Question 1

Figure 3-4  
-Refer to Figure 3-4.At a price of $20,how many units will be supplied?

Accepted Answer

A) 400 
B) 500 
C) 600 
D) 800 
A) 400 
B) 500 
C) 600 
D) 800

Question 2

Which of the following describes a characteristic of a perfectly competitive market?

Accepted Answer

A) There are many buyers but few sellers. 
B) There are many sellers but few buyers. 
C) There are many buyers and sellers. 
D) Equilibrium is achieved when demand for the product sold in the market equals the supply. 
A) There are many buyers but few sellers. 
B) There are many sellers but few buyers. 
C) There are many buyers and sellers. 
D) Equilibrium is achieved when demand for the product sold in the market equals the supply.

Question 3

Olive oil producers want to sell more olive oil at a higher price.Which of the following events would have this effect?

Accepted Answer

A) an increase in the price of olive oil presses 
B) a decrease in the cost of transporting olive oil to markets 
C) an increase in the price of land used to plant olive trees 
D) research finds that consumption of olive oil reduces the risk of heart disease 
A) an increase in the price of olive oil presses 
B) a decrease in the cost of transporting olive oil to markets 
C) an increase in the price of land used to plant olive trees 
D) research finds that consumption of olive oil reduces the risk of heart disease

Question 4

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

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)

Question 5

It is possible for a market for a good to experience a surplus and a shortage at the same time.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following generation categories has the smallest population in the United States in 2015?

Accepted Answer

A) the millennials 
B) generation X 
C) the baby boomers 
D) generation Y 
A) the millennials 
B) generation X 
C) the baby boomers 
D) generation Y

Question 7

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve.As a result

Accepted Answer

A) both the equilibrium price and quantity of MP3 players will decrease. 
B) the equilibrium price of MP3 players will decrease;the equilibrium quantity will increase. 
C) the equilibrium price of MP3 players may increase or decrease;the equilibrium quantity will decrease. 
D) the equilibrium price of MP3 players will increase;the equilibrium quantity will decrease. 
A) both the equilibrium price and quantity of MP3 players will decrease. 
B) the equilibrium price of MP3 players will decrease;the equilibrium quantity will increase. 
C) the equilibrium price of MP3 players may increase or decrease;the equilibrium quantity will decrease. 
D) the equilibrium price of MP3 players will increase;the equilibrium quantity will decrease.

Question 8

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis,economists assume that the most important determinant of the demand for a good is the ________ of the good.

Accepted Answer

A) quantity;price;quantity 
B) price;quantity;quantity 
C) price;quantity;price 
D) quantity;price;price 
A) quantity;price;quantity 
B) price;quantity;quantity 
C) price;quantity;price 
D) quantity;price;price

Question 9

Which of the following is evidence of a surplus of bananas?

Accepted Answer

A) Firms raise the price of bananas. 
B) The price of bananas is lowered in order to increase sales. 
C) The equilibrium price of bananas rises due to an increase in demand. 
D) The quantity of bananas demanded is greater than the quantity supplied. 
A) Firms raise the price of bananas. 
B) The price of bananas is lowered in order to increase sales. 
C) The equilibrium price of bananas rises due to an increase in demand. 
D) The quantity of bananas demanded is greater than the quantity supplied.

Question 10

As the number of firms in a market decreases,the supply curve will shift to the left and the equilibrium price will fall.

Accepted Answer

A) True 
 B)False

Question 11

Orange juice drinkers want to consume more orange juice at a lower price.Which of the following events would have this effect?

Accepted Answer

A) a decrease in the price of orange juice processing 
B) an increase in the cost of fertilizer used for orange groves 
C) a decrease in income,assuming orange juice is a normal good 
D) a decrease in the population 
A) a decrease in the price of orange juice processing 
B) an increase in the cost of fertilizer used for orange groves 
C) a decrease in income,assuming orange juice is a normal good 
D) a decrease in the population

Question 12

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 product and the cost of producing the product. 
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 product and the cost of producing the product. 
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 13

If in the market for oranges the supply has increased,then

Accepted Answer

A) the supply curve for oranges has shifted to the right. 
B) the supply curve for oranges has shifted to the left. 
C) there has been a movement upwards along the supply curve for oranges. 
D) there has been a movement downwards along the supply curve for oranges. 
A) the supply curve for oranges has shifted to the right. 
B) the supply curve for oranges has shifted to the left. 
C) there has been a movement upwards along the supply curve for oranges. 
D) there has been a movement downwards along the supply curve for oranges.

Question 14

A surplus occurs when the actual selling price is above the market equilibrium price.

Accepted Answer

A) True 
 B)False

Question 15

An increase in the price of off-road vehicles will result in

Accepted Answer

A) a smaller quantity of off-road vehicles supplied. 
B) a larger quantity of off-road vehicles supplied. 
C) an increase in the demand for off-road vehicles. 
D) a decrease in the supply of off-road vehicles. 
A) a smaller quantity of off-road vehicles supplied. 
B) a larger quantity of off-road vehicles supplied. 
C) an increase in the demand for off-road vehicles. 
D) a decrease in the supply of off-road vehicles.

Question 16

Figure 3-2  
-Refer to Figure 3-2.An increase in the expected future 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 17

Figure 3-1  
-Refer to Figure 3-1.An increase in the price of a substitute would be represented by a movement from

Accepted Answer

A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1. 
A) A to B. 
B) B to A. 
C) D1 to D2. 
D) D2 to D1.

Question 18

Table 3-6
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price per } \
\text { Bushel }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Demanded } \
\text { (bushels) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied } \
\text { (bushels) }
\end{array} \
\hline \$ 2 & 40,000 & 0 \
\hline 4 & 36,000 & 4,000 \
\hline 6 & 30,000 & 8,000 \
\hline 8 & 24,000 & 16,000 \
\hline 10 & 20,000 & 20,000 \
\hline 12 & 18,000 & 28,000 \
\hline 14 & 12,000 & 36,000 \
\hline 16 & 6,000 & 40,000 \
\hline
\end{array}$$
-Refer to Table 3-6.The table contains information about the sorghum market.Use the table to answer the following questions.
a.What are the equilibrium price and quantity of sorghum?
b.Suppose the prevailing price is $6 per bushel.Is there a shortage or a surplus in the market?
c.What is the quantity of the shortage or surplus?
d.How many bushels will be sold if the market price is $6 per bushel?
e.If the market price is $6 per bushel,what must happen to restore equilibrium in the market?
f.At what price will suppliers be able to sell 36,000 bushels of sorghum?
g.Suppose the market price is $14 per bushel.Is there a shortage or a surplus in the market?
h.What is the quantity of the shortage or surplus?
i.How many bushels will be sold if the market price is $14 per bushel?
j.If the market price is $14 per bushel,what must happen to restore equilibrium in the market?

Accepted Answer

a.Equilibrium price = $10;Equilibrium qu

Question 19

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

Accepted Answer

A) The supply of Lincoln letters would have to be less than the supply of Booth letters. 
B) The supply of Booth letters would have to be less than the supply of Lincoln letters. 
C) The supply of Lincoln letters and the supply of Booth letters would have to be equal. 
D) If the demand for Lincoln letters is greater than the demand for Booth letters,the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters. 
A) The supply of Lincoln letters would have to be less than the supply of Booth letters. 
B) The supply of Booth letters would have to be less than the supply of Lincoln letters. 
C) The supply of Lincoln letters and the supply of Booth letters would have to be equal. 
D) If the demand for Lincoln letters is greater than the demand for Booth letters,the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters.

Question 20

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Accepted Answer

A) an increase in the price of soybeans 
B) a decrease in the price of corn 
C) an increase in the demand for corn 
D) an increase in the price of soybean seeds 
A) an increase in the price of soybeans 
B) a decrease in the price of corn 
C) an increase in the demand for corn 
D) an increase in the price of soybean seeds

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

Figure 3-4 -Refer to Figure 3-4.At a price of $20,how many units will be supplied?

Which of the following describes a characteristic of a perfectly competitive market?

Olive oil producers want to sell more olive oil at a higher price.Which of the following events would have this effect?

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

It is possible for a market for a good to experience a surplus and a shortage at the same time.

Which of the following generation categories has the smallest population in the United States in 2015?

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve.As a result

By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis,economists assume that the most important determinant of the demand for a good is the ________ of the good.

Which of the following is evidence of a surplus of bananas?

As the number of firms in a market decreases,the supply curve will shift to the left and the equilibrium price will fall.

Orange juice drinkers want to consume more orange juice at a lower price.Which of the following events would have this effect?

A supply schedule

If in the market for oranges the supply has increased,then

A surplus occurs when the actual selling price is above the market equilibrium price.

An increase in the price of off-road vehicles will result in

Figure 3-2 -Refer to Figure 3-2.An increase in the expected future price of the product would be represented by a movement from

Figure 3-1 -Refer to Figure 3-1.An increase in the price of a substitute would be represented by a movement from

If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth,what would have to be true for the market equilibrium prices for these letters to be equal?

Farmers can plant either corn or soybeans in their fields.Which of the following would cause the supply of soybeans to increase?

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

By drawing a demand curve with on the vertical axis and on the horizontal axis,economists assume that the most important determinant of the demand for a good is the of the good.