Question 1

An increase in the demand for tattoos will lead to a

Accepted Answer

A) higher price and a larger quantity sold. 
B) lower price and a larger quantity sold. 
C) higher price and a smaller quantity sold. 
D) lower price and a smaller quantity sold. 
A) higher price and a larger quantity sold. 
B) lower price and a larger quantity sold. 
C) higher price and a smaller quantity sold. 
D) lower price and a smaller quantity sold.

Question 2

A decrease in the price of a good would

Accepted Answer

A) increase the demand for the good. 
B) increase the quantity demanded for the good. 
C) decrease the demand for the good. 
D) decrease the quantity supplied of the good. 
A) increase the demand for the good. 
B) increase the quantity demanded for the good. 
C) decrease the demand for the good. 
D) decrease the quantity supplied of the good.

Question 3

An increase in the expected future price of a good will cause the current demand for the good to

Accepted Answer

A) decrease,which is a shift to the left of the demand curve. 
B) decrease,which is a shift to the right of the demand curve. 
C) increase,which is a shift to the left of the demand curve. 
D) increase,which is a shift to the right of the demand curve. 
A) decrease,which is a shift to the left of the demand curve. 
B) decrease,which is a shift to the right of the demand curve. 
C) increase,which is a shift to the left of the demand curve. 
D) increase,which is a shift to the right of the demand curve.

Question 4

For a typical product,an increase in consumer income will cause the market demand for the product to

Accepted Answer

A) decrease,which is a shift to the left of the demand curve. 
B) decrease,which is a shift to the right of the demand curve. 
C) increase,which is a shift to the left of the demand curve. 
D) increase,which is a shift to the right of the demand curve. 
A) decrease,which is a shift to the left of the demand curve. 
B) decrease,which is a shift to the right of the demand curve. 
C) increase,which is a shift to the left of the demand curve. 
D) increase,which is a shift to the right of the demand curve.

Question 5

If the quantity of a good supplied is not very sensitive to the price of the good,this is illustrated by a

Accepted Answer

A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical). 
A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical).

Question 6

Which of the following will most likely decrease the current price of personal computers?

Accepted Answer

A) a technological advance that decreases the production costs of personal computers 
B) an increase in consumer income 
C) development of new software that makes it easier for more people to use personal computers 
D) the expectation that the price of personal computers will increase during the next six months 
A) a technological advance that decreases the production costs of personal computers 
B) an increase in consumer income 
C) development of new software that makes it easier for more people to use personal computers 
D) the expectation that the price of personal computers will increase during the next six months

Question 7

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers.This would cause the current demand for computers to

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase if the demand for computers was relatively inelastic,but decrease if the demand for computers was relatively elastic. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase if the demand for computers was relatively inelastic,but decrease if the demand for computers was relatively elastic.

Question 8

Kristen decides that she would pay as much as $400 for a new camera.She buys the camera and realizes consumer surplus of $75.How much did Kristen pay for her camera?

Accepted Answer

A) $75 
B) $325 
C) $400 
D) $475 
A) $75 
B) $325 
C) $400 
D) $475

Question 9

Sam lives in a town with a population of 3,000.He says,"This town really needs a pizza restaurant.People want pizza and would be willing to pay a lot for it,but no one will open a pizza place because they couldn't make any money." Evaluate Sam's statement.

Accepted Answer

His statement clearly conflicts with the

Question 10

Figure 3-20
  
-Refer to Figure 3-20.If the price decreases from $22 to $16,consumer surplus increases by

Accepted Answer

A) $120. 
B) $360. 
C) $480. 
D) $600. 
A) $120. 
B) $360. 
C) $480. 
D) $600.

Question 11

Table 3-1
  
-Refer to Table 3-1.If the table represents the willingness to pay of four buyers and the price of the product is $18,then their total consumer surplus is

Accepted Answer

A) $38. 
B) $42. 
C) $46. 
D) $72. 
A) $38. 
B) $42. 
C) $46. 
D) $72.

Question 12

Suppose demand decreases and supply increases.Which of the following will happen?

Accepted Answer

A) Equilibrium price will rise,fall,or stay the same while equilibrium quantity will decrease. 
B) Equilibrium price will rise,fall,or stay the same while equilibrium quantity will increase. 
C) Equilibrium quantity will rise,fall,or stay the same and equilibrium price will increase. 
D) Equilibrium quantity will rise,fall,or stay the same while equilibrium price will decrease. 
E) The change in equilibrium price and quantity cannot be determined. 
A) Equilibrium price will rise,fall,or stay the same while equilibrium quantity will decrease. 
B) Equilibrium price will rise,fall,or stay the same while equilibrium quantity will increase. 
C) Equilibrium quantity will rise,fall,or stay the same and equilibrium price will increase. 
D) Equilibrium quantity will rise,fall,or stay the same while equilibrium price will decrease. 
E) The change in equilibrium price and quantity cannot be determined.

Question 13

Figure 3-20
  
-Refer to Figure 3-20.If 40 units of the good are being bought and sold,then

Accepted Answer

A) cost to sellers is equal to the value to buyers. 
B) the value to buyers is greater than the cost to sellers. 
C) the cost to sellers is greater than the value to buyers. 
D) producer surplus would be greater than consumer surplus. 
A) cost to sellers is equal to the value to buyers. 
B) the value to buyers is greater than the cost to sellers. 
C) the cost to sellers is greater than the value to buyers. 
D) producer surplus would be greater than consumer surplus.

Question 14

Figure 3-19
  
-Refer to Figure 3-19.Buyers who value this good less than price are represented by which line segment?

Accepted Answer

A) AC. 
B) CE. 
C) BC. 
D) CD. 
A) AC. 
B) CE. 
C) BC. 
D) CD.

Question 15

Assume that eggnog and cookies are complements.If the price of eggnog goes up,what happens to the demand for cookies?

Accepted Answer

A) demand for cookies increases 
B) demand for cookies decreases 
C) demand for cookies remains unchanged 
D) the shift in demand will depend on the original price of cookies 
A) demand for cookies increases 
B) demand for cookies decreases 
C) demand for cookies remains unchanged 
D) the shift in demand will depend on the original price of cookies

Question 16

Figure 3-22

-Refer to Figure 3-22.Which of the four graphs illustrates a decrease in quantity demanded?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 17

Economic efficiency requires that

Accepted Answer

A) individuals take all actions within their power. 
B) only long-lasting,high-quality products be produced. 
C) income be distributed equally among individuals. 
D) all economic activity generating more benefits than costs to individuals in the economy be undertaken. 
A) individuals take all actions within their power. 
B) only long-lasting,high-quality products be produced. 
C) income be distributed equally among individuals. 
D) all economic activity generating more benefits than costs to individuals in the economy be undertaken.

Question 18

Each point on the demand curve indicates

Accepted Answer

A) the demand for the product. 
B) the quantity demanded at that price. 
C) the amount that people need. 
D) the amount people want to buy at different income levels. 
A) the demand for the product. 
B) the quantity demanded at that price. 
C) the amount that people need. 
D) the amount people want to buy at different income levels.

Question 19

Which of the following is least likely to increase the demand for new tires?

Accepted Answer

A) a decrease in the price of tires 
B) a decrease in the price of cars 
C) an increase in consumer income 
D) an increase in the number of miles people drive per year 
A) a decrease in the price of tires 
B) a decrease in the price of cars 
C) an increase in consumer income 
D) an increase in the number of miles people drive per year

Question 20

If consumer purchases of a good are not very sensitive to the price of the good,this is illustrated by a

Accepted Answer

A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical). 
A) demand curve that is relatively flat (more horizontal). 
B) demand curve that is relatively steep (more vertical). 
C) supply curve that is relatively flat (more horizontal). 
D) supply curve that is relatively steep (more vertical).

Exam 3: Asupply,demand,and the Market Process

An increase in the demand for tattoos will lead to a

A decrease in the price of a good would

An increase in the expected future price of a good will cause the current demand for the good to

For a typical product,an increase in consumer income will cause the market demand for the product to

If the quantity of a good supplied is not very sensitive to the price of the good,this is illustrated by a

Which of the following will most likely decrease the current price of personal computers?

Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers.This would cause the current demand for computers to

Kristen decides that she would pay as much as $400 for a new camera.She buys the camera and realizes consumer surplus of $75.How much did Kristen pay for her camera?

Sam lives in a town with a population of 3,000.He says,"This town really needs a pizza restaurant.People want pizza and would be willing to pay a lot for it,but no one will open a pizza place because they couldn't make any money." Evaluate Sam's statement.

Figure 3-20 -Refer to Figure 3-20.If the price decreases from $22 to $16,consumer surplus increases by

Table 3-1 -Refer to Table 3-1.If the table represents the willingness to pay of four buyers and the price of the product is $18,then their total consumer surplus is

Suppose demand decreases and supply increases.Which of the following will happen?

Figure 3-20 -Refer to Figure 3-20.If 40 units of the good are being bought and sold,then

Figure 3-19 -Refer to Figure 3-19.Buyers who value this good less than price are represented by which line segment?

Assume that eggnog and cookies are complements.If the price of eggnog goes up,what happens to the demand for cookies?

Figure 3-22 -Refer to Figure 3-22.Which of the four graphs illustrates a decrease in quantity demanded?

Economic efficiency requires that

Each point on the demand curve indicates

Which of the following is least likely to increase the demand for new tires?

If consumer purchases of a good are not very sensitive to the price of the good,this is illustrated by a

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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