Question 1

Anonymity on the Internet has lowered the cost of rudely confronting people.What has happened to the supply of rude confrontations?

Accepted Answer

A)  The supply has increased,shifting up and to the left. 
B)  The supply has increased,shifting down and to the right. 
C)  The supply has decreased,shifting up and to the left. 
D)  The supply has decreased,shifting down and to the right. 
A)  The supply has increased,shifting up and to the left. 
B)  The supply has increased,shifting down and to the right. 
C)  The supply has decreased,shifting up and to the left. 
D)  The supply has decreased,shifting down and to the right. B

Question 2

When the price of a good goes down,demand for the good goes down.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following statements is TRUE?

Accepted Answer

A)  Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and its market price. 
B)  Bill is willing to pay $10 for a pound of clay.If he buys a pound of clay at a market price per pound of $5,his consumer surplus is $2. 
C)  Total consumer surplus is represented graphically by the area beneath the demand curve. 
D)  Total consumer surplus is represented graphically by the area above the demand curve. 
A)  Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good or service and its market price. 
B)  Bill is willing to pay $10 for a pound of clay.If he buys a pound of clay at a market price per pound of $5,his consumer surplus is $2. 
C)  Total consumer surplus is represented graphically by the area beneath the demand curve. 
D)  Total consumer surplus is represented graphically by the area above the demand curve. A

Question 4

Use the following to answer questions 
Figure: Supply Shift 2  
-(Figure: Supply Shift 2)Refer to the figure.What would cause the supply curve to shift from S1 to S2?

Accepted Answer

A)  a $20 tax reduction on each unit of output 
B)  a $40 tax reduction on each unit of output 
C)  a $40 subsidy reduction on each unit of output 
D)  a $20 subsidy reduction on each unit of output 
A)  a $20 tax reduction on each unit of output 
B)  a $40 tax reduction on each unit of output 
C)  a $40 subsidy reduction on each unit of output 
D)  a $20 subsidy reduction on each unit of output

Question 5

A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

Accepted Answer

A) True 
 B)False

Question 6

Recall your reading about NAFTA in the textbook.Why did the NAFTA agreement result in an increase in lumber supply in the United States?

Accepted Answer

A)  NAFTA decreed that the United States should produce more lumber. 
B)  NAFTA stands for North American Furniture Trade Agreement. 
C)  NAFTA reduced barriers to trade,allowing Canadian lumber to enter the United States. 
D)  The United States sold more lumber to Canada. 
A)  NAFTA decreed that the United States should produce more lumber. 
B)  NAFTA stands for North American Furniture Trade Agreement. 
C)  NAFTA reduced barriers to trade,allowing Canadian lumber to enter the United States. 
D)  The United States sold more lumber to Canada.

Question 7

Producer surplus can be defined as the revenue producers make from selling goods in a market.

Accepted Answer

A) True 
 B)False

Question 8

The demand for an inferior good increases when income decreases.

Accepted Answer

A) True 
 B)False

Question 9

Demand for a good or service increases when the consumer's income rises,regardless of whether the good is a normal good or inferior good.

Accepted Answer

A) True 
 B)False

Question 10

Use the following to answer questions 
Figure: Supply Shift  
-(Figure: Supply Shift)What would cause the supply curve to shift from S1 to S2 as shown in the diagram?

Accepted Answer

A)  an increase in taxes on firms' output 
B)  an increase in the price of inputs used to produce the output 
C)  a decrease in the number of firms that produce the output 
D)  a decrease in the wages paid to union workers who produce the output 
A)  an increase in taxes on firms' output 
B)  an increase in the price of inputs used to produce the output 
C)  a decrease in the number of firms that produce the output 
D)  a decrease in the wages paid to union workers who produce the output

Question 11

Use the following to answer questions 
Figure: Supply Shifts  
-(Figure: Supply Shifts)In the figure,the initial supply curve is S1.Producers engage in market speculation with the belief that the price of the good will increase in the near future.This would be represented in the figure by shifting the:

Accepted Answer

A)  supply curve to S2,resulting in a lower quantity supplied at each price. 
B)  supply curve to S2,resulting in a higher quantity supplied at each price. 
C)  supply curve to S3,resulting in a lower quantity supplied at each price. 
D)  supply curve to S3,resulting in a higher quantity supplied at each price. 
A)  supply curve to S2,resulting in a lower quantity supplied at each price. 
B)  supply curve to S2,resulting in a higher quantity supplied at each price. 
C)  supply curve to S3,resulting in a lower quantity supplied at each price. 
D)  supply curve to S3,resulting in a higher quantity supplied at each price.

Question 12

A demand curve indicates that:

Accepted Answer

A)  the quantity demanded of a good is higher when its price is higher. 
B)  the quantity demanded of a good is higher when its price is lower. 
C)  the demand for a good is higher when its price is lower. 
D)  the demand for a good is higher when its price is higher. 
A)  the quantity demanded of a good is higher when its price is higher. 
B)  the quantity demanded of a good is higher when its price is lower. 
C)  the demand for a good is higher when its price is lower. 
D)  the demand for a good is higher when its price is higher.

Question 13

Figure: Supply Shift   According to the figure,the:

Accepted Answer

A)  costs of producing output have decreased. 
B)  technology for producing output has improved. 
C)  costs of producing output have increased. 
D)  price of the product has decreased. 
A)  costs of producing output have decreased. 
B)  technology for producing output has improved. 
C)  costs of producing output have increased. 
D)  price of the product has decreased.

Question 14

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demand curve for oil is negatively sloped? As the price of oil rises:

Accepted Answer

A)  consumers use oil for more and varied purposes. 
B)  consumers increasingly use oil only for those purposes without good substitutes. 
C)  consumers have an incentive to use oil more freely. 
D)  more producers are more willing and able to produce oil. 
A)  consumers use oil for more and varied purposes. 
B)  consumers increasingly use oil only for those purposes without good substitutes. 
C)  consumers have an incentive to use oil more freely. 
D)  more producers are more willing and able to produce oil.

Question 15

A decrease in the cost of inputs will shift the supply curve down and to the right.

Accepted Answer

A) True 
 B)False

Question 16

What will happen to the supply of workers 18 to 21 years after a baby boom?

Accepted Answer

A)  It will decrease,since workers will cost more to hire. 
B)  It will increase because of the influx of new adults into the labor market. 
C)  It will increase because workers will be needed to care for retirees. 
D)  It will decrease because producer surplus will be lower. 
A)  It will decrease,since workers will cost more to hire. 
B)  It will increase because of the influx of new adults into the labor market. 
C)  It will increase because workers will be needed to care for retirees. 
D)  It will decrease because producer surplus will be lower.

Question 17

A supply and/or demand graph typically shows:

Accepted Answer

A)  the price of the good on the horizontal axis and the quantity of the good on the vertical axis. 
B)  the quantity of the good on the horizontal axis and the price of the good on the vertical axis. 
C)  supply or demand of the good on the horizontal axis and price of the good on the vertical axis. 
D)  price of the good on the horizontal axis and supply or demand of the good on the vertical axis. 
A)  the price of the good on the horizontal axis and the quantity of the good on the vertical axis. 
B)  the quantity of the good on the horizontal axis and the price of the good on the vertical axis. 
C)  supply or demand of the good on the horizontal axis and price of the good on the vertical axis. 
D)  price of the good on the horizontal axis and supply or demand of the good on the vertical axis.

Question 18

If golf course fees decrease,the demand for golf balls will increase.

Accepted Answer

A) True 
 B)False

Question 19

Figure: Demand Curve   Which statement is TRUE regarding the figure?

Accepted Answer

A)  At a price of $6 per unit,consumers are willing and able to buy 10 units. 
B)  The maximum price demanders are willing to pay for 15 units is $6 per unit. 
C)  The higher the price,the greater the quantity demanded. 
D)  At a price of $3.75 per unit,consumers are indifferent between buying 10 and 15 units. 
A)  At a price of $6 per unit,consumers are willing and able to buy 10 units. 
B)  The maximum price demanders are willing to pay for 15 units is $6 per unit. 
C)  The higher the price,the greater the quantity demanded. 
D)  At a price of $3.75 per unit,consumers are indifferent between buying 10 and 15 units.

Question 20

It is widely known that the rapidly expanding corn-ethanol industry is quickly increasing the price of corn on world markets.Given this,many farmers have begun to grow corn more intensively.For instance,some producers who currently pursue a corn-soybean rotation (planting corn one year and soybeans the next)might shift to a corn-corn-soybean rotation (planting corn two years in a row and then planting soybeans in the third).Continuous production of corn (planting corn every year on the same plot of land)is another possibility.Explain what impact this explosion in the market for corn may have on the market for soybeans.In particular,will those who produce soybeans exclusively be better off,worse off,or unaffected as a result of the increase in corn prices?

Accepted Answer

Given the now relatively high price of c

Anonymity on the Internet has lowered the cost of rudely confronting people.What has happened to the supply of rude confrontations?

When the price of a good goes down,demand for the good goes down.

Which of the following statements is TRUE?

Use the following to answer questions Figure: Supply Shift 2 -(Figure: Supply Shift 2)Refer to the figure.What would cause the supply curve to shift from S₁ to S₂?

A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

Recall your reading about NAFTA in the textbook.Why did the NAFTA agreement result in an increase in lumber supply in the United States?

Producer surplus can be defined as the revenue producers make from selling goods in a market.

The demand for an inferior good increases when income decreases.

Demand for a good or service increases when the consumer's income rises,regardless of whether the good is a normal good or inferior good.

Use the following to answer questions Figure: Supply Shift -(Figure: Supply Shift)What would cause the supply curve to shift from S₁ to S₂ as shown in the diagram?

A demand curve indicates that:

Figure: Supply Shift According to the figure,the:

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demand curve for oil is negatively sloped? As the price of oil rises:

A decrease in the cost of inputs will shift the supply curve down and to the right.

What will happen to the supply of workers 18 to 21 years after a baby boom?

A supply and/or demand graph typically shows:

If golf course fees decrease,the demand for golf balls will increase.

Figure: Demand Curve Which statement is TRUE regarding the figure?

The Big Ideas

The Power of Trade

Equilibrium- How 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 3: Supply and Demand

Anonymity on the Internet has lowered the cost of rudely confronting people.What has happened to the supply of rude confrontations?

When the price of a good goes down,demand for the good goes down.

Which of the following statements is TRUE?

Use the following to answer questions Figure: Supply Shift 2 -(Figure: Supply Shift 2)Refer to the figure.What would cause the supply curve to shift from S1 to S2?

A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

Recall your reading about NAFTA in the textbook.Why did the NAFTA agreement result in an increase in lumber supply in the United States?

Producer surplus can be defined as the revenue producers make from selling goods in a market.

The demand for an inferior good increases when income decreases.

Demand for a good or service increases when the consumer's income rises,regardless of whether the good is a normal good or inferior good.

Use the following to answer questions Figure: Supply Shift -(Figure: Supply Shift)What would cause the supply curve to shift from S1 to S2 as shown in the diagram?

A demand curve indicates that:

Figure: Supply Shift According to the figure,the:

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demand curve for oil is negatively sloped? As the price of oil rises:

A decrease in the cost of inputs will shift the supply curve down and to the right.

What will happen to the supply of workers 18 to 21 years after a baby boom?

A supply and/or demand graph typically shows:

If golf course fees decrease,the demand for golf balls will increase.

Figure: Demand Curve Which statement is TRUE regarding the figure?

The Big Ideas

The Power of Trade

Equilibrium- How 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

Use the following to answer questions Figure: Supply Shift 2 -(Figure: Supply Shift 2)Refer to the figure.What would cause the supply curve to shift from S₁ to S₂?

Use the following to answer questions Figure: Supply Shift -(Figure: Supply Shift)What would cause the supply curve to shift from S₁ to S₂ as shown in the diagram?