Question 1

The willingness to pay for a commodity ________.

Accepted Answer

A)  decreases as consumption of the commodity increases 
B)  increases as consumption of the commodity increases 
C)  is always less than the market price of the commodity 
D)  is always greater than the market price of the commodity 
A)  decreases as consumption of the commodity increases 
B)  increases as consumption of the commodity increases 
C)  is always less than the market price of the commodity 
D)  is always greater than the market price of the commodity

Question 2

If there is excess demand in a perfectly competitive market,does the government need to intervene to restore the equilibrium price and quantity? Why or why not?

Accepted Answer

No.In a perfectly competitive market,no

Question 3

Define marginal cost.Is it different from the concept of willingness to accept?

Accepted Answer

Marginal cost in production refers to th

Question 4

Which of the following is true of a market?

Accepted Answer

A)  A market must be under continuous surveillance and government control. 
B)  A market always requires a specific physical location. 
C)  Goods and services are exchanged at fixed prices in all markets. 
D)  Price acts as a selection device for buyers and sellers in every market. 
A)  A market must be under continuous surveillance and government control. 
B)  A market always requires a specific physical location. 
C)  Goods and services are exchanged at fixed prices in all markets. 
D)  Price acts as a selection device for buyers and sellers in every market.

Question 5

Assume that the economy is in a recession and consumers are expecting a fall in their income levels.This will cause a(n)________.

Accepted Answer

A)  leftward shift in the market demand for all goods 
B)  rightward shift in the market demand for all goods 
C)  increase in the total quantity demanded of all goods 
D)  decrease in the total quantity demanded of all goods 
A)  leftward shift in the market demand for all goods 
B)  rightward shift in the market demand for all goods 
C)  increase in the total quantity demanded of all goods 
D)  decrease in the total quantity demanded of all goods

Question 6

-Refer to the table above.Derive the market quantity supplied at each price and sketch the market supply curve in the graph below.

Accepted Answer

The answer of  
-Refer to the table above.Derive the...

Question 7

The market supply is the ________ of the individual supplies of all the potential sellers.

Accepted Answer

A)  sum 
B)  product 
C)  square of the sum 
D)  square root of the sum 
A)  sum 
B)  product 
C)  square of the sum 
D)  square root of the sum

Question 8

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.MaxOil can produce gasoline ________.

Accepted Answer

A)  at a lower marginal cost than MagnusPetro up to the 1 millionth liter 
B)  at a higher marginal cost than MagnusPetro beyond the 1 millionth liter 
C)  at the same marginal cost as MagnusPetro up to the 1 millionth liter 
D)  at the same marginal cost as MagnusPetro beyond the 1 millionth liter 
A)  at a lower marginal cost than MagnusPetro up to the 1 millionth liter 
B)  at a higher marginal cost than MagnusPetro beyond the 1 millionth liter 
C)  at the same marginal cost as MagnusPetro up to the 1 millionth liter 
D)  at the same marginal cost as MagnusPetro beyond the 1 millionth liter

Question 9

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.The Charlotte Metropolitan Statistical Area (seven counties in North Carolina and three counties in South Carolina)is expected to grow at an annual rate of 1.3 percent.Population growth will cause a(n)________.

Accepted Answer

A)  increase in demand 
B)  decrease in demand 
C)  increase in quantity demanded 
D)  decrease in quantity demanded 
A)  increase in demand 
B)  decrease in demand 
C)  increase in quantity demanded 
D)  decrease in quantity demanded

Question 10

If the demand and supply curves for a commodity shift to the right by the same amount,then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Accepted Answer

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

Question 11

In a perfectly competitive market,the market clearing price is ________ the equilibrium price.

Accepted Answer

A)  always equal to 
B)  unrelated to 
C)  always lower than 
D)  always higher than 
A)  always equal to 
B)  unrelated to 
C)  always lower than 
D)  always higher than

Question 12

Assume that the supply curve for a commodity shifts to the left and the demand curve shifts to the right,both by the same degree.Then,in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Accepted Answer

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

Question 13

The following table shows the market demand schedule and supply schedule for notebooks.
  
-Refer to the table above.What is the shortage in the market when the price of a notebook is $3?

Accepted Answer

A)  4 units 
B)  10 units 
C)  16 units 
D)  20 units 
A)  4 units 
B)  10 units 
C)  16 units 
D)  20 units

Question 14

The development of genetically modified soybean seeds such as Roundup Ready seeds lowered tillage costs for soybean growers.How will this technological advance affect the supply of soybeans?

Accepted Answer

A)  Increase in only quantity supplied 
B)  Increase in supply 
C)  Decrease in only quantity supplied 
D)  Decrease in supply 
A)  Increase in only quantity supplied 
B)  Increase in supply 
C)  Decrease in only quantity supplied 
D)  Decrease in supply

Question 15

If the current market price of wheat in the United States is $6 per bushel and the federal government sets the maximum price of wheat at $4 per bushel,what happens to the market price and quantity of wheat in the U.S.wheat market?

Accepted Answer

A)  The market price of wheat falls and the quantity traded rises. 
B)  The market price of wheat falls and the quantity traded falls. 
C)  There is no change in the market price of wheat or the quantity traded. 
D)  The answer cannot be determined given the information provided. 
A)  The market price of wheat falls and the quantity traded rises. 
B)  The market price of wheat falls and the quantity traded falls. 
C)  There is no change in the market price of wheat or the quantity traded. 
D)  The answer cannot be determined given the information provided.

Question 16

Assume that the market for bread is perfectly competitive.The demand for bread is given by the equation D = 120 − 10P,and the market supply for bread is given by S = 60 + 5P.Determine the equilibrium price and quantity of bread.What happens if the price of the bread is set at $10 per loaf? What happens if the market price is set at $2 per loaf?

Accepted Answer

In a perfectly competitive market,the eq

Question 17

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.If the supply curve for flash drives shifts from S₁ to S₂,with no change in the demand curve,the new competitive equilibrium price is ________.

Accepted Answer

A)  $3 
B)  $4 
C)  $5 
D)  $7 
A)  $3 
B)  $4 
C)  $5 
D)  $7

Question 18

The following table shows the market demand schedule and supply schedule for notebooks.
  
-Refer to the table above.What is the shortage in the market when the price of a notebook is $1?

Accepted Answer

A)  0 units 
B)  10 units 
C)  14 units 
D)  16 units 
A)  0 units 
B)  10 units 
C)  14 units 
D)  16 units

Question 19

The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market.
  
-Refer to the table above.If the market price of wine is $8 per bottle,and the market demand for wine is 19 bottles,David's consumption of wine is ________.

Accepted Answer

A)  4 bottles 
B)  7 bottles 
C)  9 bottles 
D)  12 bottles 
A)  4 bottles 
B)  7 bottles 
C)  9 bottles 
D)  12 bottles

Question 20

A seller's willingness to accept is the same as his ________ cost of production.

Accepted Answer

A)  total 
B)  fixed 
C)  average 
D)  marginal 
A)  total 
B)  fixed 
C)  average 
D)  marginal

The willingness to pay for a commodity ________.

If there is excess demand in a perfectly competitive market,does the government need to intervene to restore the equilibrium price and quantity? Why or why not?

Define marginal cost.Is it different from the concept of willingness to accept?

Which of the following is true of a market?

Assume that the economy is in a recession and consumers are expecting a fall in their income levels.This will cause a(n)________.

-Refer to the table above.Derive the market quantity supplied at each price and sketch the market supply curve in the graph below.

The market supply is the ________ of the individual supplies of all the potential sellers.

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.MaxOil can produce gasoline ________.

If the demand and supply curves for a commodity shift to the right by the same amount,then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

In a perfectly competitive market,the market clearing price is ________ the equilibrium price.

Assume that the supply curve for a commodity shifts to the left and the demand curve shifts to the right,both by the same degree.Then,in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the shortage in the market when the price of a notebook is $3?

The development of genetically modified soybean seeds such as Roundup Ready seeds lowered tillage costs for soybean growers.How will this technological advance affect the supply of soybeans?

If the current market price of wheat in the United States is $6 per bushel and the federal government sets the maximum price of wheat at $4 per bushel,what happens to the market price and quantity of wheat in the U.S.wheat market?

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the shortage in the market when the price of a notebook is $1?

The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market. -Refer to the table above.If the market price of wine is $8 per bottle,and the market demand for wine is 19 bottles,David's consumption of wine is ________.

A seller's willingness to accept is the same as his ________ cost of production.

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

The willingness to pay for a commodity ________.

If there is excess demand in a perfectly competitive market,does the government need to intervene to restore the equilibrium price and quantity? Why or why not?

Define marginal cost.Is it different from the concept of willingness to accept?

Which of the following is true of a market?

Assume that the economy is in a recession and consumers are expecting a fall in their income levels.This will cause a(n)________.

-Refer to the table above.Derive the market quantity supplied at each price and sketch the market supply curve in the graph below.

The market supply is the ________ of the individual supplies of all the potential sellers.

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.MaxOil can produce gasoline ________.

If the demand and supply curves for a commodity shift to the right by the same amount,then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

In a perfectly competitive market,the market clearing price is ________ the equilibrium price.

Assume that the supply curve for a commodity shifts to the left and the demand curve shifts to the right,both by the same degree.Then,in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the shortage in the market when the price of a notebook is $3?

The development of genetically modified soybean seeds such as Roundup Ready seeds lowered tillage costs for soybean growers.How will this technological advance affect the supply of soybeans?

If the current market price of wheat in the United States is $6 per bushel and the federal government sets the maximum price of wheat at $4 per bushel,what happens to the market price and quantity of wheat in the U.S.wheat market?

The following table shows the market demand schedule and supply schedule for notebooks. -Refer to the table above.What is the shortage in the market when the price of a notebook is $1?

The following table shows the demand schedules of three consumers of wine. Assume that these three buyers constitute the entire market. -Refer to the table above.If the market price of wine is $8 per bottle,and the market demand for wine is 19 bottles,David's consumption of wine is ________.

A seller's willingness to accept is the same as his ________ cost of production.

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