Question 1

Producer surplus is:

Accepted Answer

A)  the difference between the market price and the minimum price at which producers are willing to sell a good. 
B)  the amount at which producers are willing to sell a good. 
C)  the amount at which producers sell a good. 
D)  the amount at which producers are willing to sell a good plus the amount at which they sell it. 
A)  the difference between the market price and the minimum price at which producers are willing to sell a good. 
B)  the amount at which producers are willing to sell a good. 
C)  the amount at which producers sell a good. 
D)  the amount at which producers are willing to sell a good plus the amount at which they sell it.

Question 2

Figure: Supply Shift   In the figure,a movement from S1 to S2 represents:

Accepted Answer

A)  a decrease in supply. 
B)  an increase in supply. 
C)  a decrease in quantity supplied. 
D)  an increase in quantity supplied. 
A)  a decrease in supply. 
B)  an increase in supply. 
C)  a decrease in quantity supplied. 
D)  an increase in quantity supplied.

Question 3

Use the following to answer questions :Figure: Producer Surplus  
-(Figure: Producer Surplus)In the diagram,if the market price of coffee is $4,how much producer surplus do suppliers earn?

Accepted Answer

A)  $15 
B)  $45 
C)  $20 
D)  $22.50 
A)  $15 
B)  $45 
C)  $20 
D)  $22.50

Question 4

An increase in the population will lead to an increase in demand.Give three other examples that lead to an increase in demand.

Accepted Answer

An increase in the price of a substitute

Question 5

If the price of corn rises,all else the same,we expect the supply of soybeans to increase.

Accepted Answer

A) True 
 B)False

Question 6

An increase in income increases the demand for normal goods.

Accepted Answer

A) True 
 B)False

Question 7

Figure: A Supply Curve   Refer to the figure.Producer surplus at a price of $40 is:

Accepted Answer

A)  $200. 
B)  $100. 
C)  $400. 
D)  $600. 
A)  $200. 
B)  $100. 
C)  $400. 
D)  $600.

Question 8

Use the following to answer questions 
Figure: Potatoes  
-(Figure: Potatoes)Refer to the figure.According to the demand curve,if the price of potatoes is $8 a pound,how many pounds are demanded?

Accepted Answer

A)  5 
B)  50 
C)  60,000 
D)  80,000 
A)  5 
B)  50 
C)  60,000 
D)  80,000

Question 9

Suppose that Saudi Arabia can produce oil at $4 per barrel,Iran at $10 per barrel,and Canada at $25 per barrel.If the price of oil is $90 per barrel,what is total producer surplus per barrel for world suppliers?

Accepted Answer

A)  $270 
B)  $129 
C)  $231 
D)  $51 
A)  $270 
B)  $129 
C)  $231 
D)  $51

Question 10

The demand curve for oil shows:

Accepted Answer

A)  the quantity demanded of oil at different income levels. 
B)  the quantity demanded of oil at different oil prices. 
C)  the demand for oil at different prices of other goods. 
D)  the demand for oil when there is a surplus or shortage. 
A)  the quantity demanded of oil at different income levels. 
B)  the quantity demanded of oil at different oil prices. 
C)  the demand for oil at different prices of other goods. 
D)  the demand for oil when there is a surplus or shortage.

Question 11

A vertical reading of the demand curve gives the maximum price per unit that consumers are willing to pay for a particular quantity of a good.

Accepted Answer

A) True 
 B)False

Question 12

The quantity demanded is the quantity that buyers can afford to buy at a particular income level.

Accepted Answer

A) True 
 B)False

Question 13

For each of the following changes,determine whether there will be a change in supply (that is,a shift of the supply curve)or a change in quantity supplied (that is,no shift of the supply curve).
I.change in the resource cost
II.change in producer expectations
III.change in the price of the good
IV.change in technology
V.the number of sellers

Accepted Answer

I,II,IV,and V are all supply s

Question 14

Which statement correctly completes the definition of a demand curve? A demand curve is a function that shows the relationship between:

Accepted Answer

A)  price and the quantity sold. 
B)  price and the quantity supplied. 
C)  price and the quantity demanded. 
D)  quantity demanded and quantity supplied. 
A)  price and the quantity sold. 
B)  price and the quantity supplied. 
C)  price and the quantity demanded. 
D)  quantity demanded and quantity supplied.

Question 15

If producers expect the price of a good to fall in the future,they might:

Accepted Answer

A)  raise the price of the good today. 
B)  hoard goods to save them for when the price is lower. 
C)  increase their supply of goods out of storage today. 
D)  increase the demand for their goods today. 
A)  raise the price of the good today. 
B)  hoard goods to save them for when the price is lower. 
C)  increase their supply of goods out of storage today. 
D)  increase the demand for their goods today.

Producer surplus is:

Figure: Supply Shift In the figure,a movement from S₁ to S₂ represents:

Use the following to answer questions :Figure: Producer Surplus -(Figure: Producer Surplus)In the diagram,if the market price of coffee is $4,how much producer surplus do suppliers earn?

An increase in the population will lead to an increase in demand.Give three other examples that lead to an increase in demand.

If the price of corn rises,all else the same,we expect the supply of soybeans to increase.

An increase in income increases the demand for normal goods.

Figure: A Supply Curve Refer to the figure.Producer surplus at a price of $40 is:

Use the following to answer questions Figure: Potatoes -(Figure: Potatoes)Refer to the figure.According to the demand curve,if the price of potatoes is $8 a pound,how many pounds are demanded?

Suppose that Saudi Arabia can produce oil at $4 per barrel,Iran at $10 per barrel,and Canada at $25 per barrel.If the price of oil is $90 per barrel,what is total producer surplus per barrel for world suppliers?

The demand curve for oil shows:

A vertical reading of the demand curve gives the maximum price per unit that consumers are willing to pay for a particular quantity of a good.

The quantity demanded is the quantity that buyers can afford to buy at a particular income level.

Which statement correctly completes the definition of a demand curve? A demand curve is a function that shows the relationship between:

If producers expect the price of a good to fall in the future,they might:

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

Producer surplus is:

Figure: Supply Shift In the figure,a movement from S1 to S2 represents:

Use the following to answer questions :Figure: Producer Surplus -(Figure: Producer Surplus)In the diagram,if the market price of coffee is $4,how much producer surplus do suppliers earn?

An increase in the population will lead to an increase in demand.Give three other examples that lead to an increase in demand.

If the price of corn rises,all else the same,we expect the supply of soybeans to increase.

An increase in income increases the demand for normal goods.

Figure: A Supply Curve Refer to the figure.Producer surplus at a price of $40 is:

Use the following to answer questions Figure: Potatoes -(Figure: Potatoes)Refer to the figure.According to the demand curve,if the price of potatoes is $8 a pound,how many pounds are demanded?

Suppose that Saudi Arabia can produce oil at $4 per barrel,Iran at $10 per barrel,and Canada at $25 per barrel.If the price of oil is $90 per barrel,what is total producer surplus per barrel for world suppliers?

The demand curve for oil shows:

A vertical reading of the demand curve gives the maximum price per unit that consumers are willing to pay for a particular quantity of a good.

The quantity demanded is the quantity that buyers can afford to buy at a particular income level.

Which statement correctly completes the definition of a demand curve? A demand curve is a function that shows the relationship between:

If producers expect the price of a good to fall in the future,they might:

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

Figure: Supply Shift In the figure,a movement from S₁ to S₂ represents: