Question 1

Exhibit 3-14
 
-Refer to Exhibit 3-14. At a price of $13, there is a ____________ of ____________ units of good X.

Accepted Answer

A)  shortage; 140
B)  shortage; 160
C)  surplus; 140
D)  surplus; 20
E)  surplus; 100F) A) and E)
G) C) and D)

Question 2

Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

Accepted Answer

A) True 
 B)False

Question 3

Equilibrium and disequilibrium

Accepted Answer

A)  are real world states.
B)  are mental constructs used by economists.
C)  foreshadow what is about to happen in a market.
D)  a and b
E)  a, b and cF) None of the above
G) C) and D)

Question 4

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.F) A) and D)
G) A) and E)

Question 5

If people begin to favor science fiction novels to a greater degree than previously, the demand curve for science fiction novels

Accepted Answer

A)  shifts rightward.
B)  shifts leftward.
C)  stays constant.
D)  can shift either rightward or leftward.E) All of the above
F) C) and D)

Question 6

Which of the following statements is false?

Accepted Answer

A)  An upward-sloping supply curve graphically represents the law of supply.
B)  A vertical supply curve graphically represents the law of supply.
C)  If income rises and good X is a normal good, then the demand for good X will rise.
D)  If income falls and good Y is an inferior good, then the demand for good Y will rise.E) C) and D)
F) B) and D)

Question 7

Exhibit 3-3
 1 to D2 can NOT occur from a change in the A) population. B) price of a substitute for good Y. C) average income of good Y buyers. D) price of good Y." class="answers-bank-image d-inline" rel="preload" > Good Y
​
​
-Refer to Exhibit 3-3. A shift in demand from D1 to D2 can NOT occur from a change in the

Accepted Answer

A)  population.
B)  price of a substitute for good Y.
C)  average income of good Y buyers.
D)  price of good Y.E) A) and B)
F) None of the above

Question 8

Oil producers expect that oil prices next year will be higher than oil prices this year. As a result, oil producers are most likely to

Accepted Answer

A)  place more oil on the market this year, thus shifting the present supply curve of oil rightward.
B)  hold some oil off the market this year, thus shifting the present supply curve of oil leftward.
C)  place more oil on the market this year, thus increasing the quantity supplied of oil at lower but not higher prices.
D)  hold some oil off the market this year, thus decreasing the quantity supplied of oil at lower but not higher prices.E) B) and D)
F) B) and C)

Question 9

A market is said to be in disequilibrium if

Accepted Answer

A)  it exhibits either a surplus or a shortage.
B)  the number of units that individuals are willing to buy exceeds the number of units they can afford.
C)  it is a market for an inferior good.
D)  none of the aboveE) A) and B)
F) B) and C)

Question 10

If consumers' surplus is $30 and the price paid for the good is $50, then the maximum price a buyer is willing and able to pay for the good is

Accepted Answer

A)  $80.
B)  $30.
C)  $50.
D)  $20.
E)  There is not enough information to answer the question.F) A) and E)
G) A) and D)

Question 11

Which of the following is consistent with the law of demand?

Accepted Answer

A)  People substitute higher-priced goods for higher-quality goods.
B)  People substitute some higher-priced goods for other higher-priced goods.
C)  People substitute lower-priced goods for higher-priced goods.
D)  People substitute some lower-priced goods for other lower-priced goods.E) A) and D)
F) A) and C)

Question 12

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

Accepted Answer

A) True 
 B)False

Question 13

On a supply-and-demand diagram, consider a price for which the horizontal distance to the supply curve is shorter than the horizontal distance to the demand curve. There is a __________ at that price and the current price must be __________ the equilibrium price.

Accepted Answer

A)  shortage; above
B)  shortage; below
C)  surplus; above
D)  surplus; belowE) A) and C)
F) B) and C)

Question 14

At a price below the equilibrium price, there is

Accepted Answer

A)  a surplus.
B)  a shortage.
C)  excess supply.
D)  sub-equilibrium.
E)  none of the aboveF) A) and C)
G) A) and B)

Question 15

The law of demand states that ____________and quantity demanded are _____________ related, ceteris paribus.

Accepted Answer

A)  price; directly
B)  price; inversely
C)  demand;inversely
D)  quantity supplied; directly
E)  supply; directlyF) B) and E)
G) A) and B)

Question 16

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

Accepted Answer

A) True 
 B)False

Question 17

With respect to the supply and demand for a given product, describe the connection that exists between equilibrium/disequilibrium and predictions. Cite your own unique example in order to help support your answer.

Accepted Answer

Economists use the concepts of equilibri...

Question 18

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 aboveF) B) and E)
G) C) and E)

Question 19

Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good.

Accepted Answer

A)  rises; falls
B)  falls; falls
C)  rises; rises
D)  falls; risesE) A) and D)
F) A) and B)

Question 20

An increase in supply is graphically represented by a leftward shift of the supply curve.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand Theory

A market is said to be in disequilibrium if

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Exhibit 3-3 Good Y ​ ​ -Refer to Exhibit 3-3. A shift in demand from D1 to D2 can NOT occur from a change in the

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Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $13, there is a ____________ of ____________ units of good X.

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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) ?

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Equilibrium and disequilibrium

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If people begin to favor science fiction novels to a greater degree than previously, the demand curve for science fiction novels

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If consumers' surplus is $30 and the price paid for the good is $50, then the maximum price a buyer is willing and able to pay for the good is

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

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The law of demand states that ____________and quantity demanded are _____________ related, ceteris paribus.

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Consumers' surplus is the difference between the maximum price the buyer is willing and able to pay for a good and the actual price paid.

Correct AnswerverifiedShow Answer

With respect to the supply and demand for a given product, describe the connection that exists between equilibrium/disequilibrium and predictions. Cite your own unique example in order to help support your answer.

Correct AnswerverifiedEconomists use the concepts of equilibri...View AnswerShow Answer

The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping.

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At a price below the equilibrium price, there is

Correct AnswerverifiedShow Answer

Oil producers expect that oil prices next year will be higher than oil prices this year. As a result, oil producers are most likely to

Correct AnswerverifiedShow Answer

Which of the following is consistent with the law of demand?

Correct AnswerverifiedShow Answer

Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good.

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On a supply-and-demand diagram, consider a price for which the horizontal distance to the supply curve is shorter than the horizontal distance to the demand curve. There is a __________ at that price and the current price must be __________ the equilibrium price.

Correct AnswerverifiedShow Answer

Mutually beneficial trade between buyers and sellers drives a market to equilibrium.

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Which of the following statements is false?

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An increase in supply is graphically represented by a leftward shift of the supply curve.

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Exhibit 3-3 Good Y -Refer to Exhibit 3-3. A shift in demand from D₁ to D₂ can NOT occur from a change in the

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Exhibit 3-14 -Refer to Exhibit 3-14. At a price of $13, there is a of units of good X.

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The law of demand states that and quantity demanded are _ related, ceteris paribus.

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Economists use the concepts of equilibri...
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Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price and equilibrium quantity for that good.

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On a supply-and-demand diagram, consider a price for which the horizontal distance to the supply curve is shorter than the horizontal distance to the demand curve. There is a at that price and the current price must be the equilibrium price.

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