Question 1

-The above figure shows a graph of a market for pizzas in a large town.At a price of $7,what is the amount of excess demand?

Accepted Answer

A)  0; there is excess supply at $7. 
B)  20 units 
C)  30 units 
D)  10 units 
A)  0; there is excess supply at $7. 
B)  20 units 
C)  30 units 
D)  10 units C

Question 2

The law of demand

Accepted Answer

A)  was passed by the 102nd U.S. Congress. 
B)  is a natural law, much like the law of gravity. 
C)  is considered a "law" in economics because of the overwhelming empirical evidence that supports its logic. 
D)  is considered a "law" in economics in order to force economic models to operate fully. 
A)  was passed by the 102nd U.S. Congress. 
B)  is a natural law, much like the law of gravity. 
C)  is considered a "law" in economics because of the overwhelming empirical evidence that supports its logic. 
D)  is considered a "law" in economics in order to force economic models to operate fully. C

Question 3

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

Accepted Answer

A)  more studying on Saturday and less on Tuesday. 
B)  more studying on Tuesday and less on Saturday. 
C)  the same amount of studying on Tuesday and Saturday. 
D)  no studying on Tuesday or Saturday. 
A)  more studying on Saturday and less on Tuesday. 
B)  more studying on Tuesday and less on Saturday. 
C)  the same amount of studying on Tuesday and Saturday. 
D)  no studying on Tuesday or Saturday. B

Question 4

A downward sloping demand curve indicates that

Accepted Answer

A)  individuals all have the same valuation of the same product. 
B)  individuals have different valuations of the same product. 
C)  individuals have no valuations of a particular product. 
D)  certain individuals are uninformed about certain aspects of the product. 
A)  individuals all have the same valuation of the same product. 
B)  individuals have different valuations of the same product. 
C)  individuals have no valuations of a particular product. 
D)  certain individuals are uninformed about certain aspects of the product.

Question 5

Which of the following would not change demand?

Accepted Answer

A)  the price of the product 
B)  information about the product's health effects 
C)  the income of the consumers 
D)  the price of related products 
A)  the price of the product 
B)  information about the product's health effects 
C)  the income of the consumers 
D)  the price of related products

Question 6

The term "inverse demand curve" refers to

Accepted Answer

A)  a demand curve that slopes upward. 
B)  expressing the demand curve in terms of price as a function of quantity. 
C)  the demand for "inverses." 
D)  the difference between quantity demanded and supplied at each price. 
A)  a demand curve that slopes upward. 
B)  expressing the demand curve in terms of price as a function of quantity. 
C)  the demand for "inverses." 
D)  the difference between quantity demanded and supplied at each price.

Question 7

Considering that the U.S.places a quota on imports of steel from South Korea,which of the following would NOT likely occur?

Accepted Answer

A)  The price of steel in the United States would increase. 
B)  The quantity of steel produced in the United States would increase or stay the same. 
C)  The demand for steel in the United States will increase. 
D)  The quantity demanded for steel in the United States will decrease. 
A)  The price of steel in the United States would increase. 
B)  The quantity of steel produced in the United States would increase or stay the same. 
C)  The demand for steel in the United States will increase. 
D)  The quantity demanded for steel in the United States will decrease.

Question 8

Costs that pertain to finding a trading partner and making a trade are called

Accepted Answer

A)  transaction costs. 
B)  transgression costs. 
C)  consumption costs. 
D)  transaction taxes. 
A)  transaction costs. 
B)  transgression costs. 
C)  consumption costs. 
D)  transaction taxes.

Question 9

-The figure above shows a graph of the market for pizzas in a large town.What characterizes the equilibrium in this market?

Accepted Answer

A)  There is excess supply at the equilibrium price of $7. 
B)  The government has selected the appropriate price for pizzas. 
C)  The quantity supplied equals the quantity demanded. 
D)  Supply equals demand. 
A)  There is excess supply at the equilibrium price of $7. 
B)  The government has selected the appropriate price for pizzas. 
C)  The quantity supplied equals the quantity demanded. 
D)  Supply equals demand.

Question 10

Explain why the equilibrium price is called the market clearing price.

Accepted Answer

At the equilibrium price,selle

Question 11

A drought in the Midwest will raise the price of wheat because of a

Accepted Answer

A)  leftward shift in the supply curve. 
B)  rightward shift in the supply curve. 
C)  leftward shift in the demand curve. 
D)  rightward shift in the demand curve. 
A)  leftward shift in the supply curve. 
B)  rightward shift in the supply curve. 
C)  leftward shift in the demand curve. 
D)  rightward shift in the demand curve.

Question 12

What can explain the fact that DVD players decreased in price during the 1990s even as more DVD players were being sold?

Accepted Answer

A)  The demand for DVDs was declining. 
B)  The supply of DVD players was decreasing. 
C)  The supply of DVD players was increasing more than the demand for DVD players. 
D)  The demand for DVD players was increasing more than the supply of DVD players. 
A)  The demand for DVDs was declining. 
B)  The supply of DVD players was decreasing. 
C)  The supply of DVD players was increasing more than the demand for DVD players. 
D)  The demand for DVD players was increasing more than the supply of DVD players.

Question 13

If government regulations increase the cost of producing gasoline while at the same time government regulations reduce the cost of driving a relatively inefficient sport utility vehicle (SUV),

Accepted Answer

A)  the supply of gasoline is expected to increase. 
B)  the demand for gasoline is expected to decrease. 
C)  the price of gasoline is expected to increase, whereas the total consumption of gasoline can increase, decrease, or stay the same. 
D)  the supply of gasoline is expected to decrease. 
A)  the supply of gasoline is expected to increase. 
B)  the demand for gasoline is expected to decrease. 
C)  the price of gasoline is expected to increase, whereas the total consumption of gasoline can increase, decrease, or stay the same. 
D)  the supply of gasoline is expected to decrease.

Question 14

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Accepted Answer

A)  Joe is not considered part of the demand for Ferraris. 
B)  Joe most likely will not be sold a Ferrari. 
C)  Joe is not considered rational. 
D)  Joe's willingness to pay is not indicative of how much he values the Ferrari. 
A)  Joe is not considered part of the demand for Ferraris. 
B)  Joe most likely will not be sold a Ferrari. 
C)  Joe is not considered rational. 
D)  Joe's willingness to pay is not indicative of how much he values the Ferrari.

Question 15

Suppose the market for a good is expressed as follows:
Inverse demand: P = 200 - 2Q
Inverse supply: P = 2Q
What is the equilibrium if the government imposes a supply quota of 75 units?
What is the equilibrium if the government imposes a supply quota of 25 units?

Accepted Answer

The market equilibrium with no quota is

Question 16

The military is not a perfectly competitive market because

Accepted Answer

A)  there is only one buyer, i.e., the government, for military goods/services. 
B)  there is imperfect information, i.e., intelligence branches. 
C)  there are heterogeneous goods/services because each military branch provides different goods/services. 
D)  All of the above 
A)  there is only one buyer, i.e., the government, for military goods/services. 
B)  there is imperfect information, i.e., intelligence branches. 
C)  there are heterogeneous goods/services because each military branch provides different goods/services. 
D)  All of the above

Question 17

A price restriction that tells suppliers the minimum price they can sell their goods for is also known as

Accepted Answer

A)  a price ceiling. 
B)  a quota. 
C)  a price floor. 
D)  deadweight loss. 
A)  a price ceiling. 
B)  a quota. 
C)  a price floor. 
D)  deadweight loss.

Question 18

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

Accepted Answer

A) True 
 B)False

Question 19

Suppose an individual inverse demand curve is given as P = 2 - 1/2 qi,where qi is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

Accepted Answer

Solve for the individual,regul

Question 20

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for workers at your nearest fast-food restaurant?

Accepted Answer

A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  None of the above. 
A)  Graph A 
B)  Graph B 
C)  Graph C 
D)  None of the above.

-The above figure shows a graph of a market for pizzas in a large town.At a price of $7,what is the amount of excess demand?

The law of demand

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

A downward sloping demand curve indicates that

Which of the following would not change demand?

The term "inverse demand curve" refers to

Considering that the U.S.places a quota on imports of steel from South Korea,which of the following would NOT likely occur?

Costs that pertain to finding a trading partner and making a trade are called

-The figure above shows a graph of the market for pizzas in a large town.What characterizes the equilibrium in this market?

Explain why the equilibrium price is called the market clearing price.

A drought in the Midwest will raise the price of wheat because of a

What can explain the fact that DVD players decreased in price during the 1990s even as more DVD players were being sold?

If government regulations increase the cost of producing gasoline while at the same time government regulations reduce the cost of driving a relatively inefficient sport utility vehicle (SUV),

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Suppose the market for a good is expressed as follows: Inverse demand: P = 200 - 2Q Inverse supply: P = 2Q What is the equilibrium if the government imposes a supply quota of 75 units? What is the equilibrium if the government imposes a supply quota of 25 units?

The military is not a perfectly competitive market because

A price restriction that tells suppliers the minimum price they can sell their goods for is also known as

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

Suppose an individual inverse demand curve is given as P = 2 - 1/2 qⁱ,where qⁱ is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for workers at your nearest fast-food restaurant?

Introduction

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 2: Supply and Demand

-The above figure shows a graph of a market for pizzas in a large town.At a price of $7,what is the amount of excess demand?

The law of demand

If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10,the law of demand predicts

A downward sloping demand curve indicates that

Which of the following would not change demand?

The term "inverse demand curve" refers to

Considering that the U.S.places a quota on imports of steel from South Korea,which of the following would NOT likely occur?

Costs that pertain to finding a trading partner and making a trade are called

-The figure above shows a graph of the market for pizzas in a large town.What characterizes the equilibrium in this market?

Explain why the equilibrium price is called the market clearing price.

A drought in the Midwest will raise the price of wheat because of a

What can explain the fact that DVD players decreased in price during the 1990s even as more DVD players were being sold?

If government regulations increase the cost of producing gasoline while at the same time government regulations reduce the cost of driving a relatively inefficient sport utility vehicle (SUV),

Assume Joe is only willing to pay $5 for a Ferrari sports car.

Suppose the market for a good is expressed as follows: Inverse demand: P = 200 - 2Q Inverse supply: P = 2Q What is the equilibrium if the government imposes a supply quota of 75 units? What is the equilibrium if the government imposes a supply quota of 25 units?

The military is not a perfectly competitive market because

A price restriction that tells suppliers the minimum price they can sell their goods for is also known as

Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs,demand curves do not slope downward for pain-relieving drugs.

Suppose an individual inverse demand curve is given as P = 2 - 1/2 qi,where qi is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for workers at your nearest fast-food restaurant?

Introduction

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Suppose an individual inverse demand curve is given as P = 2 - 1/2 qⁱ,where qⁱ is the quantity demanded by individual i.There are 50 individual consumers with this identical,individual inverse demand curve.Solve for the market demand curve.