Question 1

Holding everything else constant,an increase in the price of MP3 players will result in

Accepted Answer

A)  a decrease in the quantity of MP3 players supplied. 
B)  a decrease in the demand for MP3 players. 
C)  an increase in the supply of MP3 players. 
D)  a decrease in the quantity of MP3 players demanded. 
A)  a decrease in the quantity of MP3 players supplied. 
B)  a decrease in the demand for MP3 players. 
C)  an increase in the supply of MP3 players. 
D)  a decrease in the quantity of MP3 players demanded. D

Question 2

Figure 3-5  
-Refer to Figure 3-5.At a price of $10,the quantity sold

Accepted Answer

A)  is 2 units. 
B)  is 4 units. 
C)  is 6 units. 
D)  is 8 units. 
A)  is 2 units. 
B)  is 4 units. 
C)  is 6 units. 
D)  is 8 units. B

Question 3

What are the two effects that explain the law of demand? Briefly explain each effect.

Accepted Answer

The two effects that explain the law of demand are the income effect and the substitution effect.The income effect is the change in quantity demanded of a good that results from a change in purchasing power due to a change in the good's price.The substitution effect is the change in quantity demanded of a good that results from the effect of a change in the good's price making the good more or less expensive relative to other goods that are substitutes.

Question 4

If you exhibit the endowment effect as a decision maker,then you are

Accepted Answer

A)  deciding on the basis of sunk costs. 
B)  buying something you can't really afford because you expect to save in the future. 
C)  ignoring non-monetary opportunity costs. 
D)  consuming based on celebrity endorsements. 
A)  deciding on the basis of sunk costs. 
B)  buying something you can't really afford because you expect to save in the future. 
C)  ignoring non-monetary opportunity costs. 
D)  consuming based on celebrity endorsements.

Question 5

Explain the differences between a change in supply and a change in quantity supplied.

Accepted Answer

A change in supply refers to a shift of

Question 6

A supply schedule

Accepted Answer

A)  is a table that shows the relationship between the price of a product and the quantity of the product supplied. 
B)  is a curve that shows the relationship between the price of a product and the quantity of the product supplied. 
C)  is the relationship between the supply of a good and the cost of producing the good. 
D)  is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange. 
A)  is a table that shows the relationship between the price of a product and the quantity of the product supplied. 
B)  is a curve that shows the relationship between the price of a product and the quantity of the product supplied. 
C)  is the relationship between the supply of a good and the cost of producing the good. 
D)  is a table that shows the relationship between the price of a product and the quantity of the product that producers and consumers are willing to exchange.

Question 7

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for tropical hardwood trees if the government restricts the amount of forest lands that can be logged?

Accepted Answer

A)  D decreases, S no change, P and Q decrease 
B)  S decreases, D no change, P increases, Q decreases 
C)  D and S decrease, P and Q increase 
D)  D no change, S decreases, P increases, Q increases 
A)  D decreases, S no change, P and Q decrease 
B)  S decreases, D no change, P increases, Q decreases 
C)  D and S decrease, P and Q increase 
D)  D no change, S decreases, P increases, Q increases

Question 8

Figure 3-2  
-Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

Accepted Answer

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

Question 9

If the demand for a product increases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Accepted Answer

A) True 
 B)False

Question 10

Figure 3-2  
-Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

Accepted Answer

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

Question 11

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces no longer apply. 
D)  At equilibrium, scarcity is eliminated. 
A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces no longer apply. 
D)  At equilibrium, scarcity is eliminated.

Question 12

Figure 3-5  
-Refer to Figure 3-5.In a free market such as that depicted above,a surplus is eliminated by

Accepted Answer

A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded. 
A)  a price increase, increasing the supply and decreasing the demand. 
B)  a price decrease, decreasing the supply and increasing the demand. 
C)  a price decrease, decreasing the quantity supplied and increasing the quantity demanded. 
D)  a price increase, increasing the quantity supplied and decreasing the quantity demanded.

Question 13

The law of demand implies,holding everything else constant,that as the price of ice cream

Accepted Answer

A)  increases, the demand for ice cream will increase. 
B)  increases, the quantity of ice cream demanded will increase. 
C)  decreases, the quantity of ice cream demanded will increase. 
D)  decreases, the demand for ice cream will increase. 
A)  increases, the demand for ice cream will increase. 
B)  increases, the quantity of ice cream demanded will increase. 
C)  decreases, the quantity of ice cream demanded will increase. 
D)  decreases, the demand for ice cream will increase.

Question 14

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions; as a result,________.'

Accepted Answer

A)  the price of flat-screen televisions decreased, and the demand for flat-screen televisions increased 
B)  the equilibrium quantity of flat-screen televisions decreased 
C)  the price of flat-screen televisions decreased, and the quantity demanded of flat-screen televisions increased 
D)  the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease. 
A)  the price of flat-screen televisions decreased, and the demand for flat-screen televisions increased 
B)  the equilibrium quantity of flat-screen televisions decreased 
C)  the price of flat-screen televisions decreased, and the quantity demanded of flat-screen televisions increased 
D)  the price of flat-screen televisions decreased. The lower price caused the supply of flat-screen televisions to decrease.

Question 15

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

Accepted Answer

A)  D increases, S no change, P and Q increase 
B)  S increases, D no change, P decreases, Q increases 
C)  D and S increase, P and Q decrease 
D)  D no change, S increases, P decreases, Q decreases 
A)  D increases, S no change, P and Q increase 
B)  S increases, D no change, P decreases, Q increases 
C)  D and S increase, P and Q decrease 
D)  D no change, S increases, P decreases, Q decreases

Question 16

What is behavioural economics?

Accepted Answer

A)  The study of how people make wealth-maximising decisions. 
B)  The study of how people behave in the face of scarcity. 
C)  The study of situations in which people act in ways that are not economically rational. 
D)  The study of how people make decisions at the margin. 
A)  The study of how people make wealth-maximising decisions. 
B)  The study of how people behave in the face of scarcity. 
C)  The study of situations in which people act in ways that are not economically rational. 
D)  The study of how people make decisions at the margin.

Question 17

Indicate whether each of the following situations would shift the supply curve to the left,to the right,or not at all.
a.An increase in the number of firms in the market
b.An increase in the current price of the product
c.A decrease in productivity
d.An increase in the expected future price of a product
e.A decrease in the price of an input

Accepted Answer

a.Shift to the right

Question 18

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since their initial introduction.How did this change in technology affect the market for Blu-ray players?

Accepted Answer

A)  The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. 
B)  The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players. 
C)  The new technology caused a decrease in the demand for Blu-ray players. 
D)  The new technology caused an increase in the quantity of Blu-ray players supplied. 
A)  The new technology caused an increase in the supply of Blu-ray players and a decrease in price of Blu-ray players. 
B)  The new technology caused an increase in the supply of Blu-ray players and an increase in price of Blu-ray players. 
C)  The new technology caused a decrease in the demand for Blu-ray players. 
D)  The new technology caused an increase in the quantity of Blu-ray players supplied.

Question 19

The demand by all the consumers of a given good or service is the ________ for the good or service.

Accepted Answer

A)  market demand 
B)  quantity demanded 
C)  law of demand 
D)  scheduled demand 
A)  market demand 
B)  quantity demanded 
C)  law of demand 
D)  scheduled demand

Question 20

Figure 3-7  
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Holding everything else constant,an increase in the price of MP3 players will result in

Figure 3-5 -Refer to Figure 3-5.At a price of $10,the quantity sold

What are the two effects that explain the law of demand? Briefly explain each effect.

If you exhibit the endowment effect as a decision maker,then you are

Explain the differences between a change in supply and a change in quantity supplied.

A supply schedule

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for tropical hardwood trees if the government restricts the amount of forest lands that can be logged?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

If the demand for a product increases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

Which of the following is the correct way to describe equilibrium in a market?

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a surplus is eliminated by

The law of demand implies,holding everything else constant,that as the price of ice cream

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions; as a result,________.'

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

What is behavioural economics?

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since their initial introduction.How did this change in technology affect the market for Blu-ray players?

The demand by all the consumers of a given good or service is the ________ for the good or service.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 3: Where Prices Come From: the Interaction of Demand and Supply

Holding everything else constant,an increase in the price of MP3 players will result in

Figure 3-5 -Refer to Figure 3-5.At a price of $10,the quantity sold

What are the two effects that explain the law of demand? Briefly explain each effect.

If you exhibit the endowment effect as a decision maker,then you are

Explain the differences between a change in supply and a change in quantity supplied.

A supply schedule

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for tropical hardwood trees if the government restricts the amount of forest lands that can be logged?

Figure 3-2 -Refer to Figure 3-2.A decrease in the price of the product would be represented by a movement from

If the demand for a product increases and the supply of the product does not change,equilibrium price and equilibrium quantity will both increase.

Figure 3-2 -Refer to Figure 3-2.An increase in the number of firms in the market would be represented by a movement from

Which of the following is the correct way to describe equilibrium in a market?

Figure 3-5 -Refer to Figure 3-5.In a free market such as that depicted above,a surplus is eliminated by

The law of demand implies,holding everything else constant,that as the price of ice cream

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions; as a result,________.'

Let D = demand,S = supply,P = equilibrium price,Q = equilibrium quantity.What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

What is behavioural economics?

Blu-ray players were introduced to the market in 2006,and new technology has allowed for the cost of manufacturing the players to decline significantly since their initial introduction.How did this change in technology affect the market for Blu-ray players?

The demand by all the consumers of a given good or service is the ________ for the good or service.

Figure 3-7 -Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for rice.What happens in this market if buyers expect the price of rice to fall?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Social Policy and Inequality

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters