Question 1

At a price below the equilibrium price,there is

Accepted Answer

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

Question 2

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

Accepted Answer

A) Q2 doctors are employed at fee F1. 
B) Q3 doctors are employed at fee F1. 
C) Q1 doctors are employed at fee F1. 
D) the number of doctors employed cannot be determined at any fee. 
A) Q2 doctors are employed at fee F1. 
B) Q3 doctors are employed at fee F1. 
C) Q1 doctors are employed at fee F1. 
D) the number of doctors employed cannot be determined at any fee.

Question 3

Exhibit 3-5  
-Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point V and is now at point Z,the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

Accepted Answer

A) greater than;greater than 
B) less than;greater than 
C) greater than;less than 
D) less than;less than 
A) greater than;greater than 
B) less than;greater than 
C) greater than;less than 
D) less than;less than

Question 4

NOTES:
New
Exhibit 3-6  
-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 5

One can determine the consumers' surplus if the _______________ are known

Accepted Answer

A) tax paid 
B) maximum buying price 
C) price paid 
D) maximum buying price and price paid 
E) maximum buying price and tax paid 
A) tax paid 
B) maximum buying price 
C) price paid 
D) maximum buying price and price paid 
E) maximum buying price and tax paid

Question 6

In moving along a demand curve,everything is held constant except buyers' income.

Accepted Answer

A) True 
 B)False

Question 7

The law of diminishing marginal utility helps to explain the direct relationship between price and quantity supplied.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the government decides that every family should own its own home.To bring this about,the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build.As a result of this,

Accepted Answer

A) the supply curve of new houses would shift leftward,since it now costs $10,000 more for builders to produce a house. 
B) the demand curve for new houses would shift rightward,since now every family would want to buy a house. 
C) the demand curve for new houses would shift leftward. 
D) the supply curve of new houses would shift rightward,since builders would be willing to produce and sell more houses at each given price. 
E) c and d 
A) the supply curve of new houses would shift leftward,since it now costs $10,000 more for builders to produce a house. 
B) the demand curve for new houses would shift rightward,since now every family would want to buy a house. 
C) the demand curve for new houses would shift leftward. 
D) the supply curve of new houses would shift rightward,since builders would be willing to produce and sell more houses at each given price. 
E) c and d

Question 9

If consumers' surplus is $30 and the price paid for the good is $50,then the maximum price a buyer is willing and able to pay for the good is

Accepted Answer

A) $80. 
B) $30. 
C) $50. 
D) $20. 
E) There is not enough information to answer the question. 
A) $80. 
B) $30. 
C) $50. 
D) $20. 
E) There is not enough information to answer the question.

Question 10

One point on a market supply curve represents $4 and 100 units quantity supplied.If there are three suppliers,and at a price of $4 one of the suppliers supplies 23 units,then which of the following combinations of price and quantity supplied might hold for the other two suppliers?

Accepted Answer

A) At $4,quantity supplied could be 40 units for one supplier and 27 for the other. 
B) At $4,quantity supplied could be 33 units for one supplier and 27 for the other. 
C) At $4,quantity supplied could be 40 units for one supplier and 37 for the other. 
D) At $4,quantity supplied could be 77 units for one supplier and 10 for the other. 
E) There is not enough information to answer this question. 
A) At $4,quantity supplied could be 40 units for one supplier and 27 for the other. 
B) At $4,quantity supplied could be 33 units for one supplier and 27 for the other. 
C) At $4,quantity supplied could be 40 units for one supplier and 37 for the other. 
D) At $4,quantity supplied could be 77 units for one supplier and 10 for the other. 
E) There is not enough information to answer this question.

Question 11

Exhibit 3-15  
-Refer to Exhibit 3-15.In Exhibit 3-15,at fee F1 there is a

Accepted Answer

A) shortage of (Q3 - Q1)doctors. 
B) surplus of (Q3 - Q1)doctors. 
C) surplus of (Q2 - Q1)doctors. 
D) shortage of (Q2 - Q1)doctors. 
A) shortage of (Q3 - Q1)doctors. 
B) surplus of (Q3 - Q1)doctors. 
C) surplus of (Q2 - Q1)doctors. 
D) shortage of (Q2 - Q1)doctors.

Question 12

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Accepted Answer

A) True 
 B)False

Question 13

Supply curves are ________________ upward sloping.

Accepted Answer

A) always 
B) usually 
C) rarely 
D) never 
A) always 
B) usually 
C) rarely 
D) never

Question 14

Exhibit 3-4  
-Refer to Exhibit 3-4.A price of $6 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 15

A surplus will occur in a market when the price of the product is above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 16

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 3-4  
-Refer to Exhibit 3-4.A price of $4 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. 
E) none of the above 
A) shortage of 10 units. 
B) surplus of 10 units. 
C) surplus of 5 units. 
D) shortage of 5 units. 
E) none of the above

Question 18

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Accepted Answer

A) a fall in the price of peanuts 
B) a rise in the price of peanuts 
C) a rise in income,assuming that peanut butter is an inferior good 
D) a shift in preferences toward peanut butter 
E) none of the above 
A) a fall in the price of peanuts 
B) a rise in the price of peanuts 
C) a rise in income,assuming that peanut butter is an inferior good 
D) a shift in preferences toward peanut butter 
E) none of the above

Question 19

Exhibit 3-4  
-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 20

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.

Exam 3: Supply and Demand: Theory

At a price below the equilibrium price,there is

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

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point V and is now at point Z,the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

NOTES: New Exhibit 3-6 -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

One can determine the consumers' surplus if the _______________ are known

In moving along a demand curve,everything is held constant except buyers' income.

The law of diminishing marginal utility helps to explain the direct relationship between price and quantity supplied.

Suppose the government decides that every family should own its own home.To bring this about,the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build.As a result of this,

If consumers' surplus is $30 and the price paid for the good is $50,then the maximum price a buyer is willing and able to pay for the good is

One point on a market supply curve represents $4 and 100 units quantity supplied.If there are three suppliers,and at a price of $4 one of the suppliers supplies 23 units,then which of the following combinations of price and quantity supplied might hold for the other two suppliers?

Exhibit 3-15 -Refer to Exhibit 3-15.In Exhibit 3-15,at fee F1 there is a

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Supply curves are ________________ upward sloping.

Exhibit 3-4 -Refer to Exhibit 3-4.A price of $6 in the market will result in a

A surplus will occur in a market when the price of the product is above the equilibrium price.

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

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

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Exhibit 3-4 -A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

A vertical supply curve represents:

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

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,if equilibrium was originally at point V and is now at point Z,the new equilibrium price is it was originally and the new equilibrium quantity is __ it was originally.

NOTES: New Exhibit 3-6 -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

Exhibit 3-15 -Refer to Exhibit 3-15.In Exhibit 3-15,at fee F₁ there is a