Question 1

Figure 4-21
  
-A surplus will tend to occur at which price in Figure 4-21?

Accepted Answer

A)  P1 
B)  P2 
C)  P3 
A)  P1 
B)  P2 
C)  P3

Question 2

A price ceiling is only effective if it is above the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 3

We observe that the price of food rises and the quantity purchased also rises.This means the

Accepted Answer

A)  supply curve shifted to the left. 
B)  demand curve shifted to the right. 
C)  demand curve shifted to the left. 
D)  supply curve shifted to the right. 
A)  supply curve shifted to the left. 
B)  demand curve shifted to the right. 
C)  demand curve shifted to the left. 
D)  supply curve shifted to the right.

Question 4

If price rises,what happens to supply for a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question.

Question 5

Figure 4-16
  
-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Accepted Answer

A)  S1 to S2. 
B)  S2 to S1. 
C)  S2 to S3. 
D)  S1 to S3. 
A)  S1 to S2. 
B)  S2 to S1. 
C)  S2 to S3. 
D)  S1 to S3.

Question 6

Assuming that resources are specialized,the opportunity cost of an item increases as production of it rises.Therefore,we expect that firms will produce more if

Accepted Answer

A)  the price increases. 
B)  the price decreases. 
C)  the opportunity cost is greater than the price. 
D)  government asks firms to produce more. 
E)  the income of buyers increases. 
A)  the price increases. 
B)  the price decreases. 
C)  the opportunity cost is greater than the price. 
D)  government asks firms to produce more. 
E)  the income of buyers increases.

Question 7

The following are common errors students make when discussing supply and demand.What is the mistake in each?
a.At equilibrium, demand equals supply.
b.The quantity of demand is greater than the quantity of supply.
c.They move along the line from both ends to an equilibrium in the middle.
d.The increase in demand causes an increase in supply.

Accepted Answer

a.Demand never equals supply because the

Question 8

If the demand curve shifts outward and the supply curve remains the same,price will fall.

Accepted Answer

A) True 
 B)False

Figure 4-21 -A surplus will tend to occur at which price in Figure 4-21?

A price ceiling is only effective if it is above the market equilibrium.

We observe that the price of food rises and the quantity purchased also rises.This means the

If price rises,what happens to supply for a product?

Figure 4-16 -Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Assuming that resources are specialized,the opportunity cost of an item increases as production of it rises.Therefore,we expect that firms will produce more if

If the demand curve shifts outward and the supply curve remains the same,price will fall.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

Exam 4: Supply and Demand: An Initial Look

Figure 4-21 -A surplus will tend to occur at which price in Figure 4-21?

A price ceiling is only effective if it is above the market equilibrium.

We observe that the price of food rises and the quantity purchased also rises.This means the

If price rises,what happens to supply for a product?

Figure 4-16 -Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Assuming that resources are specialized,the opportunity cost of an item increases as production of it rises.Therefore,we expect that firms will produce more if

If the demand curve shifts outward and the supply curve remains the same,price will fall.

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters