Question 1

Liam is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of

Accepted Answer

A)  consumer surplus.
B)  employment discrimination.
C)  producer surplus.
D)  the derivation of accounting profit.

Question 2

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

Accepted Answer

This is a version of the old economics j...

Question 3

If coffee and cream are complements, an increase in the price of coffee will cause

Accepted Answer

A)  the demand for cream to increase.
B)  the demand for cream to fall.
C)  the demand for coffee to fall.
D)  no change in the demand for cream; only quantity demanded would be affected.

Question 4

Table 3-2
 
-Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

Accepted Answer

A)  $3,700.
B)  $2,700.
C)  $2,250.
D)  $1,500.

Question 5

Table 3-1
 
-Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

Accepted Answer

A)  $-10.
B)  $-6.
C)  $20.
D)  $30.

Question 6

Use the figure below to answer the following question(s) .
Figure 3-13 
-Refer to Figure 3-13. The market for margarine was initially in equilibrium at point

Accepted Answer

A)  r.
B)  s.
C)  t.
D)  u.
E)  Other things constant, a decrease in the price of butter, a close substitute for margarine, would likely move the equilibrium in this market toward point

Question 7

Figure 3-10 
-Figure 3-10 illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity.

Accepted Answer

A)  price, $20; quantity, 2,000
B)  price, $15; quantity, 3,000
C)  price, $10; quantity, 2,000
D)  price, $10; quantity, 4,000

Question 8

Suppliers recognize there is a shortage in the market for their product when they notice that

Accepted Answer

A)  the quantity supplied exceeds the quantity demanded.
B)  the quantity demanded is falling.
C)  inventories are falling.
D)  production exceeds new orders for the product.
E)  government economists announce a shortage exists.

Question 9

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Accepted Answer

A)  demand curve for grapes to shift to the right, resulting in a higher equilibrium price for grapes and a reduction in the quantity consumed.
B)  demand curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and an increase in the quantity consumed.
C)  supply curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and a decrease in the quantity consumed.
D)  supply curve for grapes to shift to the left, resulting in a higher equilibrium price for grapes and a decrease in the quantity consumed.

Question 10

The total economic cost of producing a good or service is called the

Accepted Answer

A)  comparative value of construction.
B)  social consequence of resources.
C)  marginal valuation of output.
D)  opportunity cost of production.

Question 11

Susan says, "If the price of wool coats goes up, suppliers will offer more of the coats for sale." Brad replies, "It takes three months to harvest wool and employ all the steps necessary to produce a wool coat. Quantity supplied cannot possibly increase for three months." Is Brad correct? Why or why not?

Accepted Answer

Brad is correct in noting the supply of ...

Question 12

Figure 3-20 
-Refer to Figure 3-20. At the equilibrium price, producer surplus is

Accepted Answer

A)  $480.
B)  $640.
C)  $1,120.
D)  $1,280.

Question 13

Ceteris paribus, a decrease in the price of a good will cause the

Accepted Answer

A)  quantity demanded of the good to decrease.
B)  quantity supplied of the good to increase.
C)  producer surplus derived from the good to decrease.
D)  supply of the good to decrease.

Question 14

When there is excess demand for a product in a market,

Accepted Answer

A)  price will tend to fall.
B)  price must be below the equilibrium price.
C)  price must be above the equilibrium price.
D)  producers will reduce output and sales will fall.

Question 15

A recent editorial in a local newspaper argues, "Consumers need to know more about products than just their price. They need to know how these prices are determined, who owns the businesses, and the wages of the workers." Is the editorial writer correct? Why or why not?

Accepted Answer

What is missing from the editorial is a ...

Question 16

If air travel and bus travel are substitutes,

Accepted Answer

A)  an increase in the price of bus travel will decrease the demand for air travel.
B)  a decrease in the price of bus travel will decrease the demand for air travel.
C)  an increase in the price of bus travel will generally have no effect on the demand for air travel.
D)  an increase in the price of bus travel will shift the demand curve for air travel to the left.

Question 17

Suppose the demand for tacos decreases. What will happen to producer surplus in the market for tacos?

Accepted Answer

A)  It increases.
B)  It decreases.
C)  It remains unchanged.
D)  It may increase, decrease, or remain unchanged.

Question 18

If consumer purchases of a good are not very sensitive to the price of the good, this is illustrated by a

Accepted Answer

A)  demand curve that is relatively flat (more horizontal) .
B)  demand curve that is relatively steep (more vertical) .
C)  supply curve that is relatively flat (more horizontal) .
D)  supply curve that is relatively steep (more vertical) .

Question 19

Figure 3-20 
-Refer to Figure 3-20. If 110 units of the good are being bought and sold, then

Accepted Answer

A)  the cost to sellers is equal to the value to buyers.
B)  the value to buyers is greater than the cost to sellers.
C)  the cost to sellers is greater than the value to buyers.
D)  producer surplus is greater than consumer surplus.

Question 20

Other things constant, a decrease in consumer income will

Accepted Answer

A)  decrease the demand for large-screen television sets.
B)  increase the demand for large-screen television sets.
C)  cause a movement along the demand curve for large-screen television sets, but it will not shift the demand curve.
D)  have no impact on the quantity demanded or the demand curve for large-screen television sets.

Exam 3: Demand, Supply, and the Market Process

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

Correct Answer
verified
This is a version of the old economics j...
View Answer

Use the figure below to answer the following question(s) . Figure 3-13 -Refer to Figure 3-13. The market for margarine was initially in equilibrium at point

Correct Answer
verified

Suppose the demand for tacos decreases. What will happen to producer surplus in the market for tacos?

Correct Answer
verified

A recent editorial in a local newspaper argues, "Consumers need to know more about products than just their price. They need to know how these prices are determined, who owns the businesses, and the wages of the workers." Is the editorial writer correct? Why or why not?

Correct Answer
verified
What is missing from the editorial is a ...
View Answer

Table 3-2 -Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

Correct Answer
verified

If consumer purchases of a good are not very sensitive to the price of the good, this is illustrated by a

Correct Answer
verified

If air travel and bus travel are substitutes,

Correct Answer
verified

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Correct Answer
verified

Figure 3-20 -Refer to Figure 3-20. At the equilibrium price, producer surplus is

Correct Answer
verified

Suppliers recognize there is a shortage in the market for their product when they notice that

Correct Answer
verified

Correct Answer
verified
Brad is correct in noting the supply of ...
View Answer

Ceteris paribus, a decrease in the price of a good will cause the

Correct Answer
verified

Table 3-1 -Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

Correct Answer
verified

Figure 3-10 -Figure 3-10 illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity.

Correct Answer
verified

Liam is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of

Correct Answer
verified

When there is excess demand for a product in a market,

Correct Answer
verified

Other things constant, a decrease in consumer income will

Correct Answer
verified

The total economic cost of producing a good or service is called the

Correct Answer
verified

If coffee and cream are complements, an increase in the price of coffee will cause

Correct Answer
verified

Figure 3-20 -Refer to Figure 3-20. If 110 units of the good are being bought and sold, then

Correct Answer
verified

Exam 3: Demand, Supply, and the Market Process

Two students are walking by a department store window that has on display a $400 dress. The English major declares, "I want that dress but can't afford it." The economics major replies, "No, you don't." Explain the logic of this reply.

Correct AnswerverifiedThis is a version of the old economics j...View AnswerShow Answer

Use the figure below to answer the following question(s) . Figure 3-13 -Refer to Figure 3-13. The market for margarine was initially in equilibrium at point

Correct AnswerverifiedShow Answer

Suppose the demand for tacos decreases. What will happen to producer surplus in the market for tacos?

Correct AnswerverifiedShow Answer

A recent editorial in a local newspaper argues, "Consumers need to know more about products than just their price. They need to know how these prices are determined, who owns the businesses, and the wages of the workers." Is the editorial writer correct? Why or why not?

Correct AnswerverifiedWhat is missing from the editorial is a ...View AnswerShow Answer

Table 3-2 -Refer to Table 3-2. If the market price is $1,100, the combined total cost of all participating sellers is

Correct AnswerverifiedShow Answer

If consumer purchases of a good are not very sensitive to the price of the good, this is illustrated by a

Correct AnswerverifiedShow Answer

If air travel and bus travel are substitutes,

Correct AnswerverifiedShow Answer

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the

Correct AnswerverifiedShow Answer

Figure 3-20 -Refer to Figure 3-20. At the equilibrium price, producer surplus is

Correct AnswerverifiedShow Answer

Suppliers recognize there is a shortage in the market for their product when they notice that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedBrad is correct in noting the supply of ...View AnswerShow Answer

Ceteris paribus, a decrease in the price of a good will cause the

Correct AnswerverifiedShow Answer

Table 3-1 -Refer to Table 3-1. If the table represents the willingness to pay of four buyers and the price of the product is $30, then their total consumer surplus is

Correct AnswerverifiedShow Answer

Figure 3-10 -Figure 3-10 illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity.

Correct AnswerverifiedShow Answer

Liam is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of

Correct AnswerverifiedShow Answer

When there is excess demand for a product in a market,

Correct AnswerverifiedShow Answer

Other things constant, a decrease in consumer income will

Correct AnswerverifiedShow Answer

The total economic cost of producing a good or service is called the

Correct AnswerverifiedShow Answer

If coffee and cream are complements, an increase in the price of coffee will cause

Correct AnswerverifiedShow Answer

Figure 3-20 -Refer to Figure 3-20. If 110 units of the good are being bought and sold, then

Correct AnswerverifiedShow Answer

Correct Answer
verified
This is a version of the old economics j...
View Answer

Correct Answer
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Correct Answer
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verified
What is missing from the editorial is a ...
View Answer

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verified

Correct Answer
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Correct Answer
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Correct Answer
verified
Brad is correct in noting the supply of ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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