Question 1

According to the law of supply,if the price of calculators decreased,the supply of calculators would decrease,everything else held equal.

Accepted Answer

A) True 
 B)False

Question 2

A government energy policy that focuses on new technologies for conservation and new sources of energy would result in

Accepted Answer

A) an increase in both the supply of and the demand for gasoline. 
B) a decrease in both the supply of and the demand for gasoline. 
C) an increase in the supply of gasoline along with a decrease in the demand for gasoline. 
D) a decrease in the supply of gasoline along with an increase in the demand for gasoline. 
E) no change in either the supply of or the demand for gasoline. 
A) an increase in both the supply of and the demand for gasoline. 
B) a decrease in both the supply of and the demand for gasoline. 
C) an increase in the supply of gasoline along with a decrease in the demand for gasoline. 
D) a decrease in the supply of gasoline along with an increase in the demand for gasoline. 
E) no change in either the supply of or the demand for gasoline.

Question 3

A market is in equilibrium when a price is low enough for all consumers to afford.

Accepted Answer

A) True 
 B)False

Question 4

When economists say that the supply of a product has decreased,they mean that

Accepted Answer

A) a greater quantity will be produced at any price. 
B) the price is too high for equilibrium. 
C) a smaller quantity will be produced at any price. 
D) demand was too high for producers to make a profit. 
E) the price is too low for equilibrium. 
A) a greater quantity will be produced at any price. 
B) the price is too high for equilibrium. 
C) a smaller quantity will be produced at any price. 
D) demand was too high for producers to make a profit. 
E) the price is too low for equilibrium.

Question 5

List four factors that affect willingness to buy and that shift the demand curve.

Accepted Answer

Income,prices of sub

Question 6

Exhibit 3-5  
-Refer to Exhibit 3-5.Suppose that a war in the Middle East causes the quantity supplied of oil to fall by 175 million barrels per day at every price.
(A)Chart the new supply schedule.
(B)What is the new equilibrium price and new equilibrium quantity?
(C)Given this shift in supply,is there a shortage or surplus at the old equilibrium price? Explain the mechanism that adjusts the market to the new equilibrium.

Accepted Answer

(A)@#IMG-DLM& (B)
The new equilibrium price is $18

Question 7

The law of demand states that,as the price of a product increases,consumers

Accepted Answer

A) buy more of that product. 
B) buy less of that product. 
C) buy more of other related products. 
D) buy less of other related products. 
E) may buy more or less of that product. 
A) buy more of that product. 
B) buy less of that product. 
C) buy more of other related products. 
D) buy less of other related products. 
E) may buy more or less of that product.

Question 8

The relationship between price and quantity demanded,other things being equal,is

Accepted Answer

A) negative in some economies but positive in others. 
B) negative in market-based economies but positive in regulated economies. 
C) always negative in all economies. 
D) positive in market-based economies but negative in regulated economies. 
E) always positive in all economies. 
A) negative in some economies but positive in others. 
B) negative in market-based economies but positive in regulated economies. 
C) always negative in all economies. 
D) positive in market-based economies but negative in regulated economies. 
E) always positive in all economies.

Question 9

Why is the word equilibrium used to describe the price determined by supply and demand in a market?

Accepted Answer

Equilibrium is a general term

Question 10

List four factors that affect willingness to sell and that shift the supply curve.

Accepted Answer

Technology,input pri

Question 11

Shifts in the supply of and the demand for oil were the causes of the increased gasoline prices in the 2000s.

Accepted Answer

A) True 
 B)False

Question 12

The supply curve for iPhones is upward-sloping because

Accepted Answer

A) when the price of an iPhone rises,it must be due to increased costs in producing iPhones,so producers must charge more. 
B) a higher iPhone price gives shoe producers incentive to produce more iPhones. 
C) iPhones are produced by only a few producers. 
D) iPhone producers always want to satisfy the demand for iPhones by consumers. 
E) as the price of an iPhone rises,per-unit costs of production fall. 
A) when the price of an iPhone rises,it must be due to increased costs in producing iPhones,so producers must charge more. 
B) a higher iPhone price gives shoe producers incentive to produce more iPhones. 
C) iPhones are produced by only a few producers. 
D) iPhone producers always want to satisfy the demand for iPhones by consumers. 
E) as the price of an iPhone rises,per-unit costs of production fall.

Question 13

Equilibrium prices are determined by

Accepted Answer

A) supply alone. 
B) demand alone. 
C) both supply and demand. 
D) the government. 
E) nothing at all. 
A) supply alone. 
B) demand alone. 
C) both supply and demand. 
D) the government. 
E) nothing at all.

Question 14

Which of the following is not an element of the supply and demand model?

Accepted Answer

A) Price 
B) Inputs 
C) Market 
D) Equilibrium 
E) Quantity 
A) Price 
B) Inputs 
C) Market 
D) Equilibrium 
E) Quantity

Question 15

If it is discovered that using a smartphone regularly causes brain cancer,then in the market for smartphones,

Accepted Answer

A) equilibrium price will fall and equilibrium quantity will rise. 
B) equilibrium price and equilibrium quantity will fall. 
C) there will be no change in equilibrium price or quantity. 
D) equilibrium price will rise as demand for computers decreases. 
E) equilibrium price will rise as supply decreases. 
A) equilibrium price will fall and equilibrium quantity will rise. 
B) equilibrium price and equilibrium quantity will fall. 
C) there will be no change in equilibrium price or quantity. 
D) equilibrium price will rise as demand for computers decreases. 
E) equilibrium price will rise as supply decreases.

Question 16

Plastic bags are made from petroleum.Why does an increase in gasoline consumption,which is another product made from petroleum,raise the price of plastic bags? Use the supply and demand model to explain your answer.

Accepted Answer

An increase in gasoline consum

Question 17

All else being equal,if there is a change in the price of a good,then the supply of that good will change.

Accepted Answer

A) True 
 B)False

Question 18

Economists use the term supply to refer to

Accepted Answer

A) the upward-sloping line that relates consumer expenditures to different output levels. 
B) the downward-sloping line that relates consumer expenditures to different output levels. 
C) a set of price and quantity supplied combinations,everything else held equal. 
D) the amount producers are willing but not able to produce at each price. 
E) a particular quantity supplied at a specific price. 
A) the upward-sloping line that relates consumer expenditures to different output levels. 
B) the downward-sloping line that relates consumer expenditures to different output levels. 
C) a set of price and quantity supplied combinations,everything else held equal. 
D) the amount producers are willing but not able to produce at each price. 
E) a particular quantity supplied at a specific price.

Question 19

Market equilibrium predicts all the following except the

Accepted Answer

A) price for which quantity is supplied. 
B) price for which quantity is demanded. 
C) quantity bought. 
D) quantity sold. 
E) amount of consumer income. 
A) price for which quantity is supplied. 
B) price for which quantity is demanded. 
C) quantity bought. 
D) quantity sold. 
E) amount of consumer income.

Question 20

The slope of a demand curve can be positive,negative,or zero.

Accepted Answer

A) True 
 B)False

Exam 3: The Supply and Demand Model

According to the law of supply,if the price of calculators decreased,the supply of calculators would decrease,everything else held equal.

A government energy policy that focuses on new technologies for conservation and new sources of energy would result in

A market is in equilibrium when a price is low enough for all consumers to afford.

When economists say that the supply of a product has decreased,they mean that

List four factors that affect willingness to buy and that shift the demand curve.

The law of demand states that,as the price of a product increases,consumers

The relationship between price and quantity demanded,other things being equal,is

Why is the word equilibrium used to describe the price determined by supply and demand in a market?

List four factors that affect willingness to sell and that shift the supply curve.

Shifts in the supply of and the demand for oil were the causes of the increased gasoline prices in the 2000s.

The supply curve for iPhones is upward-sloping because

Equilibrium prices are determined by

Which of the following is not an element of the supply and demand model?

If it is discovered that using a smartphone regularly causes brain cancer,then in the market for smartphones,

Plastic bags are made from petroleum.Why does an increase in gasoline consumption,which is another product made from petroleum,raise the price of plastic bags? Use the supply and demand model to explain your answer.

All else being equal,if there is a change in the price of a good,then the supply of that good will change.

Economists use the term supply to refer to

Market equilibrium predicts all the following except the

The slope of a demand curve can be positive,negative,or zero.

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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