Question 1

To an economist,an increase in demand means the same thing as an increase in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 2

Exhibit 3-4  
-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 3

Exhibit 3-9  
-Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.An economist would expect a movement in the market for X from

Accepted Answer

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

Question 4

Exhibit 3-1  
-Refer to Exhibit 3-1.At a price of $2 there is a

Accepted Answer

A) shortage of 100 units. 
B) shortage of 200 units. 
C) shortage of 150 units. 
D) surplus of 200 units.. 
E) surplus of 150 units. 
A) shortage of 100 units. 
B) shortage of 200 units. 
C) shortage of 150 units. 
D) surplus of 200 units.. 
E) surplus of 150 units.

Question 5

Exhibit 3-4  
-Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Accepted Answer

A) raise the equilibrium price of frozen yogurt. 
B) increase the quantity supplied of frozen yogurt. 
C) increase the supply of ice cream. 
D) increase the demand for frozen yogurt. 
A) raise the equilibrium price of frozen yogurt. 
B) increase the quantity supplied of frozen yogurt. 
C) increase the supply of ice cream. 
D) increase the demand for frozen yogurt.

Question 6

At a price of $9.99,Danielle buys 3 digital books per month.When the price decreases to $7.99,Danielle buys 4 digital books per month.Jason says that Danielle's demand for digital books has increased.Is Jason correct?

Accepted Answer

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

Question 7

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

Accepted Answer

A) there is a shortage of doctors at fee F1. 
B) there is a surplus of doctors at fee F1. 
C) Q3 doctors are employed at fee F1. 
D) Q2 doctors are employed at fee F1. 
E) both a and c 
A) there is a shortage of doctors at fee F1. 
B) there is a surplus of doctors at fee F1. 
C) Q3 doctors are employed at fee F1. 
D) Q2 doctors are employed at fee F1. 
E) both a and c

Question 8

If the demand for computer software rises as incomes rise,then computer software is a (an)

Accepted Answer

A) inferior good 
B) substitute (good)for computers 
C) normal good 
D) complement (good)for computers 
E) c and d 
A) inferior good 
B) substitute (good)for computers 
C) normal good 
D) complement (good)for computers 
E) c and d

Question 9

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 10

If potential buyers of good X expect the price of good X will soon fall,then the current

Accepted Answer

A) demand for good X will rise. 
B) demand for good X will remain unchanged. 
C) demand for good X will fall. 
D) quantity demanded of good X will fall. 
E) quantity demanded of good X will rise. 
A) demand for good X will rise. 
B) demand for good X will remain unchanged. 
C) demand for good X will fall. 
D) quantity demanded of good X will fall. 
E) quantity demanded of good X will rise.

Question 11

Which of the following will not shift a supply curve?

Accepted Answer

A) a change in the price of relevant resources 
B) a change in the good's own price 
C) a change in the number of sellers 
D) a change in per-unit costs brought about by a change in taxes 
A) a change in the price of relevant resources 
B) a change in the good's own price 
C) a change in the number of sellers 
D) a change in per-unit costs brought about by a change in taxes

Question 12

The "voluntary bumping plan" used by airlines to resolve the problem of overbooked flights was developed by economist

Accepted Answer

A) Adam Smith. 
B) John Maynard Keynes. 
C) Alan Greenspan. 
D) Julian Simon. 
A) Adam Smith. 
B) John Maynard Keynes. 
C) Alan Greenspan. 
D) Julian Simon.

Question 13

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

Accepted Answer

A) rises;rises 
B) rises;falls 
C) falls;rises 
D) falls;falls 
A) rises;rises 
B) rises;falls 
C) falls;rises 
D) falls;falls

Question 14

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 15

Exhibit 3-4  
-Refer to Exhibit 3-4.At a price of $6 _______________ units will be exchanged.

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
A) 5 
B) 10 
C) 15 
D) 20

Question 16

As the price of good X rises,the demand for good Y falls.Therefore,goods X and Y are

Accepted Answer

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

Question 17

Exhibit 3-4  
-Refer to Exhibit 3-4.At a price of $2 _______________ units will be exchanged.

Accepted Answer

A) 5 
B) 10 
C) 15 
D) 20 
A) 5 
B) 10 
C) 15 
D) 20

Question 18

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 19

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will

Accepted Answer

A) rise;rise. 
B) fall;fall. 
C) fall;rise. 
D) rise;fall. 
A) rise;rise. 
B) fall;fall. 
C) fall;rise. 
D) rise;fall.

Question 20

Exhibit 3-10  
-Which of the following pairs of goods would be most likely to be complements?

Accepted Answer

A) olive oil and vegetable oil 
B) peanuts and peanut butter 
C) DVD's and DVD players 
D) hiking boots and tennis shoes 
E) all of the above 
A) olive oil and vegetable oil 
B) peanuts and peanut butter 
C) DVD's and DVD players 
D) hiking boots and tennis shoes 
E) all of the above

Exam 3: Supply and Demand: Theory

To an economist,an increase in demand means the same thing as an increase in quantity demanded.

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

Exhibit 3-9 -Refer to Exhibit 3-9.The production of X is more profitable than it used to be.A number of producers enter the business of producing X.An economist would expect a movement in the market for X from

Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $2 there is a

Exhibit 3-4 -Given that frozen yogurt and ice cream are substitutes,a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

At a price of $9.99,Danielle buys 3 digital books per month.When the price decreases to $7.99,Danielle buys 4 digital books per month.Jason says that Danielle's demand for digital books has increased.Is Jason correct?

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

If the demand for computer software rises as incomes rise,then computer software is a (an)

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

If potential buyers of good X expect the price of good X will soon fall,then the current

Which of the following will not shift a supply curve?

The "voluntary bumping plan" used by airlines to resolve the problem of overbooked flights was developed by economist

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

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?

Exhibit 3-4 -Refer to Exhibit 3-4.At a price of $6 _______________ units will be exchanged.

As the price of good X rises,the demand for good Y falls.Therefore,goods X and Y are

Exhibit 3-4 -Refer to Exhibit 3-4.At a price of $2 _______________ units will be exchanged.

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

Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will

Exhibit 3-10 -Which of the following pairs of goods would be most likely to be complements?

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

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