Question 1

Exhibit 3-4  
-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 2

Exhibit 3-4  
-An "increase 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) given supply,the price of the good can be expected to rise. 
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) given supply,the price of the good can be expected to rise.

Question 3

Exhibit 3-8  
-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 4

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 5

If computers and software are complements,then

Accepted Answer

A) a fall in the price of computers will increase the demand for software and,ceteris paribus,the price of software will rise. 
B) a rise in the price of computers will decrease the demand for software and,ceteris paribus,the price of software will rise. 
C) a fall in the price of computers will decrease the demand for software and,ceteris paribus,the price of software will fall. 
D) a rise in the price of software will increase the demand for computers and,ceteris paribus,the price of computers will rise. 
E) a fall in the price of software will decrease the demand for computers and,ceteris paribus,the price of computers will fall. 
A) a fall in the price of computers will increase the demand for software and,ceteris paribus,the price of software will rise. 
B) a rise in the price of computers will decrease the demand for software and,ceteris paribus,the price of software will rise. 
C) a fall in the price of computers will decrease the demand for software and,ceteris paribus,the price of software will fall. 
D) a rise in the price of software will increase the demand for computers and,ceteris paribus,the price of computers will rise. 
E) a fall in the price of software will decrease the demand for computers and,ceteris paribus,the price of computers will fall.

Question 6

When P = $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 7

When income rises for the buyers of good X,the ____________ curve for good X will shift ________________.

Accepted Answer

A) demand;rightward 
B) demand;leftward 
C) supply;rightward 
D) supply;leftward 
E) This question cannot be answered unless we know whether good X is a normal good,a neutral good,or an inferior good. 
A) demand;rightward 
B) demand;leftward 
C) supply;rightward 
D) supply;leftward 
E) This question cannot be answered unless we know whether good X is a normal good,a neutral good,or an inferior good.

Question 8

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 9

On a supply-and-demand diagram,quantity demanded equals quantity supplied

Accepted Answer

A) only at the single equilibrium price. 
B) at every price at or above the equilibrium price. 
C) at every price at or below the equilibrium price. 
D) at every price. 
A) only at the single equilibrium price. 
B) at every price at or above the equilibrium price. 
C) at every price at or below the equilibrium price. 
D) at every price.

Question 10

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 11

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

Accepted Answer

A) True 
 B)False

Question 12

The fundamental reason why most supply curves are upward sloping is that

Accepted Answer

A) consumers substitute lower-priced goods for higher-priced goods. 
B) the quantity supplied increases as more firms enter the market. 
C) a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D) higher production raises the opportunity costs of production and so price must rise to induce more output. 
A) consumers substitute lower-priced goods for higher-priced goods. 
B) the quantity supplied increases as more firms enter the market. 
C) a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. 
D) higher production raises the opportunity costs of production and so price must rise to induce more output.

Question 13

At a price above the equilibrium price,there is

Accepted Answer

A) a shortage. 
B) a surplus. 
C) excess demand. 
D) super-equilibrium. 
E) none of the above 
A) a shortage. 
B) a surplus. 
C) excess demand. 
D) super-equilibrium. 
E) none of the above

Question 14

The law of supply states that price and quantity supplied are

Accepted Answer

A) inversely related,ceteris paribus. 
B) directly related,ceteris paribus. 
C) not related. 
D) fixed. 
A) inversely related,ceteris paribus. 
B) directly related,ceteris paribus. 
C) not related. 
D) fixed.

Question 15

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

Accepted Answer

A) Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y rises. 
B) Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y falls. 
C) Good X is an inferior good and good Y is a substitute for X.Income falls,the demand for X rises,the price of X rises,and the demand for Y falls. 
D) Good X is an inferior good and good Y is a substitute for X.Income rises,the quantity demanded of X rises,the price of X rises,and the demand for Y falls. 
E) none of the above 
A) Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y rises. 
B) Good X is an inferior good and good Y is a substitute for X.Income rises,the demand for X falls,the price of X falls,and the demand for Y falls. 
C) Good X is an inferior good and good Y is a substitute for X.Income falls,the demand for X rises,the price of X rises,and the demand for Y falls. 
D) Good X is an inferior good and good Y is a substitute for X.Income rises,the quantity demanded of X rises,the price of X rises,and the demand for Y falls. 
E) none of the above

Question 16

Economists use the terms neutral good and normal good interchangeably.

Accepted Answer

A) True 
 B)False

Question 17

The terms scarcity and shortage are synonyms.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true about the relationship between price and quantity supplied?

Accepted Answer

A) There is always a direct relationship between price and quantity supplied. 
B) There is always an inverse relationship between price and quantity supplied. 
C) There is usually a direct relationship between price and quantity supplied. 
D) There is usually an inverse relationship between price and quantity supplied. 
A) There is always a direct relationship between price and quantity supplied. 
B) There is always an inverse relationship between price and quantity supplied. 
C) There is usually a direct relationship between price and quantity supplied. 
D) There is usually an inverse relationship between price and quantity supplied.

Question 19

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 20

Exhibit 3-4  
-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.

Exam 3: Supply and Demand: Theory

Exhibit 3-4 -A "decrease in the quantity demanded" means that

Exhibit 3-4 -An "increase in the quantity demanded" means that

Exhibit 3-8 -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 _______________.

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

If computers and software are complements,then

When income rises for the buyers of good X,the ____________ curve for good X will shift ________________.

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

On a supply-and-demand diagram,quantity demanded equals quantity supplied

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 _______________.

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

The fundamental reason why most supply curves are upward sloping is that

At a price above the equilibrium price,there is

The law of supply states that price and quantity supplied are

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

Economists use the terms neutral good and normal good interchangeably.

The terms scarcity and shortage are synonyms.

Which of the following is true about the relationship between price and quantity supplied?

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

Exhibit 3-4 -A "decrease in demand" means that

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

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Exhibit 3-8 -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 _.

When income rises for the buyers of good X,the curve for good X will shift ____.

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 ___.