Question 1

An increase in a per unit production subsidy ______ 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 2

The supply curve tells us the minimum quantity that suppliers would be willing to sell at different prices.

Accepted Answer

A) True 
 B)False

Question 3

Suppose that the market price for MP3 players is $90 and MP3 players can be produced by firm X for $40 each.Producer surplus for this firm is $50 per MP3 player.

Accepted Answer

A) True 
 B)False

Question 4

New production technology in the manufacture of plasma television screens has reduced the number of defective screens.What effect will this have in the market for plasma televisions?

Accepted Answer

A)  The demand curve will increase. 
B)  The supply curve will increase. 
C)  The demand and supply curve both increase. 
D)  The demand curve will decrease. 
A)  The demand curve will increase. 
B)  The supply curve will increase. 
C)  The demand and supply curve both increase. 
D)  The demand curve will decrease.

Question 5

The law of demand states that:

Accepted Answer

A)  the lower the price,the greater the quantity demanded. 
B)  the higher the price,the higher the quantity demanded. 
C)  the demand curve is upward sloping. 
D)  an increase in income increases the quantity demanded. 
A)  the lower the price,the greater the quantity demanded. 
B)  the higher the price,the higher the quantity demanded. 
C)  the demand curve is upward sloping. 
D)  an increase in income increases the quantity demanded.

Question 6

NAFTA increased the supply curve of lumber in the United States.

Accepted Answer

A) True 
 B)False

Question 7

When income increases,the demand for all goods increases as well.

Accepted Answer

A) True 
 B)False

Question 8

An increase in production costs at any given quantity _______ 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 9

Explain the difference between a change in demand,and a change in the quantity demanded.

Accepted Answer

A change in demand is a shift of the ent

Question 10

Use the following to answer questions 
Figure: Good X  
-(Figure: Good X)From the figure,which statement is TRUE?

Accepted Answer

A)  At a price of $12 per unit,consumers are willing and able to purchase between 11 and 26 units of Good X. 
B)  36 units of Good X can be purchased by spending a total of $4. 
C)  At a price of $6 per unit,consumers are willing and able to purchase 26 units of Good X. 
D)  At a price of $4 per unit,consumers are willing and able to purchase 11 units of Good X. 
A)  At a price of $12 per unit,consumers are willing and able to purchase between 11 and 26 units of Good X. 
B)  36 units of Good X can be purchased by spending a total of $4. 
C)  At a price of $6 per unit,consumers are willing and able to purchase 26 units of Good X. 
D)  At a price of $4 per unit,consumers are willing and able to purchase 11 units of Good X.

Question 11

If prices rise,what happens to producer surplus (all other things being equal)?

Accepted Answer

A)  It falls,because fewer people buy goods. 
B)  It falls,because it encourages competition,which reduces profits. 
C)  It rises,because each producer is getting more surplus per good sold. 
D)  It stays the same,because the forces increasing the surplus counteract the forces reducing it. 
A)  It falls,because fewer people buy goods. 
B)  It falls,because it encourages competition,which reduces profits. 
C)  It rises,because each producer is getting more surplus per good sold. 
D)  It stays the same,because the forces increasing the surplus counteract the forces reducing it.

Question 12

Which of the following explains why the demand for oil has a negative slope?

Accepted Answer

A)  Oil is equally valuable in all of its uses. 
B)  Oil is not equally valuable in all of its uses. 
C)  Oil has many uses. 
D)  Oil has few substitutes. 
A)  Oil is equally valuable in all of its uses. 
B)  Oil is not equally valuable in all of its uses. 
C)  Oil has many uses. 
D)  Oil has few substitutes.

Question 13

The quantity demanded of a good or service is the amount that:

Accepted Answer

A)  consumers are willing and able to buy at a given price. 
B)  firms are willing to sell during a given time period at a given price. 
C)  a consumer would like to buy but might not be able to afford. 
D)  a consumer needs to consume during a given time period. 
A)  consumers are willing and able to buy at a given price. 
B)  firms are willing to sell during a given time period at a given price. 
C)  a consumer would like to buy but might not be able to afford. 
D)  a consumer needs to consume during a given time period.

Question 14

The demand curve:

Accepted Answer

A)  shows how much buyers are willing and able to buy at different prices. 
B)  is the amount that buyers are willing and able to buy at a particular price. 
C)  shows how much sellers are willing and able to sell at different prices. 
D)  is the amount that sellers are willing and able to sell at a particular price. 
A)  shows how much buyers are willing and able to buy at different prices. 
B)  is the amount that buyers are willing and able to buy at a particular price. 
C)  shows how much sellers are willing and able to sell at different prices. 
D)  is the amount that sellers are willing and able to sell at a particular price.

Question 15

There are more substitutes for oil as a heating and energy generator than for oil as a jet fuel.

Accepted Answer

A) True 
 B)False

Question 16

An increase in the use of labor-saving technologies will shift a product's supply curve to the right.

Accepted Answer

A) True 
 B)False

Question 17

The demand curve shows the quantity that consumers are willing and able to purchase at different prices.

Accepted Answer

A) True 
 B)False

Question 18

A tax of $4 shifts the supply curve down and to the right by $4.

Accepted Answer

A) True 
 B)False

Question 19

Changes in expectations can shift supply or demand.

Accepted Answer

A) True 
 B)False

Question 20

Demand slopes down because:

Accepted Answer

A)  supply slopes up,and supply and demand must intersect. 
B)  consumers focus too much on the price of goods when they choose the quantity to demand. 
C)  goods usually only have a single use. 
D)  consumers will choose to use goods only in their most valuable uses when prices are high. 
A)  supply slopes up,and supply and demand must intersect. 
B)  consumers focus too much on the price of goods when they choose the quantity to demand. 
C)  goods usually only have a single use. 
D)  consumers will choose to use goods only in their most valuable uses when prices are high.

Exam 3: Supply and Demand

An increase in a per unit production subsidy ______ supply.

The supply curve tells us the minimum quantity that suppliers would be willing to sell at different prices.

Suppose that the market price for MP3 players is $90 and MP3 players can be produced by firm X for $40 each.Producer surplus for this firm is $50 per MP3 player.

New production technology in the manufacture of plasma television screens has reduced the number of defective screens.What effect will this have in the market for plasma televisions?

The law of demand states that:

NAFTA increased the supply curve of lumber in the United States.

When income increases,the demand for all goods increases as well.

An increase in production costs at any given quantity _______ supply.

Explain the difference between a change in demand,and a change in the quantity demanded.

Use the following to answer questions Figure: Good X -(Figure: Good X)From the figure,which statement is TRUE?

If prices rise,what happens to producer surplus (all other things being equal)?

Which of the following explains why the demand for oil has a negative slope?

The quantity demanded of a good or service is the amount that:

The demand curve:

There are more substitutes for oil as a heating and energy generator than for oil as a jet fuel.

An increase in the use of labor-saving technologies will shift a product's supply curve to the right.

The demand curve shows the quantity that consumers are willing and able to purchase at different prices.

A tax of $4 shifts the supply curve down and to the right by $4.

Changes in expectations can shift supply or demand.

Demand slopes down because:

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