Question 1

Exhibit 3-1
 
-Refer to Exhibit 3-1.At a price of $6 there is a

Accepted Answer

A)   surplus of 100 units.
B)   surplus of 150 units.
C)   surplus of 200 units.
D)   shortage of 150 units.
E)   shortage of 200 units.

Question 2

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Accepted Answer

A)   a fall in the price of peanuts
B)   a rise in the price of peanuts
C)   a rise in income, assuming that peanut butter is an inferior good
D)   a shift in preferences toward peanut butter
E)   none of the above

Question 3

Demand takes into account goods,but not services.

Accepted Answer

A) True 
 B)False

Question 4

When P = $65,the quantity demanded of a good is 80 units,and the quantity supplied of the good is 40 units. For every $10 increase in the price of this good,quantity demanded falls by 10 units and quantity supplied rises by 10 units. The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.

Accepted Answer

A)   $55; 30
B)   $75; 50
C)   $75; 70
D)   $85; 50
E)   $85; 60

Question 5

Exhibit 3-4
 
-Refer to Exhibit 3-4.A price of $4 in the market will result in a

Accepted Answer

A)   shortage of 10 units.
B)   surplus of 10 units.
C)   surplus of 5 units.
D)   shortage of 5 units.
E)   none of the above

Question 6

The equilibrium price in market A is $24.The current price in market A is $21.At this price,a(n) ________________________ exists in market A.

Accepted Answer

A)   surplus
B)   shortage
C)   excess supply
D)   excess demand
E)   b and d

Question 7

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

Accepted Answer

A change in supply results from a change...

Question 8

Exhibit 3-8
 
-Refer to Exhibit 3-8.A shortage exists at any price below

Accepted Answer

A)   $5.00.
B)   $4.50.
C)   $4.00.
D)   $3.50.
E)   $3.00.

Question 9

Exhibit 3-8
 
-Refer to Exhibit 3-8.Equilibrium price and quantity are

Accepted Answer

A)   $3 and 25 units.
B)   $3 and 15 units.
C)   $5 and 15 units.
D)   $5 and 25 units.
E)   $1 and 25 units.

Question 10

One major reason for the law of demand is that

Accepted Answer

A)   one price changing requires at least one other price to change in the opposite direction.
B)   people substitute relatively lower-priced goods for relatively higher-priced goods.
C)   a higher price never reduces quantity demanded by enough to lower total revenue.
D)   people are willing to produce more units at a higher price.

Question 11

Which of the following statements is false?

Accepted Answer

A)   At equilibrium in a market, scarcity does not exist.
B)   If there is a shortage of 100 units at a price of $2 per unit, the shortage will be greater than 100 units at a price of $1 per unit.
C)   If there is a surplus of 30 units at a price of $3, the surplus will be less than 30 units (or even nonexistent)  at a price of $2.
D)   If there is a surplus, suppliers will not be able to sell all they had hoped to sell at a particular price.

Question 12

In the market for good X there are three buyers,Adam,Bill,and Carolyn.Adam buys 3 units of good X at $4,Bill buys 7 units of good X at $4,and Carolyn buys 8 units of good X at $4.A point on the market demand curve consists of the following price-quantity combination:

Accepted Answer

A)   $4, 10
B)   $4, 18
C)   $4, 15
D)   $5, 8
E)   none of the above

Question 13

As the price of good X rises,the demand for good Y falls.Therefore,goods X and Y are

Accepted Answer

A)   substitutes.
B)   normal goods.
C)   complements.
D)   inferior goods.
E)   none of the above

Question 14

Exhibit 3-11
 
-Refer to Exhibit 3-12. Fill in blanks (A) and (B) respectively with the market quantity supplied at each given price.

Accepted Answer

A)   12.25; 14.75
B)   49; 59
C)   37; 45
D)   39; 49
E)   none of the above

Question 15

Which economic concept is the reason behind Disney World's pricing policy involving discounts for multiple-day passes?

Accepted Answer

A)   the law of supply
B)   the law of increasing opportunity cost
C)   the law of diminishing marginal returns
D)   the law of diminishing marginal utility

Question 16

Exhibit 3-11
 
-Refer to Exhibit 3-12. Fill in blanks (E) and (F) respectively with the market quantity supplied at given each price.

Accepted Answer

A)   24.75; 32.75
B)   47; 52
C)   99; 131
D)   48; 65
E)   none of the above

Question 17

Exhibit 3-16
 
-Refer to Exhibit 3-16.Which of the following is false?

Accepted Answer

A)   Graph (1) : There is a shortage of this good when the price is equal to P3.
B)   Graph (2) : As supply increases, equilibrium quantity remains constant.
C)   Graph (3) : As demand increases, equilibrium price remains constant.
D)   Graph (4) : As supply changes, equilibrium price stays the same.

Question 18

Exhibit 3-16
 
-Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph

Accepted Answer

A)   (1) , with P* = P1.
B)   (2) , with P* = P3.
C)   (3) , with P* = P2.
D)   (3) , with P* = P3.
E)   (4) , with P* = P1.

Question 19

An increase in the number of sellers will,ceteris paribus,

Accepted Answer

A)   increase equilibrium price and quantity.
B)   increase equilibrium price and decrease equilibrium quantity.
C)   decrease equilibrium price and increase equilibrium quantity.
D)   decrease equilibrium price and quantity.
E)   increase demand.

Question 20

There are two universities,A and B,in a city.Tuition rises at University A and,as a result,the demand for attending University B rises.It follows that educational services at the two universities are

Accepted Answer

A)   complements.
B)   normal goods.
C)   inferior goods.
D)   substitutes.
E)   none of the above

Exam 3: Supply and Demand: Theory

Exhibit 3-16 -Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph

Correct Answer
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Demand takes into account goods,but not services.

Correct Answer
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In the market for good X there are three buyers,Adam,Bill,and Carolyn.Adam buys 3 units of good X at $4,Bill buys 7 units of good X at $4,and Carolyn buys 8 units of good X at $4.A point on the market demand curve consists of the following price-quantity combination:

Correct Answer
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Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $6 there is a

Correct Answer
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Exhibit 3-8 -Refer to Exhibit 3-8.Equilibrium price and quantity are

Correct Answer
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One major reason for the law of demand is that

Correct Answer
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As the price of good X rises,the demand for good Y falls.Therefore,goods X and Y are

Correct Answer
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Which of the following statements is false?

Correct Answer
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Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

Correct Answer
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A change in supply results from a change...
View Answer

Exhibit 3-11 -Refer to Exhibit 3-12. Fill in blanks (E) and (F) respectively with the market quantity supplied at given each price.

Correct Answer
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The equilibrium price in market A is $24.The current price in market A is $21.At this price,a(n) ________________________ exists in market A.

Correct Answer
verified

An increase in the number of sellers will,ceteris paribus,

Correct Answer
verified

There are two universities,A and B,in a city.Tuition rises at University A and,as a result,the demand for attending University B rises.It follows that educational services at the two universities are

Correct Answer
verified

Exhibit 3-11 -Refer to Exhibit 3-12. Fill in blanks (A) and (B) respectively with the market quantity supplied at each given price.

Correct Answer
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Which economic concept is the reason behind Disney World's pricing policy involving discounts for multiple-day passes?

Correct Answer
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Exhibit 3-4 -Refer to Exhibit 3-4.A price of $4 in the market will result in a

Correct Answer
verified

Exhibit 3-16 -Refer to Exhibit 3-16.Which of the following is false?

Correct Answer
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Exhibit 3-8 -Refer to Exhibit 3-8.A shortage exists at any price below

Correct Answer
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In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Correct Answer
verified

Correct Answer
verified

Exam 3: Supply and Demand: Theory

Exhibit 3-16 -Refer to Exhibit 3-16.If there are empty seats for a basketball game at the price P*,the situation is best depicted on graph

Correct AnswerverifiedShow Answer

Demand takes into account goods,but not services.

Correct AnswerverifiedShow Answer

In the market for good X there are three buyers,Adam,Bill,and Carolyn.Adam buys 3 units of good X at $4,Bill buys 7 units of good X at $4,and Carolyn buys 8 units of good X at $4.A point on the market demand curve consists of the following price-quantity combination:

Correct AnswerverifiedShow Answer

Exhibit 3-1 -Refer to Exhibit 3-1.At a price of $6 there is a

Correct AnswerverifiedShow Answer

Exhibit 3-8 -Refer to Exhibit 3-8.Equilibrium price and quantity are

Correct AnswerverifiedShow Answer

One major reason for the law of demand is that

Correct AnswerverifiedShow Answer

As the price of good X rises,the demand for good Y falls.Therefore,goods X and Y are

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Explain the difference between a change in supply and a change in quantity supplied.Be sure to state what causes each to change and how they differ when graphed.

Correct AnswerverifiedA change in supply results from a change...View AnswerShow Answer

Exhibit 3-11 -Refer to Exhibit 3-12. Fill in blanks (E) and (F) respectively with the market quantity supplied at given each price.

Correct AnswerverifiedShow Answer

The equilibrium price in market A is $24.The current price in market A is $21.At this price,a(n) ________________________ exists in market A.

Correct AnswerverifiedShow Answer

An increase in the number of sellers will,ceteris paribus,

Correct AnswerverifiedShow Answer

There are two universities,A and B,in a city.Tuition rises at University A and,as a result,the demand for attending University B rises.It follows that educational services at the two universities are

Correct AnswerverifiedShow Answer

Exhibit 3-11 -Refer to Exhibit 3-12. Fill in blanks (A) and (B) respectively with the market quantity supplied at each given price.

Correct AnswerverifiedShow Answer

Which economic concept is the reason behind Disney World's pricing policy involving discounts for multiple-day passes?

Correct AnswerverifiedShow Answer

Exhibit 3-4 -Refer to Exhibit 3-4.A price of $4 in the market will result in a

Correct AnswerverifiedShow Answer

Exhibit 3-16 -Refer to Exhibit 3-16.Which of the following is false?

Correct AnswerverifiedShow Answer

Exhibit 3-8 -Refer to Exhibit 3-8.A shortage exists at any price below

Correct AnswerverifiedShow Answer

In the supply-and-demand diagram of the market for peanut butter,the equilibrium point has moved up and to the right.What could have caused this?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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A change in supply results from a change...
View Answer

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