Question 1

If Maria is willing to pay $50 for a sweatshirt, how muchconsumer surplus does she earn if the market price forsweatshirts is $27.50 each?

Accepted Answer

A) $27.50 
B) $50.00 
C) $77.50 
D) $22.50 
A) $27.50 
B) $50.00 
C) $77.50 
D) $22.50 D

Question 2

Accepted Answer

A) Consumer income increases in the market for a normal good. 
B) Consumer income falls in the market for a normal good. 
C) Consumer income rises in the market for an inferior good. 
D) Consumer income falls in the market for a luxury good. 
A) Consumer income increases in the market for a normal good. 
B) Consumer income falls in the market for a normal good. 
C) Consumer income rises in the market for an inferior good. 
D) Consumer income falls in the market for a luxury good. A

Question 3

Accepted Answer

A) $65.25 
B) $81.76 
C) $87.75 
D) $93.74 
A) $65.25 
B) $81.76 
C) $87.75 
D) $93.74 C

Question 4

Which of the following choices correctly illustrates how changesin opportunity costs affect supply?

Accepted Answer

A) A farmer produces corn and wheat.The price of wheat rises; so he shifts his resources towards wheat and the supply of
Wheat rises. 
B) A fisherman fishes for lobsters and oysters.The price of lobsters rises; so he decides to spend more of his time fishing for
Oysters because he can make the same amount of money with
Fewer lobsters. 
C) A textbook for economics becomes cheaper; so more students opt to buy that particular textbook. 
D) Milk and cereal are complementary goods; so when the price of cereal falls, the quantity supplied of milk rises. 
A) A farmer produces corn and wheat.The price of wheat rises; so he shifts his resources towards wheat and the supply of
Wheat rises. 
B) A fisherman fishes for lobsters and oysters.The price of lobsters rises; so he decides to spend more of his time fishing for
Oysters because he can make the same amount of money with
Fewer lobsters. 
C) A textbook for economics becomes cheaper; so more students opt to buy that particular textbook. 
D) Milk and cereal are complementary goods; so when the price of cereal falls, the quantity supplied of milk rises.

Question 5

Quantity demanded is:

Accepted Answer

A) the amount of a good or service that a buyer is able and willing to purchase at a given price. 
B) the amount of a good or service that a buyer is able and willing to sell at a given price. 
C) the amount of a good or service that a seller is able and willing to sell at a given price. 
D) the amount of a good or service that a buyer is able and willing to purchase at various given prices. 
A) the amount of a good or service that a buyer is able and willing to purchase at a given price. 
B) the amount of a good or service that a buyer is able and willing to sell at a given price. 
C) the amount of a good or service that a seller is able and willing to sell at a given price. 
D) the amount of a good or service that a buyer is able and willing to purchase at various given prices.

Question 6

(Table: Willingness to Sell) Refer to the table. Which country isearning the most producer surplus at a market price of $35 perbarrel of oil?

Accepted Answer

A) Country X 
B) Country Y 
C) Country Z 
D) Country A 
A) Country X 
B) Country Y 
C) Country Z 
D) Country A

Question 7

A firm produces volleyballs and soccer balls. What happens tothe supply of soccer balls if the market price of volleyballsincreases?

Accepted Answer

A) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls increases. 
B) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls decreases. 
C) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases. 
D) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls increases. 
A) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls increases. 
B) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls decreases. 
C) The opportunity cost of producing soccer balls rises, so the supply curve of soccer balls decreases. 
D) The opportunity cost of producing soccer balls falls, so the supply curve of soccer balls increases.

Question 8

A local university decides to double its enrollment over the nextfive years in order to increase tuition revenue. Which of thefollowing would most likely occur in the market for rentalhousing in the surrounding community?

Accepted Answer

A) a decrease in the price of rental housing 
B) an increase in the demand for rental housing (True Answer )Correct 
C) a decrease in the supply of rental housing 
D) a population change leads to a change in quantity demanded, not demand 
A) a decrease in the price of rental housing 
B) an increase in the demand for rental housing (True Answer )Correct 
C) a decrease in the supply of rental housing 
D) a population change leads to a change in quantity demanded, not demand

Question 9

If the price of shotguns ______, the demand for shotgun shellswill _______.

Accepted Answer

A) increases; decrease 
B) increases; increase 
C) decreases; decrease 
D) double; double 
A) increases; decrease 
B) increases; increase 
C) decreases; decrease 
D) double; double

Question 10

Suppose it is widely believed that the price of flat-screen, high-definition televisions will be lower next year. What will happenas a result of such beliefs?

Accepted Answer

A) The demand for flat-screen TVs will increase now. 
B) The demand for flat-screen TVs will increase next year when the prices fall. 
C) The demand for flat-screen TVs will decrease now.(True Answer )Correct 
D) The demand for flat-screen TVs will not change. 
A) The demand for flat-screen TVs will increase now. 
B) The demand for flat-screen TVs will increase next year when the prices fall. 
C) The demand for flat-screen TVs will decrease now.(True Answer )Correct 
D) The demand for flat-screen TVs will not change.

Question 11

Suppose that Country X is a high-cost producer of oil andCountry Y is a low-cost producer of oil. The citizens of CountryX use both oil produced in their own country as well as oilproduced in Country Y. If the market price of oil decreases, oilproduction in Country X will _______, and the citizens ofCountry X will _________________.

Accepted Answer

A) decrease; purchase a larger fraction of their oil from Country Y 
B) increase; purchase a larger fraction of their oil from Country X 
C) decrease; not change their consumption mix between imported and domestic oil 
D) increase; purchase a smaller fraction of their oil from Country Y 
A) decrease; purchase a larger fraction of their oil from Country Y 
B) increase; purchase a larger fraction of their oil from Country X 
C) decrease; not change their consumption mix between imported and domestic oil 
D) increase; purchase a smaller fraction of their oil from Country Y

Question 12

Weather forecasters predict that a major winter storm willstrike your town within the next few days. Which of thefollowing would NOT occur based upon the expected storm?

Accepted Answer

A) an increase in the demand for groceries 
B) a decrease in the supply of winter clothing (True Answer )Correct 
C) an increase in the demand for gasoline and tire chains 
D) an increase in the supply of electric generators to the area 
A) an increase in the demand for groceries 
B) a decrease in the supply of winter clothing (True Answer )Correct 
C) an increase in the demand for gasoline and tire chains 
D) an increase in the supply of electric generators to the area

Question 13

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 14

Accepted Answer

A) $5,000 
B) $10,000 
C) $100 
D) $200 
A) $5,000 
B) $10,000 
C) $100 
D) $200

Question 15

The demand curve for an inferior good reacts inversely tochanges in income, while the demand curve for a normal goodhas a positive relationship with changes in income.

Accepted Answer

A) True 
 B)False

Question 16

Accepted Answer

A) $4,500 
B) $9,000 
C) $18,000 
D) $450 
A) $4,500 
B) $9,000 
C) $18,000 
D) $450

Question 17

(Figure: Demand Curve) Which of the following statements isTRUE regarding the figure?
  I. At a price of $6 per unit, consumers are willing and able tobuy 10 units
II.The maximum price demanders are willing to pay for 15units is $3.75 per unit
III. The higher the price, the greater the quantity demanded.IV. At a price of $3.75 per unit, consumers are indifferentbetween buying 10 and 15 units.

Accepted Answer

A) I only 
B) I and II only 
C) I, II, and III 
D) I, II, and IV 
A) I only 
B) I and II only 
C) I, II, and III 
D) I, II, and IV

Question 18

Michael graduates from college and his income increases by$40,000 a year. Other things held constant, he decreases thequantity of pizza he buys. For Michael, pizza is:

Accepted Answer

A) an inferior good. 
B) a complement. 
C) a substitute. 
D) a normal good. 
A) an inferior good. 
B) a complement. 
C) a substitute. 
D) a normal good.

Question 19

Consumer surplus can be defined as the net benefit toconsumers from participating in a market.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would cause the demand for hot dogbuns to increase?

Accepted Answer

A) a fall in the price of hot dog buns 
B) a fall in the price of hot dogs 
C) a rise in the price of hot dogs 
D) a rise in the price of hot dog buns 
A) a fall in the price of hot dog buns 
B) a fall in the price of hot dogs 
C) a rise in the price of hot dogs 
D) a rise in the price of hot dog buns

If Maria is willing to pay $50 for a sweatshirt, how muchconsumer surplus does she earn if the market price forsweatshirts is $27.50 each?

Which of the following choices correctly illustrates how changesin opportunity costs affect supply?

Quantity demanded is:

(Table: Willingness to Sell) Refer to the table. Which country isearning the most producer surplus at a market price of $35 perbarrel of oil?

A firm produces volleyballs and soccer balls. What happens tothe supply of soccer balls if the market price of volleyballsincreases?

A local university decides to double its enrollment over the nextfive years in order to increase tuition revenue. Which of thefollowing would most likely occur in the market for rentalhousing in the surrounding community?

If the price of shotguns , the demand for shotgun shellswill _.

Suppose it is widely believed that the price of flat-screen, high-definition televisions will be lower next year. What will happenas a result of such beliefs?

Weather forecasters predict that a major winter storm willstrike your town within the next few days. Which of thefollowing would NOT occur based upon the expected storm?

The law of demand states that:

The demand curve for an inferior good reacts inversely tochanges in income, while the demand curve for a normal goodhas a positive relationship with changes in income.

Michael graduates from college and his income increases by$40,000 a year. Other things held constant, he decreases thequantity of pizza he buys. For Michael, pizza is:

Consumer surplus can be defined as the net benefit toconsumers from participating in a market.

Which of the following would cause the demand for hot dogbuns to increase?

Welcome to Economics

Choice in a World of Scarcity

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

Exam 3: Demand and Supply

If Maria is willing to pay $50 for a sweatshirt, how muchconsumer surplus does she earn if the market price forsweatshirts is $27.50 each?

Which of the following choices correctly illustrates how changesin opportunity costs affect supply?

Quantity demanded is:

(Table: Willingness to Sell) Refer to the table. Which country isearning the most producer surplus at a market price of $35 perbarrel of oil?

A firm produces volleyballs and soccer balls. What happens tothe supply of soccer balls if the market price of volleyballsincreases?

A local university decides to double its enrollment over the nextfive years in order to increase tuition revenue. Which of thefollowing would most likely occur in the market for rentalhousing in the surrounding community?

If the price of shotguns ______, the demand for shotgun shellswill _______.

Suppose it is widely believed that the price of flat-screen, high-definition televisions will be lower next year. What will happenas a result of such beliefs?

Weather forecasters predict that a major winter storm willstrike your town within the next few days. Which of thefollowing would NOT occur based upon the expected storm?

The law of demand states that:

The demand curve for an inferior good reacts inversely tochanges in income, while the demand curve for a normal goodhas a positive relationship with changes in income.

Michael graduates from college and his income increases by$40,000 a year. Other things held constant, he decreases thequantity of pizza he buys. For Michael, pizza is:

Consumer surplus can be defined as the net benefit toconsumers from participating in a market.

Which of the following would cause the demand for hot dogbuns to increase?

Welcome to Economics

Choice in a World of Scarcity

Labor and Financial Markets

Elasticity

Consumer Choices

Production, Costs, and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Labor Markets and Income

Poverty and Economic Inequality

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Consumer Utility and Optimization

Filters

If the price of shotguns , the demand for shotgun shellswill _.