Question 1

A demand curve is the graphical representation of the law of demand.

Accepted Answer

A) True 
 B)False

Question 2

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-Refer to Exhibit 3-3.A movement from point W to point Z would have been the result of

Accepted Answer

A)  a reduction in the price of good Y. 
B)  an increase in the number of buyers in the area where good Y is being sold. 
C)  a decrease in business taxes paid by the producers of good Y. 
D)  a decrease in the number of buyers in the area where good Y is being sold. 
E)  an increase in the price of good Y. 
A)  a reduction in the price of good Y. 
B)  an increase in the number of buyers in the area where good Y is being sold. 
C)  a decrease in business taxes paid by the producers of good Y. 
D)  a decrease in the number of buyers in the area where good Y is being sold. 
E)  an increase in the price of good Y.

Question 3

-Refer to Exhibit 3-6.If an increase in the price of good Y causes the demand for good X to shift from D1 to D2,goods X and Y are

Accepted Answer

A)  normal goods. 
B)  inferior goods. 
C)  substitutes. 
D)  complements. 
E)  neutral goods. 
A)  normal goods. 
B)  inferior goods. 
C)  substitutes. 
D)  complements. 
E)  neutral goods.

Question 4

Jerry has $50,000 in his savings account and the average new car price is $23,000.Does Jerry have a demand for a new car?

Accepted Answer

A)  Yes,since Jerry can afford a new car. 
B)  Not necessarily.Jerry has the ability to buy a new car,but we don't know if he also has the willingness to buy a new car. 
C)  Yes,since Jerry's savings is more than double the average new car price. 
D)  none of the above 
A)  Yes,since Jerry can afford a new car. 
B)  Not necessarily.Jerry has the ability to buy a new car,but we don't know if he also has the willingness to buy a new car. 
C)  Yes,since Jerry's savings is more than double the average new car price. 
D)  none of the above

Question 5

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-Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

Accepted Answer

A)  There was an increase in income and production technology advanced. 
B)  There was a decrease in income and production technology advanced. 
C)  There was an increase in preferences for good X and an increase in wage rates (a relevant resource price.) 
D)  There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.) 
A)  There was an increase in income and production technology advanced. 
B)  There was a decrease in income and production technology advanced. 
C)  There was an increase in preferences for good X and an increase in wage rates (a relevant resource price.) 
D)  There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.)

Question 6

An increase in supply is graphically represented by a leftward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 7

-Refer to Exhibit 3-6.If D1 is the relevant demand curve,a decrease 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 8

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

Accepted Answer

A)  The demand for X was higher in year 2 than in year 1,ceteris paribus. 
B)  The supply of X was lower in year 2 than in year 1,ceteris paribus. 
C)  The demand was higher,and the supply was lower,in year 2 than in year 1. 
D)  a and b 
E)  a,b,and c 
A)  The demand for X was higher in year 2 than in year 1,ceteris paribus. 
B)  The supply of X was lower in year 2 than in year 1,ceteris paribus. 
C)  The demand was higher,and the supply was lower,in year 2 than in year 1. 
D)  a and b 
E)  a,b,and c

Question 9

-Refer to Exhibit 3-4.If this is a competitive market,price and quantity will gravitate toward

Accepted Answer

A)  $6 and 10 units,respectively. 
B)  $6 and 20 units,respectively. 
C)  $4 and 15 units,respectively. 
D)  $2 and 15 units,respectively. 
A)  $6 and 10 units,respectively. 
B)  $6 and 20 units,respectively. 
C)  $4 and 15 units,respectively. 
D)  $2 and 15 units,respectively.

Question 10

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-Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

Accepted Answer

A)  There was a decrease in the number of buyers and business taxes increased. 
B)  There was an increase in the number of buyers and business taxes decreased. 
C)  There was an increase in the number of buyers and business taxes increased. 
D)  There was a decrease in the number of buyers and business taxes decreased. 
A)  There was a decrease in the number of buyers and business taxes increased. 
B)  There was an increase in the number of buyers and business taxes decreased. 
C)  There was an increase in the number of buyers and business taxes increased. 
D)  There was a decrease in the number of buyers and business taxes decreased.

Question 11

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then ____________ is _______________.

Accepted Answer

A)  producers' surplus; $103 
B)  consumers' surplus; $103 
C)  consumers' surplus; $3 
D)  producers' surplus; $3 
E)  consumers' surplus; $40 
A)  producers' surplus; $103 
B)  consumers' surplus; $103 
C)  consumers' surplus; $3 
D)  producers' surplus; $3 
E)  consumers' surplus; $40

Question 12

One reads in the newspaper: "Today the president and Congress enacted a law which adds new requirements that child care providers must meet before they can offer their services for sale." As a result,an economist would predict that

Accepted Answer

A)  the supply of child care services will increase,thus lowering the price of child care services. 
B)  the supply of child care services will be unaffected by the stiffer requirements and therefore the price of child care services will not change. 
C)  the demand for child care services will fall because people who buy child care services do not want stiffer requirements placed on child care providers. 
D)  the supply of child care services will decrease,thus raising the price of child care services. 
E)  none of the above 
A)  the supply of child care services will increase,thus lowering the price of child care services. 
B)  the supply of child care services will be unaffected by the stiffer requirements and therefore the price of child care services will not change. 
C)  the demand for child care services will fall because people who buy child care services do not want stiffer requirements placed on child care providers. 
D)  the supply of child care services will decrease,thus raising the price of child care services. 
E)  none of the above

Question 13

A shortage in the bread market can cause the price of bread to rise.

Accepted Answer

A) True 
 B)False

Question 14

An increase in the expected price of corn would likely do the following to the current supply and demand for corn:

Accepted Answer

A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand,but decrease the supply. 
D)  increase the supply,but decrease the demand. 
A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand,but decrease the supply. 
D)  increase the supply,but decrease the demand.

Question 15

When the price of a good is $5,the quantity demanded of a good is 30 units,and the quantity supplied of the good is 50 units.For every $1 decrease in the price of this good,quantity demanded rises by 5 units and quantity supplied falls by 5 units.The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

Accepted Answer

A)  $3; 40 
B)  $4; 35 
C)  $2; 45 
D)  $2; 35 
E)  $3; 35 
A)  $3; 40 
B)  $4; 35 
C)  $2; 45 
D)  $2; 35 
E)  $3; 35

Question 16

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Accepted Answer

A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand,but decrease the supply. 
D)  increase the supply,but decrease the demand. 
A)  increase both the demand and the supply. 
B)  decrease both the demand and the supply. 
C)  increase the demand,but decrease the supply. 
D)  increase the supply,but decrease the demand.

Question 17

If the demand for a good rises by more than the supply of the good falls,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

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

Accepted Answer

A)  96; 86 
B)  27; 20.33 
C)  135; 122 
D)  82; 72 
E)  none of the above 
A)  96; 86 
B)  27; 20.33 
C)  135; 122 
D)  82; 72 
E)  none of the above

Question 19

A vertical supply curve represents:

Accepted Answer

A)  an inverse relationship between price and quantity supplied. 
B)  an independent relationship between price and quantity supplied. 
C)  an independent relationship between price and supply. 
D)  a direct relationship between price and quantity supplied. 
E)  a direct relationship between price and supply. 
A)  an inverse relationship between price and quantity supplied. 
B)  an independent relationship between price and quantity supplied. 
C)  an independent relationship between price and supply. 
D)  a direct relationship between price and quantity supplied. 
E)  a direct relationship between price and supply.

Question 20

-Refer to Exhibit 3-11.Fill in blanks (A)and (B)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

A demand curve is the graphical representation of the law of demand.

​ ​ -Refer to Exhibit 3-3.A movement from point W to point Z would have been the result of

-Refer to Exhibit 3-6.If an increase in the price of good Y causes the demand for good X to shift from D1 to D2,goods X and Y are

Jerry has $50,000 in his savings account and the average new car price is $23,000.Does Jerry have a demand for a new car?

​ ​ -Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

An increase in supply is graphically represented by a leftward shift of the supply curve.

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

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

-Refer to Exhibit 3-4.If this is a competitive market,price and quantity will gravitate toward

​ ​ -Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then ____________ is _______________.

One reads in the newspaper: "Today the president and Congress enacted a law which adds new requirements that child care providers must meet before they can offer their services for sale." As a result,an economist would predict that

A shortage in the bread market can cause the price of bread to rise.

An increase in the expected price of corn would likely do the following to the current supply and demand for corn:

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

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

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

A vertical supply curve represents:

-Refer to Exhibit 3-11.Fill in blanks (A)and (B)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 3-3.A movement from point W to point Z would have been the result of

-Refer to Exhibit 3-6.If an increase in the price of good Y causes the demand for good X to shift from D₁ to D₂,goods X and Y are

-Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

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

-Refer to Exhibit 3-2.Suppose equilibrium is at point A.Something then changes and equilibrium becomes point C.Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?

If the price a buyer pays for a good is $50 and the maximum price she would be willing and able to pay is $53,then is ___.

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