A)  It would shift the supply curve to the right. 
B)  It would shift the supply curve to the left. 
C)  It would shift the demand curve to the left. 
D)  It would shift the demand curve to the right.

Question 4

Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?

Accepted Answer

A)  an increase in the price of crude oil, a key ingredient required for the production of gasoline 
B)  the introduction of a miracle carburetor that substantially improves the gas mileage of automobiles 
C)  a recession that substantially reduces the income of households 
D)  an increase in the popularity and use of Sport Utility Vehicles that consume a lot of gasoline per mile driven 
A)  an increase in the price of crude oil, a key ingredient required for the production of gasoline 
B)  the introduction of a miracle carburetor that substantially improves the gas mileage of automobiles 
C)  a recession that substantially reduces the income of households 
D)  an increase in the popularity and use of Sport Utility Vehicles that consume a lot of gasoline per mile driven

Question 5

Sebastian drinks Mountain Dew. He can buy as many cans of Mountain Dew 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 Sebastian 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 6

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase if the demand for computers was relatively inelastic, but decrease if the demand for computers was relatively elastic. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  increase if the demand for computers was relatively inelastic, but decrease if the demand for computers was relatively elastic.

Question 7

Saccharin and aspartame are both low-calorie substitutes for sugar. If saccharin is found to cause cancer,

Accepted Answer

A)  the price of aspartame will increase. 
B)  the price of sugar will decrease. 
C)  the price of saccharin will increase. 
D)  the demand curves for aspartame and sugar will shift leftward. 
E)  aspartame and sugar will be complements. 
A)  the price of aspartame will increase. 
B)  the price of sugar will decrease. 
C)  the price of saccharin will increase. 
D)  the demand curves for aspartame and sugar will shift leftward. 
E)  aspartame and sugar will be complements.

Question 8

Which of the following would reduce the price of basketballs and increase the quantity sold?

Accepted Answer

A)  An increase in the demand for basketballs. 
B)  A decrease in the demand for basketballs. 
C)  A decrease in the supply of basketballs. 
D)  An increase in the supply of basketballs. 
A)  An increase in the demand for basketballs. 
B)  A decrease in the demand for basketballs. 
C)  A decrease in the supply of basketballs. 
D)  An increase in the supply of basketballs.

Question 9

A decrease in supply will cause

Accepted Answer

A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in quantity demanded. 
D)  a decrease in quantity demanded. 
E)  a decrease in equilibrium price. 
A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in quantity demanded. 
D)  a decrease in quantity demanded. 
E)  a decrease in equilibrium price.

Question 10

Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?

Accepted Answer

A)  If the price of black beans rose and the consumption of rice remained the same, they would be substitutes. 
B)  If the price of black beans rose and the consumption of rice increased, they would be substitutes. 
C)  If the price of black beans rose and the consumption of rice decreased, they would be substitutes. 
D)  If the price of black beans rose and the consumption of both goods remained the same, they would be complements. 
A)  If the price of black beans rose and the consumption of rice remained the same, they would be substitutes. 
B)  If the price of black beans rose and the consumption of rice increased, they would be substitutes. 
C)  If the price of black beans rose and the consumption of rice decreased, they would be substitutes. 
D)  If the price of black beans rose and the consumption of both goods remained the same, they would be complements.

Question 11

Use the table below to choose the correct answer. The table is a schedule of the supply and demand for ground hamburger meat (both given in thousands of pounds per month).   The equilibrium market price of ground hamburger meat would be

Accepted Answer

A)  $1 per pound. 
B)  $2 per pound. 
C)  $2.50 per pound. 
D)  $3 per pound. 
A)  $1 per pound. 
B)  $2 per pound. 
C)  $2.50 per pound. 
D)  $3 per pound.

Question 12

Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?

Accepted Answer

A)  Both price and quantity will increase. 
B)  Both price and quantity will decrease. 
C)  Price will increase and quantity decrease. 
D)  Price will decrease and quantity increase. 
E)  Nothing. 
A)  Both price and quantity will increase. 
B)  Both price and quantity will decrease. 
C)  Price will increase and quantity decrease. 
D)  Price will decrease and quantity increase. 
E)  Nothing.

Question 13

Figure 3-22         Refer to Figure 3-22. Which of the four graphs illustrates a decrease in quantity demanded?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 14

Which of the following will lead to a decrease in supply of a good?

Accepted Answer

A)  an increase in the price of the good 
B)  an increase in consumer incomes 
C)  an increase in the price of an important resource used to produce the good 
D)  a technological advance that lowers the cost of producing the good 
A)  an increase in the price of the good 
B)  an increase in consumer incomes 
C)  an increase in the price of an important resource used to produce the good 
D)  a technological advance that lowers the cost of producing the good

Question 15

The opportunity cost of production differs from an accounting definition of a firm's costs because it includes

Accepted Answer

A)  expenditures the firm undertakes for research and development. 
B)  the opportunity cost of assets and financial resources owned by the firm. 
C)  the direct monetary cost of purchasing resources. 
D)  the firm's revenue as a cost. 
A)  expenditures the firm undertakes for research and development. 
B)  the opportunity cost of assets and financial resources owned by the firm. 
C)  the direct monetary cost of purchasing resources. 
D)  the firm's revenue as a cost.

Question 16

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 17

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Accepted Answer

A)  demand curve for grapes to shift to the right, resulting in a higher equilibrium price for grapes and a reduction in the quantity consumed. 
B)  demand curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and an increase in the quantity consumed. 
C)  supply curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and a decrease in the quantity consumed. 
D)  supply curve for grapes to shift to the left, resulting in a higher equilibrium price for grapes and a decrease in the quantity consumed. 
A)  demand curve for grapes to shift to the right, resulting in a higher equilibrium price for grapes and a reduction in the quantity consumed. 
B)  demand curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and an increase in the quantity consumed. 
C)  supply curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and a decrease in the quantity consumed. 
D)  supply curve for grapes to shift to the left, resulting in a higher equilibrium price for grapes and a decrease in the quantity consumed.

Question 18

Corn and soybeans are alternatives that could be grown by most farmers. If government subsidies for ethanol lead to higher corn prices, this will

Accepted Answer

A)  increase the supply of corn. 
B)  increase the supply of soybeans. 
C)  decrease the supply of soybeans. 
D)  decrease the supply of corn. 
E)  have no effect on the supplies of corn and soybeans. 
A)  increase the supply of corn. 
B)  increase the supply of soybeans. 
C)  decrease the supply of soybeans. 
D)  decrease the supply of corn. 
E)  have no effect on the supplies of corn and soybeans.

Question 19

Which of the following would most likely increase the price of automobiles?

Accepted Answer

A)  a decrease in the price of steel used to produce automobiles 
B)  an increase in the price of gasoline 
C)  a decrease in consumer income 
D)  the United Auto Workers union obtaining a substantial wage increase for auto workers 
A)  a decrease in the price of steel used to produce automobiles 
B)  an increase in the price of gasoline 
C)  a decrease in consumer income 
D)  the United Auto Workers union obtaining a substantial wage increase for auto workers

Question 20

Suppose demand decreases and supply increases. Which of the following will happen?

Accepted Answer

A)  Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. 
B)  Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase. 
C)  Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. 
D)  Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. 
E)  The change in equilibrium price and quantity cannot be determined. 
A)  Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease. 
B)  Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase. 
C)  Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase. 
D)  Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease. 
E)  The change in equilibrium price and quantity cannot be determined.

A decrease in the expected future price of a good will cause the current demand for the good to

Table 3-1 Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to

Saccharin and aspartame are both low-calorie substitutes for sugar. If saccharin is found to cause cancer,

Which of the following would reduce the price of basketballs and increase the quantity sold?

A decrease in supply will cause

Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?

Use the table below to choose the correct answer. The table is a schedule of the supply and demand for ground hamburger meat (both given in thousands of pounds per month). The equilibrium market price of ground hamburger meat would be

Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?

Figure 3-22 Refer to Figure 3-22. Which of the four graphs illustrates a decrease in quantity demanded?

Which of the following will lead to a decrease in supply of a good?

The opportunity cost of production differs from an accounting definition of a firm's costs because it includes

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

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Corn and soybeans are alternatives that could be grown by most farmers. If government subsidies for ethanol lead to higher corn prices, this will

Which of the following would most likely increase the price of automobiles?

Suppose demand decreases and supply increases. Which of the following will happen?

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

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters

Exam 3: Demand, Supply, and the Market Process

A decrease in the expected future price of a good will cause the current demand for the good to

Table 3-1 Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

In the orange market, what impact would an increase in the price of oil that orange growers burn to keep oranges from freezing in the winter have on the market?

Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to

Saccharin and aspartame are both low-calorie substitutes for sugar. If saccharin is found to cause cancer,

Which of the following would reduce the price of basketballs and increase the quantity sold?

A decrease in supply will cause

Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?

Use the table below to choose the correct answer. The table is a schedule of the supply and demand for ground hamburger meat (both given in thousands of pounds per month). The equilibrium market price of ground hamburger meat would be

Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?

Figure 3-22 Refer to Figure 3-22. Which of the four graphs illustrates a decrease in quantity demanded?

Which of the following will lead to a decrease in supply of a good?

The opportunity cost of production differs from an accounting definition of a firm's costs because it includes

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

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Corn and soybeans are alternatives that could be grown by most farmers. If government subsidies for ethanol lead to higher corn prices, this will

Which of the following would most likely increase the price of automobiles?

Suppose demand decreases and supply increases. Which of the following will happen?

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

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters