Question 1

Define social surplus and deadweight loss.

Accepted Answer

Social surplus is the sum of consumer su...

Question 2

Wheat and oats are both used to make cereal and both are grown on the prairies. What would happen to the supply and demand of oats if the price of wheat were to rise?

Accepted Answer

An increase in the price of wheat would ...

Question 3

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _______.

Accepted Answer

A)   income gap
B)   market equilibrium
C)   law of demand
D)   price modelE) C) and D)
F) B) and D)

Question 4

A demand curve shows the relationship between price and _______ on a graph.

Accepted Answer

A)   quantity demanded
B)   quantity produced
C)   economies of scale
D)   costsE) A) and B)
F) All of the above

Question 5

The demand curve for a typical good has an) :

Accepted Answer

A)   negative slope because some consumers switch to other goods as the price rises.
B)   negative slope because consumer incomes fall as the price of the good rises.
C)   negative slope because the good has less "snob appeal" as its price falls.
D)   inverse slope because as the price goes up, the good has more profitability.E) None of the above
F) All of the above

Question 6

If new manufacturers enter the computer industry, then ceteris paribus) :

Accepted Answer

A)   the supply curve shifts to the left.
B)   the supply curve shifts to the right.
C)   the demand curve shifts to the left.
D)   some established manufacturers must exit the industry.E) B) and D)
F) C) and D)

Question 7

What is the difference between a change in demand and a change in quantity demanded?

Accepted Answer

A change in quantity demanded is caused ...

Question 8

According to the law of supply:

Accepted Answer

A)   there is a direct relationship between price and the quantity supplied.
B)   there is an inverse relationship between price and the quantity supplied.
C)   there is a direct relationship between price and quantity demanded.
D)   there is an inverse relationship between price and quantity demanded.E) B) and D)
F) B) and C)

Question 9

With alternative policies like income subsidies and directed construction subsidies readily available, why do governments enact price floors and price ceilings?

Accepted Answer

One reason is that in public policy deb...

Question 10

Define consumer surplus, producer surplus, and social surplus.

Accepted Answer

The amount that individuals would have b...

Question 11

A change in price of a good or service typically causes _______ for that specific good or service.

Accepted Answer

A)   a new equilibrium price
B)   a change along the supply curve
C)   the supply curve to shift
D)   a decreased demandE) A) and D)
F) B) and C)

Question 12

Which of the following would reduce the supply of microcomputers?

Accepted Answer

A)   a technological improvement that lowers the cost of producing the computers
B)   higher wage rates for the workers that assemble the computers
C)   a reduction in the price of computer chips used to produce the computers
D)   a reduction in the price of computers.E) A) and B)
F) C) and D)

Question 13

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

Accepted Answer

A)   the supply curve.
B)   the demand curve, as consumers try to economize because of the shortage.
C)   both the supply and demand curves.
D)   the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.E) C) and D)
F) A) and B)

Question 14

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Accepted Answer

A)   the price of Good Y will increase.
B)   Goods X and Y are normal goods.
C)   Goods X and Y are substitute goods.
D)   Goods X and Y are complement goods.E) All of the above
F) A) and D)

Question 15

Price floors and price ceilings often lead to unintended consequences, because buyers and sellers have many margins for action. List at least four margins.

Accepted Answer

These margins include black ma...

Question 16

The demand schedule for a good:

Accepted Answer

A)   indicates the quantity that people will buy at the prevailing price.
B)   indicates the quantities that suppliers will sell at various market prices.
C)   is determined primarily by the cost of producing the good.
D)   indicates the quantities that will be purchased at alternative market prices.E) None of the above
F) C) and D)

Question 17

The nature of demand indicates that as the price of a good increases:

Accepted Answer

A)   suppliers wish to sell less of it.
B)   more of it is produced.
C)   more of it is desired.
D)   buyers desire to purchase less of it.E) A) and D)
F) C) and D)

Question 18

The _______ is the only price where quantity demanded is equal to quantity supplied.

Accepted Answer

A)   equilibrium price
B)   horizontal axis intercept
C)   vertical axis intercept
D)   market priceE) All of the above
F) A) and B)

Exam 3: Demand and Supply

The _______ is the only price where quantity demanded is equal to quantity supplied.

Correct Answer
verified

With alternative policies like income subsidies and directed construction subsidies readily available, why do governments enact price floors and price ceilings?

Correct Answer
verified
One reason is that in public policy deb...
View Answer

Price floors and price ceilings often lead to unintended consequences, because buyers and sellers have many margins for action. List at least four margins.

Correct Answer
verified
These margins include black ma...
View Answer

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Correct Answer
verified

The demand curve for a typical good has an) :

Correct Answer
verified

Wheat and oats are both used to make cereal and both are grown on the prairies. What would happen to the supply and demand of oats if the price of wheat were to rise?

Correct Answer
verified
An increase in the price of wheat would ...
View Answer

Define consumer surplus, producer surplus, and social surplus.

Correct Answer
verified
The amount that individuals would have b...
View Answer

If new manufacturers enter the computer industry, then ceteris paribus) :

Correct Answer
verified

A change in price of a good or service typically causes _______ for that specific good or service.

Correct Answer
verified

What is the difference between a change in demand and a change in quantity demanded?

Correct Answer
verified
A change in quantity demanded is caused ...
View Answer

According to the law of supply:

Correct Answer
verified

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

Correct Answer
verified

Define social surplus and deadweight loss.

Correct Answer
verified
Social surplus is the sum of consumer su...
View Answer

A demand curve shows the relationship between price and _______ on a graph.

Correct Answer
verified

Which of the following would reduce the supply of microcomputers?

Correct Answer
verified

The demand schedule for a good:

Correct Answer
verified

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _______.

Correct Answer
verified

The nature of demand indicates that as the price of a good increases:

Correct Answer
verified

Exam 3: Demand and Supply

The _______ is the only price where quantity demanded is equal to quantity supplied.

Correct AnswerverifiedShow Answer

With alternative policies like income subsidies and directed construction subsidies readily available, why do governments enact price floors and price ceilings?

Correct Answerverified One reason is that in public policy deb...View AnswerShow Answer

Price floors and price ceilings often lead to unintended consequences, because buyers and sellers have many margins for action. List at least four margins.

Correct AnswerverifiedThese margins include black ma...View AnswerShow Answer

If an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:

Correct AnswerverifiedShow Answer

The demand curve for a typical good has an) :

Correct AnswerverifiedShow Answer

Wheat and oats are both used to make cereal and both are grown on the prairies. What would happen to the supply and demand of oats if the price of wheat were to rise?

Correct AnswerverifiedAn increase in the price of wheat would ...View AnswerShow Answer

Define consumer surplus, producer surplus, and social surplus.

Correct AnswerverifiedThe amount that individuals would have b...View AnswerShow Answer

If new manufacturers enter the computer industry, then ceteris paribus) :

Correct AnswerverifiedShow Answer

A change in price of a good or service typically causes _______ for that specific good or service.

Correct AnswerverifiedShow Answer

What is the difference between a change in demand and a change in quantity demanded?

Correct AnswerverifiedA change in quantity demanded is caused ...View AnswerShow Answer

According to the law of supply:

Correct AnswerverifiedShow Answer

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

Correct AnswerverifiedShow Answer

Define social surplus and deadweight loss.

Correct AnswerverifiedSocial surplus is the sum of consumer su...View AnswerShow Answer

A demand curve shows the relationship between price and _______ on a graph.

Correct AnswerverifiedShow Answer

Which of the following would reduce the supply of microcomputers?

Correct AnswerverifiedShow Answer

The demand schedule for a good:

Correct AnswerverifiedShow Answer

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _______.

Correct AnswerverifiedShow Answer

The nature of demand indicates that as the price of a good increases:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
One reason is that in public policy deb...
View Answer

Correct Answer
verified
These margins include black ma...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
An increase in the price of wheat would ...
View Answer

Correct Answer
verified
The amount that individuals would have b...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A change in quantity demanded is caused ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Social surplus is the sum of consumer su...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified