Question 1

-Refer to the table above.Which producer exhibits the greatest increase in quantity supplied for a $1.00 per bushel increase in the price of soybeans?

Accepted Answer

A)  The small Iowa farm 
B)  The average Iowa farm 
C)  The large Iowa farm 
D)  Both the average and large Iowa farms 
A)  The small Iowa farm 
B)  The average Iowa farm 
C)  The large Iowa farm 
D)  Both the average and large Iowa farms

Question 2

Which of the following examples best describes the Law of Demand?

Accepted Answer

A)  When John's income doubles, his telephone bill also doubles. 
B)  When the price of bread doubles, John's consumption of bread halves. 
C)  When the price of watches increases, a local manufacturer starts offering more watches for sale. 
D)  When a new anti-tobacco commercial is released, the consumption of tobacco products decreases sharply. 
A)  When John's income doubles, his telephone bill also doubles. 
B)  When the price of bread doubles, John's consumption of bread halves. 
C)  When the price of watches increases, a local manufacturer starts offering more watches for sale. 
D)  When a new anti-tobacco commercial is released, the consumption of tobacco products decreases sharply.

Question 3

Which of the following statements is true of the concept of willingness to pay?

Accepted Answer

A)  The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity. 
B)  The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases. 
C)  The willingness to pay for a commodity increases linearly as the consumption of the commodity increases. 
D)  If a consumer is consuming 10 units of a commodity and she is ready to pay $2 for the eleventh unit, her willingness to pay for the eleventh unit is $2. 
A)  The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity. 
B)  The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases. 
C)  The willingness to pay for a commodity increases linearly as the consumption of the commodity increases. 
D)  If a consumer is consuming 10 units of a commodity and she is ready to pay $2 for the eleventh unit, her willingness to pay for the eleventh unit is $2.

Question 4

Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal).If the consumers' willingness to pay for the hundredth unit and the seller's willingness to accept for the 175th unit are both $5.00,then ________.

Accepted Answer

A)  the equilibrium price is $5.00 
B)  the equilibrium quantity is 100 units 
C)  there is an excess supply of 75 units at the price of $5.00 
D)  there is an excess demand of 75 units at the price of $5.00 
A)  the equilibrium price is $5.00 
B)  the equilibrium quantity is 100 units 
C)  there is an excess supply of 75 units at the price of $5.00 
D)  there is an excess demand of 75 units at the price of $5.00

Question 5

All else being equal,an increase in the price of Nike Air Jordan XXXI Fly Low shoes will cause an ________.

Accepted Answer

A)  increase in quantity supplied 
B)  increase in supply 
C)  increase in quantity demanded 
D)  increase in demand 
A)  increase in quantity supplied 
B)  increase in supply 
C)  increase in quantity demanded 
D)  increase in demand

Question 6

Scenario: A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information.
  
-Refer to the scenario above.Which consumer has the highest willingness to pay for Gatorade?

Accepted Answer

A)  Consumer A 
B)  Consumer B 
C)  Consumer C 
D)  Consumers A and B 
A)  Consumer A 
B)  Consumer B 
C)  Consumer C 
D)  Consumers A and B

Question 7

If all sellers and all buyers face the same price during an exchange,it is referred to as the ________.

Accepted Answer

A)  mark-up price 
B)  market price 
C)  discounted price 
D)  cost price 
A)  mark-up price 
B)  market price 
C)  discounted price 
D)  cost price

Question 8

The equilibrium quantity in a perfectly competitive market is determined at the point of ________.

Accepted Answer

A)  intersection of the demand and supply curves 
B)  tangency between the demand and supply curves 
C)  intersection of the supply curve and the quantity axis 
D)  intersection of the demand curve and the quantity axis 
A)  intersection of the demand and supply curves 
B)  tangency between the demand and supply curves 
C)  intersection of the supply curve and the quantity axis 
D)  intersection of the demand curve and the quantity axis

Question 9

Willingness to accept is ________.

Accepted Answer

A)  always lower than the marginal cost of production 
B)  always higher than the marginal cost of production 
C)  the lowest price that a producer is willing to receive to sell an extra unit of a good 
D)  the highest price that a producer is willing to receive to sell an extra unit of a good 
A)  always lower than the marginal cost of production 
B)  always higher than the marginal cost of production 
C)  the lowest price that a producer is willing to receive to sell an extra unit of a good 
D)  the highest price that a producer is willing to receive to sell an extra unit of a good

Question 10

Which of the following is likely to cause the supply curve for steel window frames to shift to the right?

Accepted Answer

A)  A decrease in the cost of production of steel due to a new subsidy 
B)  A fall in the production of steel window frames due to factory lockouts 
C)  A rise in the market price of steel window frames due to an increase in demand 
D)  An increase in the wages of labor working in steel firms due to demands by trade unions 
A)  A decrease in the cost of production of steel due to a new subsidy 
B)  A fall in the production of steel window frames due to factory lockouts 
C)  A rise in the market price of steel window frames due to an increase in demand 
D)  An increase in the wages of labor working in steel firms due to demands by trade unions

Question 11

A fall in the price of flour,used in making cakes,is likely to ________ of cakes.

Accepted Answer

A)  increase the supply 
B)  decrease the supply 
C)  increase the quantity supplied 
D)  decrease the quantity supplied 
A)  increase the supply 
B)  decrease the supply 
C)  increase the quantity supplied 
D)  decrease the quantity supplied

Question 12

The following table shows the market demand schedule and supply schedule for notebooks.
  
-Refer to the table above.What is the surplus in the market when the price of a notebook is $9?

Accepted Answer

A)  16 units 
B)  20 units 
C)  24 units 
D)  26 units 
A)  16 units 
B)  20 units 
C)  24 units 
D)  26 units

Question 13

Refer to the scenario above.You can conclude that commercial grade emerald prices ________.

Accepted Answer

A)  increased 
B)  remained the same 
C)  decreased 
D)  was uncertain 
A)  increased 
B)  remained the same 
C)  decreased 
D)  was uncertain

Question 14

How are the following events likely to affect the market supply of rice in an economy?
a)A fall in the wage rate of farm labor
b)An increase in the productivity of farm capital due to better technology
c)An increase in the use of agricultural land for non-agricultural purposes

Accepted Answer

a)A fall in the wage rate of farm labor

Question 15

Scenario: A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information.
  
-Refer to the scenario above.What is the change in the quantity demanded in the market if the price of Gatorade falls from $4 per 20-ounce bottle to $3 per 20-ounce bottle?

Accepted Answer

A)  No increase 
B)  Increase of 1 bottle 
C)  Increase of 2 bottles 
D)  Increase of 4 bottles 
A)  No increase 
B)  Increase of 1 bottle 
C)  Increase of 2 bottles 
D)  Increase of 4 bottles

Question 16

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below.
  
-Refer to the figure above.MagnusPetro is willing to sell the ________ for ________.

Accepted Answer

A)  1 millionth liter; at most 10.00 euros 
B)  2.5 millionth liter; at most 10.00 euros 
C)  1 millionth liter; at least 10.00 euros 
D)  2.5 millionth liter; at least 10.00 euros 
A)  1 millionth liter; at most 10.00 euros 
B)  2.5 millionth liter; at most 10.00 euros 
C)  1 millionth liter; at least 10.00 euros 
D)  2.5 millionth liter; at least 10.00 euros

Question 17

The Law of Demand states that ________.

Accepted Answer

A)  the demand for a commodity is directly related to consumers' income, all other things remaining constant 
B)  the demand for a commodity always equals the supply of the commodity 
C)  the quantity demanded of a commodity varies inversely with the price of the commodity, all other things remaining constant 
D)  the quantity demanded of a commodity is the same for all consumers in a perfectly competitive market 
A)  the demand for a commodity is directly related to consumers' income, all other things remaining constant 
B)  the demand for a commodity always equals the supply of the commodity 
C)  the quantity demanded of a commodity varies inversely with the price of the commodity, all other things remaining constant 
D)  the quantity demanded of a commodity is the same for all consumers in a perfectly competitive market

Question 18

Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left,and the shift in demand is greater than the shift in supply.Then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Accepted Answer

A)  a lower price and quantity 
B)  a higher price and a lower quantity 
C)  the same price and a lower quantity 
D)  a lower price and a higher quantity 
A)  a lower price and quantity 
B)  a higher price and a lower quantity 
C)  the same price and a lower quantity 
D)  a lower price and a higher quantity

Question 19

The following figure shows the demand and supply curves for USB flash drives at different price levels. D is the demand curve, and S₁ is the initial supply curve.
  
-Refer to the figure above.When the supply curve of flash drives is S₂ and the demand curve of flash drives is D,what is the surplus in the market when the price is $7?

Accepted Answer

A)  0 units 
B)  10 units 
C)  20 units 
D)  40 units 
A)  0 units 
B)  10 units 
C)  20 units 
D)  40 units

Question 20

Other things remaining the same,a rightward shift in the supply curve will lead to a(n)________.

Accepted Answer

A)  increase in the equilibrium price and the equilibrium quantity 
B)  decrease in the equilibrium price and the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  increase in the equilibrium price and a decrease in the equilibrium quantity 
A)  increase in the equilibrium price and the equilibrium quantity 
B)  decrease in the equilibrium price and the equilibrium quantity 
C)  decrease in the equilibrium price and an increase in the equilibrium quantity 
D)  increase in the equilibrium price and a decrease in the equilibrium quantity

-Refer to the table above.Which producer exhibits the greatest increase in quantity supplied for a $1.00 per bushel increase in the price of soybeans?

Which of the following examples best describes the Law of Demand?

Which of the following statements is true of the concept of willingness to pay?

Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal).If the consumers' willingness to pay for the hundredth unit and the seller's willingness to accept for the 175th unit are both $5.00,then ________.

All else being equal,an increase in the price of Nike Air Jordan XXXI Fly Low shoes will cause an ________.

Scenario: A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information. -Refer to the scenario above.Which consumer has the highest willingness to pay for Gatorade?

If all sellers and all buyers face the same price during an exchange,it is referred to as the ________.

The equilibrium quantity in a perfectly competitive market is determined at the point of ________.

Willingness to accept is ________.

Which of the following is likely to cause the supply curve for steel window frames to shift to the right?

A fall in the price of flour,used in making cakes,is likely to ________ of cakes.

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the surplus in the market when the price of a notebook is $9?

Refer to the scenario above.You can conclude that commercial grade emerald prices ________.

How are the following events likely to affect the market supply of rice in an economy? a)A fall in the wage rate of farm labor b)An increase in the productivity of farm capital due to better technology c)An increase in the use of agricultural land for non-agricultural purposes

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below. -Refer to the figure above.MagnusPetro is willing to sell the for .

The Law of Demand states that ________.

Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left,and the shift in demand is greater than the shift in supply.Then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Other things remaining the same,a rightward shift in the supply curve will lead to a(n)________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

Exam 4: Demand, Supply, and Equilibrium

-Refer to the table above.Which producer exhibits the greatest increase in quantity supplied for a $1.00 per bushel increase in the price of soybeans?

Which of the following examples best describes the Law of Demand?

Which of the following statements is true of the concept of willingness to pay?

Consider a market where the demand curve is downward sloping and the supply curve is upward sloping (so they are neither vertical nor horizontal).If the consumers' willingness to pay for the hundredth unit and the seller's willingness to accept for the 175th unit are both $5.00,then ________.

All else being equal,an increase in the price of Nike Air Jordan XXXI Fly Low shoes will cause an ________.

Scenario: A market researcher asks three consumers, A, B, and C, about their willingness to pay for different quantities of a 20-ounce bottle of Lemon-Lime Gatorade. She collects the following information. -Refer to the scenario above.Which consumer has the highest willingness to pay for Gatorade?

If all sellers and all buyers face the same price during an exchange,it is referred to as the ________.

The equilibrium quantity in a perfectly competitive market is determined at the point of ________.

Willingness to accept is ________.

Which of the following is likely to cause the supply curve for steel window frames to shift to the right?

A fall in the price of flour,used in making cakes,is likely to ________ of cakes.

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the surplus in the market when the price of a notebook is $9?

Refer to the scenario above.You can conclude that commercial grade emerald prices ________.

How are the following events likely to affect the market supply of rice in an economy? a)A fall in the wage rate of farm labor b)An increase in the productivity of farm capital due to better technology c)An increase in the use of agricultural land for non-agricultural purposes

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below. -Refer to the figure above.MagnusPetro is willing to sell the ________ for ________.

The Law of Demand states that ________.

Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left,and the shift in demand is greater than the shift in supply.Then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Other things remaining the same,a rightward shift in the supply curve will lead to a(n)________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

The figure below shows the supply curves for gasoline for two oil companies (MaxOil and MagnusPetro). It would be useful to find the equations of the two supply curves to answer the questions below. -Refer to the figure above.MagnusPetro is willing to sell the for .