Question 1

The equilibrium price will increase if demand and supply both increase by equal amounts.

Accepted Answer

A) True 
 B)False  False

Question 2

If the market for iPads experiences a surplus,then the:

Accepted Answer

A)  supply of iPads will fall. 
B)  demand for iPads will rise. 
C)  price of iPads will rise. 
D)  price of iPads will fall. 
A)  supply of iPads will fall. 
B)  demand for iPads will rise. 
C)  price of iPads will rise. 
D)  price of iPads will fall. D

Question 3

Economic growth in China has led to more Chinese people owning cars,which:

Accepted Answer

A)  increased demand for oil,causing oil prices to rise. 
B)  decreased demand for oil,causing oil prices to rise. 
C)  increased demand for oil but decreased supply,causing oil prices to increase rapidly. 
D)  increased demand and supply of oil,causing oil prices to increase rapidly. 
A)  increased demand for oil,causing oil prices to rise. 
B)  decreased demand for oil,causing oil prices to rise. 
C)  increased demand for oil but decreased supply,causing oil prices to increase rapidly. 
D)  increased demand and supply of oil,causing oil prices to increase rapidly. A

Question 4

Figure: Demand-Driven Price Change   Refer to the figure.When the demand curve shifts from D0 to D1,the equilibrium price rises to:

Accepted Answer

A)  $9 and the equilibrium quantity rises to 120. 
B)  $9 and the equilibrium quantity rises to 160. 
C)  $8 and the equilibrium quantity rises to 140. 
D)  $8 and the equilibrium quantity rises to 160. 
A)  $9 and the equilibrium quantity rises to 120. 
B)  $9 and the equilibrium quantity rises to 160. 
C)  $8 and the equilibrium quantity rises to 140. 
D)  $8 and the equilibrium quantity rises to 160.

Question 5

Use the following to answer questions 
Figure: Gains from Trade  
-(Figure: Gains from Trade)Refer to the figure.What are the total gains from trade at the free market equilibrium?

Accepted Answer

A)  $1,000 
B)  $500 
C)  $0 
D)  $1,500 
A)  $1,000 
B)  $500 
C)  $0 
D)  $1,500

Question 6

If market supply increases:

Accepted Answer

A)  equilibrium price and quantity will both increase. 
B)  equilibrium price and quantity will both decrease. 
C)  equilibrium price will increase but equilibrium quantity will decrease. 
D)  equilibrium price will decrease but equilibrium quantity will increase. 
A)  equilibrium price and quantity will both increase. 
B)  equilibrium price and quantity will both decrease. 
C)  equilibrium price will increase but equilibrium quantity will decrease. 
D)  equilibrium price will decrease but equilibrium quantity will increase.

Question 7

Use the following to answer questions 
Figure: Market Changes  
-(Figure: Market Changes)Refer to the figures.If these figures represent the market for new cars,which figure shows the effect of an economic recession?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D

Question 8

When there is a shortage of 1,000 units of a particular good:

Accepted Answer

A)  the price of the good will rise. 
B)  the price of the good will fall. 
C)  the quantity demanded of the good will equal 1,000 units. 
D)  there will be no change in the price of the good. 
A)  the price of the good will rise. 
B)  the price of the good will fall. 
C)  the quantity demanded of the good will equal 1,000 units. 
D)  there will be no change in the price of the good.

Question 9

Technological advances have increased the supply of digital cameras.As a result the:

Accepted Answer

A)  demand for digital cameras will increase,putting downward pressure on the price of digital cameras. 
B)  quantity demanded for digital cameras will increase. 
C)  quantity supplied of digitals cameras will increase,putting downward pressure on the price of digital cameras. 
D)  demand and supply of digital cameras will both increase. 
A)  demand for digital cameras will increase,putting downward pressure on the price of digital cameras. 
B)  quantity demanded for digital cameras will increase. 
C)  quantity supplied of digitals cameras will increase,putting downward pressure on the price of digital cameras. 
D)  demand and supply of digital cameras will both increase.

Question 10

Use the following to answer questions 
Figure: Demand,Supply Shifts  
-(Figure: Demand,Supply Shifts)In the figure,the initial demand curve is D1 and the initial supply curve is S1.Resource prices in this market increase;at the same time,the consumer population declines as migration causes an outflow of population to other regions.What happens to the supply curve and/or demand curve?

Accepted Answer

A)  S1 shifts to S2 but then shifts back to S1.D1 remains at D1. 
B)  S1 shifts to S3 and D1 shifts to D2. 
C)  S1 shifts to S2 and D1 shifts to D3. 
D)  S1 shifts to S2 and D1 shifts to D2. 
A)  S1 shifts to S2 but then shifts back to S1.D1 remains at D1. 
B)  S1 shifts to S3 and D1 shifts to D2. 
C)  S1 shifts to S2 and D1 shifts to D3. 
D)  S1 shifts to S2 and D1 shifts to D2.

Question 11

If market transactions equal the equilibrium quantity,there may still be unexploited gains from trade.

Accepted Answer

A) True 
 B)False

Question 12

A(n)______ causes the equilibrium price to ______ and equilibrium quantity to ______.

Accepted Answer

A)  decrease in supply;rise;fall 
B)  decrease in demand;fall;rise 
C)  increase in supply;rise;rise 
D)  increase in demand;rise;fall 
A)  decrease in supply;rise;fall 
B)  decrease in demand;fall;rise 
C)  increase in supply;rise;rise 
D)  increase in demand;rise;fall

Question 13

Figure: Four Panel 3   Which of the panels shows the effect of a negative supply shock?

Accepted Answer

A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D 
A)  Panel A 
B)  Panel B 
C)  Panel C 
D)  Panel D

Question 14

When the price of a good equals the equilibrium price:

Accepted Answer

A)  there will still be some wasted resources. 
B)  gains from trade are minimized. 
C)  opportunity cost is minimized. 
D)  there are no unexploited gains from trade. 
A)  there will still be some wasted resources. 
B)  gains from trade are minimized. 
C)  opportunity cost is minimized. 
D)  there are no unexploited gains from trade.

Question 15

In a free market when there are unexploited gains from trade:

Accepted Answer

A)  the market is slow to adjust to this situation. 
B)  there are sellers who are unwilling to sell at prices buyers are willing to pay. 
C)  there are buyers who are willing to pay more for goods than sellers are asking. 
D)  an equilibrium price and quantity have been reached. 
A)  the market is slow to adjust to this situation. 
B)  there are sellers who are unwilling to sell at prices buyers are willing to pay. 
C)  there are buyers who are willing to pay more for goods than sellers are asking. 
D)  an equilibrium price and quantity have been reached.

Question 16

An increase in the price of a good will decrease DEMAND for that good.

Accepted Answer

A) True 
 B)False

Question 17

For most of human history,salt was a rare and valuable commodity that had to be either mined or extracted from the ocean through evaporation.This changed when modern chemistry allowed humans to produce it in factories.How did this development affect the market for salt?

Accepted Answer

A)  Demand increased,causing the price to rise. 
B)  Demand increased,causing the price to fall. 
C)  Supply increased,causing the price to rise. 
D)  Supply increased,causing the price to fall. 
A)  Demand increased,causing the price to rise. 
B)  Demand increased,causing the price to fall. 
C)  Supply increased,causing the price to rise. 
D)  Supply increased,causing the price to fall.

Question 18

Use the following to answer questions 
Figure: Price and Quantity 3  
-(Figure: Price and Quantity 3)The value of wasted resources at a quantity of 80 units in the diagram is:

Accepted Answer

A)  $800. 
B)  $900. 
C)  $600. 
D)  $200. 
A)  $800. 
B)  $900. 
C)  $600. 
D)  $200.

Question 19

Gains from trade are maximized in a competitive market when:

Accepted Answer

A)  quantity supplied equals quantity demanded. 
B)  quantity supplied exceeds quantity demanded. 
C)  quantity demanded exceeds quantity supplied. 
D)  quantity supplied equals zero. 
A)  quantity supplied equals quantity demanded. 
B)  quantity supplied exceeds quantity demanded. 
C)  quantity demanded exceeds quantity supplied. 
D)  quantity supplied equals zero.

Question 20

Imagine a free market in which quantity supplied is 40 units and quantity demanded is 50 units at the current price.The market is experiencing a(n):

Accepted Answer

A)  equilibrium. 
B)  surplus. 
C)  shortage. 
D)  shift. 
A)  equilibrium. 
B)  surplus. 
C)  shortage. 
D)  shift.

The equilibrium price will increase if demand and supply both increase by equal amounts.

If the market for iPads experiences a surplus,then the:

Economic growth in China has led to more Chinese people owning cars,which:

Figure: Demand-Driven Price Change Refer to the figure.When the demand curve shifts from D₀ to D₁,the equilibrium price rises to:

Use the following to answer questions Figure: Gains from Trade -(Figure: Gains from Trade)Refer to the figure.What are the total gains from trade at the free market equilibrium?

If market supply increases:

Use the following to answer questions Figure: Market Changes -(Figure: Market Changes)Refer to the figures.If these figures represent the market for new cars,which figure shows the effect of an economic recession?

When there is a shortage of 1,000 units of a particular good:

Technological advances have increased the supply of digital cameras.As a result the:

If market transactions equal the equilibrium quantity,there may still be unexploited gains from trade.

A(n) causes the equilibrium price to and equilibrium quantity to __.

Figure: Four Panel 3 Which of the panels shows the effect of a negative supply shock?

When the price of a good equals the equilibrium price:

In a free market when there are unexploited gains from trade:

An increase in the price of a good will decrease DEMAND for that good.

For most of human history,salt was a rare and valuable commodity that had to be either mined or extracted from the ocean through evaporation.This changed when modern chemistry allowed humans to produce it in factories.How did this development affect the market for salt?

Use the following to answer questions Figure: Price and Quantity 3 -(Figure: Price and Quantity 3)The value of wasted resources at a quantity of 80 units in the diagram is:

Gains from trade are maximized in a competitive market when:

Imagine a free market in which quantity supplied is 40 units and quantity demanded is 50 units at the current price.The market is experiencing a(n):

The Big Ideas

The Power of Trade

Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

Exam 4: Equilibrium- How Supply and Demand

The equilibrium price will increase if demand and supply both increase by equal amounts.

If the market for iPads experiences a surplus,then the:

Economic growth in China has led to more Chinese people owning cars,which:

Figure: Demand-Driven Price Change Refer to the figure.When the demand curve shifts from D0 to D1,the equilibrium price rises to:

Use the following to answer questions Figure: Gains from Trade -(Figure: Gains from Trade)Refer to the figure.What are the total gains from trade at the free market equilibrium?

If market supply increases:

Use the following to answer questions Figure: Market Changes -(Figure: Market Changes)Refer to the figures.If these figures represent the market for new cars,which figure shows the effect of an economic recession?

When there is a shortage of 1,000 units of a particular good:

Technological advances have increased the supply of digital cameras.As a result the:

If market transactions equal the equilibrium quantity,there may still be unexploited gains from trade.

A(n)______ causes the equilibrium price to ______ and equilibrium quantity to ______.

Figure: Four Panel 3 Which of the panels shows the effect of a negative supply shock?

When the price of a good equals the equilibrium price:

In a free market when there are unexploited gains from trade:

An increase in the price of a good will decrease DEMAND for that good.

For most of human history,salt was a rare and valuable commodity that had to be either mined or extracted from the ocean through evaporation.This changed when modern chemistry allowed humans to produce it in factories.How did this development affect the market for salt?

Use the following to answer questions Figure: Price and Quantity 3 -(Figure: Price and Quantity 3)The value of wasted resources at a quantity of 80 units in the diagram is:

Gains from trade are maximized in a competitive market when:

Imagine a free market in which quantity supplied is 40 units and quantity demanded is 50 units at the current price.The market is experiencing a(n):

The Big Ideas

The Power of Trade

Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

Figure: Demand-Driven Price Change Refer to the figure.When the demand curve shifts from D₀ to D₁,the equilibrium price rises to:

A(n) causes the equilibrium price to and equilibrium quantity to __.