Question 1

Figure 3-19
 
-Refer to Figure 3-19. Buyers who value this good more than price are represented by which line segment?

Accepted Answer

A)   AC
B)   CE
C)   BC
D)   CD

Question 2

Suppose a person defects from Cuba (a country that generally disregards the use of markets) to the United States and asks to see a market in action. Where would you take her? Did you give her a complete showing of this market?

Accepted Answer

Most students will provide Answers such ...

Question 3

Use the figure below to answer the following question(s) .
Figure 3-9
 
-Given the demand (D)  and supply (S)  for gasoline in Figure 3-9, if the price of gasoline were $3 per gallon,

Accepted Answer

A)   consumers would wish to purchase more than was being supplied.
B)   producers would be supplying more than consumers wished to purchase.
C)   the quantity consumers wished to purchase would equal the quantity that producers wished to supply.
D)   there would be a tendency for the price of gasoline to rise.

Question 4

Which of the following would most likely increase the price of automobiles?

Accepted Answer

A)   a decrease in the price of steel used to produce automobiles
B)   an increase in the price of gasoline
C)   a decrease in consumer income
D)   the United Auto Workers union obtaining a substantial wage increase for auto workers

Question 5

Figure 3-22

-Refer to Figure 3-22. Which of the four graphs represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Accepted Answer

A)   A
B)   B
C)   C
D)   D

Question 6

Market prices are

Accepted Answer

A)   conveyors of information.
B)   determined by the interactions of supply and demand in voluntary exchange.
C)   indicators of the relative scarcity of resources and products.
D)   all of the above.

Question 7

Use the figure below to answer the following question(s) .
Figure 3-9
 
-Given the demand (D)  and supply (S)  for gasoline in Figure 3-9, if the price of gasoline were $1 per gallon,

Accepted Answer

A)   consumers would wish to purchase more than was being supplied.
B)   producers would be supplying more than consumers wished to purchase.
C)   the quantity consumers wished to purchase would equal the quantity that producers wished to supply.
D)   there would be a tendency for the price of gasoline to fall.

Question 8

Figure 3-15
 
-Refer to Figure 3-15. Which area represents the increase in producer surplus when the price rises from P₁ to P₂?

Accepted Answer

A)   BCE
B)   ACF
C)   ABED
D)   AFEB

Question 9

Figure 3-22

-Refer to Figure 3-22. Graph A shows which of the following?

Accepted Answer

A)   An increase in demand and an increase in quantity supplied.
B)   An increase in demand and an increase in supply.
C)   An increase in quantity demanded and an increase in quantity supplied.
D)   An increase in supply and an increase in quantity demanded.

Question 10

Figure 3-15
 
-Refer to Figure 3-15. Which area represents producer surplus when the price is P₂?

Accepted Answer

A)   BCE
B)   ACF
C)   ABED
D)   AFEB

Question 11

Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?

Accepted Answer

A)   a decrease in the demand for oranges
B)   an increase in the supply of oranges
C)   an increase in the quantity of oranges bought and sold
D)   an increase in the price of oranges

Question 12

A decrease in the supply of a good will

Accepted Answer

A)   decrease the demand for the good.
B)   cause the price of the good to fall.
C)   lead to an increase in the price of the good.
D)   increase the quantity of the good bought and sold.

Question 13

"He [the producer] intends only his gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." What is the "invisible hand" referred to in this statement?

Accepted Answer

A)   the elasticity of the market demand curve
B)   the power of government when decisions are made democratically
C)   the guidelines and regulations set for his industry by the government
D)   the incentive structure accompanying market prices

Question 14

In his book The Wealth of Nations, this famous economist argued that economic activity was directed by an "invisible hand."

Accepted Answer

A)   Alfred Marshall
B)   Milton Friedman
C)   Adam Smith
D)   David Ricardo

Question 15

Figure 3-16
 
-Refer to Figure 3-16. When the price is P₁, producer surplus is

Accepted Answer

A)   A.
B)   C.
C)   A + B.
D)   C + D.

Question 16

John advertises his used car for $3,000 in the newspaper. He would be willing to sell his used car for as low as $2,000. He is offered $2,600 for it from a buyer and accepts it. In this trade, John receives

Accepted Answer

A)   producer surplus of $3,000.
B)   producer surplus of $2,600.
C)   producer surplus of $600.
D)   consumer surplus of $400.

Question 17

Suppose both the equilibrium price and quantity fall for a particular product. Which of the following best explains this situation?

Accepted Answer

A)   Supply and demand simultaneously increased and the shift in supply was greater than the shift in demand.
B)   Supply and demand simultaneously increased and the shift in supply was less than the shift in demand.
C)   Supply and demand simultaneously decreased and the shift in supply was greater than the shift in demand.
D)   Supply and demand simultaneously decreased and the shift in supply was less than the shift in demand.

Question 18

Figure 3-18
 
-Refer to Figure 3-18. Which area represents the increase in consumer surplus when the price falls from P₁ to P₂?

Accepted Answer

A)   ABD
B)   ACF
C)   DEF
D)   BCFD

Question 19

If we observe an increase in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by

Accepted Answer

A)   an increase in the supply of the good.
B)   an increase in the demand for the good.
C)   a decrease in the demand for the good.
D)   a decrease in the supply of the good.

Question 20

Figure 3-18
 
-Refer to Figure 3-18. When the price falls from P₁ to P₂, which area represents the increase in consumer surplus to existing buyers?

Accepted Answer

A)   ABD
B)   ACF
C)   BCED
D)   DEF

Exam 3: B : Supply, Demand, and the Market Process

Suppose both the equilibrium price and quantity fall for a particular product. Which of the following best explains this situation?

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Market prices are

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If we observe an increase in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by

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Figure 3-15 -Refer to Figure 3-15. Which area represents producer surplus when the price is P₂?

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Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?

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Figure 3-22 -Refer to Figure 3-22. Graph A shows which of the following?

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Use the figure below to answer the following question(s) . Figure 3-9 -Given the demand (D) and supply (S) for gasoline in Figure 3-9, if the price of gasoline were $1 per gallon,

Correct AnswerverifiedShow Answer

John advertises his used car for $3,000 in the newspaper. He would be willing to sell his used car for as low as $2,000. He is offered $2,600 for it from a buyer and accepts it. In this trade, John receives

Correct AnswerverifiedShow Answer

Which of the following would most likely increase the price of automobiles?

Correct AnswerverifiedShow Answer

In his book The Wealth of Nations, this famous economist argued that economic activity was directed by an "invisible hand."

Correct AnswerverifiedShow Answer

Suppose a person defects from Cuba (a country that generally disregards the use of markets) to the United States and asks to see a market in action. Where would you take her? Did you give her a complete showing of this market?

Correct AnswerverifiedMost students will provide Answers such ...View AnswerShow Answer

Figure 3-19 -Refer to Figure 3-19. Buyers who value this good more than price are represented by which line segment?

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A decrease in the supply of a good will

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Figure 3-15 -Refer to Figure 3-15. Which area represents the increase in producer surplus when the price rises from P₁ to P₂?

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Figure 3-18 -Refer to Figure 3-18. When the price falls from P₁ to P₂, which area represents the increase in consumer surplus to existing buyers?

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Figure 3-16 -Refer to Figure 3-16. When the price is P₁, producer surplus is

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Figure 3-22 -Refer to Figure 3-22. Which of the four graphs represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

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Figure 3-18 -Refer to Figure 3-18. Which area represents the increase in consumer surplus when the price falls from P₁ to P₂?

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Use the figure below to answer the following question(s) . Figure 3-9 -Given the demand (D) and supply (S) for gasoline in Figure 3-9, if the price of gasoline were $3 per gallon,

Correct AnswerverifiedShow Answer

"He [the producer] intends only his gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention." What is the "invisible hand" referred to in this statement?

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Most students will provide Answers such ...
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