Question 1

Exhibit 3-16  
-Refer to Exhibit 3-16.Which of the following is false?

Accepted Answer

A) Graph (1): There is a shortage of this good when the price is equal to P3. 
B) Graph (2): As supply increases,equilibrium quantity remains constant. 
C) Graph (3): As demand increases,equilibrium price remains constant. 
D) Graph (4): As supply changes,equilibrium price stays the same. 
A) Graph (1): There is a shortage of this good when the price is equal to P3. 
B) Graph (2): As supply increases,equilibrium quantity remains constant. 
C) Graph (3): As demand increases,equilibrium price remains constant. 
D) Graph (4): As supply changes,equilibrium price stays the same.

Question 2

Exhibit 3-10  
-An increase in the number of sellers of a good will,ceteris paribus,__________________ for that good.

Accepted Answer

A) increase equilibrium price and quantity 
B) increase equilibrium price and decrease equilibrium quantity 
C) decrease equilibrium price and increase equilibrium quantity 
D) decrease equilibrium price and quantity 
E) increase demand 
A) increase equilibrium price and quantity 
B) increase equilibrium price and decrease equilibrium quantity 
C) decrease equilibrium price and increase equilibrium quantity 
D) decrease equilibrium price and quantity 
E) increase demand

Question 3

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

Accepted Answer

Surpluses always occur at prices that ar

Question 4

Demand refers to

Accepted Answer

A) how much of a good people are willing and able to buy at a particular price. 
B) the different quantities of a good people are willing and able to buy at different prices. 
C) the different quantities of a good people are willing and able to buy at a particular price. 
D) how much of a good people are willing to buy at different prices. 
E) none of the above 
A) how much of a good people are willing and able to buy at a particular price. 
B) the different quantities of a good people are willing and able to buy at different prices. 
C) the different quantities of a good people are willing and able to buy at a particular price. 
D) how much of a good people are willing to buy at different prices. 
E) none of the above

Question 5

Exhibit 3-3   ​
-Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

Accepted Answer

A) a increase in the price of good Y. 
B) an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C) an increase in the price of a complement to good Y. 
D) a decrease in the number of buyers of good Y. 
E) a decrease in good Y buyers' income (assuming that good Y is a normal good). 
A) a increase in the price of good Y. 
B) an increase in good Y buyers' income (assuming that good Y is an inferior good). 
C) an increase in the price of a complement to good Y. 
D) a decrease in the number of buyers of good Y. 
E) a decrease in good Y buyers' income (assuming that good Y is a normal good).

Question 6

Suppose that for a given good,demand decreases and supply decreases at the same time.If demand decreases by a greater amount than supply decreases,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 7

If the supply curve and the demand curve for lettuce both shift to the left by an equal amount,what can we say about the resulting changes in equilibrium price and quantity?

Accepted Answer

A) The price will increase,but the quantity may increase or decrease. 
B) The price will increase,and the quantity will increase. 
C) The price will decrease,and the quantity will increase. 
D) The price will stay the same,but the quantity will increase. 
E) The price will stay the same,but the quantity will decrease. 
A) The price will increase,but the quantity may increase or decrease. 
B) The price will increase,and the quantity will increase. 
C) The price will decrease,and the quantity will increase. 
D) The price will stay the same,but the quantity will increase. 
E) The price will stay the same,but the quantity will decrease.

Question 8

Exhibit 3-9  
-A market is said to be in disequilibrium if

Accepted Answer

A) it exhibits either a surplus or a shortage. 
B) the number of units that individuals are willing to buy exceeds the number of units they can afford. 
C) it is a market for an inferior good. 
D) none of the above 
A) it exhibits either a surplus or a shortage. 
B) the number of units that individuals are willing to buy exceeds the number of units they can afford. 
C) it is a market for an inferior good. 
D) none of the above

Question 9

__________ is the number of units that individuals are __________ to buy at a particular price during some time period.

Accepted Answer

A) Demand;willing and able 
B) Supply;willing and able 
C) Quantity demanded;willing and able 
D) Demand;able 
E) Quantity demanded;willing 
A) Demand;willing and able 
B) Supply;willing and able 
C) Quantity demanded;willing and able 
D) Demand;able 
E) Quantity demanded;willing

Question 10

One major reason for the law of demand is that

Accepted Answer

A) one price changing requires at least one other price to change in the opposite direction. 
B) people substitute relatively lower-priced goods for relatively higher-priced goods. 
C) a higher price never reduces quantity demanded by enough to lower total revenue. 
D) people are willing to produce more units at a higher price. 
A) one price changing requires at least one other price to change in the opposite direction. 
B) people substitute relatively lower-priced goods for relatively higher-priced goods. 
C) a higher price never reduces quantity demanded by enough to lower total revenue. 
D) people are willing to produce more units at a higher price.

Question 11

Which of the following statements is false?

Accepted Answer

A) An upward-sloping supply curve graphically represents the law of supply. 
B) A vertical supply curve graphically represents the law of supply. 
C) If income rises and good X is a normal good,then the demand for good X will rise. 
D) If income falls and good Y is an inferior good,then the demand for good Y will rise. 
A) An upward-sloping supply curve graphically represents the law of supply. 
B) A vertical supply curve graphically represents the law of supply. 
C) If income rises and good X is a normal good,then the demand for good X will rise. 
D) If income falls and good Y is an inferior good,then the demand for good Y will rise.

Question 12

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right)?

Accepted Answer

A) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and supply,ceteris paribus. 
B) Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and quantity supplied,ceteris paribus. 
C) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and demand,ceteris paribus. 
D) Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and demand,ceteris paribus. 
E) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and quantity demanded,ceteris paribus. 
A) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and supply,ceteris paribus. 
B) Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and quantity supplied,ceteris paribus. 
C) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and demand,ceteris paribus. 
D) Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and demand,ceteris paribus. 
E) Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and quantity demanded,ceteris paribus.

Question 13

If the demand curve for a good shifts leftward,

Accepted Answer

A) quantity demanded is less at each price. 
B) quantity demanded remains constant at each price. 
C) quantity demanded is greater at each price. 
D) demand is greater at each price. 
A) quantity demanded is less at each price. 
B) quantity demanded remains constant at each price. 
C) quantity demanded is greater at each price. 
D) demand is greater at each price.

Question 14

Suppose that the average price of refrigerators has fallen over the past few years,yet the refrigerator companies have offered more and more of them for sale.Does this mean that the supply curve for refrigerators is downward sloping? Explain.

Accepted Answer

The reason that refrigerator prices have

Question 15

Exhibit 3-16  
-As Jamal's income rises,his demand for pizza does not change.It follows that,for Jamal,pizza is a(n)

Accepted Answer

A) normal good. 
B) inferior good. 
C) neutral good. 
D) substitute good. 
E) complementary good. 
A) normal good. 
B) inferior good. 
C) neutral good. 
D) substitute good. 
E) complementary good.

Question 16

On a supply-and-demand diagram,equilibrium is found

Accepted Answer

A) where the supply curve intercepts the vertical axis. 
B) where the demand curve intercepts the horizontal axis. 
C) where the demand and supply curves intersect. 
D) at every point on either curve 
A) where the supply curve intercepts the vertical axis. 
B) where the demand curve intercepts the horizontal axis. 
C) where the demand and supply curves intersect. 
D) at every point on either curve

Question 17

Exhibit 3-10  
-Refer to Exhibit 3-10.100 units of X will be exchanged in this market if the price is

Accepted Answer

A) $30. 
B) $20. 
C) $10. 
D) a or c 
E) none of the above 
A) $30. 
B) $20. 
C) $10. 
D) a or c 
E) none of the above

Question 18

What is the definition of producers' surplus?

Accepted Answer

A) price received minus maximum selling price 
B) maximum selling price minus price received 
C) price received minus minimum selling price 
D) highest price minus lowest price 
E) none of the above 
A) price received minus maximum selling price 
B) maximum selling price minus price received 
C) price received minus minimum selling price 
D) highest price minus lowest price 
E) none of the above

Question 19

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

Accepted Answer

A) place more oil on the market this year,thus shifting the present supply curve of oil rightward. 
B) hold some oil off the market this year,thus shifting the present supply curve of oil leftward. 
C) place more oil on the market this year,thus increasing the quantity supplied of oil at lower but not higher prices. 
D) hold some oil off the market this year,thus decreasing the quantity supplied of oil at lower but not higher prices. 
A) place more oil on the market this year,thus shifting the present supply curve of oil rightward. 
B) hold some oil off the market this year,thus shifting the present supply curve of oil leftward. 
C) place more oil on the market this year,thus increasing the quantity supplied of oil at lower but not higher prices. 
D) hold some oil off the market this year,thus decreasing the quantity supplied of oil at lower but not higher prices.

Question 20

Exhibit 3-4  
-An increase 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.

Exam 3: Supply and Demand: Theory

Exhibit 3-16 -Refer to Exhibit 3-16.Which of the following is false?

Exhibit 3-10 -An increase in the number of sellers of a good will,ceteris paribus,__________________ for that good.

Explain why the price of a good tends to fall when there is a surplus of the good.Give a hypothetical numerical example to help support your answer.

Demand refers to

Exhibit 3-3 ​ -Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

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

If the supply curve and the demand curve for lettuce both shift to the left by an equal amount,what can we say about the resulting changes in equilibrium price and quantity?

Exhibit 3-9 -A market is said to be in disequilibrium if

__________ is the number of units that individuals are __________ to buy at a particular price during some time period.

One major reason for the law of demand is that

Which of the following statements is false?

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right)?

If the demand curve for a good shifts leftward,

Suppose that the average price of refrigerators has fallen over the past few years,yet the refrigerator companies have offered more and more of them for sale.Does this mean that the supply curve for refrigerators is downward sloping? Explain.

Exhibit 3-16 -As Jamal's income rises,his demand for pizza does not change.It follows that,for Jamal,pizza is a(n)

On a supply-and-demand diagram,equilibrium is found

Exhibit 3-10 -Refer to Exhibit 3-10.100 units of X will be exchanged in this market if the price is

What is the definition of producers' surplus?

Oil producers expect that oil prices next year will be higher than oil prices this year.As a result,oil producers are most likely to

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

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 3-3 -Refer to Exhibit 3-3.A movement from point V to point W could not have been the result of

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

is the number of units that individuals are to buy at a particular price during some time period.