Question 1

-Refer to Exhibit 3-4.A price of $4 in the 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. 
E)  none of the above 
A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units. 
E)  none of the above

Question 2

At a price of $15 each,Marta buys 4 books per month.When the price increases to $20,Marta buys 3 books per month.Luz says that Marta's demand for books has decreased.Is Luz correct?

Accepted Answer

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

Question 3

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to Exhibit 3-8.A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

Accepted Answer

A)  shortage; downward 
B)  shortage; upward 
C)  surplus; downward 
D)  surplus; upward 
A)  shortage; downward 
B)  shortage; upward 
C)  surplus; downward 
D)  surplus; upward

Question 5

If the demand curve for a good shifts leftward,

Accepted Answer

A)  quantity demanded is less at each price. 
B)  quantity demanded remains constant at each price. 
C)  quantity demanded is greater at each price. 
D)  demand is greater at each price. 
A)  quantity demanded is less at each price. 
B)  quantity demanded remains constant at each price. 
C)  quantity demanded is greater at each price. 
D)  demand is greater at each price.

Question 6

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved down and to the right.What could have caused this?

Accepted Answer

A)  a fall in the price of peanuts 
B)  a rise in the price of peanuts 
C)  a rise in income,assuming that peanut butter is an inferior good 
D)  a shift in preferences toward peanut butter 
A)  a fall in the price of peanuts 
B)  a rise in the price of peanuts 
C)  a rise in income,assuming that peanut butter is an inferior good 
D)  a shift in preferences toward peanut butter

Question 7

There are two universities,A and B,in a city.Tuition rises at University A and,as a result,the demand for attending University B rises.It follows that educational services at the two universities are

Accepted Answer

A)  complements. 
B)  normal goods. 
C)  inferior goods. 
D)  substitutes. 
E)  none of the above 
A)  complements. 
B)  normal goods. 
C)  inferior goods. 
D)  substitutes. 
E)  none of the above

Question 8

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market.
-Refer to Exhibit 3-12.Each individual seller's supply curve is ________________ sloping and the market supply curve is _________________ sloping.

Accepted Answer

A)  upward; also upward 
B)  downward; also downward 
C)  upward; downward 
D)  downward; upward 
A)  upward; also upward 
B)  downward; also downward 
C)  upward; downward 
D)  downward; upward

Question 9

A demand schedule is a numerical tabulation of the ___________________ of a good at different ____________________.

Accepted Answer

A)  quantity supplied; prices 
B)  quantity demanded; incomes 
C)  quantity demanded; prices 
D)  quantity supplied; incomes 
A)  quantity supplied; prices 
B)  quantity demanded; incomes 
C)  quantity demanded; prices 
D)  quantity supplied; incomes

Question 10

If the maximum price a person is willing and able to pay for a good is $50,and consumers' surplus is $20,then it follows that the price the buyer paid for the good is

Accepted Answer

A)  $20 
B)  $70 
C)  $50 
D)  $30 
E)  There is not enough information to answer the question. 
A)  $20 
B)  $70 
C)  $50 
D)  $30 
E)  There is not enough information to answer the question.

Question 11

As the price of good A rises as a result of a decrease in the supply of good A,the demand for good B rises.Therefore,goods A and B are

Accepted Answer

A)  normal goods. 
B)  inferior goods. 
C)  substitutes for one another. 
D)  complements to one another. 
E)  none of the above 
A)  normal goods. 
B)  inferior goods. 
C)  substitutes for one another. 
D)  complements to one another. 
E)  none of the above

Question 12

A "decrease in the quantity demanded" means that

Accepted Answer

A)  the demand curve has shifted to the right. 
B)  the supply curve has shifted to the left. 
C)  price has declined and consumers therefore want to purchase more of the good. 
D)  price has increased and consumers therefore want to purchase less of the good. 
A)  the demand curve has shifted to the right. 
B)  the supply curve has shifted to the left. 
C)  price has declined and consumers therefore want to purchase more of the good. 
D)  price has increased and consumers therefore want to purchase less of the good.

Question 13

Resource X is necessary to the production of good Y.If the price of resource X falls,

Accepted Answer

A)  the supply curve of Y shifts leftward. 
B)  the supply curve of Y shifts rightward. 
C)  the supply curve of Y is unaffected. 
D)  there is a movement down the supply curve of Y. 
E)  there is a movement up the supply curve of Y. 
A)  the supply curve of Y shifts leftward. 
B)  the supply curve of Y shifts rightward. 
C)  the supply curve of Y is unaffected. 
D)  there is a movement down the supply curve of Y. 
E)  there is a movement up the supply curve of Y.

Question 14

In moving along a demand curve for good X,which of the following is NOT held constant?

Accepted Answer

A)  the prices of substitute goods for good X 
B)  the prices of complementary goods for good X 
C)  incomes of consumers of good X 
D)  the price of good X 
A)  the prices of substitute goods for good X 
B)  the prices of complementary goods for good X 
C)  incomes of consumers of good X 
D)  the price of good X

Question 15

Which of the following is consistent with the law of demand?

Accepted Answer

A)  People substitute higher-priced goods for higher-quality goods. 
B)  People substitute some higher-priced goods for other higher-priced goods. 
C)  People substitute lower-priced goods for higher-priced goods. 
D)  People substitute some lower-priced goods for other lower-priced goods. 
A)  People substitute higher-priced goods for higher-quality goods. 
B)  People substitute some higher-priced goods for other higher-priced goods. 
C)  People substitute lower-priced goods for higher-priced goods. 
D)  People substitute some lower-priced goods for other lower-priced goods.

Question 16

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

Accepted Answer

A)  Q2 doctors are employed at fee F1. 
B)  Q3 doctors are employed at fee F1. 
C)  Q1 doctors are employed at fee F1. 
D)  the number of doctors employed cannot be determined at any fee. 
A)  Q2 doctors are employed at fee F1. 
B)  Q3 doctors are employed at fee F1. 
C)  Q1 doctors are employed at fee F1. 
D)  the number of doctors employed cannot be determined at any fee.

Question 17

Oil producers expect that oil prices next year will be lower 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 18

Suppose that the government imposes a new $1 per-unit tax on the production of soft drinks.The result would be a(n)________________ in the equilibrium price of soft drinks and a(n)______________________in the equilibrium quantity of soft drinks.

Accepted Answer

A)  increase; decrease 
B)  increase; increase 
C)  decrease; decrease 
D)  decrease; increase 
A)  increase; decrease 
B)  increase; increase 
C)  decrease; decrease 
D)  decrease; increase

Question 19

Assume that Jose,Kaitlyn,Leah,and Maria are the only buyers in this market.
-Refer to Exhibit 3-13.Each individual consumer's demand curve is ________________ sloping and the market demand curve is _________________ sloping.

Accepted Answer

A)  upward; also upward 
B)  downward; also downward 
C)  upward; downward 
D)  downward; upward 
A)  upward; also upward 
B)  downward; also downward 
C)  upward; downward 
D)  downward; upward

Question 20

-Refer to Exhibit 3-11.Fill in blanks (C)and (D)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

Exam 3: Supply and Demand: Theory

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

At a price of $15 each,Marta buys 4 books per month.When the price increases to $20,Marta buys 3 books per month.Luz says that Marta's demand for books has decreased.Is Luz correct?

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

-Refer to Exhibit 3-8.A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

If the demand curve for a good shifts leftward,

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved down and to the right.What could have caused this?

There are two universities,A and B,in a city.Tuition rises at University A and,as a result,the demand for attending University B rises.It follows that educational services at the two universities are

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Each individual seller's supply curve is ________________ sloping and the market supply curve is _________________ sloping.

A demand schedule is a numerical tabulation of the ___________________ of a good at different ____________________.

If the maximum price a person is willing and able to pay for a good is $50,and consumers' surplus is $20,then it follows that the price the buyer paid for the good is

As the price of good A rises as a result of a decrease in the supply of good A,the demand for good B rises.Therefore,goods A and B are

A "decrease in the quantity demanded" means that

Resource X is necessary to the production of good Y.If the price of resource X falls,

In moving along a demand curve for good X,which of the following is NOT held constant?

Which of the following is consistent with the law of demand?

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

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

Suppose that the government imposes a new $1 per-unit tax on the production of soft drinks.The result would be a(n)________________ in the equilibrium price of soft drinks and a(n)______________________in the equilibrium quantity of soft drinks.

Assume that Jose,Kaitlyn,Leah,and Maria are the only buyers in this market. -Refer to Exhibit 3-13.Each individual consumer's demand curve is ________________ sloping and the market demand curve is _________________ sloping.

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

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 3-8.A price of $1 will result in a ___ in this market which will cause the price of the product to gravitate .

Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Each individual seller's supply curve is sloping and the market supply curve is _ sloping.

A demand schedule is a numerical tabulation of the _ of a good at different __.

Suppose that the government imposes a new $1 per-unit tax on the production of soft drinks.The result would be a(n) in the equilibrium price of soft drinks and a(n)______in the equilibrium quantity of soft drinks.

Assume that Jose,Kaitlyn,Leah,and Maria are the only buyers in this market. -Refer to Exhibit 3-13.Each individual consumer's demand curve is sloping and the market demand curve is _ sloping.