Question 1

Jamal buys a new jacket for $50. If his willingness to pay is ____, he receives consumer surplus of $15 on his purchase

Accepted Answer

A)  $15. 
B)  $35. 
C)  $50. 
D)  $65. 
A)  $15. 
B)  $35. 
C)  $50. 
D)  $65.

Question 2

A shortage occurs whenever

Accepted Answer

A)  quantity demanded exceeds quantity supplied at the equilibrium price. 
B)  price is less than equilibrium price. 
C)  quantity demanded is less than quantity supplied. 
D)  goods are scarce. 
E)  some of the people who need the product are not willing and able to buy it at the equilibrium price. 
A)  quantity demanded exceeds quantity supplied at the equilibrium price. 
B)  price is less than equilibrium price. 
C)  quantity demanded is less than quantity supplied. 
D)  goods are scarce. 
E)  some of the people who need the product are not willing and able to buy it at the equilibrium price.

Question 3

Use the figure below to answer the following question(s). Figure 3-13
  Refer to Figure 3-13. The market for margarine was initially in equilibrium at point e. Other things constant, an increase in the price of soybean oil, an important ingredient used to produce margarine, would likely move the equilibrium in this market toward point

Accepted Answer

A)  r. 
B)  s. 
C)  t. 
D)  u. 
A)  r. 
B)  s. 
C)  t. 
D)  u.

Question 4

Figure 3-15   Refer to Figure 3-15. Which area represents producer surplus when the price is P1?

Accepted Answer

A)  BCE 
B)  ACF 
C)  ABED 
D)  DEF 
A)  BCE 
B)  ACF 
C)  ABED 
D)  DEF

Question 5

When economists say the supply of a product has decreased, they mean that

Accepted Answer

A)  the supply curve has shifted to the left. 
B)  the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C)  producers are now willing to sell more of this product at each possible price. 
D)  the supply curve has shifted to the right. 
A)  the supply curve has shifted to the left. 
B)  the product price has decreased, and as a consequence, suppliers are producing less of the product. 
C)  producers are now willing to sell more of this product at each possible price. 
D)  the supply curve has shifted to the right.

Question 6

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be

Accepted Answer

A)  a decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  a decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  an increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  an increase in the supply of automobiles, which is a shift to the left of the supply curve. 
A)  a decrease in the supply of automobiles, which is a shift to the right of the supply curve. 
B)  a decrease in the supply of automobiles, which is a shift to the left of the supply curve. 
C)  an increase in the supply of automobiles, which is a shift to the right of the supply curve. 
D)  an increase in the supply of automobiles, which is a shift to the left of the supply curve.

Question 7

The height of the supply curve at a quantity of 100 represents the

Accepted Answer

A)  total value of all 100 units to consumers. 
B)  minimum price required to induce a producer to supply the hundredth unit. 
C)  equilibrium price of the good regardless of the position of the demand curve. 
D)  profit derived by producers from the sale of the hundredth unit. 
A)  total value of all 100 units to consumers. 
B)  minimum price required to induce a producer to supply the hundredth unit. 
C)  equilibrium price of the good regardless of the position of the demand curve. 
D)  profit derived by producers from the sale of the hundredth unit.

Question 8

If there is an increase in both the supply and demand for a good, which of the following will definitely occur?

Accepted Answer

A)  The price of the good will increase. 
B)  The price of the good will decrease. 
C)  The equilibrium quantity will increase. 
D)  The equilibrium quantity will decrease. 
A)  The price of the good will increase. 
B)  The price of the good will decrease. 
C)  The equilibrium quantity will increase. 
D)  The equilibrium quantity will decrease.

Question 9

When economists say the demand for a product has increased, they mean the

Accepted Answer

A)  demand curve has shifted to the right. 
B)  price of the product has fallen, and consequently, consumers are buying more of it. 
C)  cost of producing the product has risen. 
D)  amount of the product that consumers are willing to purchase at various prices has decreased. 
A)  demand curve has shifted to the right. 
B)  price of the product has fallen, and consequently, consumers are buying more of it. 
C)  cost of producing the product has risen. 
D)  amount of the product that consumers are willing to purchase at various prices has decreased.

Question 10

If price rises, 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 11

Figure 3-2   Given the supply and demand conditions illustrated in Figure 3-2, the equilibrium price of steak is

Accepted Answer

A)  $2 per pound. 
B)  $4 per pound. 
C)  $6 per pound. 
D)  $8 per pound. 
A)  $2 per pound. 
B)  $4 per pound. 
C)  $6 per pound. 
D)  $8 per pound.

Question 12

Table 3-2   Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

Accepted Answer

A)  $3,700. 
B)  $2,700. 
C)  $2,250. 
D)  $1,500. 
A)  $3,700. 
B)  $2,700. 
C)  $2,250. 
D)  $1,500.

Question 13

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 14

Figure 3-23   Refer to Figure 3-23. The movement from point A to point B on the graph would be caused by

Accepted Answer

A)  an increase in price. 
B)  a decrease in price. 
C)  a decrease in the price of a substitute good. 
D)  an increase in income. 
A)  an increase in price. 
B)  a decrease in price. 
C)  a decrease in the price of a substitute good. 
D)  an increase in income.

Question 15

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

Accepted Answer

A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  the demand for Y is elastic, but the demand for Z is inelastic. 
A)  Y and Z are complements. 
B)  Y and Z are substitutes. 
C)  Y and Z are unrelated. 
D)  the demand for Y is elastic, but the demand for Z is inelastic.

Question 16

Figure 3-22         Refer to Figure 3-22. Which of the four graphs illustrates an increase in quantity supplied?

Accepted Answer

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

Question 17

Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?

Accepted Answer

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

Question 18

Table 3-2   Refer to Table 3-2. If the price is $1,000,

Accepted Answer

A)  Denise is a willing supplier. 
B)  Catherine is a willing supplier. 
C)  Dale's producer surplus is $500. 
D)  All of the above are correct. 
A)  Denise is a willing supplier. 
B)  Catherine is a willing supplier. 
C)  Dale's producer surplus is $500. 
D)  All of the above are correct.

Question 19

Use the figure below to answer the following question(s). Figure 3-3
  In Figure 3-3, if the initial demand for margarine were D1, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as

Accepted Answer

A)  a shift in the demand curve to D2. 
B)  a shift in the demand curve to D3. 
C)  a movement downward to the right along the original demand curve D1. 
D)  none of the above. 
A)  a shift in the demand curve to D2. 
B)  a shift in the demand curve to D3. 
C)  a movement downward to the right along the original demand curve D1. 
D)  none of the above.

Question 20

Which of the following events would decrease producer surplus?

Accepted Answer

A)  Sellers' costs stay the same and the price of the good increases. 
B)  Sellers' costs increase and the price of the good stays the same. 
C)  Sellers' costs decrease and the price of the good increases. 
D)  All of the above are correct. 
A)  Sellers' costs stay the same and the price of the good increases. 
B)  Sellers' costs increase and the price of the good stays the same. 
C)  Sellers' costs decrease and the price of the good increases. 
D)  All of the above are correct.

Jamal buys a new jacket for $50. If his willingness to pay is ____, he receives consumer surplus of $15 on his purchase

A shortage occurs whenever

Figure 3-15 Refer to Figure 3-15. Which area represents producer surplus when the price is P₁?

When economists say the supply of a product has decreased, they mean that

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be

The height of the supply curve at a quantity of 100 represents the

If there is an increase in both the supply and demand for a good, which of the following will definitely occur?

When economists say the demand for a product has increased, they mean the

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

Figure 3-2 Given the supply and demand conditions illustrated in Figure 3-2, the equilibrium price of steak is

Table 3-2 Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

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?

Figure 3-23 Refer to Figure 3-23. The movement from point A to point B on the graph would be caused by

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

Figure 3-22 Refer to Figure 3-22. Which of the four graphs illustrates an increase in quantity supplied?

Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?

Table 3-2 Refer to Table 3-2. If the price is $1,000,

Use the figure below to answer the following question(s). Figure 3-3 In Figure 3-3, if the initial demand for margarine were D₁, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as

Which of the following events would decrease producer surplus?

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

Jamal buys a new jacket for $50. If his willingness to pay is ____, he receives consumer surplus of $15 on his purchase

A shortage occurs whenever

Figure 3-15 Refer to Figure 3-15. Which area represents producer surplus when the price is P1?

When economists say the supply of a product has decreased, they mean that

If the United Auto Workers union can obtain a substantial wage increase for auto workers, there will be

The height of the supply curve at a quantity of 100 represents the

If there is an increase in both the supply and demand for a good, which of the following will definitely occur?

When economists say the demand for a product has increased, they mean the

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

Figure 3-2 Given the supply and demand conditions illustrated in Figure 3-2, the equilibrium price of steak is

Table 3-2 Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

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?

Figure 3-23 Refer to Figure 3-23. The movement from point A to point B on the graph would be caused by

If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that

Figure 3-22 Refer to Figure 3-22. Which of the four graphs illustrates an increase in quantity supplied?

Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?

Table 3-2 Refer to Table 3-2. If the price is $1,000,

Use the figure below to answer the following question(s). Figure 3-3 In Figure 3-3, if the initial demand for margarine were D1, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as

Which of the following events would decrease producer surplus?

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

Figure 3-15 Refer to Figure 3-15. Which area represents producer surplus when the price is P₁?

Use the figure below to answer the following question(s). Figure 3-3 In Figure 3-3, if the initial demand for margarine were D₁, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as