Question 1

Use the following to answer questions:
Figure: Bananas 
-(Figure: Bananas)  Refer to the figure. If the price of bananas is $10 a pound, which number is closest to the number of pounds that suppliers will supply?

Accepted Answer

A)   5
B)   50
C)   60,000
D)   80,000

Question 2

A market has a supply equation as follows: Qs = P. The market price for the product is $50. Calculate the dollar amount of producer surplus in this market and illustrate your answer graphically.

Accepted Answer

The first step is to calculate the inter...

Question 3

Which of the following are likely to be complements?

Accepted Answer

A)   hot dogs and hamburgers
B)   books and book-lights
C)   coffee and tea
D)   cars and vans

Question 4

Recall the discussion in your textbook about the supply curve for oil. What explains why the supply curve for oil is positively sloped?

Accepted Answer

A)   As the price of oil rises, producers' costs of drilling oil also rise.
B)   As more and more producers enter the market, the price of oil rises.
C)   As the price of oil rises, consumers buy less and less oil.
D)   As the price of oil rises, more producers enter the market.

Question 5

What does the law of supply state?

Accepted Answer

A)   There is a positive relationship between price and quantity supplied.
B)   There is a negative relationship between price and quantity supplied.
C)   When prices rise, suppliers sell more.
D)   When prices rise, buyers buy less of the product.

Question 6

An inferior good is one that:

Accepted Answer

A)   is of low quality or not very durable.
B)   gets poor reviews from objective, independent evaluators.
C)   no consumers are willing to buy.
D)   experiences decreased demand when income increases.

Question 7

The demand curve for oil shows:

Accepted Answer

A)   the quantity demanded of oil at different income levels.
B)   the quantity demanded of oil at different oil prices.
C)   the demand for oil at different prices of other goods.
D)   the demand for oil when there is a surplus or shortage.

Question 8

If prices rise, what happens to producer surplus (all other things being equal) ?

Accepted Answer

A)   It falls, because fewer people buy goods.
B)   It falls, because it encourages competition, which reduces profits.
C)   It rises, because each producer is getting more surplus per good sold.
D)   It stays the same, because the forces increasing the surplus counteract the forces reducing it.

Question 9

The supply curve shows the relationship between:

Accepted Answer

A)   demand and supply.
B)   quantity demanded and quantity supplied.
C)   price and quantity supplied.
D)   price and quantity demanded.

Question 10

If the price of computers ______, the demand for printers will ______.

Accepted Answer

A)   increases; increase
B)   decreases; decrease
C)   decreases; not change
D)   increases; decrease

Question 11

If you are willing to pay $8 for a $6 burrito, what is your consumer surplus if you buy it?

Accepted Answer

A)   $8
B)   $2
C)   $0
D)   $6

Question 12

If, for a given amount of a good or service, willingness to pay decreases, then:

Accepted Answer

A)   supply has increased.
B)   supply has decreased.
C)   demand has increased.
D)   demand has decreased.

Question 13

A higher opportunity cost of producing a good increases the supply of that good.

Accepted Answer

A) True 
 B)False

Question 14

The quantity supplied is the quantity that:

Accepted Answer

A)   sellers are willing to sell but they cannot produce enough.
B)   sellers are able to sell at a given cost but they are not willing to sell.
C)   sellers are willing to sell at a given cost.
D)   sellers are willing and able to sell at a given price.

Question 15

In the market for fertilizer, an:

Accepted Answer

A)   increase in the wage rate will increase the demand for fertilizer.
B)   advance in technology will increase the supply of fertilizer.
C)   increase in the wage rate will increase the supply of fertilizer.
D)   increase in the cost of equipment will increase the supply of fertilizer.

Question 16

If the price of _____ rises, all else the same, the demand for large SUVs will decrease.

Accepted Answer

A)   electric vehicles
B)   gasoline
C)   minivans
D)   motorcycles

Question 17

A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

Accepted Answer

A) True 
 B)False

Question 18

In the week before Hurricane Katrina, the price of flashlights rose in New Orleans because of:

Accepted Answer

A)   an increase in supply.
B)   an increase in demand.
C)   a decrease in supply.
D)   a decrease in demand.

Question 19

If the price of gas is expected to rise sharply in the future, all else the same, the demand for gas today will:

Accepted Answer

A)   increase
B)   decrease
C)   remain the same
D)   change in an indeterminate direction

Question 20

A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

Accepted Answer

A)   decreases; down and to the right
B)   increases; down and to the right
C)   decreases; up and to the left
D)   increases; up and to the left

Exam 3: Supply and Demand

If the price of _____ rises, all else the same, the demand for large SUVs will decrease.

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The quantity supplied is the quantity that:

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If you are willing to pay $8 for a $6 burrito, what is your consumer surplus if you buy it?

Correct AnswerverifiedShow Answer

A market has a supply equation as follows: Qs = P. The market price for the product is $50. Calculate the dollar amount of producer surplus in this market and illustrate your answer graphically.

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

A farmer can grow either apples or oranges. An increase in the price of apples ______ the opportunity cost of growing oranges so that the supply curve of oranges shifts ______.

Correct AnswerverifiedShow Answer

A change in price is reflected by a movement along the same demand curve while a change in demand refers to a shift of the entire demand curve.

Correct AnswerverifiedShow Answer

What does the law of supply state?

Correct AnswerverifiedShow Answer

Which of the following are likely to be complements?

Correct AnswerverifiedShow Answer

Recall the discussion in your textbook about the supply curve for oil. What explains why the supply curve for oil is positively sloped?

Correct AnswerverifiedShow Answer

The demand curve for oil shows:

Correct AnswerverifiedShow Answer

A higher opportunity cost of producing a good increases the supply of that good.

Correct AnswerverifiedShow Answer

If, for a given amount of a good or service, willingness to pay decreases, then:

Correct AnswerverifiedShow Answer

If prices rise, what happens to producer surplus (all other things being equal) ?

Correct AnswerverifiedShow Answer

If the price of computers ______, the demand for printers will ______.

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Bananas -(Figure: Bananas) Refer to the figure. If the price of bananas is $10 a pound, which number is closest to the number of pounds that suppliers will supply?

Correct AnswerverifiedShow Answer

In the week before Hurricane Katrina, the price of flashlights rose in New Orleans because of:

Correct AnswerverifiedShow Answer

In the market for fertilizer, an:

Correct AnswerverifiedShow Answer

The supply curve shows the relationship between:

Correct AnswerverifiedShow Answer

If the price of gas is expected to rise sharply in the future, all else the same, the demand for gas today will:

Correct AnswerverifiedShow Answer

An inferior good is one that:

Correct AnswerverifiedShow Answer

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A market has a supply equation as follows: Q_s = P. The market price for the product is $50. Calculate the dollar amount of producer 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

A farmer can grow either apples or oranges. An increase in the price of apples the opportunity cost of growing oranges so that the supply curve of oranges shifts .

Correct Answer
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If the price of computers , the demand for printers will .

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