Question 1

Which of the following would cause a decrease (leftward shift) in the short-run aggregate supply curve (SRAS)?

Accepted Answer

A)  an increase in oil prices 
B)  an advance in technology 
C)  an increase in the CPI 
D)  an increase in the long-run aggregate supply curve (LRAS) 
A)  an increase in oil prices 
B)  an advance in technology 
C)  an increase in the CPI 
D)  an increase in the long-run aggregate supply curve (LRAS)

Question 2

Total surplus equals:

Accepted Answer

A)  consumer surplus + producer surplus − deadweight loss. 
B)  consumer surplus − producer surplus − deadweight loss. 
C)  consumer surplus − producer surplus + deadweight loss. 
D)  consumer surplus + producer surplus. 
A)  consumer surplus + producer surplus − deadweight loss. 
B)  consumer surplus − producer surplus − deadweight loss. 
C)  consumer surplus − producer surplus + deadweight loss. 
D)  consumer surplus + producer surplus.

Question 3

Exhibit 6A-3 Consumer equilibrium
​
 
Given the budget line and indifference curves shown in Exhibit 6A-3, point V is:

Accepted Answer

A)  inferior to point X. 
B)  lowest attainable level of total utility. 
C)  unobtainable. 
D)  consumer equilibrium. 
A)  inferior to point X. 
B)  lowest attainable level of total utility. 
C)  unobtainable. 
D)  consumer equilibrium.

Question 4

​ Exhibit 10A-2 Macro AD-AS Model
 
​I n Exhibit 10A- 2, the intersection of AD with SRAS indicates:

Accepted Answer

A)  ​a short-run equilibrium. 
B)  ​a long-run equilibrium. 
C)  ​that the economy needs policies to reduce unemployment. 
D)  ​that the economy is at full employment. 
A)  ​a short-run equilibrium. 
B)  ​a long-run equilibrium. 
C)  ​that the economy needs policies to reduce unemployment. 
D)  ​that the economy is at full employment.

Question 5

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
 
As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

Accepted Answer

A)  total surplus increases. 
B)  deadweight loss increases. 
C)  overproduction decreases. 
D)  underproduction decreases. 
A)  total surplus increases. 
B)  deadweight loss increases. 
C)  overproduction decreases. 
D)  underproduction decreases.

Question 6

​ Exhibit 10A-1 Aggregate demand and supply model
 
As shown in Exhibit 10A-1 and assuming the aggregate demand curve shifts from AD 1 and AD 2 , the full-employment level of real GDP is:

Accepted Answer

A)  ​$12 billion. 
B)  ​$8 billion. 
C)  ​$150 billion. 
D)  ​unable to be determined. 
A)  ​$12 billion. 
B)  ​$8 billion. 
C)  ​$150 billion. 
D)  ​unable to be determined.

Question 7

Which of the following causes a leftward shift in the short-run aggregate supply curve?

Accepted Answer

A)  an increase of goods prices while nominal incomes are unchanged 
B)  an increase in nominal incomes (wages and salaries) 
C)  an increase of full-employment real GDP 
D)  an increase of personal consumption expenditures while the price level is unchanged 
A)  an increase of goods prices while nominal incomes are unchanged 
B)  an increase in nominal incomes (wages and salaries) 
C)  an increase of full-employment real GDP 
D)  an increase of personal consumption expenditures while the price level is unchanged

Question 8

Exhibit 1A-8 Straight line relationship
 
For the relationship shown in Exhibit 1A-8, suppose the price of hamburgers increases and hamburgers are a substitute for pizza. What change would occur on the graph?

Accepted Answer

A)  There will be a movement upward and to the left along the curve. 
B)  There will be a movement downward and to the right along the curve. 
C)  The curve will shift. 
D)  The slope of the curve will become steeper. 
A)  There will be a movement upward and to the left along the curve. 
B)  There will be a movement downward and to the right along the curve. 
C)  The curve will shift. 
D)  The slope of the curve will become steeper.

Question 9

Exhibit 6A-3 Consumer equilibrium
​
 
Given the budget line and indifference curves shown in Exhibit 6A-3, at point Z:

Accepted Answer

A)  Px exceeds Py. 
B)  MUx = MUy. 
C)  MRS = Px / Py. 
D)  MRS = Py / Px. 
A)  Px exceeds Py. 
B)  MUx = MUy. 
C)  MRS = Px / Py. 
D)  MRS = Py / Px.

Question 10

​
 
  Macro AD-AS Model
In Exhibit 10A-4, the self-correction argument is that in the long run, competition:

Accepted Answer

A)  from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS. 
B)  from unemployed workers causes a rightward shift in SRAS. 
C)  among firms for workers increases nominal wages and this causes a leftward shift in SRAS. 
D)  among consumers causes an increase in the CPI and a rightward shift in SRAS. 
A)  from unemployed workers causes an increase in nominal wages and a leftward shift in SRAS. 
B)  from unemployed workers causes a rightward shift in SRAS. 
C)  among firms for workers increases nominal wages and this causes a leftward shift in SRAS. 
D)  among consumers causes an increase in the CPI and a rightward shift in SRAS.

Question 11

A demand curve is downward sloping because

Accepted Answer

A)  as the price of the good decreases, the consumer finds that a lower indifference curve is attainable. 
B)  as the price of the good decreases, the consumer finds that a higher indifference curve is attainable. 
C)  consumers move downward along a budget line as the price of a good decreases. 
D)  consumers move upward along a budget line as the price of a good decreases. 
A)  as the price of the good decreases, the consumer finds that a lower indifference curve is attainable. 
B)  as the price of the good decreases, the consumer finds that a higher indifference curve is attainable. 
C)  consumers move downward along a budget line as the price of a good decreases. 
D)  consumers move upward along a budget line as the price of a good decreases.

Question 12

An inverse relationship exists when:

Accepted Answer

A)  there is no association between two variables. 
B)  one variable increases and there is no change in the other variable. 
C)  one variable increases and the other variable increases. 
D)  one variable increases and the other variable decreases. 
A)  there is no association between two variables. 
B)  one variable increases and there is no change in the other variable. 
C)  one variable increases and the other variable increases. 
D)  one variable increases and the other variable decreases.

Exam 31: Understanding Direct and Inverse Relationships between Variables

Which of the following would cause a decrease (leftward shift) in the short-run aggregate supply curve (SRAS)?

Total surplus equals:

Exhibit 6A-3 Consumer equilibrium ​ Given the budget line and indifference curves shown in Exhibit 6A-3, point V is:

​ Exhibit 10A-2 Macro AD-AS Model ​I n Exhibit 10A- 2, the intersection of AD with SRAS indicates:

Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then:

​ Exhibit 10A-1 Aggregate demand and supply model As shown in Exhibit 10A-1 and assuming the aggregate demand curve shifts from AD 1 and AD 2 , the full-employment level of real GDP is:

Which of the following causes a leftward shift in the short-run aggregate supply curve?

Exhibit 1A-8 Straight line relationship For the relationship shown in Exhibit 1A-8, suppose the price of hamburgers increases and hamburgers are a substitute for pizza. What change would occur on the graph?

Exhibit 6A-3 Consumer equilibrium ​ Given the budget line and indifference curves shown in Exhibit 6A-3, at point Z:

​ Macro AD-AS Model In Exhibit 10A-4, the self-correction argument is that in the long run, competition:

A demand curve is downward sloping because

An inverse relationship exists when:

Introducing the Economic Way of Thinking

Production Possibilities Opportunity Cost and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution Poverty and Discrimination

Antitrust and Regulation

Environmental Economics

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less Developed Countries

Filters

Exhibit 6A-3 Consumer equilibrium Given the budget line and indifference curves shown in Exhibit 6A-3, point V is:

Exhibit 10A-2 Macro AD-AS Model I n Exhibit 10A- 2, the intersection of AD with SRAS indicates:

Exhibit 10A-1 Aggregate demand and supply model As shown in Exhibit 10A-1 and assuming the aggregate demand curve shifts from AD ₁ and AD ₂ , the full-employment level of real GDP is:

Exhibit 6A-3 Consumer equilibrium Given the budget line and indifference curves shown in Exhibit 6A-3, at point Z:

Macro AD-AS Model In Exhibit 10A-4, the self-correction argument is that in the long run, competition: