Question 1

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,then equilibrium price __________ and equilibrium quantity __________ for that good.

Accepted Answer

A) rises;falls 
B) falls;falls 
C) rises;rises 
D) falls;rises

Question 2

A change in price will lead to a change in __________ and to a change in __________,while a change in preferences will lead to a change in __________ and a change in the prices of relevant resources will lead to a change in __________.

Accepted Answer

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

Question 3

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

Accepted Answer

A) Technological advances lead to lower demand,which leads to lower prices. 
B) Technological advances lead to greater supply,which leads to lower prices. 
C) Technological advances lead to greater quantity supplied,which leads to lower prices. 
D) Technological advances lead to lower taxes,which lead to greater supply,which leads to lower prices. 
E) Technological advances lead to higher taxes,which lead to fewer subsidies,which lead to greater supply,which leads to lower prices.

Question 8

Which of the following is an example of a service?

Accepted Answer

A) medical care 
B) dental care 
C) a psychology lecture 
D) a television set 
E) a,b and c

Question 9

Exhibit 3-10 
-Refer to Exhibit 3-10.300 units of X will be exchanged in this market if the price is

Accepted Answer

A) $30. 
B) $20. 
C) $10. 
D) none of the above

Question 10

Exhibit 3-1 
-Refer to Exhibit 3-1.At a price of $6 there is a

Accepted Answer

A) surplus of 100 units. 
B) surplus of 150 units. 
C) surplus of 200 units. 
D) shortage of 150 units. 
E) shortage of 200 units.

Question 11

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

Accepted Answer

A) The supply of good X was higher in year 2 than in year 1 and the demand for good X was the same in year 2 as in year 1. 
B) The demand for good X was higher in year 2 than in year 1 and the supply of good X was the same in year 2 as in year 1. 
C) Both the demand for,and supply of,good X were higher in year 2 than in year 1. 
D) b or c 
E) a,b,or c

Question 12

The law of demand states that price and ______________ are _____________ related,ceteris paribus.

Accepted Answer

A) demand;inversely 
B) quantity demanded;inversely 
C) demand;directly 
D) quantity demanded;directly 
E) ​quantity supplied;directly

Question 13

Exhibit 3-5 
-Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S1 to S2 could have been caused by

Accepted Answer

A) a decline in the number of buyers in the market. 
B) a decline in the price of a substitute good. 
C) a decrease in income (assuming the good is a normal good). 
D) the granting of a subsidy to the producer. 
E) none of the above

Question 14

When Hurricane Katrina hit the Gulf Coast of the United States in 2005 it destroyed 5,000,000 acres of timber.Given that lumber is timber that has been sawed or split into planks and boards,explain in terms of supply and/or demand how the hurricane impacted each of the following markets (be sure to note the expected resulting impact on equilibrium price and quantity):
a.Domestic lumber
b.Imported lumber
c.New home construction

Accepted Answer

The answer of When Hurricane Katrina hit the Gulf Coast...

Question 15

Consider a point on a market demand curve.The point represents

Accepted Answer

A) a single price and the quantity demanded by an individual buyer. 
B) a single price and the sum of the quantities demanded by all buyers. 
C) various prices and various quantities demanded. 
D) a single price and the quantity demanded by an individual buyer at that price and all other prices. 
E) a and c

Question 16

When P = $65,the quantity demanded of a good is 80 units,and the quantity supplied of the good is 40 units.For every $10 increase in the price of this good,quantity demanded falls by 10 units and quantity supplied rises by 10 units.The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

Accepted Answer

A) $55;30 
B) $75;50 
C) $75;70 
D) $85;50 
E) $85;60

Question 17

Suppose Smith wants one iPhone no matter what the price is between $0 and $350,Jones wants one iPhone no matter what the price is between $0 and $200,and Griffith wants one iPhone no matter what the price is between $0 and $450.In this case,each individual buyer's demand curve will be __________________ and the market demand curve will be __________________.

Accepted Answer

A) downward sloping;vertical 
B) vertical;downward sloping 
C) vertical;vertical 
D) downward sloping;downward sloping

Question 18

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

Accepted Answer

The answer of Explain the difference between a change in...

Question 19

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

Accepted Answer

A) The demand for X was higher in year 2 than in year 1,ceteris paribus. 
B) The supply of X was lower in year 2 than in year 1,ceteris paribus. 
C) The demand was higher,and the supply was lower,in year 2 than in year 1. 
D) a and b 
E) a,b,and c

Question 20

Exhibit 3-10 
-Refer to Exhibit 3-10.$20 is the

Accepted Answer

A) equilibrium price. 
B) market-clearing price. 
C) price at which there is neither a surplus nor a shortage. 
D) all of the above

Exam 3: Supply and Demand: Theory

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,then equilibrium price and equilibrium quantity for that good.

A change in price will lead to a change in and to a change in ,while a change in preferences will lead to a change in and a change in the prices of relevant resources will lead to a change in .

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

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

An advance in technology in the production of good X causes

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

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

Which of the following is an example of a service?

Exhibit 3-10 -Refer to Exhibit 3-10.300 units of X will be exchanged in this market if the price is

Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $6 there is a

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

The law of demand states that price and __ are _ related,ceteris paribus.

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S₁ to S₂ could have been caused by

Consider a point on a market demand curve.The point represents

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

Exhibit 3-10 -Refer to Exhibit 3-10.$20 is the

Exam 3: Supply and Demand: Theory

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,then equilibrium price __________ and equilibrium quantity __________ for that good.

A change in price will lead to a change in __________ and to a change in __________,while a change in preferences will lead to a change in __________ and a change in the prices of relevant resources will lead to a change in __________.

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

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

An advance in technology in the production of good X causes

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

An economist says,"Technological advances have the power to lower the prices of many of the goods we buy." Here is how this works:

Which of the following is an example of a service?

Exhibit 3-10 -Refer to Exhibit 3-10.300 units of X will be exchanged in this market if the price is

Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $6 there is a

In year 1 the price of good X is $10 and 100 units are bought and sold.In year 2 the price of good X is $13 and 230 units are bought and sold.What can explain this?

The law of demand states that price and ______________ are _____________ related,ceteris paribus.

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S1 to S2 could have been caused by

Consider a point on a market demand curve.The point represents

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?

Exhibit 3-10 -Refer to Exhibit 3-10.$20 is the

Suppose that for a given good demand increases and supply increases at the same time.If demand increases by a lesser amount than supply increases,then equilibrium price and equilibrium quantity for that good.

A change in price will lead to a change in and to a change in ,while a change in preferences will lead to a change in and a change in the prices of relevant resources will lead to a change in .

The law of demand states that price and __ are _ related,ceteris paribus.

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S₁ to S₂ could have been caused by