Question 1

The market demand curve for a given product may be downward sloping even if no person in that market has a downward sloping demand curve.

Accepted Answer

A) True 
 B)False

Question 2

An increase in the price of good B caused an increase in the demand for good C.This indicates that goods B and C are

Accepted Answer

A) complements. 
B) substitutes. 
C) neither substitutes nor complements. 
D) normal goods. 
A) complements. 
B) substitutes. 
C) neither substitutes nor complements. 
D) normal goods.

Question 3

Exhibit 3-1  
-Refer to Exhibit 3-1.Equilibrium price and quantity are ____________________,respectively.

Accepted Answer

A) $2 and 250 units 
B) $4 and 250 units 
C) $2 and 150 units 
D) $6 and 250 units 
E) none of the above 
A) $2 and 250 units 
B) $4 and 250 units 
C) $2 and 150 units 
D) $6 and 250 units 
E) none of the above

Question 4

At a price for which the quantity supplied exceeds the quantity demanded,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

Accepted Answer

A) surplus;downward 
B) surplus;upward 
C) shortage;downward 
D) shortage;upward 
A) surplus;downward 
B) surplus;upward 
C) shortage;downward 
D) shortage;upward

Question 5

When a market is in disequilibrium,such as when the quantity supplied of a good is greater than the quantity demanded of that good,the price of the good will rise,ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

If people begin to favor science fiction novels to a greater degree than previously,the demand curve for science fiction novels

Accepted Answer

A) shifts rightward. 
B) shifts leftward. 
C) stays constant. 
D) can shift either rightward or leftward. 
A) shifts rightward. 
B) shifts leftward. 
C) stays constant. 
D) can shift either rightward or leftward.

Question 8

When the price of Toyota Corollas rises,ceteris paribus,the demand for Corollas falls.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 3-4  
-In moving along a demand curve for good X,which of the following is NOT held constant?

Accepted Answer

A) the prices of substitute goods for good X 
B) the prices of complementary goods for good X 
C) incomes of consumers of good X 
D) the price of good X 
A) the prices of substitute goods for good X 
B) the prices of complementary goods for good X 
C) incomes of consumers of good X 
D) the price of good X

Question 10

Which of the following statements is false?

Accepted Answer

A) The shift factors for the supply curve are: income,preferences,prices of related goods,the number of buyers,and expectations of future price. 
B) A change in (own)price changes the quantity supplied of a good. 
C) A change in demand is graphically represented by a shift in the demand curve. 
D) A change in quantity demanded is represented by a movement along a given demand curve. 
A) The shift factors for the supply curve are: income,preferences,prices of related goods,the number of buyers,and expectations of future price. 
B) A change in (own)price changes the quantity supplied of a good. 
C) A change in demand is graphically represented by a shift in the demand curve. 
D) A change in quantity demanded is represented by a movement along a given demand curve.

Question 11

With respect to the supply and demand for a given product,describe the connection that exists between equilibrium/disequilibrium and predictions.Cite your own unique example in order to help support your answer.

Accepted Answer

Economists use the concepts of equilibri

Question 12

Exhibit 3-8  
-Refer to Exhibit 3-8.A price of $1 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 13

Describe one of the two reasons given in the textbook to help explain why price and quantity demanded are inversely related.

Accepted Answer

One reason that price and quantity deman

Question 14

As the price of good A rises,the demand for good B rises.Therefore,goods A and B are

Accepted Answer

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

Question 15

At a price for which quantity demanded exceeds quantity supplied,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

Accepted Answer

A) surplus;downward 
B) surplus;upward 
C) shortage;downward 
D) shortage;upward 
A) surplus;downward 
B) surplus;upward 
C) shortage;downward 
D) shortage;upward

Question 16

If the producers' surplus is $50,and the consumers' surplus is $40,then what is the minimum selling price of the good?

Accepted Answer

A) $10 
B) $40 
C) $50 
D) $90 
E) There is not enough information to answer the question. 
A) $10 
B) $40 
C) $50 
D) $90 
E) There is not enough information to answer the question.

Question 17

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

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 18

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

Accepted Answer

A) supply curve for good X shifts leftward and the price of good X rises. 
B) quantity supplied of good X falls and the price of good X rises. 
C) demand curve for good X shifts leftward and the price of good X falls. 
D) supply curve for good X shifts rightward and the price of good X falls. 
E) supply curve for good X shifts leftward and the price of good X falls. 
A) supply curve for good X shifts leftward and the price of good X rises. 
B) quantity supplied of good X falls and the price of good X rises. 
C) demand curve for good X shifts leftward and the price of good X falls. 
D) supply curve for good X shifts rightward and the price of good X falls. 
E) supply curve for good X shifts leftward and the price of good X falls.

Question 19

If the demand for a good increases by more than the supply of the good increases,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 20

The sum of consumers' surplus and producers' surplus is maximized at equilibrium.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand: Theory

The market demand curve for a given product may be downward sloping even if no person in that market has a downward sloping demand curve.

An increase in the price of good B caused an increase in the demand for good C.This indicates that goods B and C are

Exhibit 3-1 -Refer to Exhibit 3-1.Equilibrium price and quantity are ____________________,respectively.

At a price for which the quantity supplied exceeds the quantity demanded,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

When a market is in disequilibrium,such as when the quantity supplied of a good is greater than the quantity demanded of that good,the price of the good will rise,ceteris paribus.

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

If people begin to favor science fiction novels to a greater degree than previously,the demand curve for science fiction novels

When the price of Toyota Corollas rises,ceteris paribus,the demand for Corollas falls.

Exhibit 3-4 -In moving along a demand curve for good X,which of the following is NOT held constant?

Which of the following statements is false?

With respect to the supply and demand for a given product,describe the connection that exists between equilibrium/disequilibrium and predictions.Cite your own unique example in order to help support your answer.

Exhibit 3-8 -Refer to Exhibit 3-8.A price of $1 will result in a ___________________ in this market which will cause the price of the product to gravitate ________________.

Describe one of the two reasons given in the textbook to help explain why price and quantity demanded are inversely related.

As the price of good A rises,the demand for good B rises.Therefore,goods A and B are

At a price for which quantity demanded exceeds quantity supplied,a __________ is experienced,which pushes the price __________ toward its equilibrium value.

If the producers' surplus is $50,and the consumers' surplus is $40,then what is the minimum selling price of the good?

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

The government imposes a $2.50 per-unit tax on the production of good X.As a result the

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

The sum of consumers' surplus and producers' surplus is maximized at equilibrium.

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

At a price for which the quantity supplied exceeds the quantity demanded,a is experienced,which pushes the price toward its equilibrium value.

Exhibit 3-8 -Refer to Exhibit 3-8.A price of $1 will result in a ___ in this market which will cause the price of the product to gravitate .

At a price for which quantity demanded exceeds quantity supplied,a is experienced,which pushes the price toward its equilibrium value.

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

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