Question 1

-Refer to Exhibit 3-4.A price of $2 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. 
A)  shortage of 10 units. 
B)  surplus of 10 units. 
C)  surplus of 5 units. 
D)  shortage of 5 units.

Question 2

On the basis of the law of demand,it is more likely that a person will lose his temper when the price of losing his temper is low than when it is high.

Accepted Answer

A) True 
 B)False

Question 3

The equilibrium price of a good in market A is $24.The current price of the good in market A is $21.At this price,a(n)________________________ of the good exists in market A.

Accepted Answer

A)  surplus 
B)  shortage 
C)  excess supply 
D)  excess demand 
E)  b and d 
A)  surplus 
B)  shortage 
C)  excess supply 
D)  excess demand 
E)  b and d

Question 4

If Max's demand for hot dogs falls as his income rises,then for Max hot dogs are

Accepted Answer

A)  a bad good. 
B)  an inferior good. 
C)  a preferential good. 
D)  a normal good. 
E)  a neutral good. 
A)  a bad good. 
B)  an inferior good. 
C)  a preferential good. 
D)  a normal good. 
E)  a neutral good.

Question 5

Which of the following illustrates the law of demand?

Accepted Answer

A)  Jorge buys fewer pencils at $2 per pencil than at $1 per pencil,ceteris paribus. 
B)  Chen buys more ice cream at $4 per half-gallon than at $3 per half gallon,ceteris paribus. 
C)  Karissa buys fewer sweaters at $50 each than at $35 each,ceteris paribus. 
D)  a,b,and c 
E)  a and c 
A)  Jorge buys fewer pencils at $2 per pencil than at $1 per pencil,ceteris paribus. 
B)  Chen buys more ice cream at $4 per half-gallon than at $3 per half gallon,ceteris paribus. 
C)  Karissa buys fewer sweaters at $50 each than at $35 each,ceteris paribus. 
D)  a,b,and c 
E)  a and c

Question 6

Labor is a resource that is necessary to produce many goods."If the price of labor falls," says the economist,"the prices of goods will soon follow." How does this work?

Accepted Answer

A)  If the price of labor falls,the supply of goods rises,and the prices of those goods fall. 
B)  If the price of labor falls,the quantity supplied of goods rises,and the prices of those goods fall. 
C)  If the price of labor falls,the demand for goods falls,and the prices of those goods fall. 
D)  If the price of labor falls,the demand for goods rises,and the prices of those goods fall. 
E)  If the price of labor falls,the supply of goods falls,and the prices of those goods fall. 
A)  If the price of labor falls,the supply of goods rises,and the prices of those goods fall. 
B)  If the price of labor falls,the quantity supplied of goods rises,and the prices of those goods fall. 
C)  If the price of labor falls,the demand for goods falls,and the prices of those goods fall. 
D)  If the price of labor falls,the demand for goods rises,and the prices of those goods fall. 
E)  If the price of labor falls,the supply of goods falls,and the prices of those goods fall.

Question 7

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

Accepted Answer

A)  15.43; 10.88 
B)  74; 62 
C)  75; 64 
D)  108; 87 
E)  none of the above 
A)  15.43; 10.88 
B)  74; 62 
C)  75; 64 
D)  108; 87 
E)  none of the above

Question 8

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,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 9

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

Accepted Answer

A)  Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y rises. 
B)  Goods X and Y are substitutes.The price of X rises,the demand for X falls,and the demand for Y rises. 
C)  Goods X and Y are substitutes.The price of X falls,the demand for X rises,and the quantity demanded of Y rises. 
D)  Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y falls. 
E)  Goods X and Y are complements.The price of X falls,the quantity demanded of X rises,and the demand for Y falls. 
A)  Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y rises. 
B)  Goods X and Y are substitutes.The price of X rises,the demand for X falls,and the demand for Y rises. 
C)  Goods X and Y are substitutes.The price of X falls,the demand for X rises,and the quantity demanded of Y rises. 
D)  Goods X and Y are substitutes.The price of X falls,the quantity demanded of X rises,and the demand for Y falls. 
E)  Goods X and Y are complements.The price of X falls,the quantity demanded of X rises,and the demand for Y falls.

Question 10

Which of the following statements is true?

Accepted Answer

A)  To an economist,demand is different from quantity demanded. 
B)  A demand schedule is the numerical tabulation of the law of demand. 
C)  A demand curve is the graphical representation of the direct relationship between price and quantity demanded. 
D)  a and b 
E)  a,b,and c 
A)  To an economist,demand is different from quantity demanded. 
B)  A demand schedule is the numerical tabulation of the law of demand. 
C)  A demand curve is the graphical representation of the direct relationship between price and quantity demanded. 
D)  a and b 
E)  a,b,and c

Question 11

If the workers of a firm successfully negotiate an increase in wages,which of the following is most likely to happen?

Accepted Answer

A)  The demand curve for the product the firm produces shifts rightward. 
B)  The demand curve for the product the firm produces shifts leftward. 
C)  The supply curve of the product the firm produces shifts rightward. 
D)  The supply curve of the product the firm produces shifts leftward. 
A)  The demand curve for the product the firm produces shifts rightward. 
B)  The demand curve for the product the firm produces shifts leftward. 
C)  The supply curve of the product the firm produces shifts rightward. 
D)  The supply curve of the product the firm produces shifts leftward.

Question 12

-Refer to Exhibit 3-9.A severe recession has sharply decreased the incomes of consumers.Knowing that X is a normal good,you expect a movement in the market for X from

Accepted Answer

A)  A to B. 
B)  E to F. 
C)  F to E. 
D)  B to A. 
A)  A to B. 
B)  E to F. 
C)  F to E. 
D)  B to A.

Question 13

-Refer to Exhibit 3-16.Which of the following is false?

Accepted Answer

A)  Graph (1): There is a shortage of this good when the price is equal to P3. 
B)  Graph (2): As supply increases,equilibrium quantity remains constant. 
C)  Graph (3): As demand increases,equilibrium price remains constant. 
D)  Graph (4): As supply changes,equilibrium price stays the same. 
A)  Graph (1): There is a shortage of this good when the price is equal to P3. 
B)  Graph (2): As supply increases,equilibrium quantity remains constant. 
C)  Graph (3): As demand increases,equilibrium price remains constant. 
D)  Graph (4): As supply changes,equilibrium price stays the same.

Question 14

-Refer to Exhibit 3-9.Consumers view X and Y as substitutes.If the price of Y increases as a result of a decrease in the supply of Y,an economist would expect a movement in the market for X from

Accepted Answer

A)  F to E. 
B)  A to B. 
C)  E to F. 
D)  B to A. 
A)  F to E. 
B)  A to B. 
C)  E to F. 
D)  B to A.

Question 15

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

Accepted Answer

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

Question 16

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

Accepted Answer

A) True 
 B)False

Question 17

In the market for good X there are three buyers,Adam,Bill,and Carolyn.Adam buys 3 units of good X at $4,Bill buys 7 units of good X at $4,and Carolyn buys 8 units of good X at $4.One point on the market demand curve for good X consists of a price of _____________ and a quantity demanded of __________________ units.

Accepted Answer

A)  $4; 10 
B)  $4; 18 
C)  $4; 15 
D)  $5; 8 
E)  none of the above 
A)  $4; 10 
B)  $4; 18 
C)  $4; 15 
D)  $5; 8 
E)  none of the above

Question 18

-Refer to Exhibit 3-8.A price of $5 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 19

-Refer to Exhibit 3-9.A large number of immigrants who love to consume X enter the country.An economist would expect a movement in the market for X from

Accepted Answer

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

Question 20

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point Z and the new equilibrium is now at point V,this change may have been caused by

Accepted Answer

A)  a decrease in consumers' income (assuming that this is an inferior good)and a simultaneous decline in technology in the production of this good. 
B)  an increase in consumers' income (assuming that this is an inferior good)and a simultaneous improvement in technology in the production of this good. 
C)  a decrease in consumers' income (assuming that this is an inferior good)and no change in supply. 
D)  an increase in consumers' income (assuming that this is an inferior good)and no change in supply. 
A)  a decrease in consumers' income (assuming that this is an inferior good)and a simultaneous decline in technology in the production of this good. 
B)  an increase in consumers' income (assuming that this is an inferior good)and a simultaneous improvement in technology in the production of this good. 
C)  a decrease in consumers' income (assuming that this is an inferior good)and no change in supply. 
D)  an increase in consumers' income (assuming that this is an inferior good)and no change in supply.

Exam 3: Supply and Demand: Theory

-Refer to Exhibit 3-4.A price of $2 in the market will result in a

On the basis of the law of demand,it is more likely that a person will lose his temper when the price of losing his temper is low than when it is high.

The equilibrium price of a good in market A is $24.The current price of the good in market A is $21.At this price,a(n)________________________ of the good exists in market A.

If Max's demand for hot dogs falls as his income rises,then for Max hot dogs are

Which of the following illustrates the law of demand?

Labor is a resource that is necessary to produce many goods."If the price of labor falls," says the economist,"the prices of goods will soon follow." How does this work?

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

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

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

Which of the following statements is true?

If the workers of a firm successfully negotiate an increase in wages,which of the following is most likely to happen?

-Refer to Exhibit 3-9.A severe recession has sharply decreased the incomes of consumers.Knowing that X is a normal good,you expect a movement in the market for X from

-Refer to Exhibit 3-16.Which of the following is false?

-Refer to Exhibit 3-9.Consumers view X and Y as substitutes.If the price of Y increases as a result of a decrease in the supply of Y,an economist would expect a movement in the market for X from

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

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

-Refer to Exhibit 3-8.A price of $5 will result in a ___________________ in this market which will cause the price of the product to gravitate _______________.

-Refer to Exhibit 3-9.A large number of immigrants who love to consume X enter the country.An economist would expect a movement in the market for X from

-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point Z and the new equilibrium is now at point V,this change may have been caused by

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

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Stocks,bonds,futures,and Options

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

-Refer to Exhibit 3-8.A price of $5 will result in a _____ in this market which will cause the price of the product to gravitate _.