Question 1

When economists say the demand for a product has decreased,they mean

Accepted Answer

A)  the demand curve has shifted to the left.
B)  the product price has increased,and as a consequence,consumers are buying less of the product.
C)  consumers are now willing and able to buy more of this product at each possible price.
D)  the demand curve has shifted to the right.

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

Figure 3-22

-Refer to Figure 3-22.Graph C 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 4

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 5

Which of the following would most likely cause the price of wheat to decline?

Accepted Answer

A)  an increase in the production costs of corn,a substitute for wheat
B)  a decrease in the price of soybeans,a substitute for wheat
C)  an increase in the price of fertilizer,a resource used to produce wheat
D)  a sandwich craze among Americans,causing increased demand for whole-wheat bread

Question 6

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 7

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly.Economic theory would suggest that the observed data could best be explained as

Accepted Answer

A)  an increase in supply,while demand remained relatively constant.
B)  a decrease in both supply and demand.
C)  an increase in demand,while supply remained relatively constant.
D)  a sharp increase in both supply and demand.

Question 8

The price elasticity of demand for a commodity is determined primarily by the

Accepted Answer

A)  size of the consumer surplus.
B)  availability of good substitutes for the good.
C)  incomes of consumers.
D)  availability of complementary goods.

Question 9

The price of a good will tend to fall when

Accepted Answer

A)  there is excess demand for the good.
B)  there is excess supply of the good.
C)  demand for the good increases.
D)  the supply of the good decreases.

Question 10

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 new buyers entering the market?

Accepted Answer

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

Question 11

A decrease in the expected future price of a good will cause the current demand for the good to

Accepted Answer

A)  decrease,which is a shift to the left of the demand curve.
B)  decrease,which is a shift to the right of the demand curve.
C)  increase,which is a shift to the left of the demand curve.
D)  increase,which is a shift to the right of the demand curve.

Question 12

Andrew decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Andrew pay for his computer?

Accepted Answer

A)  $700
B)  $2,300
C)  $3,000
D)  $3,700

Question 13

Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice,a substitute product?

Accepted Answer

A)  The price of orange juice will increase,and the quantity purchased will fall.
B)  The price of orange juice will fall,and the quantity purchased will increase.
C)  The price of orange juice will increase,and the quantity purchased will increase.
D)  The price of orange juice will fall,and the quantity purchased will fall.

Question 14

Figure 3-18
 
-Refer to Figure 3-18.Which area represents consumer surplus at a price of P₂?

Accepted Answer

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

Question 15

The maximum price that consumers are willing to pay for the hundredth unit of a good can be found as

Accepted Answer

A)  the height of the supply curve at a quantity of 100.
B)  the height of the demand curve at a quantity of 100.
C)  the difference between the height of the supply and demand curves at a quantity of 100.
D)  none of the above.

Question 16

Assuming Chinese food and Thai food are substitutes,if Lucy Ho's Chinese restaurant reduces its prices,

Accepted Answer

A)  the demand for food at Lucy Ho's will increase.
B)  the quantity demanded for food at Lucy Ho's will increase.
C)  the demand facing the nearby Bahn Thai restaurant will decrease.
D)  both b and c will happen.

Question 17

Suppose demand increases and supply decreases.Which of the following will happen?

Accepted Answer

A)  Equilibrium price will rise,fall,or stay the same while equilibrium quantity will decrease.
B)  Equilibrium price will rise,fall,or stay the same while equilibrium quantity will increase.
C)  Equilibrium quantity will rise,fall,or stay the same and equilibrium price will increase.
D)  Equilibrium quantity will rise,fall,or stay the same while equilibrium price will decrease.
E)  The change in equilibrium price and quantity cannot be determined.

Question 18

Which of the following is true of profits and losses?

Accepted Answer

A)  Profits direct entrepreneurs toward production of goods that are highly valued relative to their cost,while losses direct them away from wealth-reducing activities.
B)  Profits indicate that the firm is charging prices that are too high,while losses indicate that the firm needs to raise its prices.
C)  Profits indicate that the consumer is getting a bad deal,while losses indicate that the consumer values the product highly relative to its cost.
D)  Profits indicate that the suppliers of resources are underpaid,while losses indicate they are overpaid.

Question 19

If there is an increase in both the supply and demand for a good,which of the following will definitely occur?

Accepted Answer

A)  The price of the good will increase.
B)  The price of the good will decrease.
C)  The equilibrium quantity will increase.
D)  The equilibrium quantity will decrease.

Question 20

If consumer purchases of a good are not very sensitive to the price of the good,economists say the demand for the good is relatively

Accepted Answer

A)  inelastic.
B)  elastic.
C)  robust.
D)  inverse.

Exam 3: Asupply,demand,and the Market Process

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 new buyers entering the market?

Correct Answer
verified

Which of the following is true of profits and losses?

Correct Answer
verified

Which of the following would most likely cause the price of wheat to decline?

Correct Answer
verified

A decrease in the expected future price of a good will cause the current demand for the good to

Correct Answer
verified

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?

Correct Answer
verified

If consumer purchases of a good are not very sensitive to the price of the good,economists say the demand for the good is relatively

Correct Answer
verified

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 Answer
verified
Most students will provide answers such ...
View Answer

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

Correct Answer
verified

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

If there is an increase in both the supply and demand for a good,which of the following will definitely occur?

Correct Answer
verified

The price elasticity of demand for a commodity is determined primarily by the

Correct Answer
verified

Andrew decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Andrew pay for his computer?

Correct Answer
verified

Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice,a substitute product?

Correct Answer
verified

Assuming Chinese food and Thai food are substitutes,if Lucy Ho's Chinese restaurant reduces its prices,

Correct Answer
verified

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly.Economic theory would suggest that the observed data could best be explained as

Correct Answer
verified

Suppose demand increases and supply decreases.Which of the following will happen?

Correct Answer
verified

Figure 3-18 -Refer to Figure 3-18.Which area represents consumer surplus at a price of P₂?

Correct Answer
verified

The maximum price that consumers are willing to pay for the hundredth unit of a good can be found as

Correct Answer
verified

The price of a good will tend to fall when

Correct Answer
verified

When economists say the demand for a product has decreased,they mean

Correct Answer
verified

Exam 3: Asupply,demand,and the Market Process

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 new buyers entering the market?

Correct AnswerverifiedShow Answer

Which of the following is true of profits and losses?

Correct AnswerverifiedShow Answer

Which of the following would most likely cause the price of wheat to decline?

Correct AnswerverifiedShow Answer

A decrease in the expected future price of a good will cause the current demand for the good to

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

If consumer purchases of a good are not very sensitive to the price of the good,economists say the demand for the good is relatively

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

Correct AnswerverifiedShow Answer

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

If there is an increase in both the supply and demand for a good,which of the following will definitely occur?

Correct AnswerverifiedShow Answer

The price elasticity of demand for a commodity is determined primarily by the

Correct AnswerverifiedShow Answer

Andrew decides that he would pay as much as $3,000 for a new laptop computer.He buys the computer and realizes consumer surplus of $700.How much did Andrew pay for his computer?

Correct AnswerverifiedShow Answer

Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice,a substitute product?

Correct AnswerverifiedShow Answer

Assuming Chinese food and Thai food are substitutes,if Lucy Ho's Chinese restaurant reduces its prices,

Correct AnswerverifiedShow Answer

Over the past 20 years both the quantity of health care provided and health care prices have been rising rapidly.Economic theory would suggest that the observed data could best be explained as

Correct AnswerverifiedShow Answer

Suppose demand increases and supply decreases.Which of the following will happen?

Correct AnswerverifiedShow Answer

Figure 3-18 -Refer to Figure 3-18.Which area represents consumer surplus at a price of P₂?

Correct AnswerverifiedShow Answer

The maximum price that consumers are willing to pay for the hundredth unit of a good can be found as

Correct AnswerverifiedShow Answer

The price of a good will tend to fall when

Correct AnswerverifiedShow Answer

When economists say the demand for a product has decreased,they mean

Correct AnswerverifiedShow Answer

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Most students will provide answers such ...
View Answer

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

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