Question 1

-Refer to Exhibit 3-14.At a price of $10,there is a ____________ of ____________ units of good X.

Accepted Answer

A)  surplus; 340 
B)  shortage; 230 
C)  surplus; 60 
D)  shortage; 340 
E)  shortage; 270 
A)  surplus; 340 
B)  shortage; 230 
C)  surplus; 60 
D)  shortage; 340 
E)  shortage; 270

Question 2

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

Accepted Answer

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

Question 3

-Refer to Exhibit 3-14.At a price of $11,there is a ____________ of ____________ units of good X.

Accepted Answer

A)  shortage; 290 
B)  shortage; 215 
C)  surplus; 40 
D)  surplus; 290 
E)  shortage; 230 
A)  shortage; 290 
B)  shortage; 215 
C)  surplus; 40 
D)  surplus; 290 
E)  shortage; 230

Question 4

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,an increase in the price of good X may cause

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 quantity supplied 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 quantity supplied of good X.

Question 5

An increase in the number of sellers of a good will __________________ for that good,ceteris paribus.

Accepted Answer

A)  increase equilibrium price and quantity 
B)  increase equilibrium price and decrease equilibrium quantity 
C)  decrease equilibrium price and increase equilibrium quantity 
D)  decrease equilibrium price and quantity 
E)  increase demand 
A)  increase equilibrium price and quantity 
B)  increase equilibrium price and decrease equilibrium quantity 
C)  decrease equilibrium price and increase equilibrium quantity 
D)  decrease equilibrium price and quantity 
E)  increase demand

Question 6

Equilibrium and disequilibrium

Accepted Answer

A)  are real world states. 
B)  are mental constructs used by economists. 
C)  foreshadow what is about to happen in a market. 
D)  a and b 
E)  a,b and c 
A)  are real world states. 
B)  are mental constructs used by economists. 
C)  foreshadow what is about to happen in a market. 
D)  a and b 
E)  a,b and c

Question 7

The law of supply states that price and quantity supplied are

Accepted Answer

A)  inversely related,ceteris paribus. 
B)  directly related,ceteris paribus. 
C)  not related. 
D)  fixed. 
A)  inversely related,ceteris paribus. 
B)  directly related,ceteris paribus. 
C)  not related. 
D)  fixed.

Question 8

"As the price of apples goes up,the demand for apples goes down." The author of this statement

Accepted Answer

A)  implies that price and demand are unrelated. 
B)  uses the word "demand" when he should use the word "supply." 
C)  uses the word "demand" when he should use the words "quantity demanded." 
D)  implies that demand and price have a direct relationship. 
A)  implies that price and demand are unrelated. 
B)  uses the word "demand" when he should use the word "supply." 
C)  uses the word "demand" when he should use the words "quantity demanded." 
D)  implies that demand and price have a direct relationship.

Question 9

Which of the following is descriptive of the law of diminishing marginal utility?

Accepted Answer

A)  The third hamburger consumed provides less utility than the second hamburger consumed. 
B)  The third hamburger is priced higher than the first hamburger. 
C)  As price falls,quantity demanded rises,ceteris paribus. 
D)  The price of a good rises as the costs of producing that good rise. 
E)  none of the above 
A)  The third hamburger consumed provides less utility than the second hamburger consumed. 
B)  The third hamburger is priced higher than the first hamburger. 
C)  As price falls,quantity demanded rises,ceteris paribus. 
D)  The price of a good rises as the costs of producing that good rise. 
E)  none of the above

Question 10

Which of the following statements best represents the law of supply?

Accepted Answer

A)  Price and quantity supplied are inversely related. 
B)  Price and quantity supplied are directly related. 
C)  Price and quantity supplied are inversely related,ceteris paribus. 
D)  Price and quantity supplied are directly related,ceteris paribus. 
E)  Price and supply are directly related,ceteris paribus. 
A)  Price and quantity supplied are inversely related. 
B)  Price and quantity supplied are directly related. 
C)  Price and quantity supplied are inversely related,ceteris paribus. 
D)  Price and quantity supplied are directly related,ceteris paribus. 
E)  Price and supply are directly related,ceteris paribus.

Question 11

Consider a point on a market demand curve.The point represents

Accepted Answer

A)  a single price and the quantity demanded by an individual buyer. 
B)  a single price and the sum of the quantities demanded by all buyers. 
C)  various prices and various quantities demanded. 
D)  a single price and the quantity demanded by an individual buyer at that price and all other prices. 
E)  a and c 
A)  a single price and the quantity demanded by an individual buyer. 
B)  a single price and the sum of the quantities demanded by all buyers. 
C)  various prices and various quantities demanded. 
D)  a single price and the quantity demanded by an individual buyer at that price and all other prices. 
E)  a and c

Question 12

-Refer to Exhibit 3-6.If a decrease in income causes the demand for good X to shift from D1 to D2,then good X is

Accepted Answer

A)  a normal good. 
B)  an inferior good. 
C)  a substitute good. 
D)  a complementary good. 
E)  a neutral good. 
A)  a normal good. 
B)  an inferior good. 
C)  a substitute good. 
D)  a complementary good. 
E)  a neutral good.

Question 13

On a supply-and-demand diagram,quantity demanded equals quantity supplied

Accepted Answer

A)  only at the single equilibrium price. 
B)  at every price at or above the equilibrium price. 
C)  at every price at or below the equilibrium price. 
D)  at every price. 
A)  only at the single equilibrium price. 
B)  at every price at or above the equilibrium price. 
C)  at every price at or below the equilibrium price. 
D)  at every price.

Question 14

Explain the difference between a change in demand and a change in quantity demanded.Be sure to specify what causes each to change and how they differ when graphed.

Accepted Answer

A change in demand results from a change

Question 15

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-Refer to Exhibit 3-2.Which of the following would result in a movement from point A on D1 to point B on D2?

Accepted Answer

A)  an increase in a per-unit tax on good X 
B)  an increase in income of the buyers of good X,assuming good X is an inferior good 
C)  a decline in technology in the production of good X 
D)  an increase in income of the buyers of good X,assuming good X is a normal good 
A)  an increase in a per-unit tax on good X 
B)  an increase in income of the buyers of good X,assuming good X is an inferior good 
C)  a decline in technology in the production of good X 
D)  an increase in income of the buyers of good X,assuming good X is a normal good

Question 16

Explain why the price of a good tends to rise when there is a shortage of the good.Give a hypothetical numerical example to help support your answer.

Accepted Answer

Shortages always occur at prices that ar

Question 17

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

Accepted Answer

Surpluses always occur at prices that ar

Question 18

-Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.An economist would expect a movement in the market for X from

Accepted Answer

A)  S2 to S1. 
B)  D2 to D1. 
C)  D1 to D2. 
D)  S1 to S2. 
A)  S2 to S1. 
B)  D2 to D1. 
C)  D1 to D2. 
D)  S1 to S2.

Question 19

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-If the supply of and demand for a product decrease at the same time,then equilibrium

Accepted Answer

A)  quantity and equilibrium price must both decline. 
B)  quantity must decline,but equilibrium price may either rise,fall,or remain unchanged. 
C)  price must fall,but equilibrium quantity may either rise,fall,or remain unchanged. 
D)  quantity must fall and equilibrium price must rise. 
A)  quantity and equilibrium price must both decline. 
B)  quantity must decline,but equilibrium price may either rise,fall,or remain unchanged. 
C)  price must fall,but equilibrium quantity may either rise,fall,or remain unchanged. 
D)  quantity must fall and equilibrium price must rise.

Question 20

Which of the following statements represents a correct and sequentially accurate economic explanation?

Accepted Answer

A)  Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y rises. 
B)  Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y falls. 
C)  Good X is an inferior good and good Y is a substitute for X.Income falls,the demand for X rises,the price of X rises,and the demand for Y falls. 
D)  Good X is an inferior good and good Y is a substitute for X.Income rises,the quantity demanded of X rises,the price of X rises,and the demand for Y falls. 
E)  none of the above 
A)  Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y rises. 
B)  Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y falls. 
C)  Good X is an inferior good and good Y is a substitute for X.Income falls,the demand for X rises,the price of X rises,and the demand for Y falls. 
D)  Good X is an inferior good and good Y is a substitute for X.Income rises,the quantity demanded of X rises,the price of X rises,and the demand for Y falls. 
E)  none of the above

Exam 3: Supply and Demand: Theory

-Refer to Exhibit 3-14.At a price of $10,there is a ____________ of ____________ units of good X.

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

-Refer to Exhibit 3-14.At a price of $11,there is a ____________ of ____________ units of good X.

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,an increase in the price of good X may cause

An increase in the number of sellers of a good will __________________ for that good,ceteris paribus.

Equilibrium and disequilibrium

The law of supply states that price and quantity supplied are

"As the price of apples goes up,the demand for apples goes down." The author of this statement

Which of the following is descriptive of the law of diminishing marginal utility?

Which of the following statements best represents the law of supply?

Consider a point on a market demand curve.The point represents

-Refer to Exhibit 3-6.If a decrease in income causes the demand for good X to shift from D1 to D2,then good X is

On a supply-and-demand diagram,quantity demanded equals quantity supplied

Explain the difference between a change in demand and a change in quantity demanded.Be sure to specify what causes each to change and how they differ when graphed.

​ ​ -Refer to Exhibit 3-2.Which of the following would result in a movement from point A on D1 to point B on D2?

Explain why the price of a good tends to rise when there is a shortage of the good.Give a hypothetical numerical example to help support your answer.

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

-Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.An economist would expect a movement in the market for X from

​ ​ -If the supply of and demand for a product decrease at the same time,then equilibrium

Which of the following statements represents a correct and sequentially accurate economic explanation?

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 $10,there is a of units of good X.

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

-Refer to Exhibit 3-14.At a price of $11,there is a of units of good X.

-Refer to Exhibit 3-7.If S₁ is the relevant supply curve,an increase in the price of good X may cause

-Refer to Exhibit 3-6.If a decrease in income causes the demand for good X to shift from D₁ to D₂,then good X is

-Refer to Exhibit 3-2.Which of the following would result in a movement from point A on D₁ to point B on D₂?

-If the supply of and demand for a product decrease at the same time,then equilibrium