Question 1

Quantity demanded:

Accepted Answer

A)   shows how much buyers are willing and able to buy at different prices.
B)   is the amount that buyers are willing and able to buy at a particular price.
C)   shows how much sellers are willing and able to sell at different prices.
D)   is the amount that sellers are willing and able to sell at a particular price.E) C) and D)
F) A) and D)

Question 2

New research suggests that cholesterol may not be as unhealthy as previously thought. If so, what will happen to the demand for eggs, a high-cholesterol food?

Accepted Answer

A)   It will decrease because eggs and cholesterol are substitutes.
B)   It will increase because of consumers' taste for food that is perceived to be healthier.
C)   It will increase since eggs are an inferior good.
D)   It will decrease because there will be fewer chickens to lay eggs.E) All of the above
F) None of the above

Question 3

An increase in demand shifts the demand curve:

Accepted Answer

A)   up and to the right.
B)   down and to the right.
C)   up and to the left.
D)   down and to the left.E) C) and D)
F) A) and B)

Question 4

Weather forecasters predict that a major winter storm will strike your town within the next few days. Which would occur today based upon the expected storm?

Accepted Answer

A)   a decrease in peoples' willingness to pay for bottled water
B)   a decrease in demand for batteries
C)   an increase in people's willingness to pay for electric generators
D)   a shift to the left of the demand curve for snow tiresE) All of the above
F) C) and D)

Question 5

Use the following to answer questions: Figure: Good X 
-(Figure: Good X)  From the figure, the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit.

Accepted Answer

A)   36; $4
B)   11; $4
C)   36; $12
D)   26; $4E) A) and B)
F) A) and C)

Question 6

New production technology in the manufacture of plasma television screens has reduced the number of defective screens. What effect will this have in the market for plasma televisions?

Accepted Answer

A)   The demand curve will increase.
B)   The supply curve will increase.
C)   The demand and supply curve both increase.
D)   The demand curve will decrease.E) All of the above
F) B) and D)

Question 7

A market has a demand equation as follows: Qd = 60 - 4P. The market price of the product is $5. Calculate the dollar amount of consumer surplus in this market, and illustrate your answer graphically.

Accepted Answer

The first step is to calculate the inter...

Question 8

If the price of granite countertops rises, we would expect the demand for quartz countertops (a substitute product for granite) to decrease.

Accepted Answer

A) True 
 B)False

Question 9

Which variable does NOT shift the demand curve?

Accepted Answer

A)   population
B)   price of complement goods
C)   income
D)   price of the good itselfE) B) and C)
F) B) and D)

Question 10

Which statement expresses the law of demand?

Accepted Answer

A)   There is a positive relationship between price and consumer surplus.
B)   There is a positive relationship between price and quantity that buyers are willing and able to purchase.
C)   There is an inverse relationship between the willingness to pay and the ability to pay.
D)   There is a negative relationship between price and quantity demanded.E) A) and D)
F) A) and C)

Question 11

A decrease in the opportunity cost of steel production will:

Accepted Answer

A)   increase the price of steel.
B)   make suppliers more likely to produce steel, thus shifting the supply curve up and to the left.
C)   make suppliers more likely to produce steel, thus shifting the supply curve down and to the right.
D)   entice producers to produce more substitute goods.E) All of the above
F) None of the above

Question 12

A demand curve indicates that:

Accepted Answer

A)   the quantity demanded of a good is higher when its price is higher.
B)   the quantity demanded of a good is higher when its price is lower.
C)   the demand for a good is higher when its price is lower.
D)   the demand for a good is higher when its price is higher.E) All of the above
F) A) and D)

Question 13

What will happen to the supply of workers 18 to 21 years after a baby boom?

Accepted Answer

A)   It will decrease, since workers will cost more to hire.
B)   It will increase because of the influx of new adults into the labor market.
C)   It will increase because workers will be needed to care for retirees.
D)   It will decrease because producer surplus will be lower.E) A) and B)
F) A) and C)

Question 14

Zoey receives a big raise at work and decides to buy additional porcelain figurines. Which of the following statements is TRUE?

Accepted Answer

A)   Zoey considers porcelain figurines to be a normal good.
B)   Zoey considers porcelain figurines to be an inferior good.
C)   Zoey's demand for porcelain figurines decreased.
D)   Zoey's willingness to pay for porcelain figures has decreased.E) C) and D)
F) None of the above

Question 15

Producer surplus is:

Accepted Answer

A)   the difference between the market price and the minimum price at which producers are willing to sell a good.
B)   the amount at which producers are willing to sell a good.
C)   the amount at which producers sell a good.
D)   the amount at which producers are willing to sell a good plus the amount at which they sell it.E) All of the above
F) B) and D)

Question 16

Use the following to answer questions : Figure: Oil

-(Figure: Oil)  Compared with producing the 20 millionth barrel of oil, the cost of producing the 40 millionth barrel of oil is:

Accepted Answer

A)   $40 lower.
B)   $40 higher.
C)   approximately the same.
D)   $80 higher.E) A) and B)
F) A) and C)

Question 17

There are more substitutes for oil as a heating and energy generator than for oil as a jet fuel.

Accepted Answer

A) True 
 B)False

Question 18

Which statement correctly completes the definition of a demand curve? A demand curve is a function that shows the relationship between:

Accepted Answer

A)   price and the quantity sold.
B)   price and the quantity supplied.
C)   price and the quantity demanded.
D)   quantity demanded and quantity supplied.E) None of the above
F) All of the above

Question 19

The quantity demanded is the quantity that buyers can afford to buy at a particular income level.

Accepted Answer

A) True 
 B)False

Question 20

When the price of oil used for generating electricity increases, the demand for nuclear power will increase.

Accepted Answer

A) True 
 B)False

Exam 3: Supply and Demand

New production technology in the manufacture of plasma television screens has reduced the number of defective screens. What effect will this have in the market for plasma televisions?

Correct AnswerverifiedShow Answer

Which statement correctly completes the definition of a demand curve? A demand curve is a function that shows the relationship between:

Correct AnswerverifiedShow Answer

What will happen to the supply of workers 18 to 21 years after a baby boom?

Correct AnswerverifiedShow Answer

New research suggests that cholesterol may not be as unhealthy as previously thought. If so, what will happen to the demand for eggs, a high-cholesterol food?

Correct AnswerverifiedShow Answer

Zoey receives a big raise at work and decides to buy additional porcelain figurines. Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

Which statement expresses the law of demand?

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: Oil -(Figure: Oil) Compared with producing the 20 millionth barrel of oil, the cost of producing the 40 millionth barrel of oil is:

Correct AnswerverifiedShow Answer

There are more substitutes for oil as a heating and energy generator than for oil as a jet fuel.

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Good X -(Figure: Good X) From the figure, the maximum price that consumers are willing to pay for _____ units of Good X is _____ per unit.

Correct AnswerverifiedShow Answer

Weather forecasters predict that a major winter storm will strike your town within the next few days. Which would occur today based upon the expected storm?

Correct AnswerverifiedShow Answer

A decrease in the opportunity cost of steel production will:

Correct AnswerverifiedShow Answer

The quantity demanded is the quantity that buyers can afford to buy at a particular income level.

Correct AnswerverifiedShow Answer

Which variable does NOT shift the demand curve?

Correct AnswerverifiedShow Answer

Producer surplus is:

Correct AnswerverifiedShow Answer

Quantity demanded:

Correct AnswerverifiedShow Answer

When the price of oil used for generating electricity increases, the demand for nuclear power will increase.

Correct AnswerverifiedShow Answer

An increase in demand shifts the demand curve:

Correct AnswerverifiedShow Answer

A market has a demand equation as follows: Qd = 60 - 4P. The market price of the product is $5. Calculate the dollar amount of consumer surplus in this market, and illustrate your answer graphically.

Correct AnswerverifiedThe first step is to calculate the inter...View AnswerShow Answer

A demand curve indicates that:

Correct AnswerverifiedShow Answer

If the price of granite countertops rises, we would expect the demand for quartz countertops (a substitute product for granite) to decrease.

Correct AnswerverifiedShow Answer

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Use the following to answer questions: Figure: Good X -(Figure: Good X) From the figure, the maximum price that consumers are willing to pay for _ units of Good X is _ per unit.

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A market has a demand equation as follows: Q_d= 60 - 4P. The market price of the product is $5. Calculate the dollar amount of consumer surplus in this market, and illustrate your answer graphically.

Correct Answer
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The first step is to calculate the inter...
View Answer

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