Question 1

One can determine producers' surplus if the minimum selling price and the _____________ are known.

Accepted Answer

A)  price received 
B)  price paid 
C)  tax paid 
D)  tax received 
E)  a and c 
A)  price received 
B)  price paid 
C)  tax paid 
D)  tax received 
E)  a and c

Question 2

-Refer to Exhibit 3-8.Equilibrium price and quantity are ____________________,respectively.

Accepted Answer

A)  $3 and 25 units 
B)  $3 and 15 units 
C)  $5 and 15 units 
D)  $5 and 25 units 
E)  $1 and 25 units 
A)  $3 and 25 units 
B)  $3 and 15 units 
C)  $5 and 15 units 
D)  $5 and 25 units 
E)  $1 and 25 units

Question 3

Which of the following statements is false?

Accepted Answer

A)  The shift factors for the supply curve are: income,preferences,prices of related goods,the number of buyers,and expectations of future price. 
B)  A change in (own)price changes the quantity supplied of a good. 
C)  A change in demand is graphically represented by a shift in the demand curve. 
D)  A change in quantity demanded is represented by a movement along a given demand curve. 
A)  The shift factors for the supply curve are: income,preferences,prices of related goods,the number of buyers,and expectations of future price. 
B)  A change in (own)price changes the quantity supplied of a good. 
C)  A change in demand is graphically represented by a shift in the demand curve. 
D)  A change in quantity demanded is represented by a movement along a given demand curve.

Question 4

-Refer to Exhibit 3-6.If an increase in income causes the demand for good X to shift from D1 to D3,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 5

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-Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

Accepted Answer

A)  a increase in the price of good Y. 
B)  an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C)  an increase in the price of a complement to good Y. 
D)  a decrease in the number of buyers of good Y. 
E)  a decrease in good Y buyers' income (assuming that good Y is a normal good). 
A)  a increase in the price of good Y. 
B)  an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C)  an increase in the price of a complement to good Y. 
D)  a decrease in the number of buyers of good Y. 
E)  a decrease in good Y buyers' income (assuming that good Y is a normal good).

Question 6

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,a decrease in the price of a resource that is necessary for 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 7

If the producers' surplus is $50,and the consumers' surplus is $40,then what is the minimum selling price of the good?

Accepted Answer

A)  $10 
B)  $40 
C)  $50 
D)  $90 
E)  There is not enough information to answer the question. 
A)  $10 
B)  $40 
C)  $50 
D)  $90 
E)  There is not enough information to answer the question.

Question 8

If a supply curve shifts rightward,this means

Accepted Answer

A)  suppliers are willing and able to offer less of the good for sale at every price. 
B)  suppliers are willing and able to offer more of the good for sale at every price. 
C)  quantity supplied is greater at every price. 
D)  suppliers are willing and able to offer more of the good for sale only at a particular price. 
E)  b and c 
A)  suppliers are willing and able to offer less of the good for sale at every price. 
B)  suppliers are willing and able to offer more of the good for sale at every price. 
C)  quantity supplied is greater at every price. 
D)  suppliers are willing and able to offer more of the good for sale only at a particular price. 
E)  b and c

Question 9

An advance in technology in the production of good X causes

Accepted Answer

A)  a rightward shift in the supply curve for good X. 
B)  a leftward shift in the supply curve for good X. 
C)  the supply curve for good X to change from upward sloping to vertical. 
D)  the supply curve for good X to change from vertical to upward sloping. 
A)  a rightward shift in the supply curve for good X. 
B)  a leftward shift in the supply curve for good X. 
C)  the supply curve for good X to change from upward sloping to vertical. 
D)  the supply curve for good X to change from vertical to upward sloping.

Question 10

Economists use the terms neutral good and normal good interchangeably.

Accepted Answer

A) True 
 B)False

Question 11

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

Accepted Answer

A)  Technological advances lead to lower demand,which leads to lower prices. 
B)  Technological advances lead to greater supply,which leads to lower prices. 
C)  Technological advances lead to greater quantity supplied,which leads to lower prices. 
D)  Technological advances lead to lower taxes,which lead to greater supply,which leads to lower prices. 
E)  Technological advances lead to higher taxes,which lead to fewer subsidies,which lead to greater supply,which leads to lower prices. 
A)  Technological advances lead to lower demand,which leads to lower prices. 
B)  Technological advances lead to greater supply,which leads to lower prices. 
C)  Technological advances lead to greater quantity supplied,which leads to lower prices. 
D)  Technological advances lead to lower taxes,which lead to greater supply,which leads to lower prices. 
E)  Technological advances lead to higher taxes,which lead to fewer subsidies,which lead to greater supply,which leads to lower prices.

Question 12

-Refer to Exhibit 3-15.In Exhibit 3-15,

Accepted Answer

A)  there is a shortage of doctors at fee F1. 
B)  there is a surplus of doctors at fee F1. 
C)  Q3 doctors are employed at fee F1. 
D)  Q2 doctors are employed at fee F1. 
E)  both a and c 
A)  there is a shortage of doctors at fee F1. 
B)  there is a surplus of doctors at fee F1. 
C)  Q3 doctors are employed at fee F1. 
D)  Q2 doctors are employed at fee F1. 
E)  both a and c

Question 13

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.

Accepted Answer

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

Question 14

-Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph

Accepted Answer

A)  (1),with P* = P1. 
B)  (2),with P* = P3. 
C)  (3),with P* = P2. 
D)  (3),with P* = P3. 
E)  (4),with P* = P1. 
A)  (1),with P* = P1. 
B)  (2),with P* = P3. 
C)  (3),with P* = P2. 
D)  (3),with P* = P3. 
E)  (4),with P* = P1.

Question 15

A "decrease 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 16

-Refer to Exhibit 3-8.A shortage exists at any price below

Accepted Answer

A)  $5.00. 
B)  $4.50. 
C)  $4.00. 
D)  $3.50. 
E)  $3.00. 
A)  $5.00. 
B)  $4.50. 
C)  $4.00. 
D)  $3.50. 
E)  $3.00.

Question 17

When Hurricane Katrina hit the Gulf Coast of the United States in 2005 it destroyed 5,000,000 acres of timber.Given that lumber is timber that has been sawed or split into planks and boards,explain in terms of supply and/or demand how the hurricane impacted each of the following markets (be sure to note the expected resulting impact on equilibrium price and quantity):
a.
Domestic lumber
b.
Imported lumber
c.
New home construction

Accepted Answer

a. The severe weather would be expected

Question 18

A market is said to be in disequilibrium if

Accepted Answer

A)  it exhibits either a surplus or a shortage. 
B)  the number of units that individuals are willing to buy exceeds the number of units they can afford. 
C)  it is a market for an inferior good. 
D)  none of the above 
A)  it exhibits either a surplus or a shortage. 
B)  the number of units that individuals are willing to buy exceeds the number of units they can afford. 
C)  it is a market for an inferior good. 
D)  none of the above

Question 19

Demand refers to

Accepted Answer

A)  how much of a good people are willing and able to buy at a particular price. 
B)  the different quantities of a good people are willing and able to buy at different prices. 
C)  the different quantities of a good people are willing and able to buy at a particular price. 
D)  how much of a good people are willing to buy at different prices. 
E)  none of the above 
A)  how much of a good people are willing and able to buy at a particular price. 
B)  the different quantities of a good people are willing and able to buy at different prices. 
C)  the different quantities of a good people are willing and able to buy at a particular price. 
D)  how much of a good people are willing to buy at different prices. 
E)  none of the above

Question 20

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

Accepted Answer

A)  There was an increase in income (assuming that good X is an inferior good)and technology remained constant. 
B)  There was an increase in income (assuming that good X is a normal good)and technology remained constant 
C)  There was an increase in income (assuming that good X is an inferior good)and technology improved. 
D)  There was an increase in income (assuming that good X is a normal good)and technology declined. 
A)  There was an increase in income (assuming that good X is an inferior good)and technology remained constant. 
B)  There was an increase in income (assuming that good X is a normal good)and technology remained constant 
C)  There was an increase in income (assuming that good X is an inferior good)and technology improved. 
D)  There was an increase in income (assuming that good X is a normal good)and technology declined.

Exam 3: Supply and Demand: Theory

One can determine producers' surplus if the minimum selling price and the _____________ are known.

-Refer to Exhibit 3-8.Equilibrium price and quantity are ____________________,respectively.

Which of the following statements is false?

-Refer to Exhibit 3-6.If an increase in income causes the demand for good X to shift from D1 to D3,then good X is

​ ​ -Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

-Refer to Exhibit 3-7.If S1 is the relevant supply curve,a decrease in the price of a resource that is necessary for the production of good X causes

If the producers' surplus is $50,and the consumers' surplus is $40,then what is the minimum selling price of the good?

If a supply curve shifts rightward,this means

An advance in technology in the production of good X causes

Economists use the terms neutral good and normal good interchangeably.

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

-Refer to Exhibit 3-15.In Exhibit 3-15,

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.

-Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph

A "decrease in demand" means that

-Refer to Exhibit 3-8.A shortage exists at any price below

A market is said to be in disequilibrium if

Demand refers to

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

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 3-6.If an increase in income causes the demand for good X to shift from D₁ to D₃,then good X is

-Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

-Refer to Exhibit 3-7.If S₁ is the relevant supply curve,a decrease in the price of a resource that is necessary for the production of good X causes

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will and the equilibrium quantity of Y will __.

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