Question 1

Another term for excess supply is shortage.

Accepted Answer

A) True 
 B)False  False

Question 2

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

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. A

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

In general,all markets equilibrate at the same speed.

Accepted Answer

A) True 
 B)False

Question 5

Demand takes into account goods,but not services.

Accepted Answer

A) True 
 B)False

Question 6

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 7

One reason that helps to explain the law of demand is the law of

Accepted Answer

A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) increasing opportunity costs. 
D) supply. 
A) diminishing marginal utility. 
B) diminishing marginal returns. 
C) increasing opportunity costs. 
D) supply.

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

Exhibit 3-2   Good X
​
​
-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) There was a decrease in the price of a substitute for good X. 
B) There was an increase in the price of a complement to good X. 
C) There was a decline in technology in the production of good X. 
D) There was an increase in the price of a substitute for good X. 
A) There was a decrease in the price of a substitute for good X. 
B) There was an increase in the price of a complement to good X. 
C) There was a decline in technology in the production of good X. 
D) There was an increase in the price of a substitute for good X.

Question 10

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 11

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 12

Exhibit 3-10  
-Refer to Exhibit 3-10.At a price of $10,__________ units of the good will be exchanged.

Accepted Answer

A) 100 
B) 200 
C) 300 
D) none of the above 
A) 100 
B) 200 
C) 300 
D) none of the above

Question 13

Supply curves are usually upward sloping.

Accepted Answer

A) True 
 B)False

Question 14

A rightward shift in the demand curve for tennis balls could be caused by

Accepted Answer

A) a fall in the price of tennis balls. 
B) a fall in the price of tennis rackets. 
C) a rise in the price of tennis lessons. 
D) a fall in income,assuming tennis balls are a normal good. 
A) a fall in the price of tennis balls. 
B) a fall in the price of tennis rackets. 
C) a rise in the price of tennis lessons. 
D) a fall in income,assuming tennis balls are a normal good.

Question 15

Exhibit 3-8  
-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 16

Good X is a normal good.If the average income of those who buy good X rises,the _____________ curve for good X will shift ____________ resulting in a(n)_____________ in the equilibrium price of X and a(n)____________ in the equilibrium quantity of X.

Accepted Answer

A) supply;rightward;decrease;increase. 
B) demand;leftward;decrease;decrease 
C) demand;rightward;increase;increase 
D) supply;leftward;increase;decrease 
E) supply;leftward;increase;increase 
A) supply;rightward;decrease;increase. 
B) demand;leftward;decrease;decrease 
C) demand;rightward;increase;increase 
D) supply;leftward;increase;decrease 
E) supply;leftward;increase;increase

Question 17

If hot dogs are an inferior good,a decrease in income will cause the equilibrium price of hot dogs to rise.

Accepted Answer

A) True 
 B)False

Question 18

Exhibit 3-16  
-Refer to Exhibit 3-16.Which of the graphs best represents the market for theater tickets that are already sold out on the day of the performance?

Accepted Answer

A) (1) 
B) (2) 
C) (3) 
D) (4) 
A) (1) 
B) (2) 
C) (3) 
D) (4)

Question 19

Exhibit 3-2   Good X
​
​
-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.

Question 20

NOTES:
New
Exhibit 3-6  
-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.

Exam 3: Supply and Demand: Theory

Another term for excess supply is shortage.

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

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

In general,all markets equilibrate at the same speed.

Demand takes into account goods,but not services.

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 __________.

One reason that helps to explain the law of demand is the law of

If a supply curve shifts rightward,this means

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

Equilibrium and disequilibrium

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?

Exhibit 3-10 -Refer to Exhibit 3-10.At a price of $10,__________ units of the good will be exchanged.

Supply curves are usually upward sloping.

A rightward shift in the demand curve for tennis balls could be caused by

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

Good X is a normal good.If the average income of those who buy good X rises,the _____________ curve for good X will shift ____________ resulting in a(n)_____________ in the equilibrium price of X and a(n)____________ in the equilibrium quantity of X.

If hot dogs are an inferior good,a decrease in income will cause the equilibrium price of hot dogs to rise.

Exhibit 3-16 -Refer to Exhibit 3-16.Which of the graphs best represents the market for theater tickets that are already sold out on the day of the performance?

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

NOTES: New Exhibit 3-6 -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

What Economics Is About

Production Possibilities Frontier Framework

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

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

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

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 .

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

Good X is a normal good.If the average income of those who buy good X rises,the _______ curve for good X will shift resulting in a(n)_ in the equilibrium price of X and a(n)______ in the equilibrium quantity of X.

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

NOTES: New Exhibit 3-6 -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