Question 1

The supply curve illustrates:

Accepted Answer

A) that limited resources are available for society to use. 
B) the relationship between the quantity supplied and the price of a good. 
C) the total cost of producing a good. 
D) the willingness to produce a good if the technology to produce it becomes available. 
A) that limited resources are available for society to use. 
B) the relationship between the quantity supplied and the price of a good. 
C) the total cost of producing a good. 
D) the willingness to produce a good if the technology to produce it becomes available.

Question 2

(Figure: Supply Shifts) In the figure, the initial supply curve isS1. If producers form expectations that the price will be lowerin the near future, S1 will:

Accepted Answer

A) shift to S2. 
B) shift to S3. 
C) not shift. 
D) not shift, although the price of the good will decrease today. 
A) shift to S2. 
B) shift to S3. 
C) not shift. 
D) not shift, although the price of the good will decrease today.

Question 3

Producer surplus can be defined as the revenue producersmake from selling goods in a market.

Accepted Answer

A) True 
 B)False

Question 4

New research indicates that running marathons is actually badfor the heart (it increases inflammatory markers associatedwith heart attacks). This news will:

Accepted Answer

A) lead to a decrease in the demand for running shoes.(True Answer )Correct 
B) have no effect on the demand or supply of running shoes. 
C) increase the supply of running shoes. 
D) lead to an increase in the demand for running shoes. 
A) lead to a decrease in the demand for running shoes.(True Answer )Correct 
B) have no effect on the demand or supply of running shoes. 
C) increase the supply of running shoes. 
D) lead to an increase in the demand for running shoes.

Question 5

If Romaine lettuce and Iceberg lettuce are substitutes, anincrease in the price of Romaine lettuce will ______ the demandfor Iceberg lettuce.

Accepted Answer

A) reduce 
B) increase 
C) not shift 
D) decrease 
A) reduce 
B) increase 
C) not shift 
D) decrease

Question 6

Advances in technology such as personal computers andcellular telecommunications are indicated in the supply graphby a movement along the supply curve.

Accepted Answer

A) True 
 B)False

Question 7

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.(True Answer )Correct 
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.(True Answer )Correct 
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 8

Which of the following factors does NOT result in a shift of thesupply curve?

Accepted Answer

A) a change in the number of sellers in the market 
B) a change in the demand for the product (True Answer )Correct 
C) a change in production technology 
D) a change in the costs of production 
A) a change in the number of sellers in the market 
B) a change in the demand for the product (True Answer )Correct 
C) a change in production technology 
D) a change in the costs of production

Question 9

The price of coffee has increased, yet evidence suggests thedemand for coffee has been stable. A possible explanation isthat:

Accepted Answer

A) there has been no change in the supply of coffee. 
B) there has been increased use of subsidies in coffee production. 
C) wages of workers in coffee production might have decreased. 
D) wages of workers in coffee production might have increased. 
A) there has been no change in the supply of coffee. 
B) there has been increased use of subsidies in coffee production. 
C) wages of workers in coffee production might have decreased. 
D) wages of workers in coffee production might have increased.

Question 10

The movie trilogy The Lord of the Rings was hugely successful,and, as a result, the demand for fantasy novels, action figures,and online role-playing games surged. The increase in demandcan be explained by a(n):

Accepted Answer

A) increase in population. 
B) change in expectations. 
C) change in tastes. 
D) change in the price of substitutes. 
A) increase in population. 
B) change in expectations. 
C) change in tastes. 
D) change in the price of substitutes.

Question 11

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demandcurve for oil is negatively sloped?
As the price of oil rises:

Accepted Answer

A) consumers use oil for more and varied purposes. 
B) consumers increasingly use oil only for those purposes without good substitutes. 
C) consumers have an incentive to use oil more freely. 
D) more producers are more willing and able to produce oil. 
A) consumers use oil for more and varied purposes. 
B) consumers increasingly use oil only for those purposes without good substitutes. 
C) consumers have an incentive to use oil more freely. 
D) more producers are more willing and able to produce oil.

Question 12

I. a decrease in the price of a complement goodII. a decrease in the price of the productIII. a decrease in the price of a substitute goodIV. an increase in taxes

Accepted Answer

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

Question 13

The quantity supplied of oil is the amount that:

Accepted Answer

A) producers plan to sell during a given time period at a given price. 
B) is actually bought during a given time period at a given price. 
C) producers wish they could sell at a higher price. 
D) people are willing to buy during a given time period at a given price. 
A) producers plan to sell during a given time period at a given price. 
B) is actually bought during a given time period at a given price. 
C) producers wish they could sell at a higher price. 
D) people are willing to buy during a given time period at a given price.

Question 14

If the price of computers ______, the demand for printers will______.

Accepted Answer

A) increases; increase 
B) decreases; decrease 
C) decreases; not change 
D) increases; decrease 
A) increases; increase 
B) decreases; decrease 
C) decreases; not change 
D) increases; decrease

Question 15

Accepted Answer

A) $380 
B) $415 
C) $345 
D) $5,145 
A) $380 
B) $415 
C) $345 
D) $5,145

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

(Table: Sweetbrand) The table shows the maximum consumerwillingness to pay for "Sweetbrand" cheesecakes. Which of thefour consumers receives the most consumer surplus, if themarket price of the cheesecakes is $12.50 each?

Accepted Answer

A) Frodo 
B) Sam 
C) Mary 
D) Pippin 
A) Frodo 
B) Sam 
C) Mary 
D) Pippin

Question 18

What does the law of demand state?

Accepted Answer

A) As incomes increase, people consume more of all goods. 
B) The demand for a good increases with the number of consumers in the market. 
C) As the price of a good declines, consumers purchase more of that good. 
D) The supply of a good increases in proportion to the demand for it. 
A) As incomes increase, people consume more of all goods. 
B) The demand for a good increases with the number of consumers in the market. 
C) As the price of a good declines, consumers purchase more of that good. 
D) The supply of a good increases in proportion to the demand for it.

Question 19

(Figure: Lobster Market) In the figure, a $10 tax is imposed onthe market for lobsters. What is the market price that lobsterproducers would need to receive to induce them to produce 5,000 bushels of lobster per day?

Accepted Answer

A) $50 
B) $40 
C) unknown 
D) $60 
A) $50 
B) $40 
C) unknown 
D) $60

Question 20

Potato chips and popcorn are substitutes. A subsidy for potatochips will ______the demand for popcorn and the quantity ofpopcorn sold will ______.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase 
A) increase; increase 
B) increase; decrease 
C) decrease; decrease 
D) decrease; increase

The supply curve illustrates:

(Figure: Supply Shifts) In the figure, the initial supply curve isS₁. If producers form expectations that the price will be lowerin the near future, S₁ will:

Producer surplus can be defined as the revenue producersmake from selling goods in a market.

New research indicates that running marathons is actually badfor the heart (it increases inflammatory markers associatedwith heart attacks). This news will:

If Romaine lettuce and Iceberg lettuce are substitutes, anincrease in the price of Romaine lettuce will ______ the demandfor Iceberg lettuce.

Advances in technology such as personal computers andcellular telecommunications are indicated in the supply graphby a movement along the supply curve.

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

Which of the following factors does NOT result in a shift of thesupply curve?

The price of coffee has increased, yet evidence suggests thedemand for coffee has been stable. A possible explanation isthat:

The movie trilogy The Lord of the Rings was hugely successful,and, as a result, the demand for fantasy novels, action figures,and online role-playing games surged. The increase in demandcan be explained by a(n):

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demandcurve for oil is negatively sloped? As the price of oil rises:

I. a decrease in the price of a complement goodII. a decrease in the price of the productIII. a decrease in the price of a substitute goodIV. an increase in taxes

The quantity supplied of oil is the amount that:

If the price of computers , the demand for printers will.

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

(Table: Sweetbrand) The table shows the maximum consumerwillingness to pay for "Sweetbrand" cheesecakes. Which of thefour consumers receives the most consumer surplus, if themarket price of the cheesecakes is $12.50 each?

What does the law of demand state?

(Figure: Lobster Market) In the figure, a $10 tax is imposed onthe market for lobsters. What is the market price that lobsterproducers would need to receive to induce them to produce 5,000 bushels of lobster per day?

Potato chips and popcorn are substitutes. A subsidy for potatochips will the demand for popcorn and the quantity ofpopcorn sold will .

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

The supply curve illustrates:

(Figure: Supply Shifts) In the figure, the initial supply curve isS1. If producers form expectations that the price will be lowerin the near future, S1 will:

Producer surplus can be defined as the revenue producersmake from selling goods in a market.

New research indicates that running marathons is actually badfor the heart (it increases inflammatory markers associatedwith heart attacks). This news will:

If Romaine lettuce and Iceberg lettuce are substitutes, anincrease in the price of Romaine lettuce will ______ the demandfor Iceberg lettuce.

Advances in technology such as personal computers andcellular telecommunications are indicated in the supply graphby a movement along the supply curve.

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

Which of the following factors does NOT result in a shift of thesupply curve?

The price of coffee has increased, yet evidence suggests thedemand for coffee has been stable. A possible explanation isthat:

The movie trilogy The Lord of the Rings was hugely successful,and, as a result, the demand for fantasy novels, action figures,and online role-playing games surged. The increase in demandcan be explained by a(n):

Recall the discussion about the demand for oil in your textbook.Which of the following correctly explains why the demandcurve for oil is negatively sloped? As the price of oil rises:

I. a decrease in the price of a complement goodII. a decrease in the price of the productIII. a decrease in the price of a substitute goodIV. an increase in taxes

The quantity supplied of oil is the amount that:

If the price of computers ______, the demand for printers will______.

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

(Table: Sweetbrand) The table shows the maximum consumerwillingness to pay for "Sweetbrand" cheesecakes. Which of thefour consumers receives the most consumer surplus, if themarket price of the cheesecakes is $12.50 each?

What does the law of demand state?

(Figure: Lobster Market) In the figure, a $10 tax is imposed onthe market for lobsters. What is the market price that lobsterproducers would need to receive to induce them to produce 5,000 bushels of lobster per day?

Potato chips and popcorn are substitutes. A subsidy for potatochips will ______the demand for popcorn and the quantity ofpopcorn sold will ______.

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

(Figure: Supply Shifts) In the figure, the initial supply curve isS₁. If producers form expectations that the price will be lowerin the near future, S₁ will:

If the price of computers , the demand for printers will.

Potato chips and popcorn are substitutes. A subsidy for potatochips will the demand for popcorn and the quantity ofpopcorn sold will .