Question 1

Which of the following would most likely increase the demand for peanut butter?

Accepted Answer

A) a decrease in the price of jelly,a good that is often used with peanut butter 
B) the discovery that excessive consumption of peanut butter is harmful to one's health 
C) crop failures that raise the price of peanuts 
D) the invention of a new product that consumers think is a good substitute for peanut butter 
A) a decrease in the price of jelly,a good that is often used with peanut butter 
B) the discovery that excessive consumption of peanut butter is harmful to one's health 
C) crop failures that raise the price of peanuts 
D) the invention of a new product that consumers think is a good substitute for peanut butter

Question 2

Assume that supply decreases greatly and demand decreases slightly.Which of the following will happen?

Accepted Answer

A) Equilibrium price will fall and equilibrium quantity will rise. 
B) Equilibrium price will rise and equilibrium quantity will fall. 
C) Equilibrium price will rise and equilibrium quantity will rise. 
D) Equilibrium price will fall and equilibrium quantity will fall. 
E) Neither equilibrium price nor equilibrium quantity will change. 
A) Equilibrium price will fall and equilibrium quantity will rise. 
B) Equilibrium price will rise and equilibrium quantity will fall. 
C) Equilibrium price will rise and equilibrium quantity will rise. 
D) Equilibrium price will fall and equilibrium quantity will fall. 
E) Neither equilibrium price nor equilibrium quantity will change.

Question 3

Which of the following is true?

Accepted Answer

A) The height of the demand curve for a product at a given quantity represents the marginal value derived by the consumption of that unit. 
B) The height of the demand curve for a product at a given quantity reflects the total value consumers derive from all units of the good consumed. 
C) The total area above the demand curve for a product is equal to consumer surplus. 
D) At every quantity,the height of the demand curve for a product represents the cost of producing that unit. 
A) The height of the demand curve for a product at a given quantity represents the marginal value derived by the consumption of that unit. 
B) The height of the demand curve for a product at a given quantity reflects the total value consumers derive from all units of the good consumed. 
C) The total area above the demand curve for a product is equal to consumer surplus. 
D) At every quantity,the height of the demand curve for a product represents the cost of producing that unit.

Question 4

When the market for a good is in equilibrium,

Accepted Answer

A) consumer surplus will equal producer surplus. 
B) the total value created for consumers will equal the total cost of production for business firms. 
C) all units valued more highly than the opportunity cost of production will be supplied. 
D) all units that have value will be produced,regardless of their cost of production. 
A) consumer surplus will equal producer surplus. 
B) the total value created for consumers will equal the total cost of production for business firms. 
C) all units valued more highly than the opportunity cost of production will be supplied. 
D) all units that have value will be produced,regardless of their cost of production.

Question 5

Which of the following would most likely cause the current demand for natural gas to decrease?

Accepted Answer

A) an increase in consumer income 
B) an increase in the price of natural gas 
C) a decrease in the price of electricity,a substitute for natural gas 
D) the expectation that the price of natural gas will rise sharply next month 
A) an increase in consumer income 
B) an increase in the price of natural gas 
C) a decrease in the price of electricity,a substitute for natural gas 
D) the expectation that the price of natural gas will rise sharply next month

Question 6

Which of the following would increase the price of fitness equipment?

Accepted Answer

A) a reduction in consumer income 
B) a major study indicating that a 30-minute workout each day improved health more than was previously thought to be the case 
C) a decrease in the price of steel used to produce the equipment 
D) all of the above 
A) a reduction in consumer income 
B) a major study indicating that a 30-minute workout each day improved health more than was previously thought to be the case 
C) a decrease in the price of steel used to produce the equipment 
D) all of the above

Question 7

Producers are willing to offer greater quantities for sale at higher prices because

Accepted Answer

A) they have the incentive to pay the increasing opportunity cost of resources necessary to attract them from alternative uses 
B) they will decrease their profits by expanding production at higher prices 
C) the government orders them to do so 
D) lower prices attract new firms,which have higher costs of production 
E) they hire superior quality,higher-priced resources as production expands 
A) they have the incentive to pay the increasing opportunity cost of resources necessary to attract them from alternative uses 
B) they will decrease their profits by expanding production at higher prices 
C) the government orders them to do so 
D) lower prices attract new firms,which have higher costs of production 
E) they hire superior quality,higher-priced resources as production expands

Question 8

If cigars and cigarettes are substitute goods,an increase in the price of cigars would result in

Accepted Answer

A) an increase in the demand for cigarettes. 
B) a decrease in the price of cigarettes. 
C) a decrease in the demand for cigarettes. 
D) a decrease in the demand for cigars. 
A) an increase in the demand for cigarettes. 
B) a decrease in the price of cigarettes. 
C) a decrease in the demand for cigarettes. 
D) a decrease in the demand for cigars.

Question 9

When the "invisible hand" guides economic activity,prices of products reflect

Accepted Answer

A) only the values that society places on those products. 
B) only the costs to society of producing those products. 
C) both the values that society places on those products and the costs to society of producing those products. 
D) none of the above;when the "invisible hand" guides economic activity,prices of products are set by the government in a manner that is thought to be "fair." 
A) only the values that society places on those products. 
B) only the costs to society of producing those products. 
C) both the values that society places on those products and the costs to society of producing those products. 
D) none of the above;when the "invisible hand" guides economic activity,prices of products are set by the government in a manner that is thought to be "fair."

Question 10

An increase in the price of a good normally increases the

Accepted Answer

A) demand for its substitutes 
B) supply of complements for the good 
C) purchasing power of consumers' dollar incomes 
D) money income of the consumer 
A) demand for its substitutes 
B) supply of complements for the good 
C) purchasing power of consumers' dollar incomes 
D) money income of the consumer

Question 11

Velcro is becoming more and more popular for a variety of uses,including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Accepted Answer

A) Both price and quantity will increase. 
B) Both price and quantity will decrease. 
C) Price will increase and quantity decrease. 
D) Price will decrease and quantity increase. 
E) Nothing. 
A) Both price and quantity will increase. 
B) Both price and quantity will decrease. 
C) Price will increase and quantity decrease. 
D) Price will decrease and quantity increase. 
E) Nothing.

Question 12

Economists maintain that the price of a product has no effect on demand.How can this be true?

Accepted Answer

When constructing the demand curve,price

Question 13

Figure 3-22

-Refer to Figure 3-22.Suppose the events depicted in graphs A and C were illustrated together on a single graph.A definitive result of the two events would be

Accepted Answer

A) an increase in the equilibrium quantity. 
B) an increase in the equilibrium price. 
C) an instance in which the law of demand fails to hold. 
D) All of the above are correct. 
A) an increase in the equilibrium quantity. 
B) an increase in the equilibrium price. 
C) an instance in which the law of demand fails to hold. 
D) All of the above are correct.

Question 14

Use the figure below to answer the following question(s).
Figure 3-9
  
-In Figure 3-9,if D and S represent the demand and supply for gasoline,what is the equilibrium price and quantity?

Accepted Answer

A) price,$1;quantity,20 
B) price,$2;quantity,30 
C) price,$3;quantity,40 
D) price,$4;quantity,50 
A) price,$1;quantity,20 
B) price,$2;quantity,30 
C) price,$3;quantity,40 
D) price,$4;quantity,50

Question 15

Which of the following would most likely cause the supply of wheat to increase?

Accepted Answer

A) a decrease in the price of corn,a substitute for wheat 
B) a technological advance that lowers the cost of producing wheat 
C) an increase in the cost of producing wheat 
D) a change in consumer preferences,causing them to prefer plain white bread to whole-wheat bread 
A) a decrease in the price of corn,a substitute for wheat 
B) a technological advance that lowers the cost of producing wheat 
C) an increase in the cost of producing wheat 
D) a change in consumer preferences,causing them to prefer plain white bread to whole-wheat bread

Question 16

Which of the following would increase the supply of laptop computers?

Accepted Answer

A) higher wage rates for the workers that produce laptop computers 
B) a technological improvement that lowers the cost of producing laptop computers 
C) an increase in the price of computer chips used to produce laptop computers 
D) all of the above 
A) higher wage rates for the workers that produce laptop computers 
B) a technological improvement that lowers the cost of producing laptop computers 
C) an increase in the price of computer chips used to produce laptop computers 
D) all of the above

Question 17

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 18

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 19

Which of the following would most likely shift the supply curve to the left for Wii video games?

Accepted Answer

A) an increase in the price of Wii video games 
B) a decrease in the price of computer chips used to make Wii games 
C) a decrease in the demand for Wii games 
D) an increase in the price of electronic components used to produce the Wii games 
A) an increase in the price of Wii video games 
B) a decrease in the price of computer chips used to make Wii games 
C) a decrease in the demand for Wii games 
D) an increase in the price of electronic components used to produce the Wii games

Question 20

If we observe a decrease 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.

Exam 3: Asupply,demand,and the Market Process

Which of the following would most likely increase the demand for peanut butter?

Assume that supply decreases greatly and demand decreases slightly.Which of the following will happen?

Which of the following is true?

When the market for a good is in equilibrium,

Which of the following would most likely cause the current demand for natural gas to decrease?

Which of the following would increase the price of fitness equipment?

Producers are willing to offer greater quantities for sale at higher prices because

If cigars and cigarettes are substitute goods,an increase in the price of cigars would result in

When the "invisible hand" guides economic activity,prices of products reflect

An increase in the price of a good normally increases the

Velcro is becoming more and more popular for a variety of uses,including as fasteners for shoes.What should happen to the equilibrium price and quantity for shoelaces as a result?

Economists maintain that the price of a product has no effect on demand.How can this be true?

Figure 3-22 -Refer to Figure 3-22.Suppose the events depicted in graphs A and C were illustrated together on a single graph.A definitive result of the two events would be

Use the figure below to answer the following question(s). Figure 3-9 -In Figure 3-9,if D and S represent the demand and supply for gasoline,what is the equilibrium price and quantity?

Which of the following would most likely cause the supply of wheat to increase?

Which of the following would increase the supply of laptop computers?

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

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

Which of the following would most likely shift the supply curve to the left for Wii video games?

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

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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