Question 1

The curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

Accepted Answer

A) market demand curve. 
B) consumer surplus curve. 
C) average cost curve. 
D) market supply curve. 
A) market demand curve. 
B) consumer surplus curve. 
C) average cost curve. 
D) market supply curve.

Question 2

The economic principle that producers are willing to produce more output when price is high is depicted by the:

Accepted Answer

A) upward slope of the supply curve. 
B) extreme steepness of the supply curve. 
C) downward slope of the supply curve. 
D) interaction of the supply and demand curves. 
A) upward slope of the supply curve. 
B) extreme steepness of the supply curve. 
C) downward slope of the supply curve. 
D) interaction of the supply and demand curves.

Question 3

In the early part of 1998, crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact will these lower crude oil prices have on the price of gasoline?

Accepted Answer

Since crude oil is an input to producing

Question 4

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

Accepted Answer

A) the lower the demand. 
B) the higher the demand. 
C) the greater the consumer surplus. 
D) the lower the consumer surplus. 
A) the lower the demand. 
B) the higher the demand. 
C) the greater the consumer surplus. 
D) the lower the consumer surplus.

Question 5

You are the manager of Fast & Easy Donuts.Almost all of your donut sales are derived from the drive-through window.You know from experience that coffee is a complement for your donuts.The morning newspaper says that a major storm has just destroyed 50 percent of this year's coffee bean crop.Will this affect how much flour you order? Will it affect how many employees you schedule? What will happen to prices?

Accepted Answer

Destruction of 50% of this year's coffee

Question 6

Suppose both supply and demand increase.What effect will this have on the equilibrium quantity?

Accepted Answer

A) it will fall. 
B) it will rise. 
C) it may rise or fall. 
D) it will remain the same. 
A) it will fall. 
B) it will rise. 
C) it may rise or fall. 
D) it will remain the same.

Question 7

An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline in a market with downward sloping demand and upward sloping supply would raise the equilibrium price

Accepted Answer

A) exactly $1.00 per gallon. 
B) by less than $1.00 per gallon. 
C) by more than $1.00 per gallon. 
D) too little information to determine the impact on the equilibrium price. 
A) exactly $1.00 per gallon. 
B) by less than $1.00 per gallon. 
C) by more than $1.00 per gallon. 
D) too little information to determine the impact on the equilibrium price.

Question 8

All else held constant, as additional firms enter an industry

Accepted Answer

A) more output is available at each given price. 
B) less output is available at each given price. 
C) the same output is available at each given price. 
D) output could increase or decrease at each given price. 
A) more output is available at each given price. 
B) less output is available at each given price. 
C) the same output is available at each given price. 
D) output could increase or decrease at each given price.

Question 9

If A and B are complementary goods, a decrease in the price of good A would:

Accepted Answer

A) have no effect on the quantity demanded of B. 
B) lead to an increase in demand for B. 
C) lead to a decrease in demand for B. 
D) none of the statements associated with this question are correct. 
A) have no effect on the quantity demanded of B. 
B) lead to an increase in demand for B. 
C) lead to a decrease in demand for B. 
D) none of the statements associated with this question are correct.

Question 10

Consider a market characterized by the following demand and supply conditions: PX = 15 - 2QX and PX = 3 + 2QX.The equilibrium price and quantity are, respectively,

Accepted Answer

A) $3 and 9 units. 
B) $9 and 3 units. 
C) $12 and 4 units. 
D) $4 and 12 units. 
A) $3 and 9 units. 
B) $9 and 3 units. 
C) $12 and 4 units. 
D) $4 and 12 units.

Question 11

An ad valorem tax shifts the supply curve

Accepted Answer

A) down by the amount of the tax. 
B) up by the amount of the tax. 
C) by rotating it counter-clockwise. 
D) by rotating it clockwise. 
A) down by the amount of the tax. 
B) up by the amount of the tax. 
C) by rotating it counter-clockwise. 
D) by rotating it clockwise.

Question 12

An inferior good is a good

Accepted Answer

A) that has low quality. 
B) that consumers purchase less of when their incomes are higher. 
C) that consumers purchase more when their incomes are higher. 
D) of high quality. 
A) that has low quality. 
B) that consumers purchase less of when their incomes are higher. 
C) that consumers purchase more when their incomes are higher. 
D) of high quality.

Question 13

Which of the following statements is incorrect?

Accepted Answer

A) As the population rises, the market demand curve shifts to the right. 
B) As a greater fraction of the population becomes elderly, the demand for medical services will tend to increase. 
C) Changes in the composition of the population affect the demand for a product. 
D) none of the statements associated with this question are incorrect. 
A) As the population rises, the market demand curve shifts to the right. 
B) As a greater fraction of the population becomes elderly, the demand for medical services will tend to increase. 
C) Changes in the composition of the population affect the demand for a product. 
D) none of the statements associated with this question are incorrect.

Question 14

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

Accepted Answer

A) 1 unit and $6 per unit. 
B) 1 unit and $8 per unit. 
C) 3 units and $6 per unit. 
D) 3 units and $8 per unit. 
A) 1 unit and $6 per unit. 
B) 1 unit and $8 per unit. 
C) 3 units and $6 per unit. 
D) 3 units and $8 per unit.

Question 15

When quantity demanded exceeds quantity supplied

Accepted Answer

A) there exists a surplus of a good. 
B) the price tends to fall. 
C) the price is below the equilibrium price. 
D) there is no excess demand. 
A) there exists a surplus of a good. 
B) the price tends to fall. 
C) the price is below the equilibrium price. 
D) there is no excess demand.

Question 16

Suppose the demand for good X is given by Qdx = 20 - 4Px + 2Py + M.The price of good X is $5, the price of good Y is $15, and income is $150.Given these prices and income, how much of good X will be purchased?

Accepted Answer

A) 160. 
B) 180. 
C) 220. 
D) None of the statements associated with this question are correct. 
A) 160. 
B) 180. 
C) 220. 
D) None of the statements associated with this question are correct.

Question 17

If A and B are complements, an increase in the price of good A would:

Accepted Answer

A) have no effect on the quantity demanded of B. 
B) lead to an increase in demand for B. 
C) lead to a decrease in demand for B. 
D) none of the statements associated with this question are correct. 
A) have no effect on the quantity demanded of B. 
B) lead to an increase in demand for B. 
C) lead to a decrease in demand for B. 
D) none of the statements associated with this question are correct.

Question 18

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the loss in social welfare when an $8 per unit price floor is imposed on the market.

Accepted Answer

A) $0. 
B) $1. 
C) $2. 
D) $3. 
A) $0. 
B) $1. 
C) $2. 
D) $3.

Question 19

Suppose that supply increases and demand decreases.What effect will this have on price and quantity?

Accepted Answer

A) Price will increase and quantity may rise or fall. 
B) Price will decrease and quantity will increase. 
C) Price will decrease and quantity will decrease. 
D) None of the statements associated with this question are correct. 
A) Price will increase and quantity may rise or fall. 
B) Price will decrease and quantity will increase. 
C) Price will decrease and quantity will decrease. 
D) None of the statements associated with this question are correct.

Question 20

An excise tax shifts the supply curve

Accepted Answer

A) down by the amount of the tax. 
B) up by the amount of the tax. 
C) by rotating it counter-clockwise. 
D) by rotating it clockwise. 
A) down by the amount of the tax. 
B) up by the amount of the tax. 
C) by rotating it counter-clockwise. 
D) by rotating it clockwise.

The curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

The economic principle that producers are willing to produce more output when price is high is depicted by the:

In the early part of 1998, crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact will these lower crude oil prices have on the price of gasoline?

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

Suppose both supply and demand increase.What effect will this have on the equilibrium quantity?

An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline in a market with downward sloping demand and upward sloping supply would raise the equilibrium price

All else held constant, as additional firms enter an industry

If A and B are complementary goods, a decrease in the price of good A would:

Consider a market characterized by the following demand and supply conditions: P_X = 15 - 2Q_X and P_X = 3 + 2Q_X.The equilibrium price and quantity are, respectively,

An ad valorem tax shifts the supply curve

An inferior good is a good

Which of the following statements is incorrect?

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 number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

When quantity demanded exceeds quantity supplied

Suppose the demand for good X is given by Q^d_x = 20 - 4P_x + 2P_y + M.The price of good X is $5, the price of good Y is $15, and income is $150.Given these prices and income, how much of good X will be purchased?

If A and B are complements, an increase in the price of good A would:

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 loss in social welfare when an $8 per unit price floor is imposed on the market.

Suppose that supply increases and demand decreases.What effect will this have on price and quantity?

An excise tax shifts the supply curve

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

The curve which summarizes the total quantity producers are willing and able to produce at differing prices is the:

The economic principle that producers are willing to produce more output when price is high is depicted by the:

In the early part of 1998, crude oil prices fell to a nine-year low at $13.28 a barrel.Falling crude oil prices were due in part to technological advances that made locating reservoirs and extraction cheaper.What impact will these lower crude oil prices have on the price of gasoline?

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

Suppose both supply and demand increase.What effect will this have on the equilibrium quantity?

An excise tax of $1.00 per gallon of gasoline placed on the suppliers of gasoline in a market with downward sloping demand and upward sloping supply would raise the equilibrium price

All else held constant, as additional firms enter an industry

If A and B are complementary goods, a decrease in the price of good A would:

Consider a market characterized by the following demand and supply conditions: PX = 15 - 2QX and PX = 3 + 2QX.The equilibrium price and quantity are, respectively,

An ad valorem tax shifts the supply curve

An inferior good is a good

Which of the following statements is incorrect?

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

When quantity demanded exceeds quantity supplied

Suppose the demand for good X is given by Qdx = 20 - 4Px + 2Py + M.The price of good X is $5, the price of good Y is $15, and income is $150.Given these prices and income, how much of good X will be purchased?

If A and B are complements, an increase in the price of good A would:

Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX. Compute the loss in social welfare when an $8 per unit price floor is imposed on the market.

Suppose that supply increases and demand decreases.What effect will this have on price and quantity?

An excise tax shifts the supply curve

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

Consider a market characterized by the following demand and supply conditions: P_X = 15 - 2Q_X and P_X = 3 + 2Q_X.The equilibrium price and quantity are, respectively,

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 number of units and the price at which those units will be exchanged when there is an $8 per unit price floor.

Suppose the demand for good X is given by Q^d_x = 20 - 4P_x + 2P_y + M.The price of good X is $5, the price of good Y is $15, and income is $150.Given these prices and income, how much of good X will be purchased?

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 loss in social welfare when an $8 per unit price floor is imposed on the market.