Question 1

Which of the following is likely to lead to an increase in the quantity supplied of steel?

Accepted Answer

A)  A rise in the market price of steel 
B)  An expected increase in the demand for steel in the future 
C)  A fall in the wage rate of labor employed in the steel industry 
D)  An increase in the productivity of capital due to technological innovation 
A)  A rise in the market price of steel 
B)  An expected increase in the demand for steel in the future 
C)  A fall in the wage rate of labor employed in the steel industry 
D)  An increase in the productivity of capital due to technological innovation

Question 2

The automobile market in the United States is often said to be highly competitive.But it is not perfectly competitive.What makes this market not perfectly competitive?

Accepted Answer

A)  Different car companies make different vehicles with different features. 
B)  An individual car buyer can dictate what price he or she pays for a vehicle. 
C)  More than three major car companies exist in this market. 
D)  An individual seller can dictate what price a consumer pays for a vehicle. 
A)  Different car companies make different vehicles with different features. 
B)  An individual car buyer can dictate what price he or she pays for a vehicle. 
C)  More than three major car companies exist in this market. 
D)  An individual seller can dictate what price a consumer pays for a vehicle.

Question 3

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.The total demand curve has the vertical intercept at ________ and its slope changes at ________.

Accepted Answer

A)  5.00 euros; 10.00 euros 
B)  5.00 euros; 7.00 euros 
C)  2.00 euros; 5.00 euros 
D)  2.00 euros; 7.00 euros 
A)  5.00 euros; 10.00 euros 
B)  5.00 euros; 7.00 euros 
C)  2.00 euros; 5.00 euros 
D)  2.00 euros; 7.00 euros

Question 4

In a perfectly competitive market,________.

Accepted Answer

A)  all exchanges take place involuntarily 
B)  there is only one seller and many buyers 
C)  all sellers sell an identical good or a service 
D)  there is no provision for the protection of property rights 
A)  all exchanges take place involuntarily 
B)  there is only one seller and many buyers 
C)  all sellers sell an identical good or a service 
D)  there is no provision for the protection of property rights

Question 5

Scenario: Suppose Major League Baseball (MLB) is considering expansion to a U.S. city that currently does not have a MLB franchise. The league has compiled the following information on five cities viewed as the top contenders for an expansion franchise:
   
MLB decides Charlotte is the most attractive candidate to receive an expansion franchise and is contemplating how demographic and economic information is likely to affect demand to attend MLB games in Charlotte.
-Refer to the scenario above.Suppose Charlotte's NBA franchise,the Charlotte Hornets,decides to relocate to Seattle,Washington.How will the city's loss of this professional sports franchise affect demand for MLB game attendance in Charlotte?

Accepted Answer

A)  Cause an increase in only quantity demanded 
B)  Cause an increase in demand 
C)  Cause a decrease in only quantity demanded 
D)  Cause a decrease in demand 
A)  Cause an increase in only quantity demanded 
B)  Cause an increase in demand 
C)  Cause a decrease in only quantity demanded 
D)  Cause a decrease in demand

Question 6

Suppose that,when you arrive at the sale site for $50 Apple laptops (described in the text)at 1:45 A.M.,you find more than 2,000 people already waiting for the site to open.You turn around and go home to get some sleep.Later you buy an Apple laptop,the same model as the $50 one,for $1,070.This indicates that ________.

Accepted Answer

A)  more than fifty people in the crowd were physically stronger than you 
B)  you are willing to pay at most $1,070 for the laptop 
C)  your opportunity cost of waiting at the site (and pushing and shoving) is at most $1,020 
D)  your opportunity cost of waiting at the site (and pushing and shoving) is at least $1,020 
A)  more than fifty people in the crowd were physically stronger than you 
B)  you are willing to pay at most $1,070 for the laptop 
C)  your opportunity cost of waiting at the site (and pushing and shoving) is at most $1,020 
D)  your opportunity cost of waiting at the site (and pushing and shoving) is at least $1,020

Question 7

The numbers in the table below characterize the market for raccoon skins in Minnesota during the 2010-2011 trapping season. The demand schedule that prevailed in November and December of 2010 is denoted by "Original Quantity Demanded," and the demand schedule that prevailed from late January onward is denoted by "Quantity Demanded-Late January."
  
-Refer to the table above.The original equilibrium price is ________ per skin and the original equilibrium quantity is ________ skins.

Accepted Answer

A)  $22; 360 
B)  $20; 300 
C)  $16; 500 
D)  $14; 180 
A)  $22; 360 
B)  $20; 300 
C)  $16; 500 
D)  $14; 180

Question 8

Why do economists study perfectly competitive markets even though few,if any,markets in the real world are perfectly competitive?

Accepted Answer

A)  Because insights we gain from studying the perfectly competitive market are directly applicable to real markets, even though they are not perfectly competitive. 
B)  Because the behavior of buyers and sellers can be studied theoretically only in the perfectly competitive market model. 
C)  Because the perfectly competitive market is a good approximation to many markets in the real world and helps us understand how real markets work. 
D)  Because the perfectly competitive market is the most relevant model for actual government economic policies. 
A)  Because insights we gain from studying the perfectly competitive market are directly applicable to real markets, even though they are not perfectly competitive. 
B)  Because the behavior of buyers and sellers can be studied theoretically only in the perfectly competitive market model. 
C)  Because the perfectly competitive market is a good approximation to many markets in the real world and helps us understand how real markets work. 
D)  Because the perfectly competitive market is the most relevant model for actual government economic policies.

Question 9

Why is the competitive equilibrium price often referred to as the market clearing price?

Accepted Answer

The competitive equilibrium price is det

Question 10

What will happen to the equilibrium price and quantity of cars if there is an increase in the price of gasoline?

Accepted Answer

An increase in the price of gasoline wil

Question 11

With real-world examples,explain the various factors that can cause a shift in the supply curve of a commodity.

Accepted Answer

The supply curve of a commodity can shif

Question 12

A(n)________ is a group of buyers and sellers who are trading goods and/or services.

Accepted Answer

A)  firm 
B)  market 
C)  enterprise 
D)  government 
A)  firm 
B)  market 
C)  enterprise 
D)  government

Question 13

If the demand for gem-quality diamonds decreases AND the supply of gem-quality diamonds decreases,what can be said about equilibrium price and quantity in this market?

Accepted Answer

A)  Equilibrium price and quantity will both fall. 
B)  Equilibrium price and quantity will both rise. 
C)  Equilibrium quantity will fall, but the change in equilibrium price is uncertain. 
D)  Equilibrium quantity will rise, but the change in equilibrium price is uncertain. 
A)  Equilibrium price and quantity will both fall. 
B)  Equilibrium price and quantity will both rise. 
C)  Equilibrium quantity will fall, but the change in equilibrium price is uncertain. 
D)  Equilibrium quantity will rise, but the change in equilibrium price is uncertain.

Question 14

The table below provides data on opium sales and farmgate prices of opium in Afghanistan from 1994 to 2008.
  
-Refer to the table above.From 2007 to 2008,opium sales fell by roughly 6.1 percent and opium prices fell by 18.6 percent.If you are told that the supply curve of opium remained constant from 2007 to 2008,what was the likely change in opium demand?

Accepted Answer

A)  Decrease in demand 
B)  Increase in demand 
C)  Increase in only quantity demanded 
D)  Decrease in only quantity demanded 
A)  Decrease in demand 
B)  Increase in demand 
C)  Increase in only quantity demanded 
D)  Decrease in only quantity demanded

Question 15

Scenario: Suppose the market for wheat in the United States is given by the demand and supply schedules in the table below (as well as the accompanying graph).

Suppose the U.S. government imposes a minimum price for wheat (price floor) of $6 per bushel.
-Refer to the scenario above.At the minimum price of $6 per bushel,there is a ________ of ________ million bushels.

Accepted Answer

A)  shortage; 3 
B)  shortage; 6 
C)  surplus; 3 
D)  surplus; 6 
A)  shortage; 3 
B)  shortage; 6 
C)  surplus; 3 
D)  surplus; 6

Question 16

A surplus occurs in a market when ________.

Accepted Answer

A)  demand exceeds supply 
B)  the price is lower than the equilibrium price 
C)  the price is higher than the equilibrium price 
D)  the marginal cost of production is negligible 
A)  demand exceeds supply 
B)  the price is lower than the equilibrium price 
C)  the price is higher than the equilibrium price 
D)  the marginal cost of production is negligible

Question 17

Which of the following pairs of goods is likely to be considered complements?

Accepted Answer

A)  Pens and writing pads 
B)  Laptops and electric heaters 
C)  Motorcycles and typewriters 
D)  Nokia and Samsung cell phones 
A)  Pens and writing pads 
B)  Laptops and electric heaters 
C)  Motorcycles and typewriters 
D)  Nokia and Samsung cell phones

Question 18

A shortage occurs in a market when ________.

Accepted Answer

A)  supply exceeds demand 
B)  price is lower than the equilibrium price 
C)  price is higher than the equilibrium price 
D)  the marginal utility of consumption is negligible 
A)  supply exceeds demand 
B)  price is lower than the equilibrium price 
C)  price is higher than the equilibrium price 
D)  the marginal utility of consumption is negligible

Question 19

The following figure shows the demand and supply curves for gas. D₁ is the initial demand curve, and S is the supply curve.
  
-Refer to the figure above.When the demand curve for gas is D₂ and the supply curve of gas is S,the equilibrium quantity is ________ gallons.

Accepted Answer

A)  20 
B)  40 
C)  50 
D)  70 
A)  20 
B)  40 
C)  50 
D)  70

Question 20

Which of the following is likely to cause the demand curve for cars to shift to the left?

Accepted Answer

A)  A rise in the price of gasoline 
B)  An increase in the economy's national income 
C)  An increase in the cost of production, leading to an increase in the price of cars 
D)  A rise in the price of cars 
A)  A rise in the price of gasoline 
B)  An increase in the economy's national income 
C)  An increase in the cost of production, leading to an increase in the price of cars 
D)  A rise in the price of cars

Which of the following is likely to lead to an increase in the quantity supplied of steel?

The automobile market in the United States is often said to be highly competitive.But it is not perfectly competitive.What makes this market not perfectly competitive?

In a perfectly competitive market,________.

Why do economists study perfectly competitive markets even though few,if any,markets in the real world are perfectly competitive?

Why is the competitive equilibrium price often referred to as the market clearing price?

What will happen to the equilibrium price and quantity of cars if there is an increase in the price of gasoline?

With real-world examples,explain the various factors that can cause a shift in the supply curve of a commodity.

A(n)________ is a group of buyers and sellers who are trading goods and/or services.

If the demand for gem-quality diamonds decreases AND the supply of gem-quality diamonds decreases,what can be said about equilibrium price and quantity in this market?

A surplus occurs in a market when ________.

Which of the following pairs of goods is likely to be considered complements?

A shortage occurs in a market when ________.

The following figure shows the demand and supply curves for gas. D₁ is the initial demand curve, and S is the supply curve. -Refer to the figure above.When the demand curve for gas is D₂ and the supply curve of gas is S,the equilibrium quantity is ________ gallons.

Which of the following is likely to cause the demand curve for cars to shift to the left?

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

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Exam 4: Demand, Supply, and Equilibrium

Which of the following is likely to lead to an increase in the quantity supplied of steel?

The automobile market in the United States is often said to be highly competitive.But it is not perfectly competitive.What makes this market not perfectly competitive?

In a perfectly competitive market,________.

Why do economists study perfectly competitive markets even though few,if any,markets in the real world are perfectly competitive?

Why is the competitive equilibrium price often referred to as the market clearing price?

What will happen to the equilibrium price and quantity of cars if there is an increase in the price of gasoline?

With real-world examples,explain the various factors that can cause a shift in the supply curve of a commodity.

A(n)________ is a group of buyers and sellers who are trading goods and/or services.

If the demand for gem-quality diamonds decreases AND the supply of gem-quality diamonds decreases,what can be said about equilibrium price and quantity in this market?

A surplus occurs in a market when ________.

Which of the following pairs of goods is likely to be considered complements?

A shortage occurs in a market when ________.

The following figure shows the demand and supply curves for gas. D₁ is the initial demand curve, and S is the supply curve. -Refer to the figure above.When the demand curve for gas is D₂ and the supply curve of gas is S,the equilibrium quantity is ________ gallons.

Which of the following is likely to cause the demand curve for cars to shift to the left?

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