Question 1

If the demand for beer increased,what would be the effect on the equilibrium price and quantity of beer?

Accepted Answer

A) price increases,quantity decreases 
B) price decreases,quantity decreases 
C) price increases,quantity increases 
D) price decreases,quantity increases 
A) price increases,quantity decreases 
B) price decreases,quantity decreases 
C) price increases,quantity increases 
D) price decreases,quantity increases

Question 2

Which of the following best represents the effects of a decrease in the price of tomato juice,other things being equal?

Accepted Answer

A) An upward movement along the demand curve for tomato juice. 
B) A downward movement along the demand curve for tomato juice. 
C) A rightward shift in the demand curve for tomato juice. 
D) A leftward shift in the demand curve for tomato juice. 
A) An upward movement along the demand curve for tomato juice. 
B) A downward movement along the demand curve for tomato juice. 
C) A rightward shift in the demand curve for tomato juice. 
D) A leftward shift in the demand curve for tomato juice.

Question 3

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 4

If people expect the price of coffee to rise next month,the demand for coffee will

Accepted Answer

A) decrease now. 
B) increase now. 
C) stay the same now and increase next month. 
D) stay the same now and decrease next month. 
E) stay the same now and next month. 
A) decrease now. 
B) increase now. 
C) stay the same now and increase next month. 
D) stay the same now and decrease next month. 
E) stay the same now and next month.

Question 5

When there is excess demand for a product in a market,

Accepted Answer

A) price will tend to fall. 
B) price must be below the equilibrium price. 
C) price must be above the equilibrium price. 
D) producers will reduce output and sales will fall. 
A) price will tend to fall. 
B) price must be below the equilibrium price. 
C) price must be above the equilibrium price. 
D) producers will reduce output and sales will fall.

Question 6

When property rights are well defined and markets are competitive,the

Accepted Answer

A) market equilibrium violates the conditions for economic efficiency. 
B) market equilibrium is consistent with economic efficiency. 
C) conditions necessary for economic efficiency no longer apply. 
D) quantity supplied will rarely equal the quantity demanded. 
A) market equilibrium violates the conditions for economic efficiency. 
B) market equilibrium is consistent with economic efficiency. 
C) conditions necessary for economic efficiency no longer apply. 
D) quantity supplied will rarely equal the quantity demanded.

Question 7

The price of a good will tend to rise when

Accepted Answer

A) there is excess demand for the good. 
B) there is excess supply of the good. 
C) demand for the good decreases. 
D) the supply of the good increases. 
A) there is excess demand for the good. 
B) there is excess supply of the good. 
C) demand for the good decreases. 
D) the supply of the good increases.

Question 8

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 9

Which of the following would be the best example of consumer surplus?

Accepted Answer

A) Jane pays $30 a month for phone service even though it is worth $70 to her. 
B) Sam refuses to pay $10 for a haircut because it is only worth $8 to him. 
C) Fred buys a car for $4,000,the maximum amount that he would be willing to pay for it. 
D) When Sue purchases a candy bar for $.50,she uses a $20 bill to pay for it. 
A) Jane pays $30 a month for phone service even though it is worth $70 to her. 
B) Sam refuses to pay $10 for a haircut because it is only worth $8 to him. 
C) Fred buys a car for $4,000,the maximum amount that he would be willing to pay for it. 
D) When Sue purchases a candy bar for $.50,she uses a $20 bill to pay for it.

Question 10

To be economically successful,the entrepreneur must

Accepted Answer

A) combine resources in a manner that increases their value. 
B) produce a good that consumers value less than the resources used to produce it. 
C) use only personal financial capital to avoid the interest payments that would have to be paid if the money is borrowed from the bank. 
D) transform or rearrange resources to maximize the entrepreneur's cost of production. 
A) combine resources in a manner that increases their value. 
B) produce a good that consumers value less than the resources used to produce it. 
C) use only personal financial capital to avoid the interest payments that would have to be paid if the money is borrowed from the bank. 
D) transform or rearrange resources to maximize the entrepreneur's cost of production.

Question 11

If we observe an increase in the price of a good and a decrease in the amount of the good bought and sold,this could be explained by

Accepted Answer

A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good. 
A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good.

Question 12

Which of the following factors would cause the demand curve for a good to increase (shift to the right)?

Accepted Answer

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

Question 13

A decrease in the supply of a good will

Accepted Answer

A) decrease the demand for the good. 
B) cause the price of the good to fall. 
C) lead to an increase in the price of the good. 
D) increase the quantity of the good bought and sold. 
A) decrease the demand for the good. 
B) cause the price of the good to fall. 
C) lead to an increase in the price of the good. 
D) increase the quantity of the good bought and sold.

Question 14

If Susan receives $3,000 of value from a computer that she was able to purchase from Joe's Computer Shop for $1,800,this indicates that

Accepted Answer

A) Susan's opportunity cost of purchasing the computer was $3,000. 
B) Joe earned a $1,200 profit on the sale of the computer. 
C) Susan reaped a consumer surplus of $1,200 from the purchase of the computer. 
D) Joe incurred a loss a $1,200 on the sale of the computer. 
A) Susan's opportunity cost of purchasing the computer was $3,000. 
B) Joe earned a $1,200 profit on the sale of the computer. 
C) Susan reaped a consumer surplus of $1,200 from the purchase of the computer. 
D) Joe incurred a loss a $1,200 on the sale of the computer.

Question 15

When experts first predicted major weather-related coffee crop failures in Central and South America in 1986,the price of coffee already on grocery shelves in the United States increased sharply.When coffee became temporarily more scarce,the usefulness to society of "coffee conservation" increased.The immediate sharp price increase (which soon leveled off)gave consumers an incentive to

Accepted Answer

A) buy all the coffee they could at the higher prices and hoard it,since there was obviously a shortage. 
B) drink as much coffee as possible at the higher price. 
C) start conserving coffee immediately and switch to other beverages if it was easy to do so. 
D) ignore the price of coffee and drink it as they normally would. 
A) buy all the coffee they could at the higher prices and hoard it,since there was obviously a shortage. 
B) drink as much coffee as possible at the higher price. 
C) start conserving coffee immediately and switch to other beverages if it was easy to do so. 
D) ignore the price of coffee and drink it as they normally would.

Question 16

Graphically,the area that represents the difference between the market price and the minimum price required to induce suppliers to produce a good is called

Accepted Answer

A) consumer surplus. 
B) producer surplus. 
C) marginal cost. 
D) triangular arbitrage. 
A) consumer surplus. 
B) producer surplus. 
C) marginal cost. 
D) triangular arbitrage.

Question 17

A cold spell in Florida extensively reduced the orange crop,and as a result,California oranges commanded a higher price.Which of the following statements best explains the situation?

Accepted Answer

A) The supply of Florida oranges fell,causing the supply of California oranges to increase as well as their price. 
B) The supply of Florida oranges fell,causing the supply of California oranges to decrease and their price to increase. 
C) The supply of Florida oranges fell,causing their price to increase and the demand for California oranges to increase. 
D) The demand for Florida oranges was reduced by the freeze,causing an increase in the price of California oranges and a greater demand for them. 
A) The supply of Florida oranges fell,causing the supply of California oranges to increase as well as their price. 
B) The supply of Florida oranges fell,causing the supply of California oranges to decrease and their price to increase. 
C) The supply of Florida oranges fell,causing their price to increase and the demand for California oranges to increase. 
D) The demand for Florida oranges was reduced by the freeze,causing an increase in the price of California oranges and a greater demand for them.

Question 18

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold,this could be explained by

Accepted Answer

A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good. 
A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good.

Question 19

If we observe an increase in the price of a good and an increase in the amount of the good bought and sold,this could be explained by

Accepted Answer

A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good. 
A) an increase in the supply of the good. 
B) an increase in the demand for the good. 
C) a decrease in the demand for the good. 
D) a decrease in the supply of the good.

Question 20

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

Exam 3: Asupply,demand,and the Market Process

If the demand for beer increased,what would be the effect on the equilibrium price and quantity of beer?

Which of the following best represents the effects of a decrease in the price of tomato juice,other things being equal?

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?

If people expect the price of coffee to rise next month,the demand for coffee will

When there is excess demand for a product in a market,

When property rights are well defined and markets are competitive,the

The price of a good will tend to rise when

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 would be the best example of consumer surplus?

To be economically successful,the entrepreneur must

If we observe an increase in the price of a good and a decrease in the amount of the good bought and sold,this could be explained by

Which of the following factors would cause the demand curve for a good to increase (shift to the right)?

A decrease in the supply of a good will

If Susan receives $3,000 of value from a computer that she was able to purchase from Joe's Computer Shop for $1,800,this indicates that

Graphically,the area that represents the difference between the market price and the minimum price required to induce suppliers to produce a good is called

A cold spell in Florida extensively reduced the orange crop,and as a result,California oranges commanded a higher price.Which of the following statements best explains the situation?

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold,this could be explained by

If we observe an increase in the price of a good and an increase in the amount of the good bought and sold,this could be explained by

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

The Economic Approach

Asome Tools of the Economist

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

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

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney 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

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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