Question 1

Figure 4.2.1
Market Demand and Supply for Pet Rocks
  
-Look at Figure 4.2.1. There is a shortage if the price is

Accepted Answer

A)  $7. 
B)  $4. 
C)  $5. 
D)  below $4. 
E)  above $4. 
A)  $7. 
B)  $4. 
C)  $5. 
D)  below $4. 
E)  above $4.

Question 2

Businesses adjust prices more frequently than they adjust quantities.

Accepted Answer

A) True 
 B)False

Question 3

Without property rights there would be no incentive to produce and sell products.

Accepted Answer

A) True 
 B)False

Question 4

Producer surplus is the

Accepted Answer

A)  the difference between the maximum price consumers are willing and able to pay and the minimum price producers are willing to accept. 
B)  the difference between the maximum price consumers are willing and able to pay and the price actually paid to producers. 
C)  the difference between the amount a producer is willing to accept and the price actually received. 
D)  the area above the marginal cost curve. 
E)  the total amount producers received for a product. 
A)  the difference between the maximum price consumers are willing and able to pay and the minimum price producers are willing to accept. 
B)  the difference between the maximum price consumers are willing and able to pay and the price actually paid to producers. 
C)  the difference between the amount a producer is willing to accept and the price actually received. 
D)  the area above the marginal cost curve. 
E)  the total amount producers received for a product.

Question 5

When a market is in equilibrium, businesses that are not willing to supply products or services at the market-clearing price have not made a smart choice.

Accepted Answer

A) True 
 B)False

Question 6

Prices are the outcome of a market process of competing bids and offers.

Accepted Answer

A) True 
 B)False

Question 7

If buyers expect the price of gasoline will be higher in the future, the price of gasoline today ________ and the quantity supplied today ________.

Accepted Answer

A)  falls; increases 
B)  rises; decreases 
C)  falls; is unaffected 
D)  rises; increases 
E)  falls; decreases 
A)  falls; increases 
B)  rises; decreases 
C)  falls; is unaffected 
D)  rises; increases 
E)  falls; decreases

Question 8

When demand increases,

Accepted Answer

A)  price rises and quantity supplied increases. 
B)  price falls and quantity supplied decreases. 
C)  price falls with no change in supply. 
D)  supply increases so that price remains the same. 
E)  supply decreases and price rises. 
A)  price rises and quantity supplied increases. 
B)  price falls and quantity supplied decreases. 
C)  price falls with no change in supply. 
D)  supply increases so that price remains the same. 
E)  supply decreases and price rises.

Question 9

A shortage is the amount by which quantity

Accepted Answer

A)  demanded exceeds quantity supplied. 
B)  supplied exceeds quantity demanded. 
C)  demanded increases when the price rises. 
D)  demanded exceeds the equilibrium quantity. 
E)  supplied exceeds the equilibrium quantity. 
A)  demanded exceeds quantity supplied. 
B)  supplied exceeds quantity demanded. 
C)  demanded increases when the price rises. 
D)  demanded exceeds the equilibrium quantity. 
E)  supplied exceeds the equilibrium quantity.

Question 10

Producer surplus is the area under the marginal benefit curve but above the market price.

Accepted Answer

A) True 
 B)False

Question 11

When supply decreases,

Accepted Answer

A)  price falls with no change in quantity demanded. 
B)  price rises and quantity demanded decreases. 
C)  price falls and quantity demanded increases. 
D)  demand decreases so that price remains the same. 
E)  price rises and demand increases. 
A)  price falls with no change in quantity demanded. 
B)  price rises and quantity demanded decreases. 
C)  price falls and quantity demanded increases. 
D)  demand decreases so that price remains the same. 
E)  price rises and demand increases.

Question 12

At an efficient market outcome,

Accepted Answer

A)  consumer surplus exceeds producer surplus. 
B)  producer surplus exceeds consumer surplus. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  marginal benefit is maximized. 
E)  the sum of consumer surplus and producer surplus is minimized. 
A)  consumer surplus exceeds producer surplus. 
B)  producer surplus exceeds consumer surplus. 
C)  the sum of consumer surplus and producer surplus is maximized. 
D)  marginal benefit is maximized. 
E)  the sum of consumer surplus and producer surplus is minimized.

Question 13

Table 4.2.2.
-Look at Table 4.2.2. Consumers learn that the rubber ducks wear out batteries quickly. As a result, demand decreases by 100 rubber ducks at each price. At the same time, input prices rise and supply decreases by 100 rubber ducks at each price. The new equilibrium price is $________ and the new equilibrium quantity is ________ rubber ducks.

Accepted Answer

A)  70; 450 
B)  70; 350 
C)  50; 450 
D)  50; 350 
E)  60; 300 
A)  70; 450 
B)  70; 350 
C)  50; 450 
D)  50; 350 
E)  60; 300

Question 14

If the price of gasoline rises, the price of automobiles should also rise because gasoline and automobiles are complementary products.

Accepted Answer

A) True 
 B)False

Question 15

Shortages create incentives for businesses to make quantity adjustments even when prices don't change.

Accepted Answer

A) True 
 B)False

Question 16

If enrollment at your school decreases even though tuition fees fall, it is likely that

Accepted Answer

A)  your instructors are boring. 
B)  demand decreased. 
C)  demand increased. 
D)  supply decreased. 
E)  supply increased. 
A)  your instructors are boring. 
B)  demand decreased. 
C)  demand increased. 
D)  supply decreased. 
E)  supply increased.

Question 17

If the price of gasoline rises, the price of automobiles should fall because gasoline and automobiles are complementary products.

Accepted Answer

A) True 
 B)False

Question 18

When the price is too low, shortages cause the price to fall further.

Accepted Answer

A) True 
 B)False

Question 19

Sellers compete against buyers in the marketplace.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4.3.1
Market for Espresso Shots
    
-Look at Table 4.3.1. Drought destroys many coffee plants, causing half of the espresso businesses to go out of business. This change is a

Accepted Answer

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

Figure 4.2.1 Market Demand and Supply for Pet Rocks -Look at Figure 4.2.1. There is a shortage if the price is

Businesses adjust prices more frequently than they adjust quantities.

Without property rights there would be no incentive to produce and sell products.

Producer surplus is the

When a market is in equilibrium, businesses that are not willing to supply products or services at the market-clearing price have not made a smart choice.

Prices are the outcome of a market process of competing bids and offers.

If buyers expect the price of gasoline will be higher in the future, the price of gasoline today and the quantity supplied today .

When demand increases,

A shortage is the amount by which quantity

Producer surplus is the area under the marginal benefit curve but above the market price.

When supply decreases,

At an efficient market outcome,

If the price of gasoline rises, the price of automobiles should also rise because gasoline and automobiles are complementary products.

Shortages create incentives for businesses to make quantity adjustments even when prices don't change.

If enrollment at your school decreases even though tuition fees fall, it is likely that

If the price of gasoline rises, the price of automobiles should fall because gasoline and automobiles are complementary products.

When the price is too low, shortages cause the price to fall further.

Sellers compete against buyers in the marketplace.

Figure 4.3.1 Market for Espresso Shots -Look at Table 4.3.1. Drought destroys many coffee plants, causing half of the espresso businesses to go out of business. This change is a

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

Exam 4: Coordinating Smart Choices: Demand and Supply

Figure 4.2.1 Market Demand and Supply for Pet Rocks -Look at Figure 4.2.1. There is a shortage if the price is

Businesses adjust prices more frequently than they adjust quantities.

Without property rights there would be no incentive to produce and sell products.

Producer surplus is the

When a market is in equilibrium, businesses that are not willing to supply products or services at the market-clearing price have not made a smart choice.

Prices are the outcome of a market process of competing bids and offers.

If buyers expect the price of gasoline will be higher in the future, the price of gasoline today ________ and the quantity supplied today ________.

When demand increases,

A shortage is the amount by which quantity

Producer surplus is the area under the marginal benefit curve but above the market price.

When supply decreases,

At an efficient market outcome,

If the price of gasoline rises, the price of automobiles should also rise because gasoline and automobiles are complementary products.

Shortages create incentives for businesses to make quantity adjustments even when prices don't change.

If enrollment at your school decreases even though tuition fees fall, it is likely that

If the price of gasoline rises, the price of automobiles should fall because gasoline and automobiles are complementary products.

When the price is too low, shortages cause the price to fall further.

Sellers compete against buyers in the marketplace.

Figure 4.3.1 Market for Espresso Shots -Look at Table 4.3.1. Drought destroys many coffee plants, causing half of the espresso businesses to go out of business. This change is a

Whats in Economics for You Scarcity, Opportunity Cost, Trade, and Models

Making Smart Choices: the Law of Demand

Show Me the Money: the Law of Supply

Are Your Smart Choices Smart for All Macroeconomics and Microeconomics

Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

Costs of Not Working and Living: Unemployment and Inflation

Skating to Where the Puck Is Going: Aggregate Supply and Aggregate Demand

Money Is for Lunatics: Demanders and Suppliers of Money

Trading Dollars for Dollars Exchange Rates and Payments With the Rest of the World

Steering Blindly Monetary Policy and the Bank of Canada

Spending Others Money: Fiscal Policy, Deficits, and National Debt

Are Sweatshops All Bad Globalization and Trade Policy

Filters

If buyers expect the price of gasoline will be higher in the future, the price of gasoline today and the quantity supplied today .