Question 1

Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Accepted Answer

A)  raise the equilibrium price of frozen yogurt. 
B)  increase the quantity supplied of frozen yogurt. 
C)  increase the supply of ice cream. 
D)  increase the demand for frozen yogurt. 
A)  raise the equilibrium price of frozen yogurt. 
B)  increase the quantity supplied of frozen yogurt. 
C)  increase the supply of ice cream. 
D)  increase the demand for frozen yogurt.

Question 2

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market.
-Refer to Exhibit 3-12.Fill in blanks (E)and (F)respectively with the market quantity supplied at given each price.

Accepted Answer

A)  10.50; 12.91 
B)  47; 52 
C)  99; 131 
D)  105; 142 
E)  none of the above 
A)  10.50; 12.91 
B)  47; 52 
C)  99; 131 
D)  105; 142 
E)  none of the above

Question 3

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

Accepted Answer

A)  The supply of good X was higher in year 2 than in year 1 and the demand for good X was the same in year 2 as in year 1. 
B)  The demand for good X was higher in year 2 than in year 1 and the supply of good X was the same in year 2 as in year 1. 
C)  Both the demand for,and supply of,good X were higher in year 2 than in year 1. 
D)  b or c 
E)  a,b,or c 
A)  The supply of good X was higher in year 2 than in year 1 and the demand for good X was the same in year 2 as in year 1. 
B)  The demand for good X was higher in year 2 than in year 1 and the supply of good X was the same in year 2 as in year 1. 
C)  Both the demand for,and supply of,good X were higher in year 2 than in year 1. 
D)  b or c 
E)  a,b,or c

Question 4

-Refer to Exhibit 3-14.At a price of $13,there is a ____________ of ____________ units of good X.

Accepted Answer

A)  shortage; 140 
B)  shortage; 160 
C)  surplus; 140 
D)  surplus; 20 
E)  surplus; 100 
A)  shortage; 140 
B)  shortage; 160 
C)  surplus; 140 
D)  surplus; 20 
E)  surplus; 100

Question 5

At a price of $9.99 per digital book,Danielle buys 3 digital books per month.When the price decreases to $7.99,Danielle buys 4 digital books per month.Jason says that Danielle's demand for digital books has increased.Is Jason correct?

Accepted Answer

A)  Yes,Jason is correct. 
B)  No,Jason is incorrect.Danielle's demand has decreased. 
C)  No,Jason is incorrect.Danielle's quantity demanded has decreased,but her demand has stayed the same. 
D)  No,Jason is incorrect.Danielle's quantity demanded has increased,but her demand has stayed the same. 
E)  No,Jason is incorrect.Danielle's quantity demanded has increased and her demand has decreased. 
A)  Yes,Jason is correct. 
B)  No,Jason is incorrect.Danielle's demand has decreased. 
C)  No,Jason is incorrect.Danielle's quantity demanded has decreased,but her demand has stayed the same. 
D)  No,Jason is incorrect.Danielle's quantity demanded has increased,but her demand has stayed the same. 
E)  No,Jason is incorrect.Danielle's quantity demanded has increased and her demand has decreased.

Question 6

Good Y is an inferior good.If the average income of those who buy good Y rises,the _____________ curve for good Y will shift ____________ resulting in a(n)_____________ in the equilibrium price of Y and a(n)____________ in the equilibrium quantity of Y.

Accepted Answer

A)  supply; rightward; decrease; increase. 
B)  demand; leftward; decrease; decrease 
C)  demand; rightward; increase; increase 
D)  supply; leftward; increase; decrease 
E)  supply; leftward; increase; increase 
A)  supply; rightward; decrease; increase. 
B)  demand; leftward; decrease; decrease 
C)  demand; rightward; increase; increase 
D)  supply; leftward; increase; decrease 
E)  supply; leftward; increase; increase

Question 7

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

Accepted Answer

A) True 
 B)False

Question 8

Suppose Smith wants one iPhone no matter what the price is between $0 and $350,Jones wants one iPhone no matter what the price is between $0 and $200,and Griffith wants one iPhone no matter what the price is between $0 and $450.In this case,each individual buyer's demand curve will be __________________ and the market demand curve will be __________________.

Accepted Answer

A)  downward sloping; vertical 
B)  vertical; downward sloping 
C)  vertical; vertical 
D)  downward sloping; downward sloping 
A)  downward sloping; vertical 
B)  vertical; downward sloping 
C)  vertical; vertical 
D)  downward sloping; downward sloping

Question 9

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

Accepted Answer

A)  place more oil on the market this year,thus shifting the present supply curve of oil rightward. 
B)  hold some oil off the market this year,thus shifting the present supply curve of oil leftward. 
C)  place more oil on the market this year,thus increasing the quantity supplied of oil at lower but not higher prices. 
D)  hold some oil off the market this year,thus decreasing the quantity supplied of oil at lower but not higher prices. 
A)  place more oil on the market this year,thus shifting the present supply curve of oil rightward. 
B)  hold some oil off the market this year,thus shifting the present supply curve of oil leftward. 
C)  place more oil on the market this year,thus increasing the quantity supplied of oil at lower but not higher prices. 
D)  hold some oil off the market this year,thus decreasing the quantity supplied of oil at lower but not higher prices.

Question 10

An "increase in demand" means that

Accepted Answer

A)  the demand curve has shifted to the left. 
B)  price has declined and consumers want to purchase more of the good. 
C)  the demand curve has shifted to the right. 
D)  the price of the good can be expected to decline,assuming supply stays constant. 
A)  the demand curve has shifted to the left. 
B)  price has declined and consumers want to purchase more of the good. 
C)  the demand curve has shifted to the right. 
D)  the price of the good can be expected to decline,assuming supply stays constant.

Question 11

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.

Accepted Answer

A)  shortage; above 
B)  shortage; below 
C)  surplus; above 
D)  surplus; below 
A)  shortage; above 
B)  shortage; below 
C)  surplus; above 
D)  surplus; below

Question 12

An increase in the number of buyers in a particular market for a good will result in a ___________________ for that good.

Accepted Answer

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

Question 13

-Refer to Exhibit 3-6.If D1 is the relevant demand curve,an increase in the price of good X may cause

Accepted Answer

A)  demand to shift from D1 to D2. 
B)  demand to shift from D1 to D3. 
C)  a movement along D1 from point A to point B. 
D)  a movement along D1 from point A to point C. 
A)  demand to shift from D1 to D2. 
B)  demand to shift from D1 to D3. 
C)  a movement along D1 from point A to point B. 
D)  a movement along D1 from point A to point C.

Question 14

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

Accepted Answer

A change in supply results from a change

Question 15

-Refer to Exhibit 3-11.Fill in blanks (E)and (F)respectively with "Exchange" or "No Exchange"to indicate whether or not exchange would take place at the given prices.

Accepted Answer

A)  Exchange; Exchange 
B)  Exchange; No Exchange 
C)  No Exchange; Exchange 
D)  No Exchange; No Exchange 
A)  Exchange; Exchange 
B)  Exchange; No Exchange 
C)  No Exchange; Exchange 
D)  No Exchange; No Exchange

Question 16

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

Accepted Answer

A)  olive oil and vegetable oil 
B)  peanuts and peanut butter 
C)  airline tickets and rental cars 
D)  hiking boots and tennis shoes 
E)  all of the above 
A)  olive oil and vegetable oil 
B)  peanuts and peanut butter 
C)  airline tickets and rental cars 
D)  hiking boots and tennis shoes 
E)  all of the above

Question 17

If the demand for a good increases by more than the supply of the good increases,then the good's equilibrium price will __________ and its equilibrium quantity will __________.

Accepted Answer

A)  rise; fall 
B)  rise; rise 
C)  fall; fall 
D)  fall; rise 
A)  rise; fall 
B)  rise; rise 
C)  fall; fall 
D)  fall; rise

Question 18

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point W and is now at point X,the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

Accepted Answer

A)  greater than; greater than 
B)  less than; greater than 
C)  greater than; less than 
D)  less than; less than 
A)  greater than; greater than 
B)  less than; greater than 
C)  greater than; less than 
D)  less than; less than

Question 19

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,a decline in technology in the production of good X causes

Accepted Answer

A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X. 
A)  the supply of good X to shift from S1 to S2 
B)  the supply of good X to shift from S1 to S3. 
C)  a movement along S1 perhaps from point A to point B. 
D)  a movement along S1 perhaps from point A to point C. 
E)  no change in the supply of good X.

Question 20

Another term for excess supply is shortage.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand: Theory

Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Fill in blanks (E)and (F)respectively with the market quantity supplied at given each price.

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

-Refer to Exhibit 3-14.At a price of $13,there is a ____________ of ____________ units of good X.

At a price of $9.99 per digital book,Danielle buys 3 digital books per month.When the price decreases to $7.99,Danielle buys 4 digital books per month.Jason says that Danielle's demand for digital books has increased.Is Jason correct?

Good Y is an inferior good.If the average income of those who buy good Y rises,the _____________ curve for good Y will shift ____________ resulting in a(n)_____________ in the equilibrium price of Y and a(n)____________ in the equilibrium quantity of Y.

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

An "increase in demand" means that

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a __________ at that price and the current price must be __________ the equilibrium price.

An increase in the number of buyers in a particular market for a good will result in a ___________________ for that good.

-Refer to Exhibit 3-6.If D1 is the relevant demand curve,an increase in the price of good X may cause

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

-Refer to Exhibit 3-11.Fill in blanks (E)and (F)respectively with "Exchange" or "No Exchange"to indicate whether or not exchange would take place at the given prices.

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

If the demand for a good increases by more than the supply of the good increases,then the good's equilibrium price will __________ and its equilibrium quantity will __________.

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point W and is now at point X,the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,a decline in technology in the production of good X causes

Another term for excess supply is shortage.

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

-Refer to Exhibit 3-14.At a price of $13,there is a of units of good X.

Good Y is an inferior good.If the average income of those who buy good Y rises,the _______ curve for good Y will shift resulting in a(n)_ in the equilibrium price of Y and a(n)______ in the equilibrium quantity of Y.

On a supply-and-demand diagram,consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve.There is a at that price and the current price must be the equilibrium price.

-Refer to Exhibit 3-6.If D₁ is the relevant demand curve,an increase in the price of good X may cause

If the demand for a good increases by more than the supply of the good increases,then the good's equilibrium price will and its equilibrium quantity will .

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point W and is now at point X,the new equilibrium price is it was originally and the new equilibrium quantity is __ it was originally.

-Refer to Exhibit 3-7.If S₁ is the relevant supply curve,a decline in technology in the production of good X causes