Question 1

Exhibit 3-11
 
-Refer to Exhibit 3-11. Fill in blanks (E) and (F) respectively with "Exchange" or "No Exchange"to indicate whether or not exchange would take place at the given prices.

Accepted Answer

A) Exchange; Exchange 
B) Exchange; No Exchange 
C) No Exchange; Exchange 
D) No Exchange; No Exchange

Question 2

Exhibit 3-2
  Good X
​
​
-Refer to Exhibit 3-2. Which of the following would result in a movement from point A on D1 to point B on D2?

Accepted Answer

A) an increase in a per-unit tax on good X 
B) an increase in income of the buyers of good X, assuming good X is an inferior good 
C) a decline in technology in the production of good X 
D) an increase in income of the buyers of good X, assuming good X is a normal good

Question 3

Given that frozen yogurt and ice cream are substitutes, a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

Accepted Answer

A) raise the equilibrium price of frozen yogurt. 
B) increase the quantity supplied of frozen yogurt. 
C) increase the supply of ice cream. 
D) increase the demand for frozen yogurt.

Question 4

On the basis of the law of demand, it is more likely that a person will lose his temper when the price of losing his temper is low than when it is high.

Accepted Answer

A) True 
 B)False

Question 5

If the workers of a firm successfully negotiate an increase in wages, which of the following is most likely to happen?

Accepted Answer

A) The demand curve for the product the firm produces shifts rightward. 
B) The demand curve for the product the firm produces shifts leftward. 
C) The supply curve of the product the firm produces shifts rightward. 
D) The supply curve of the product the firm produces shifts leftward.

Question 6

If rice is an inferior good, a decrease in income will cause the equilibrium price of rice to rise.

Accepted Answer

A) True 
 B)False

Question 7

If a demand curve shifts rightward, this means

Accepted Answer

A) quantity demanded is greater only at one particular price. 
B) quantity demanded is greater at every price. 
C) buyers are willing and able to purchase more of the good at every price. 
D) buyers are willing and able to purchase less of the good at every price. 
E) b and c

Question 8

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

Accepted Answer

A) True 
 B)False

Question 9

A change in price will lead to a change in __________ and to a change in __________, while a change in government subsidies will lead to a change in __________ and a change in the number of buyers will lead to a change in __________.

Accepted Answer

A) quantity demanded; quantity supplied; supply; demand 
B) demand; quantity supplied; supply; quantity demanded 
C) quantity demanded; supply; quantity supplied; demand 
D) quantity supplied; quantity demanded; demand; supply 
E) quantity demanded; demand; quantity supplied; supply

Question 10

A vertical supply curve represents:

Accepted Answer

A) an inverse relationship between price and quantity supplied. 
B) an independent relationship between price and quantity supplied. 
C) an independent relationship between price and supply. 
D) a direct relationship between price and quantity supplied. 
E) a direct relationship between price and supply.

Question 11

Exhibit 3-4
 
-Refer to Exhibit 3-4. If this is a competitive market, price and quantity will gravitate toward

Accepted Answer

A) $6 and 10 units, respectively. 
B) $6 and 20 units, respectively. 
C) $4 and 15 units, respectively. 
D) $2 and 15 units, respectively.

Question 12

A shortage in the bread market can cause the price of bread to rise.

Accepted Answer

A) True 
 B)False

Question 13

Exhibit 3-12
---------------------------------------------------Quantity Supplied --------------------------------------------
  Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market.
-Refer to Exhibit 3-12. Fill in blanks (A) and (B) respectively with the market quantity supplied at each given price.

Accepted Answer

A) 12.25; 14.75 
B) 49; 59 
C) 48; 61 
D) 8.00; 8.71 
E) none of the above

Question 14

Exhibit 3-6
 
-Refer to Exhibit 3-6. If D1 is the relevant demand curve, an increase in the price of good X may cause

Accepted Answer

A) demand to shift from D1 to D2. 
B) demand to shift from D1 to D3. 
C) a movement along D1 from point A to point B. 
D) a movement along D1 from point A to point C.

Question 15

Exhibit 3-5
 
-Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point V and is now at point Z, the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

Accepted Answer

A) greater than; greater than 
B) less than; greater than 
C) greater than; less than 
D) less than; less than

Question 16

Which of the following illustrates the law of demand?

Accepted Answer

A) Jorge buys fewer pencils at $2 per pencil than at $1 per pencil, ceteris paribus. 
B) Chen buys more ice cream at $4 per half-gallon than at $3 per half gallon, ceteris paribus. 
C) Karissa buys fewer sweaters at $50 each than at $35 each, ceteris paribus. 
D) a, b, and c 
E) a and c

Question 17

An advance in technology in the production of good X causes

Accepted Answer

A) a rightward shift in the supply curve for good X. 
B) a leftward shift in the supply curve for good X. 
C) the supply curve for good X to change from upward sloping to vertical. 
D) the supply curve for good X to change from vertical to upward sloping.

Question 18

At a price for which the quantity supplied exceeds the quantity demanded, a __________ is experienced, which pushes the price __________ toward its equilibrium value.

Accepted Answer

A) surplus; downward 
B) surplus; upward 
C) shortage; downward 
D) shortage; upward

Question 19

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Accepted Answer

A) increase both the demand and the supply. 
B) decrease both the demand and the supply. 
C) increase the demand, but decrease the supply. 
D) increase the supply, but decrease the demand.

Question 20

Exhibit 3-12
---------------------------------------------------Quantity Supplied --------------------------------------------
  Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market.
-Refer to Exhibit 3-12. Each individual seller's supply curve is ________________ sloping and the market supply curve is _________________ sloping.

Accepted Answer

A) upward; also upward 
B) downward; also downward 
C) upward; downward 
D) downward; upward

Exam 3: Supply and Demand Theory

Exhibit 3-11 -Refer to Exhibit 3-11. Fill in blanks (E) and (F) respectively with "Exchange" or "No Exchange"to indicate whether or not exchange would take place at the given prices.

Exhibit 3-2 Good X -Refer to Exhibit 3-2. Which of the following would result in a movement from point A on D₁ to point B on D₂?

Given that frozen yogurt and ice cream are substitutes, a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

On the basis of the law of demand, it is more likely that a person will lose his temper when the price of losing his temper is low than when it is high.

If the workers of a firm successfully negotiate an increase in wages, which of the following is most likely to happen?

If rice is an inferior good, a decrease in income will cause the equilibrium price of rice to rise.

If a demand curve shifts rightward, this means

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

A change in price will lead to a change in and to a change in , while a change in government subsidies will lead to a change in and a change in the number of buyers will lead to a change in .

A vertical supply curve represents:

Exhibit 3-4 -Refer to Exhibit 3-4. If this is a competitive market, price and quantity will gravitate toward

A shortage in the bread market can cause the price of bread to rise.

Exhibit 3-6 -Refer to Exhibit 3-6. If D₁ is the relevant demand curve, an increase in the price of good X may cause

Exhibit 3-5 -Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point V and is now at point Z, the new equilibrium price is it was originally and the new equilibrium quantity is __ it was originally.

Which of the following illustrates the law of demand?

An advance in technology in the production of good X causes

At a price for which the quantity supplied exceeds the quantity demanded, a is experienced, which pushes the price toward its equilibrium value.

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Exam 3: Supply and Demand Theory

Exhibit 3-11 -Refer to Exhibit 3-11. Fill in blanks (E) and (F) respectively with "Exchange" or "No Exchange"to indicate whether or not exchange would take place at the given prices.

Exhibit 3-2 Good X ​ ​ -Refer to Exhibit 3-2. Which of the following would result in a movement from point A on D1 to point B on D2?

Given that frozen yogurt and ice cream are substitutes, a shift in preferences in favor of yogurt would be predicted to do all of the following EXCEPT

On the basis of the law of demand, it is more likely that a person will lose his temper when the price of losing his temper is low than when it is high.

If the workers of a firm successfully negotiate an increase in wages, which of the following is most likely to happen?

If rice is an inferior good, a decrease in income will cause the equilibrium price of rice to rise.

If a demand curve shifts rightward, this means

A simultaneous decrease in the demand and the supply of good X always leads to a decrease in the price of good X.

A change in price will lead to a change in __________ and to a change in __________, while a change in government subsidies will lead to a change in __________ and a change in the number of buyers will lead to a change in __________.

A vertical supply curve represents:

Exhibit 3-4 -Refer to Exhibit 3-4. If this is a competitive market, price and quantity will gravitate toward

A shortage in the bread market can cause the price of bread to rise.

Exhibit 3-6 -Refer to Exhibit 3-6. If D1 is the relevant demand curve, an increase in the price of good X may cause

Exhibit 3-5 -Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point V and is now at point Z, the new equilibrium price is __________ it was originally and the new equilibrium quantity is ____________ it was originally.

Which of the following illustrates the law of demand?

An advance in technology in the production of good X causes

At a price for which the quantity supplied exceeds the quantity demanded, a __________ is experienced, which pushes the price __________ toward its equilibrium value.

A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:

Exhibit 3-2 Good X -Refer to Exhibit 3-2. Which of the following would result in a movement from point A on D₁ to point B on D₂?

A change in price will lead to a change in and to a change in , while a change in government subsidies will lead to a change in and a change in the number of buyers will lead to a change in .

Exhibit 3-6 -Refer to Exhibit 3-6. If D₁ is the relevant demand curve, an increase in the price of good X may cause

Exhibit 3-5 -Refer to Exhibit 3-5. In the market shown, if equilibrium was originally at point V and is now at point Z, the new equilibrium price is it was originally and the new equilibrium quantity is __ it was originally.

At a price for which the quantity supplied exceeds the quantity demanded, a is experienced, which pushes the price toward its equilibrium value.