Question 1

Which of the following pairs of goods would be most likely to be substitutes?

Accepted Answer

A)  pasta and pasta sauce 
B)  olive oil and vegetable oil 
C)  chips and salsa 
D)  tires and automobiles 
E)  all of the above 
A)  pasta and pasta sauce 
B)  olive oil and vegetable oil 
C)  chips and salsa 
D)  tires and automobiles 
E)  all of the above

Question 2

The fundamental reason why most supply curves are upward sloping is that

Accepted Answer

A)  consumers substitute lower-priced goods for higher-priced goods. 
B)  the quantity supplied increases as more firms enter the market. 
C)  a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D)  higher production raises the opportunity costs of production and so price must rise to induce more output. 
A)  consumers substitute lower-priced goods for higher-priced goods. 
B)  the quantity supplied increases as more firms enter the market. 
C)  a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D)  higher production raises the opportunity costs of production and so price must rise to induce more output.

Question 3

-Refer to Exhibit 3-4.A price of $6 in this market will result in a

Accepted Answer

A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units. 
A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units.

Question 4

Suppose that for a given good demand increases and supply decreases at the same time.If demand increases by a lesser amount than supply decreases,then equilibrium price __________ and equilibrium quantity __________ for that good.

Accepted Answer

A)  rises; falls 
B)  falls; falls 
C)  rises; rises 
D)  falls; rises 
A)  rises; falls 
B)  falls; falls 
C)  rises; rises 
D)  falls; rises

Question 5

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​
-Refer to Exhibit 3-3.A movement from point Z to point W would have been the result of

Accepted Answer

A)  a reduction in the price of good Y. 
B)  an increase in taxes paid by the producers of good Y. 
C)  a decline in technology in the production of good Y. 
D)  an increase in the number of buyers of good Y. 
A)  a reduction in the price of good Y. 
B)  an increase in taxes paid by the producers of good Y. 
C)  a decline in technology in the production of good Y. 
D)  an increase in the number of buyers of good Y.

Question 6

One reason that helps to explain the law of supply is the law of

Accepted Answer

A)  diminishing marginal utility. 
B)  diminishing marginal returns. 
C)  decreasing opportunity costs. 
D)  demand. 
A)  diminishing marginal utility. 
B)  diminishing marginal returns. 
C)  decreasing opportunity costs. 
D)  demand.

Question 7

Assume that Jose,Kaitlyn,Leah,and Maria are the only buyers in this market.
-Refer to Exhibit 3-13.Fill in blanks (E)and (F)respectively with the market quantity demanded at each given price.

Accepted Answer

A)  6.78; 3.80 
B)  61; 38 
C)  75; 64 
D)  48; 27 
E)  none of the above 
A)  6.78; 3.80 
B)  61; 38 
C)  75; 64 
D)  48; 27 
E)  none of the above

Question 8

If the U.S.government imposes a more restrictive import quota on Japanese video gaming systems,the ____________ curve for Japanese video gaming systems in the U.S.will shift ___________.

Accepted Answer

A)  supply; leftward 
B)  supply; rightward 
C)  demand; leftward 
D)  demand; rightward 
A)  supply; leftward 
B)  supply; rightward 
C)  demand; leftward 
D)  demand; rightward

Question 9

Economists state that the __________ utility a person receives from a unit of a good,the __________ the price he or she is willing to pay for it.

Accepted Answer

A)  more; lower 
B)  more; higher 
C)  less; higher 
D)  less; lower 
E)  b and d 
A)  more; lower 
B)  more; higher 
C)  less; higher 
D)  less; lower 
E)  b and d

Question 10

Which of the following is an example of a service?

Accepted Answer

A)  medical care 
B)  dental care 
C)  a psychology lecture 
D)  a television set 
E)  a,b and c 
A)  medical care 
B)  dental care 
C)  a psychology lecture 
D)  a television set 
E)  a,b and c

Question 11

When the price of Toyota Corollas rises,the demand for Corollas falls,ceteris paribus

Accepted Answer

A) True 
 B)False

Question 12

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

Accepted Answer

A)  supply curve for good X shifts leftward and the price of good X rises. 
B)  quantity supplied of good X falls and the price of good X rises. 
C)  demand curve for good X shifts leftward and the price of good X falls. 
D)  supply curve for good X shifts rightward and the price of good X falls. 
E)  supply curve for good X shifts leftward and the price of good X falls. 
A)  supply curve for good X shifts leftward and the price of good X rises. 
B)  quantity supplied of good X falls and the price of good X rises. 
C)  demand curve for good X shifts leftward and the price of good X falls. 
D)  supply curve for good X shifts rightward and the price of good X falls. 
E)  supply curve for good X shifts leftward and the price of good X falls.

Question 13

Which of the following statements is false?

Accepted Answer

A)  A change in the price of good X will usually change the quantity supplied of good X,ceteris paribus. 
B)  A change in the number of sellers of a good can change the supply of that good. 
C)  Price and quantity supplied are directly related. 
D)  A vertical supply curve represents a direct relationship between price and quantity supplied. 
A)  A change in the price of good X will usually change the quantity supplied of good X,ceteris paribus. 
B)  A change in the number of sellers of a good can change the supply of that good. 
C)  Price and quantity supplied are directly related. 
D)  A vertical supply curve represents a direct relationship between price and quantity supplied.

Question 14

If the demand for computer software rises as incomes rise,then computer software is a (an)

Accepted Answer

A)  inferior good 
B)  substitute (good)for computers 
C)  normal good 
D)  complement (good)for computers 
E)  c and d 
A)  inferior good 
B)  substitute (good)for computers 
C)  normal good 
D)  complement (good)for computers 
E)  c and d

Question 15

Which of the following statements is false?

Accepted Answer

A)  At equilibrium in a market,scarcity does not exist. 
B)  If there is a shortage of 100 units at a price of $2 per unit,the shortage will be greater than 100 units at a price of $1 per unit. 
C)  If there is a surplus of 30 units at a price of $3,the surplus will be less than 30 units (or even nonexistent)at a price of $2. 
D)  If there is a surplus,suppliers will not be able to sell all they had hoped to sell at a particular price. 
A)  At equilibrium in a market,scarcity does not exist. 
B)  If there is a shortage of 100 units at a price of $2 per unit,the shortage will be greater than 100 units at a price of $1 per unit. 
C)  If there is a surplus of 30 units at a price of $3,the surplus will be less than 30 units (or even nonexistent)at a price of $2. 
D)  If there is a surplus,suppliers will not be able to sell all they had hoped to sell at a particular price.

Question 16

If people begin to favor science fiction novels to a greater degree than previously,the demand curve for science fiction novels

Accepted Answer

A)  shifts rightward. 
B)  shifts leftward. 
C)  stays constant. 
D)  can shift either rightward or leftward. 
A)  shifts rightward. 
B)  shifts leftward. 
C)  stays constant. 
D)  can shift either rightward or leftward.

Question 17

The terms scarcity and shortage are synonyms.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true about the relationship between price and quantity supplied?

Accepted Answer

A)  There is always a direct relationship between price and quantity supplied. 
B)  There is always an inverse relationship between price and quantity supplied. 
C)  There is usually a direct relationship between price and quantity supplied. 
D)  There is usually an inverse relationship between price and quantity supplied. 
A)  There is always a direct relationship between price and quantity supplied. 
B)  There is always an inverse relationship between price and quantity supplied. 
C)  There is usually a direct relationship between price and quantity supplied. 
D)  There is usually an inverse relationship between price and quantity supplied.

Question 19

In general,all markets equilibrate at the same speed.

Accepted Answer

A) True 
 B)False

Question 20

Supply curves are ________________ upward sloping.

Accepted Answer

A)  always 
B)  usually 
C)  rarely 
D)  never 
A)  always 
B)  usually 
C)  rarely 
D)  never

Exam 3: Supply and Demand: Theory

Which of the following pairs of goods would be most likely to be substitutes?

The fundamental reason why most supply curves are upward sloping is that

-Refer to Exhibit 3-4.A price of $6 in this market will result in a

Suppose that for a given good demand increases and supply decreases at the same time.If demand increases by a lesser amount than supply decreases,then equilibrium price __________ and equilibrium quantity __________ for that good.

​ ​ -Refer to Exhibit 3-3.A movement from point Z to point W would have been the result of

One reason that helps to explain the law of supply is the law of

Assume that Jose,Kaitlyn,Leah,and Maria are the only buyers in this market. -Refer to Exhibit 3-13.Fill in blanks (E)and (F)respectively with the market quantity demanded at each given price.

If the U.S.government imposes a more restrictive import quota on Japanese video gaming systems,the ____________ curve for Japanese video gaming systems in the U.S.will shift ___________.

Economists state that the __________ utility a person receives from a unit of a good,the __________ the price he or she is willing to pay for it.

Which of the following is an example of a service?

When the price of Toyota Corollas rises,the demand for Corollas falls,ceteris paribus

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

Which of the following statements is false?

If the demand for computer software rises as incomes rise,then computer software is a (an)

Which of the following statements is false?

If people begin to favor science fiction novels to a greater degree than previously,the demand curve for science fiction novels

The terms scarcity and shortage are synonyms.

Which of the following is true about the relationship between price and quantity supplied?

In general,all markets equilibrate at the same speed.

Supply curves are ________________ upward sloping.

What Economics Is About

Production Possibilities Frontier Framework

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Suppose that for a given good demand increases and supply decreases at the same time.If demand increases by a lesser amount than supply decreases,then equilibrium price and equilibrium quantity for that good.

-Refer to Exhibit 3-3.A movement from point Z to point W would have been the result of

If the U.S.government imposes a more restrictive import quota on Japanese video gaming systems,the __ curve for Japanese video gaming systems in the U.S.will shift _.

Economists state that the utility a person receives from a unit of a good,the the price he or she is willing to pay for it.