Question 1

Which of the following would most likely increase demand for tickets to major league baseball games?

Accepted Answer

A)  a decrease in consumer income
B)  an increase in the price of tickets to professional football games,a substitute for baseball games
C)  an increase in the price of refreshments sold at the baseball games
D)  none of the aboveE) B) and C)
F) B) and D)

Question 2

When economists say the quantity demanded of a product has increased,they mean the

Accepted Answer

A)  demand curve has shifted to the left.
B)  demand curve has shifted to the right.
C)  price of the product has fallen,and consequently,consumers are buying more of it.
D)  price of the product has risen,and consequently,consumers are buying less of it.E) None of the above
F) All of the above

Question 3

Because the height of the demand curve measures the marginal value of the good to consumers,the fact that a demand curve slopes downward to the right illustrates that

Accepted Answer

A)  as more of a product is consumed,consumers will value additional units less.
B)  as more of a product is consumed,consumers will value additional units more.
C)  the value of additional units of the good is unrelated to the amount consumed.
D)  the cost of production for a good generally rises as more of it is produced.E) A) and B)
F) A) and C)

Question 4

If Harry is paid $25,000 to sell his crop of tomatoes even though he would have been willing to have sold the crop for as little as $20,000,this indicates that

Accepted Answer

A)  Harry received no producer surplus from the transaction.
B)  Harry received $5,000 of producer surplus from the transaction.
C)  Harry received $20,000 of producer surplus from the transaction.
D)  Harry received $25,000 of producer surplus from the transaction.E) All of the above
F) None of the above

Question 5

Market prices provide information to consumers,helping them coordinate their activities so long as

Accepted Answer

A)  competition is present and buyers and sellers are free to choose mutually agreeable prices.
B)  prices are not allowed to rise too high,causing a shortage.
C)  prices are legally kept equal in all markets,preventing unfair price increases in markets with shortages and unfair price decreases when a market surplus is present.
D)  the government carefully screens producers and effectively keeps inefficient producers out of the market.E) None of the above
F) C) and D)

Question 6

A recent editorial in a local newspaper argues,"Consumers need to know more about products than just their price.They need to know how these prices are determined,who owns the businesses,and the wages of the workers." Is the editorial writer correct? Why or why not?

Accepted Answer

What is missing from the editorial is a ...

Question 7

If a decrease in the price of good Y causes the demand for good Z to decrease,this indicates that

Accepted Answer

A)  Y and Z are complements.
B)  Y and Z are substitutes.
C)  Y and Z are unrelated.
D)  the demand for Y is elastic,but the demand for Z is inelastic.E) A) and C)
F) A) and D)

Question 8

When there is excess supply of a product in a market,

Accepted Answer

A)  price will tend to rise.
B)  price must be above the equilibrium price.
C)  producers will expand output and sales will rise.
D)  price must be below the equilibrium price.E) B) and C)
F) A) and D)

Question 9

An important assumption that is made when constructing a supply schedule is

Accepted Answer

A)  only price and quantity matter in determining supply.
B)  firms always want to sell a certain amount of a product.
C)  supply is too important to be left to the marketplace.
D)  all other determinants of supply are held constant.
E)  demand has a positive slope.F) B) and D)
G) All of the above

Question 10

If price rises,what happens to the quantity demanded for a product?

Accepted Answer

A)  It increases.
B)  It decreases.
C)  It does not change.
D)  Uncertain--economic theory has no answer to this question.E) A) and C)
F) A) and B)

Question 11

Figure 3-17
 
-Refer to Figure 3-17.When the price is P₂,consumer surplus is

Accepted Answer

A)  A.
B)  B.
C)  A + B.
D)  A + B + C.E) A) and D)
F) A) and B)

Question 12

The current demand for automobiles would decrease if

Accepted Answer

A)  the price of gasoline fell.
B)  consumer income rose.
C)  consumers suddenly believed the price of automobiles would be sharply lower in the near future.
D)  consumers suddenly believed the price of automobiles would be sharply higher in the near future.E) B) and C)
F) B) and D)

Question 13

For a typical product,a decrease in consumer income will cause the market demand for the product 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.E) B) and C)
F) A) and B)

Question 14

The efficiency of market organization is dependent on which of the following?

Accepted Answer

A)  well-regulated supply and demand
B)  the availability of low cost resources and high tariffs on foreign imports
C)  competitive markets and well-defined and enforced private property rights
D)  Government establishment of the invisible hand principle and the inelasticity of certain goods.E) All of the above
F) C) and D)

Question 15

Use the figure below to answer the following question(s) .
Figure 3-13
 
-Refer to Figure 3-13.The market for margarine was initially in equilibrium at point

Accepted Answer

A)  r.
B)  s.
C)  t.
D)  u.
E)  Other things constant,an increase in the price of soybean oil,an important ingredient used to produce margarine,would likely move the equilibrium in this market toward pointF) B) and D)
G) All of the above

Question 16

Assume the demand curve for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Accepted Answer

A)  the demand for cookies will fall.
B)  the demand for cookies will rise.
C)  a larger quantity of cookies will be demanded.
D)  a smaller quantity of cookies will be demanded.E) None of the above
F) A) and B)

Question 17

A technological breakthrough lowers the cost of manufacturing VCRs.As a result,the market changes to a new equilibrium because of

Accepted Answer

A)  an upward movement along the demand curve for VCRs.
B)  a rightward shift in the demand curve for VCRs.
C)  a rightward shift in the supply curve for VCRs.
D)  a shortage of VCRs.E) None of the above
F) C) and D)

Question 18

Which of the following events would increase producer surplus?

Accepted Answer

A)  Sellers' costs stay the same and the price of the good increases.
B)  Sellers' costs increase and the price of the good stays the same.
C)  Sellers' costs increase and the price of the good decreases.
D)  All of the above are correct.E) All of the above
F) B) and D)

Question 19

Figure 3-20
 
-Refer to Figure 3-20.At the equilibrium price,consumer surplus is

Accepted Answer

A)  $480.
B)  $640.
C)  $1,120.
D)  $1,280.E) None of the above
F) B) and D)

Question 20

Which of the following occurs when a shortage occurs in the market for a good?

Accepted Answer

A)  Quantity demanded exceeds quantity supplied and the market mechanism pushes the price up,which in turn encourages more production and less consumption.
B)  Quantity supplied exceeds quantity demanded and the price falls,which encourages more production and less consumption.
C)  Quantity demanded exceeds quantity supplied and the market mechanism pushes the price down,which encourages more production and less consumption.
D)  Quantity supplied exceeds quantity demanded and the price rises,which encourages more production and less consumption.E) All of the above
F) B) and C)

Exam 3: Asupply,demand,and the Market Process

If price rises,what happens to the quantity demanded for a product?

Correct AnswerverifiedShow Answer

Which of the following events would increase producer surplus?

Correct AnswerverifiedShow Answer

If a decrease in the price of good Y causes the demand for good Z to decrease,this indicates that

Correct AnswerverifiedShow Answer

Which of the following occurs when a shortage occurs in the market for a good?

Correct AnswerverifiedShow Answer

Figure 3-17 -Refer to Figure 3-17.When the price is P₂,consumer surplus is

Correct AnswerverifiedShow Answer

For a typical product,a decrease in consumer income will cause the market demand for the product to

Correct AnswerverifiedShow Answer

Use the figure below to answer the following question(s) . Figure 3-13 -Refer to Figure 3-13.The market for margarine was initially in equilibrium at point

Correct AnswerverifiedShow Answer

If Harry is paid $25,000 to sell his crop of tomatoes even though he would have been willing to have sold the crop for as little as $20,000,this indicates that

Correct AnswerverifiedShow Answer

The current demand for automobiles would decrease if

Correct AnswerverifiedShow Answer

An important assumption that is made when constructing a supply schedule is

Correct AnswerverifiedShow Answer

Market prices provide information to consumers,helping them coordinate their activities so long as

Correct AnswerverifiedShow Answer

A technological breakthrough lowers the cost of manufacturing VCRs.As a result,the market changes to a new equilibrium because of

Correct AnswerverifiedShow Answer

Because the height of the demand curve measures the marginal value of the good to consumers,the fact that a demand curve slopes downward to the right illustrates that

Correct AnswerverifiedShow Answer

A recent editorial in a local newspaper argues,"Consumers need to know more about products than just their price.They need to know how these prices are determined,who owns the businesses,and the wages of the workers." Is the editorial writer correct? Why or why not?

Correct AnswerverifiedWhat is missing from the editorial is a ...View AnswerShow Answer

Assume the demand curve for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Correct AnswerverifiedShow Answer

Which of the following would most likely increase demand for tickets to major league baseball games?

Correct AnswerverifiedShow Answer

Figure 3-20 -Refer to Figure 3-20.At the equilibrium price,consumer surplus is

Correct AnswerverifiedShow Answer

When there is excess supply of a product in a market,

Correct AnswerverifiedShow Answer

When economists say the quantity demanded of a product has increased,they mean the

Correct AnswerverifiedShow Answer

The efficiency of market organization is dependent on which of the following?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
What is missing from the editorial is a ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified