Question 1

Other things held constant, the higher the price of a good

Accepted Answer

A) the lower the producer surplus. 
B) the greater the producer surplus. 
C) the higher the supply. 
D) the lower the supply. 
A) the lower the producer surplus. 
B) the greater the producer surplus. 
C) the higher the supply. 
D) the lower the supply.

Question 2

Suppose good X is a normal good.Then a decrease in income would lead to

Accepted Answer

A) an outward shift of the demand curve. 
B) an inward shift of the demand curve. 
C) no shift of the demand curve. 
D) a movement along the demand curve. 
A) an outward shift of the demand curve. 
B) an inward shift of the demand curve. 
C) no shift of the demand curve. 
D) a movement along the demand curve.

Question 3

A floor price is

Accepted Answer

A) the minimum legal price that can be charged in a market. 
B) the maximum legal price that can be charged in a market. 
C) below the initial market equilibrium price. 
D) equal to the initial market equilibrium price. 
A) the minimum legal price that can be charged in a market. 
B) the maximum legal price that can be charged in a market. 
C) below the initial market equilibrium price. 
D) equal to the initial market equilibrium price.

Question 4

Suppose the market supply for good X is given by QXS = -100 + 5PX.If the equilibrium price of X is $100 per unit then producer surplus is

Accepted Answer

A) $400. 
B) $1,600. 
C) $16,000. 
D) none of the statements associated with this question are correct. 
A) $400. 
B) $1,600. 
C) $16,000. 
D) none of the statements associated with this question are correct.

Question 5

Recently, the Brazilian Association of Citrus Exports (Abecitrus) announced that orange production would be down 25 percent this year because of poor weather conditions, disease, and tree stress resulting from three straight bumper crops.What effect will the decreased production of oranges have on the demand for tomato juice?

Accepted Answer

A 25% reduction in the production of ora

Question 6

Suppose X and Y are complements and demand for X is Qxd = $\alpha$0 + $\alpha$XPX + $\alpha$YPY + $\alpha$MM + $\alpha$HH.Then we know

Accepted Answer

A) $\alpha$H > 0. B) $\alpha$X > 0. C) $\alpha$Y M < 0. A) $\alpha$H > 0. B) $\alpha$X > 0. C) $\alpha$Y M < 0.

Question 7

If the price of good X becomes lower, then the level of consumer surplus becomes

Accepted Answer

A) lower. 
B) higher. 
C) unchanged. 
D) lower in the short-run but higher in the long run. 
A) lower. 
B) higher. 
C) unchanged. 
D) lower in the short-run but higher in the long run.

Question 8

Which of the following is least likely to be a normal good?

Accepted Answer

A) Steak. 
B) Airline travel. 
C) Bologna. 
D) A house. 
A) Steak. 
B) Airline travel. 
C) Bologna. 
D) A house.

Question 9

The federal government recently decided to raise the excise tax on hard liquor.
a.Graphically illustrate the effects of this tax on the market for hard liquor.
b.Would a $1 increase in the excise tax on liquor increase the equilibrium price of liquor by $1? Explain.
c.How would the excise tax on hard liquor affect a beer distributor?

Accepted Answer

a.As can be seen from Figure 2-11, the m

Question 10

American Tennishoe, Inc., is concerned because Congress has proposed an excise tax of $1 on each pair of tennis shoes sold in the United States.They are lobbying against the tax through an advertising campaign that says the tax will raise the price of tennis shoes by $1.Use supply and demand graphs to show how much of the tax will actually be passed on to consumers.

Accepted Answer

Suppose shoe producers are responsible f

Question 11

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive, then:

Accepted Answer

A) goods y and x are complements. 
B) goods y and x are inferior goods. 
C) goods y and x are normal goods. 
D) goods y and x are substitutes. 
A) goods y and x are complements. 
B) goods y and x are inferior goods. 
C) goods y and x are normal goods. 
D) goods y and x are substitutes.

Question 12

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the equilibrium price and quantity in this market.

Accepted Answer

A) $24 and 24 units, respectively. 
B) $4 and 4 units, respectively. 
C) $2 and 6 units, respectively. 
D) $6 and 2 units, respectively. 
A) $24 and 24 units, respectively. 
B) $4 and 4 units, respectively. 
C) $2 and 6 units, respectively. 
D) $6 and 2 units, respectively.

Question 13

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Accepted Answer

A) shift rightward. 
B) shift leftward. 
C) become flatter. 
D) become steeper. 
A) shift rightward. 
B) shift leftward. 
C) become flatter. 
D) become steeper.

Question 14

Changes in the price of a good lead to:

Accepted Answer

A) changes in the quantity supplied of the good. 
B) changes in supply. 
C) changes in demand. 
D) no effects in quantity supplied or demanded. 
A) changes in the quantity supplied of the good. 
B) changes in supply. 
C) changes in demand. 
D) no effects in quantity supplied or demanded.

Question 15

Which of the following pairs of goods are probably complements?

Accepted Answer

A) Electricity and natural gas. 
B) Butter and margarine. 
C) Steak and chicken. 
D) Ketchup and French fries. 
A) Electricity and natural gas. 
B) Butter and margarine. 
C) Steak and chicken. 
D) Ketchup and French fries.

Question 16

In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P.A price ceiling of $4 will result in a

Accepted Answer

A) shortage of 24 units. 
B) shortage of 34 units. 
C) surplus of 58 units. 
D) surplus of 34 units. 
A) shortage of 24 units. 
B) shortage of 34 units. 
C) surplus of 58 units. 
D) surplus of 34 units.

Question 17

If supply increases, then the

Accepted Answer

A) supply curve shifts to the left. 
B) equilibrium price goes down. 
C) equilibrium quantity goes down. 
D) demand curve shifts to the right. 
A) supply curve shifts to the left. 
B) equilibrium price goes down. 
C) equilibrium quantity goes down. 
D) demand curve shifts to the right.

Question 18

Jane pays the market price of $69 for a new pair of running shoes, even though she would be happy to pay a maximum of $100 for the same pair of shoes.This is an example of the concept of

Accepted Answer

A) producer surplus. 
B) price ceilings. 
C) full economic prices. 
D) consumer surplus. 
A) producer surplus. 
B) price ceilings. 
C) full economic prices. 
D) consumer surplus.

Question 19

Which of the following are least likely to be complements?

Accepted Answer

A) Peanut butter and jelly. 
B) Bread and butter. 
C) Sports coats and dress slacks. 
D) Cars and trucks. 
A) Peanut butter and jelly. 
B) Bread and butter. 
C) Sports coats and dress slacks. 
D) Cars and trucks.

Question 20

The supply function

Accepted Answer

A) describes how much of good X will be produced at an alternative price of good X, given all the other variables being constant. 
B) recognizes that the quantity of a good produced depends on its price and supply shifters. 
C) shows the relationship between the quantity supplied of X and variables other than its price. 
D) does not include technology. 
A) describes how much of good X will be produced at an alternative price of good X, given all the other variables being constant. 
B) recognizes that the quantity of a good produced depends on its price and supply shifters. 
C) shows the relationship between the quantity supplied of X and variables other than its price. 
D) does not include technology.

Other things held constant, the higher the price of a good

Suppose good X is a normal good.Then a decrease in income would lead to

A floor price is

Suppose the market supply for good X is given by Q_X^S = -100 + 5P_X.If the equilibrium price of X is $100 per unit then producer surplus is

Suppose X and Y are complements and demand for X is Q_x^d = $\alpha$ ₀ + $\alpha$ _XP_X + $\alpha$ _YP_Y + $\alpha$ _MM + $\alpha$ _HH.Then we know

If the price of good X becomes lower, then the level of consumer surplus becomes

Which of the following is least likely to be a normal good?

Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive, then:

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 - 2Q_X and P_X = 2 + 2Q_X_. Compute the equilibrium price and quantity in this market.

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Changes in the price of a good lead to:

Which of the following pairs of goods are probably complements?

In a competitive market, the market demand is Q^d = 70 - 3P and the market supply is Q^s = 6P.A price ceiling of $4 will result in a

If supply increases, then the

Jane pays the market price of $69 for a new pair of running shoes, even though she would be happy to pay a maximum of $100 for the same pair of shoes.This is an example of the concept of

Which of the following are least likely to be complements?

The supply function

The Fundamentals of Managerial Economics

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Exam 2: Market Forces: Demand and Supply

Other things held constant, the higher the price of a good

Suppose good X is a normal good.Then a decrease in income would lead to

A floor price is

Suppose the market supply for good X is given by QXS = -100 + 5PX.If the equilibrium price of X is $100 per unit then producer surplus is

Suppose X and Y are complements and demand for X is Qxd = α\alphaα 0 + α\alphaα XPX + α\alphaα YPY + α\alphaα MM + α\alphaα HH.Then we know

If the price of good X becomes lower, then the level of consumer surplus becomes

Which of the following is least likely to be a normal good?

Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM.If ay is positive, then:

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the equilibrium price and quantity in this market.

Graphically, an increase in the number of vegetarians will cause the demand curve for Tofu (a meat substitute) to

Changes in the price of a good lead to:

Which of the following pairs of goods are probably complements?

In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P.A price ceiling of $4 will result in a

If supply increases, then the

Jane pays the market price of $69 for a new pair of running shoes, even though she would be happy to pay a maximum of $100 for the same pair of shoes.This is an example of the concept of

Which of the following are least likely to be complements?

The supply function

The Fundamentals of Managerial Economics

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Basic Oligopoly Models

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Suppose the market supply for good X is given by Q_X^S = -100 + 5P_X.If the equilibrium price of X is $100 per unit then producer surplus is

Suppose X and Y are complements and demand for X is Q_x^d = $\alpha$ ₀ + $\alpha$ _XP_X + $\alpha$ _YP_Y + $\alpha$ _MM + $\alpha$ _HH.Then we know

Suppose the demand for good X is given by Q^d_x = 10 + a_xP_x + a_yP_y + a_MM.If a_y is positive, then:

Consider a market characterized by the following inverse demand and supply functions: P_X = 10 - 2Q_X and P_X = 2 + 2Q_X_. Compute the equilibrium price and quantity in this market.

In a competitive market, the market demand is Q^d = 70 - 3P and the market supply is Q^s = 6P.A price ceiling of $4 will result in a