Question 1

Suppose it is observed in a market that price has fallen but more product is being produced and sold.This could be caused by a(n)

Accepted Answer

A) decrease in supply and demand. 
B) decrease in demand. 
C) decrease in supply. 
D) increase in supply. 
E) increase in demand. 
A) decrease in supply and demand. 
B) decrease in demand. 
C) decrease in supply. 
D) increase in supply. 
E) increase in demand.

Question 2

Which of the following leads to a leftward shift of the demand curve?

Accepted Answer

A) An expectation of a decline in the product price in the future 
B) A decrease in the good's own price 
C) An increase in the price of a substitute 
D) A decrease in the price of a complement 
E) An increase in the number of consumers 
A) An expectation of a decline in the product price in the future 
B) A decrease in the good's own price 
C) An increase in the price of a substitute 
D) A decrease in the price of a complement 
E) An increase in the number of consumers

Question 3

Suppose all blue-collar workers receive a substantial pay increase.What will happen in the product markets that employ these workers?

Accepted Answer

A) Supply will decrease. 
B) Supply will increase. 
C) Output will rise. 
D) Demand will decrease. 
E) Prices will fall. 
A) Supply will decrease. 
B) Supply will increase. 
C) Output will rise. 
D) Demand will decrease. 
E) Prices will fall.

Question 4

What is the difference between an increase in supply and an increase in quantity supplied?

Accepted Answer

An increase in supply is a shi

Question 5

The demand schedule is a table or list of the prices and corresponding quantities demanded of a particular good or service.

Accepted Answer

A) True 
 B)False

Question 6

Exhibit 3-1  
-Consider the market described by the schedule in Exhibit 3-1.Which of the following is true?

Accepted Answer

A) The law of supply is violated. 
B) There is no equilibrium. 
C) At $5 per unit,people will purchase 100 units. 
D) At $2 per unit,people will purchase 700 units. 
E) The law of demand is violated. 
A) The law of supply is violated. 
B) There is no equilibrium. 
C) At $5 per unit,people will purchase 100 units. 
D) At $2 per unit,people will purchase 700 units. 
E) The law of demand is violated.

Question 7

A change in the quantity supplied is reflected by a shift of the supply curve.

Accepted Answer

A) True 
 B)False

Question 8

According to the law of supply,if the price of personal computers increased,ceteris paribus,

Accepted Answer

A) the quantity supplied of personal computers would not change. 
B) the quantity supplied of personal computers would decrease. 
C) the supply of personal computers would decrease. 
D) the quantity supplied of personal computers would increase. 
E) the supply of personal computers would increase. 
A) the quantity supplied of personal computers would not change. 
B) the quantity supplied of personal computers would decrease. 
C) the supply of personal computers would decrease. 
D) the quantity supplied of personal computers would increase. 
E) the supply of personal computers would increase.

Question 9

Draw a supply and demand diagram.Label the equilibrium price and equilibrium quantity as well as the axes and curves.

Accepted Answer

P^e = equili

Question 10

Exhibit 3-3  
-Refer to Exhibit 3-3.The equilibrium price and quantity in the market are

Accepted Answer

A) $27 and 25 units,respectively. 
B) $9 and 25 units,respectively. 
C) $18 and 32 units,respectively. 
D) $9 and 10 units,respectively. 
E) $27 and 55 units,respectively. 
A) $27 and 25 units,respectively. 
B) $9 and 25 units,respectively. 
C) $18 and 32 units,respectively. 
D) $9 and 10 units,respectively. 
E) $27 and 55 units,respectively.

Question 11

A change in supply will not be caused by a(n)

Accepted Answer

A) change in the price producers believe will prevail in the future. 
B) change in the price of inputs. 
C) change in the number of producers. 
D) increase in the number of consumers. 
E) improvement in technology. 
A) change in the price producers believe will prevail in the future. 
B) change in the price of inputs. 
C) change in the number of producers. 
D) increase in the number of consumers. 
E) improvement in technology.

Question 12

Suppose that the price of bananas has been rising while the amount sold has been falling.Which of the following is the best explanation?
(A)Consumer preferences have shifted in favor of bananas because they are healthful.
(B)Consumer incomes have risen faster than inflation.
(C)Bad weather has reduced some banana crops.

Accepted Answer

The best explanation is (C)because a red

Question 13

Exhibit 3-5  
-Refer to Exhibit 3-5 for the demand and supply model of the world oil market (in millions of barrels per day).
(A)Is there a shortage or surplus of oil at a price of $18.00 per barrel? Why? What is the quantity of shortage or surplus?
(B)Is there a shortage or surplus of oil at a price of $17.50 per barrel? Why? What is the quantity of shortage or surplus?
(C)What is the equilibrium price and quantity in this market?

Accepted Answer

(A) There is a surplus of 65 million bar

Question 14

The demand curve for apples is downward-sloping because

Accepted Answer

A) when fewer apples are produced,the money in people's apple budgets does not have to stretch as far. 
B) there must have been an apple blight,so there must be fewer apples to buy. 
C) when apple prices rise,the price of other goods must also be rising,so people cannot afford to buy as much. 
D) at higher apple prices,people will seek other,relatively cheaper alternatives,like pears,oranges,or plums. 
E) at higher prices,apples are more expensive to produce,so fewer are grown. 
A) when fewer apples are produced,the money in people's apple budgets does not have to stretch as far. 
B) there must have been an apple blight,so there must be fewer apples to buy. 
C) when apple prices rise,the price of other goods must also be rising,so people cannot afford to buy as much. 
D) at higher apple prices,people will seek other,relatively cheaper alternatives,like pears,oranges,or plums. 
E) at higher prices,apples are more expensive to produce,so fewer are grown.

Question 15

Other things being equal,the quantity supplied decreases as price increases.

Accepted Answer

A) True 
 B)False

Question 16

Market equilibrium occurs when the

Accepted Answer

A) quantity supplied equals quantity demanded. 
B) quantity supplied is greater than quantity demanded. 
C) quantity supplied is less than quantity demanded. 
D) quantity supplied is fixed by the government. 
E) quantity demanded equals zero. 
A) quantity supplied equals quantity demanded. 
B) quantity supplied is greater than quantity demanded. 
C) quantity supplied is less than quantity demanded. 
D) quantity supplied is fixed by the government. 
E) quantity demanded equals zero.

Question 17

Exhibit 3-2  
-In the market represented in Exhibit 3-2,if price rises (perhaps due to government mandate)from $.70 to $.80,

Accepted Answer

A) a surplus of 30 units will occur. 
B) producers will not be able to sell all they are willing to produce. 
C) consumers would like to buy more than will be produced. 
D) a shortage of 15 units will occur. 
E) a new market equilibrium quantity of 25 units will result. 
A) a surplus of 30 units will occur. 
B) producers will not be able to sell all they are willing to produce. 
C) consumers would like to buy more than will be produced. 
D) a shortage of 15 units will occur. 
E) a new market equilibrium quantity of 25 units will result.

Question 18

Which of the following will not cause the demand for ice cream to change?

Accepted Answer

A) A change in population size 
B) A change in the price of ice cream 
C) A change in consumer incomes 
D) A change in the price of yogurt 
E) A change in seasons 
A) A change in population size 
B) A change in the price of ice cream 
C) A change in consumer incomes 
D) A change in the price of yogurt 
E) A change in seasons

Question 19

Suppose consumer incomes increase,and we are looking at a market for a normal good.What will happen to demand,quantity demanded,supply,and quantity supplied as a result of this market change?

Accepted Answer

Demand increases,but supply do

Question 20

Which of the following statements is true?

Accepted Answer

A) An increase in quantity demanded means a movement along a given demand curve. 
B) An increase in demand means a movement along a given demand curve. 
C) An increase in demand means that consumers will purchase less of a product at each possible price. 
D) Price and quantity demanded are positively related. 
E) An increase in demand always means the same as an increase in quantity demanded. 
A) An increase in quantity demanded means a movement along a given demand curve. 
B) An increase in demand means a movement along a given demand curve. 
C) An increase in demand means that consumers will purchase less of a product at each possible price. 
D) Price and quantity demanded are positively related. 
E) An increase in demand always means the same as an increase in quantity demanded.

Exam 3: The Supply and Demand Model

Suppose it is observed in a market that price has fallen but more product is being produced and sold.This could be caused by a(n)

Which of the following leads to a leftward shift of the demand curve?

Suppose all blue-collar workers receive a substantial pay increase.What will happen in the product markets that employ these workers?

What is the difference between an increase in supply and an increase in quantity supplied?

The demand schedule is a table or list of the prices and corresponding quantities demanded of a particular good or service.

Exhibit 3-1 -Consider the market described by the schedule in Exhibit 3-1.Which of the following is true?

A change in the quantity supplied is reflected by a shift of the supply curve.

According to the law of supply,if the price of personal computers increased,ceteris paribus,

Draw a supply and demand diagram.Label the equilibrium price and equilibrium quantity as well as the axes and curves.

Exhibit 3-3 -Refer to Exhibit 3-3.The equilibrium price and quantity in the market are

A change in supply will not be caused by a(n)

The demand curve for apples is downward-sloping because

Other things being equal,the quantity supplied decreases as price increases.

Market equilibrium occurs when the

Exhibit 3-2 -In the market represented in Exhibit 3-2,if price rises (perhaps due to government mandate)from $.70 to $.80,

Which of the following will not cause the demand for ice cream to change?

Suppose consumer incomes increase,and we are looking at a market for a normal good.What will happen to demand,quantity demanded,supply,and quantity supplied as a result of this market change?

Which of the following statements is true?

The Central Idea

Observing and Explaining the Economy

Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, transfers, and Income Distribution

Public Goods, externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth and Globalization

International Trade

International Finance

Reading,understanding,and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Present Discounted Value

The Miracle of Compound Growth

Deriving the Growth Accounting Formula

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

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