Question 1

Exhibit 3-15 1. B)  there is a surplus of doctors at fee F1. C)  Q3 doctors are employed at fee F1. D)  Q2 doctors are employed at fee F1. E)  both a and c" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 3-15.In Exhibit 3-15,

Accepted Answer

A)   there is a shortage of doctors at fee F1.
B)   there is a surplus of doctors at fee F1.
C)   Q3 doctors are employed at fee F1.
D)   Q2 doctors are employed at fee F1.
E)   both a and c

Question 2

A vertical supply curve represents:

Accepted Answer

A)   an inverse relationship between price and quantity supplied.
B)   an independent relationship between price and quantity supplied.
C)   an independent relationship between price and supply.
D)   a direct relationship between price and quantity supplied.
E)   a direct relationship between price and supply.

Question 3

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

Accepted Answer

A) True 
 B)False

Question 4

Exhibit 3-5 1 to S2 could have been caused by A)  a decline in the number of buyers in the market. B)  a decline in the price of a substitute good. C)  a decrease in income (assuming the good is a normal good) . D)  the granting of a subsidy to the producer. E)  none of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S1 to S2 could have been caused by

Accepted Answer

A)   a decline in the number of buyers in the market.
B)   a decline in the price of a substitute good.
C)   a decrease in income (assuming the good is a normal good) .
D)   the granting of a subsidy to the producer.
E)   none of the above

Question 5

The fundamental reason why most supply curves are upward sloping is that

Accepted Answer

A)   consumers substitute lower-priced goods for higher-priced goods.
B)   the quantity supplied increases as more firms enter the market.
C)   a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated.
D)   higher production raises the opportunity costs of production and so price must rise to induce more output.

Question 6

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 7

Resource X is necessary to the production of good Y.If the price of resource X rises,the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y.

Accepted Answer

A)   supply;rightward;decrease;increase.
B)   demand;leftward;decrease;decrease
C)   demand;rightward;increase;increase
D)   supply;leftward;increase;decrease
E)   supply;leftward;increase;increase

Question 8

One can determine producers' surplus if the minimum selling price and the _____________ is known.

Accepted Answer

A)   price received
B)   price paid
C)   tax paid
D)   tax received
E)   a and c

Question 9

Exhibit 3-12
  Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market.
-Refer to Exhibit 3-12.Each individual seller's supply curve is ________________ sloping and the market supply curve is _________________ sloping.

Accepted Answer

A)   upward;also upward
B)   downward;also downward
C)   upward;downward
D)   downward;upward

Question 10

Exhibit 3-14
 
-Refer to Exhibit 3-14.At a price of $12,there is a ____________ unit ____________ of good X.

Accepted Answer

A)   195;shortage
B)   230;shortage
C)   195;surplus
D)   230;surplus
E)   180;shortage

Question 11

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 12

An "increase in demand" means that

Accepted Answer

A)   the demand curve has shifted to the left.
B)   price has declined and consumers want to purchase more of the good.
C)   the demand curve has shifted to the right.
D)   the price of the good can be expected to decline,assuming supply stays constant.

Question 13

Exhibit 3-16 1. B)  (2) ,with P* = P3. C)  (3) ,with P* = P2. D)  (3) ,with P* = P3. E)  (4) ,with P* = P1." class="answers-bank-image d-inline" rel="preload" >
-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 14

Which of the following is an example of a service?

Accepted Answer

A)   medical care
B)   dental care
C)   a psychology lecture
D)   a television set
E)   a,b and c

Question 15

A "decrease in demand" means that

Accepted Answer

A)   the demand curve has shifted to the left.
B)   price has declined and consumers want to purchase more of the good.
C)   the demand curve has shifted to the right.
D)   the price of the good can be expected to decline,assuming supply stays constant.

Question 16

One can determine the consumers' surplus if the _______________ is known

Accepted Answer

A)   tax paid
B)   maximum buying price
C)   price paid
D)   b and c
E)   a and b

Question 17

Economists state that the __________ utility a person receives from a unit of a good,the __________ the price he or she is willing to pay for it.

Accepted Answer

A)   more;lower
B)   more;higher
C)   less;higher
D)   less;lower
E)   b and d

Question 18

Exhibit 3-14
 
-Refer to Exhibit 3-14.At a price of $11,there is a ____________ unit ____________ of good X.

Accepted Answer

A)   290;shortage
B)   215;shortage
C)   40;surplus
D)   290;surplus
E)   230;shortage

Question 19

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right) ?

Accepted Answer

A)   Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and supply,ceteris paribus.
B)   Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and quantity supplied,ceteris paribus.
C)   Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and demand,ceteris paribus.
D)   Because a demand curve is the graphical representation of the law of demand,which specifies a direct relationship between price and demand,ceteris paribus.
E)   Because a demand curve is the graphical representation of the law of demand,which specifies an inverse relationship between price and quantity demanded,ceteris paribus.

Question 20

Which of the following pairs of goods would be most likely to be complements?

Accepted Answer

A)   butter and margarine.
B)   peanuts and peanut butter.
C)   DVD's and DVD players.
D)   hiking boots and tennis shoes.
E)   All of the above

Exam 3: Supply and Demand: Theory

Economists state that the __________ utility a person receives from a unit of a good,the __________ the price he or she is willing to pay for it.

Correct AnswerverifiedShow Answer

Which of the following is an example of a service?

Correct AnswerverifiedShow Answer

The fundamental reason why most supply curves are upward sloping is that

Correct AnswerverifiedShow Answer

Exhibit 3-14 -Refer to Exhibit 3-14.At a price of $12,there is a ____________ unit ____________ of good X.

Correct AnswerverifiedShow Answer

An "increase in demand" means that

Correct AnswerverifiedShow Answer

Exhibit 3-15 -Refer to Exhibit 3-15.In Exhibit 3-15,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A "decrease in demand" means that

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

Resource X is necessary to the production of good Y.If the price of resource X rises,the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y.

Correct AnswerverifiedShow Answer

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

Exhibit 3-12 Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Each individual seller's supply curve is ________________ sloping and the market supply curve is _________________ sloping.

Correct AnswerverifiedShow Answer

Exhibit 3-14 -Refer to Exhibit 3-14.At a price of $11,there is a ____________ unit ____________ of good X.

Correct AnswerverifiedShow Answer

Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S1 to S2 could have been caused by

Correct AnswerverifiedShow Answer

If price is on the vertical axis and quantity demanded is on the horizontal axis,why is a demand curve downward sloping (left to right) ?

Correct AnswerverifiedShow Answer

A vertical supply curve represents:

Correct AnswerverifiedShow Answer

One can determine the consumers' surplus if the _______________ is known

Correct AnswerverifiedShow Answer

If the quantity demanded of good X is greater than the quantity supplied of good X,then the market for good X is in disequilibrium.

Correct AnswerverifiedShow Answer

One can determine producers' surplus if the minimum selling price and the _____________ is known.

Correct AnswerverifiedShow Answer

Which of the following pairs of goods would be most likely to be complements?

Correct AnswerverifiedShow Answer

Economists state that the utility a person receives from a unit of a good,the the price he or she is willing to pay for it.

Correct Answer
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Exhibit 3-14 -Refer to Exhibit 3-14.At a price of $12,there is a unit of good X.

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Resource X is necessary to the production of good Y.If the price of resource X rises,the _______ curve for good Y will shift resulting in a(n) _ in the equilibrium price of Y and a(n) ______ in the equilibrium quantity of Y.

Correct Answer
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Exhibit 3-12 Assume that Aline,Bentley,Calvin,and Daniel are the only sellers in this market. -Refer to Exhibit 3-12.Each individual seller's supply curve is sloping and the market supply curve is _ sloping.

Correct Answer
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Exhibit 3-14 -Refer to Exhibit 3-14.At a price of $11,there is a unit of good X.

Correct Answer
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Exhibit 3-5 -Refer to Exhibit 3-5.In the market shown,a rightward shift in supply from S₁ to S₂ could have been caused by

Correct Answer
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