Question 1

A change in quantity supplied is reflected by a movement along the same supply curve while a change in supply refers to a shift in the entire supply curve.

Accepted Answer

A) True 
 B)False

Question 2

Total producer surplus equals:

Accepted Answer

A)  the supply curve. 
B)  the area above the supply curve and beneath the market price. 
C)  the area beneath the supply curve and above the demand curve. 
D)  the market price. 
A)  the supply curve. 
B)  the area above the supply curve and beneath the market price. 
C)  the area beneath the supply curve and above the demand curve. 
D)  the market price.

Question 3

Figure A: Supply Right Shift Figure B: Supply Left Shift   Refer to the two figures.Which statement is TRUE?

Accepted Answer

A)  Figure A depicts the expectation that the future price will decrease. 
B)  Figure A depicts an increase in taxes. 
C)  Figure B depicts falling input prices. 
D)  Figure B depicts technological innovations. 
A)  Figure A depicts the expectation that the future price will decrease. 
B)  Figure A depicts an increase in taxes. 
C)  Figure B depicts falling input prices. 
D)  Figure B depicts technological innovations.

Question 4

A decrease in production costs at any given quantity ______ supply.

Accepted Answer

A)  increases 
B)  decreases 
C)  does not change 
D)  may increase or decrease 
A)  increases 
B)  decreases 
C)  does not change 
D)  may increase or decrease

Question 5

The demand curve for oil has a _____ slope because a _____ price of oil signals consumers to use oil in _____ valuable uses.

Accepted Answer

A)  negative;higher;less 
B)  negative;lower;more 
C)  positive;higher;more 
D)  negative;lower;less 
A)  negative;higher;less 
B)  negative;lower;more 
C)  positive;higher;more 
D)  negative;lower;less

Question 6

In the early 1980s,movie rentals averaged $5 a night;by the early 1990s that average was $1 per night.This is an example of a supply curve shifter based on:

Accepted Answer

A)  a change in tastes and preferences. 
B)  a decrease in the wages of workers in the video rental stores. 
C)  an increase in the number of VCRs owned by consumers. 
D)  the entry of new suppliers into the market. 
A)  a change in tastes and preferences. 
B)  a decrease in the wages of workers in the video rental stores. 
C)  an increase in the number of VCRs owned by consumers. 
D)  the entry of new suppliers into the market.

Question 7

The demand curve shows the relationship between:

Accepted Answer

A)  demand and supply. 
B)  quantity demanded and quantity supplied. 
C)  price and quantity supplied. 
D)  price and quantity demanded. 
A)  demand and supply. 
B)  quantity demanded and quantity supplied. 
C)  price and quantity supplied. 
D)  price and quantity demanded.

Question 8

Use the following to answer questions 
Figure: Good X  
-(Figure: Good X)From the figure,the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit.

Accepted Answer

A)  36;$4 
B)  11;$4 
C)  36;$12 
D)  26;$4 
A)  36;$4 
B)  11;$4 
C)  36;$12 
D)  26;$4

Question 9

Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

Accepted Answer

A) True 
 B)False

Question 10

There are more substitutes for oil as a jet fuel than for oil as a lubricant.

Accepted Answer

A) True 
 B)False

Question 11

Firms are willing and able to sell 100 guitars per day at a price of $250 per guitar.What price will firms require to sell 100 guitars per day if there is a tax of $15 per guitar?

Accepted Answer

A)  $235 
B)  $250 
C)  between $235 and $250 
D)  $265 
A)  $235 
B)  $250 
C)  between $235 and $250 
D)  $265

Question 12

A farmer can grow soy or sorghum.If the price of soy increases,the opportunity cost of growing sorghum ______,shifting the supply curve of sorghum ______.

Accepted Answer

A)  decreases;up and to the left 
B)  increases;up and to the left 
C)  decreases;down and to the right 
D)  increases;down and to the right 
A)  decreases;up and to the left 
B)  increases;up and to the left 
C)  decreases;down and to the right 
D)  increases;down and to the right

Question 13

An increase in a per unit production tax ______ supply.

Accepted Answer

A)  increases 
B)  decreases 
C)  does not change 
D)  changes in an indeterminate direction 
A)  increases 
B)  decreases 
C)  does not change 
D)  changes in an indeterminate direction

Question 14

A higher opportunity cost of producing a good increases the supply of that good.

Accepted Answer

A) True 
 B)False

Question 15

The quantity demanded is the quantity that buyers are:

Accepted Answer

A)  willing to buy but they cannot afford to pay. 
B)  able to buy at a given income level but not willing to pay. 
C)  willing to buy at a given income level. 
D)  willing and able to buy at a given price. 
A)  willing to buy but they cannot afford to pay. 
B)  able to buy at a given income level but not willing to pay. 
C)  willing to buy at a given income level. 
D)  willing and able to buy at a given price.

Question 16

A government subsidy to producers causes the:

Accepted Answer

A)  supply of the product to increase. 
B)  supply of the product to decrease. 
C)  supply curve to change slope. 
D)  supply curve to shift up and to the left. 
A)  supply of the product to increase. 
B)  supply of the product to decrease. 
C)  supply curve to change slope. 
D)  supply curve to shift up and to the left.

Question 17

The difference between the market price and the minimum price at which a seller is willing to sell a certain quantity of a good is:

Accepted Answer

A)  producer shortage. 
B)  consumer shortage. 
C)  producer surplus. 
D)  consumer surplus. 
A)  producer shortage. 
B)  consumer shortage. 
C)  producer surplus. 
D)  consumer surplus.

Question 18

A farmer can grow either apples or oranges.An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

Accepted Answer

A)  decreases;down and to the right 
B)  increases;down and to the right 
C)  decreases;up and to the left 
D)  increases;up and to the left 
A)  decreases;down and to the right 
B)  increases;down and to the right 
C)  decreases;up and to the left 
D)  increases;up and to the left

Question 19

An inferior good is one of poor quality.

Accepted Answer

A) True 
 B)False

Question 20

Figure: Demand Curve   Refer to the figure.What is the maximum amount that buyers are willing and able to pay at a price of $45 per book?

Accepted Answer

A)  300 books 
B)  450 books 
C)  100 books 
D)  0 books 
A)  300 books 
B)  450 books 
C)  100 books 
D)  0 books

Exam 3: Supply and Demand

A change in quantity supplied is reflected by a movement along the same supply curve while a change in supply refers to a shift in the entire supply curve.

Total producer surplus equals:

Figure A: Supply Right Shift Figure B: Supply Left Shift Refer to the two figures.Which statement is TRUE?

A decrease in production costs at any given quantity ______ supply.

The demand curve for oil has a _____ slope because a _____ price of oil signals consumers to use oil in _____ valuable uses.

In the early 1980s,movie rentals averaged $5 a night;by the early 1990s that average was $1 per night.This is an example of a supply curve shifter based on:

The demand curve shows the relationship between:

Use the following to answer questions Figure: Good X -(Figure: Good X)From the figure,the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit.

Advances in technology such as personal computers and cellular telecommunications are indicated in the supply graph by a movement along the supply curve.

There are more substitutes for oil as a jet fuel than for oil as a lubricant.

Firms are willing and able to sell 100 guitars per day at a price of $250 per guitar.What price will firms require to sell 100 guitars per day if there is a tax of $15 per guitar?

A farmer can grow soy or sorghum.If the price of soy increases,the opportunity cost of growing sorghum ______,shifting the supply curve of sorghum ______.

An increase in a per unit production tax ______ supply.

A higher opportunity cost of producing a good increases the supply of that good.

The quantity demanded is the quantity that buyers are:

A government subsidy to producers causes the:

The difference between the market price and the minimum price at which a seller is willing to sell a certain quantity of a good is:

A farmer can grow either apples or oranges.An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

An inferior good is one of poor quality.

Figure: Demand Curve Refer to the figure.What is the maximum amount that buyers are willing and able to pay at a price of $45 per book?

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

The demand curve for oil has a ___ slope because a _ price of oil signals consumers to use oil in ___ valuable uses.

Use the following to answer questions Figure: Good X -(Figure: Good X)From the figure,the maximum price that consumers are willing to pay for _ units of Good X is _ per unit.

A farmer can grow soy or sorghum.If the price of soy increases,the opportunity cost of growing sorghum ,shifting the supply curve of sorghum .

A farmer can grow either apples or oranges.An increase in the price of apples the opportunity cost of growing oranges so that the supply curve of oranges shifts .