Question 1

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

Accepted Answer

A)  there will be excess demand. 
B)  there will be excess supply. 
C)  the curves will shift to make a new equilibrium at the regulated price. 
D)  None of the above. 
A)  there will be excess demand. 
B)  there will be excess supply. 
C)  the curves will shift to make a new equilibrium at the regulated price. 
D)  None of the above.

Question 2

Which of the following cultural events likely increased the demand for the associated product?

Accepted Answer

A)  the banning of cigarette advertising on television 
B)  the inclusion of Reese's Pieces in the movie E.T. 
C)  increased environmental awareness about the impacts of sport utility vehicles (SUVs) 
D)  concerns over "Mad Cow" disease in beef 
A)  the banning of cigarette advertising on television 
B)  the inclusion of Reese's Pieces in the movie E.T. 
C)  increased environmental awareness about the impacts of sport utility vehicles (SUVs) 
D)  concerns over "Mad Cow" disease in beef

Question 3

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

Accepted Answer

A)  those who are buying gasoline value it at least $5 per gallon. 
B)  those who are not buying gasoline value it more than $5 per gallon. 
C)  only those who are extremely wealthy are buying gasoline. 
D)  the price of gasoline needs to be regulated by the Federal Government. 
A)  those who are buying gasoline value it at least $5 per gallon. 
B)  those who are not buying gasoline value it more than $5 per gallon. 
C)  only those who are extremely wealthy are buying gasoline. 
D)  the price of gasoline needs to be regulated by the Federal Government.

Question 4

In the labor market,if the government imposes a minimum wage that is below the equilibrium wage,then

Accepted Answer

A)  workers who wish to work at the minimum wage will have a difficult time finding jobs. 
B)  firms will hire fewer workers than without the minimum wage law. 
C)  some workers may lose their jobs as a result. 
D)  nothing will happen to the wage rate or employment. 
A)  workers who wish to work at the minimum wage will have a difficult time finding jobs. 
B)  firms will hire fewer workers than without the minimum wage law. 
C)  some workers may lose their jobs as a result. 
D)  nothing will happen to the wage rate or employment.

Question 5

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Accepted Answer

In all cases,total expenditure equals 10

Question 6

Holding all other factors constant,consumers demand more of a good the

Accepted Answer

A)  higher its price. 
B)  lower its price. 
C)  steeper the downward slope of the demand curve. 
D)  steeper the upward slope of the demand curve. 
A)  higher its price. 
B)  lower its price. 
C)  steeper the downward slope of the demand curve. 
D)  steeper the upward slope of the demand curve.

Question 7

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be supplied unless the price is above

Accepted Answer

A)  $0. 
B)  $5. 
C)  $12. 
D)  $14. 
A)  $0. 
B)  $5. 
C)  $12. 
D)  $14.

Question 8

Once an equilibrium is achieved,it can persist indefinitely because

Accepted Answer

A)  shocks that shift the demand curve or the supply curve cannot occur. 
B)  shocks to the demand curve are always exactly offset by shocks to the supply curve. 
C)  the government never intervenes in markets at equilibrium. 
D)  in the absence of supply/demand shocks no one applies pressure to change the price. 
A)  shocks that shift the demand curve or the supply curve cannot occur. 
B)  shocks to the demand curve are always exactly offset by shocks to the supply curve. 
C)  the government never intervenes in markets at equilibrium. 
D)  in the absence of supply/demand shocks no one applies pressure to change the price.

Question 9

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

Accepted Answer

A)  the intercept of the function. 
B)  the slope of the function. 
C)  neither the slope nor the intercept of the function. 
D)  in both the slope and the intercept of the function. 
A)  the intercept of the function. 
B)  the slope of the function. 
C)  neither the slope nor the intercept of the function. 
D)  in both the slope and the intercept of the function.

Question 10

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

Accepted Answer

A) True 
 B)False

Question 11

The Law of Supply ensures that supply curves slope upward.

Accepted Answer

A) True 
 B)False

Question 12

One reason the supply and demand model might not be appropriate to the health-care industry?

Accepted Answer

A)  Consumers do not have full information. 
B)  Providers do not know the demand for health-care services. 
C)  Consumers do not know how to value their own health. 
D)  The costs of finding a doctor are too low. 
A)  Consumers do not have full information. 
B)  Providers do not know the demand for health-care services. 
C)  Consumers do not know how to value their own health. 
D)  The costs of finding a doctor are too low.

Question 13

The quantity of a good that consumers demand depends only on the price of the good.

Accepted Answer

A) True 
 B)False

Question 14

Explain why the supply-and-demand model should not be used to analyze the market for jeans.

Accepted Answer

Products in the jeans market are not ide

Question 15

Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb,where QD is the quantity of pizza demanded,P is the price of pizza,and Pb is the price of a burrito.What is the relationship between burritos and pizza,from the point of view of consumers?

Accepted Answer

A)  They are independent. 
B)  They are complements. 
C)  They are substitutes. 
D)  Not enough information to answer the question. 
A)  They are independent. 
B)  They are complements. 
C)  They are substitutes. 
D)  Not enough information to answer the question.

Question 16

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for the air we are currently breathing?

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.

Question 17

An increase in the demand curve for orange juice would be illustrated as a

Accepted Answer

A)  leftward shift of the demand curve. 
B)  rightward shift of the demand curve. 
C)  movement up along the demand curve. 
D)  movement down along the demand curve. 
A)  leftward shift of the demand curve. 
B)  rightward shift of the demand curve. 
C)  movement up along the demand curve. 
D)  movement down along the demand curve.

Question 18

If price is initially above the equilibrium level,

Accepted Answer

A)  the supply curve will shift rightward. 
B)  the supply curve will shift leftward. 
C)  excess supply exists. 
D)  all firms can sell as much as they want. 
A)  the supply curve will shift rightward. 
B)  the supply curve will shift leftward. 
C)  excess supply exists. 
D)  all firms can sell as much as they want.

Question 19

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

Accepted Answer

A)  shift the supply of corn to the left. 
B)  shift the supply of corn to the right. 
C)  reduce the production of corn by sliding down the corn supply curve, all else equal. 
D)  increase the production of corn by sliding up the corn supply curve, all else equal. 
A)  shift the supply of corn to the left. 
B)  shift the supply of corn to the right. 
C)  reduce the production of corn by sliding down the corn supply curve, all else equal. 
D)  increase the production of corn by sliding up the corn supply curve, all else equal.

Question 20

-The above figure shows a graph of the market for pizzas in a large town.Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce no more than 40 pizzas.What will the price of pizza be as a result of this quota?

Accepted Answer

A)  $2 
B)  $7 
C)  $8 
D)  $10 
A)  $2 
B)  $7 
C)  $8 
D)  $10

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

Which of the following cultural events likely increased the demand for the associated product?

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

In the labor market,if the government imposes a minimum wage that is below the equilibrium wage,then

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Holding all other factors constant,consumers demand more of a good the

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be supplied unless the price is above

Once an equilibrium is achieved,it can persist indefinitely because

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

The Law of Supply ensures that supply curves slope upward.

One reason the supply and demand model might not be appropriate to the health-care industry?

The quantity of a good that consumers demand depends only on the price of the good.

Explain why the supply-and-demand model should not be used to analyze the market for jeans.

Suppose the market demand curve for pizza can be expressed as Q^D = 100 - 2P + 3Pb,where Q^D is the quantity of pizza demanded,P is the price of pizza,and Pb is the price of a burrito.What is the relationship between burritos and pizza,from the point of view of consumers?

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for the air we are currently breathing?

An increase in the demand curve for orange juice would be illustrated as a

If price is initially above the equilibrium level,

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

-The above figure shows a graph of the market for pizzas in a large town.Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce no more than 40 pizzas.What will the price of pizza be as a result of this quota?

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

If a government-imposed price ceiling causes the observed price in a market to be below the equilibrium price,

Which of the following cultural events likely increased the demand for the associated product?

If the price of gasoline were $5,many people would stop buying gasoline while others would continue to do so.This would indicate

In the labor market,if the government imposes a minimum wage that is below the equilibrium wage,then

Suppose the demand for a particular product can be expressed as Q = 100/p.Calculate the total amount spent on this good when p = 10,20,and 50.Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?

Holding all other factors constant,consumers demand more of a good the

-The above figure shows a graph of the market for pizzas in a large town.No pizzas will be supplied unless the price is above

Once an equilibrium is achieved,it can persist indefinitely because

Consider the demand function Qd = 150 - 2P.The effects of other determinants of Qd is reflected in

Import quotas on steel tend to result in higher quantities of steel being sold at lower prices than would be observed in the absence of a quota.

The Law of Supply ensures that supply curves slope upward.

One reason the supply and demand model might not be appropriate to the health-care industry?

The quantity of a good that consumers demand depends only on the price of the good.

Explain why the supply-and-demand model should not be used to analyze the market for jeans.

Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb,where QD is the quantity of pizza demanded,P is the price of pizza,and Pb is the price of a burrito.What is the relationship between burritos and pizza,from the point of view of consumers?

-The above figure shows three different supply-and-demand graphs.Which graph best represents the market for the air we are currently breathing?

An increase in the demand curve for orange juice would be illustrated as a

If price is initially above the equilibrium level,

If ethanol production is expected to increase the price of corn,U.S.farmers will likely

-The above figure shows a graph of the market for pizzas in a large town.Suppose that concern over dietary habits has led the government to impose a restriction that limits suppliers to produce no more than 40 pizzas.What will the price of pizza be as a result of this quota?

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 the market demand curve for pizza can be expressed as Q^D = 100 - 2P + 3Pb,where Q^D is the quantity of pizza demanded,P is the price of pizza,and Pb is the price of a burrito.What is the relationship between burritos and pizza,from the point of view of consumers?