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186. Supply curves are ________________ upward sloping.
a.
always
b.
usually
c.
rarely
d.
never
187. Resource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will
______________ and the equilibrium quantity of Y will
a.
rise; rise.
b.
fall; fall.
c.
fall; rise.
d.
rise; fall.
188. Resource X is necessary to the production of good Y. If the price of resource X rises, the _____________ curve for
good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in
the equilibrium quantity of Y.
a.
supply; rightward; decrease; increase.
b.
demand; leftward; decrease; decrease
c.
demand; rightward; increase; increase
d.
supply; leftward; increase; decrease
e.
supply; leftward; increase; increase
189. Good Y is an inferior good. If the average income of those who buy good Y rises, the _____________ curve for good
Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the
equilibrium quantity of Y.
a.
supply; rightward; decrease; increase.
b.
demand; leftward; decrease; decrease
c.
demand; rightward; increase; increase
d.
supply; leftward; increase; decrease
e.
supply; leftward; increase; increase
190. Good X is a normal good. If the average income of those who buy good X rises, the _____________ curve for good
X will shift ____________ resulting in a(n) _____________ in the equilibrium price of X and a(n) ____________ in the
equilibrium quantity of X.
a.
supply; rightward; decrease; increase.
b.
demand; leftward; decrease; decrease
c.
demand; rightward; increase; increase
d.
supply; leftward; increase; decrease
e.
supply; leftward; increase; increase
191. There is a technological improvement in the production of good X. As a result, the _____________ curve for good
X will shift ____________ resulting in a(n) _____________ in the equilibrium price of X and a(n) ____________ in the
equilibrium quantity of X.
a.
supply; rightward; decrease; increase.
b.
demand; leftward; decrease; decrease
c.
demand; rightward; increase; increase
d.
supply; leftward; increase; decrease
e.
supply; leftward; increase; increase
192. One reason that helps to explain the law of supply is the law of
a.
diminishing marginal utility.
b.
diminishing marginal returns.
c.
decreasing opportunity costs.
d.
demand.
193. When P = $5, the quantity demanded of a good is 30 units, and the quantity supplied of the good is 50 units. For
every $1 decrease in the price of this good, quantity demanded rises by 5 units and quantity supplied falls by 5 units. The
equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.
a.
$3; 40
b.
$4; 35
c.
$2; 45
d.
$2; 35
e.
$3; 35
194. When P = $65, the quantity demanded of a good is 80 units, and the quantity supplied of the good is 40 units. For
every $10 increase in the price of this good, quantity demanded falls by 10 units and quantity supplied rises by 10
units. The equilibrium price of this good is ___________and the equilibrium quantity of this good is _________ units.
a.
$55; 30
b.
$75; 50
c.
$75; 70
d.
$85; 50
e.
$85; 60
195. When income rises for the buyers of good X, the ____________ curve for good X will shift ________________.
a.
demand; rightward
b.
demand; leftward
c.
supply; rightward
d.
supply; leftward
e.
This question cannot be answered unless we know whether good X is a normal good, a neutral good, or an
inferior good.
Exhibit 3-11
Units of Good X
Maximum Buying
Price
Minimum Selling Price
Result
1st
$12
$6
(A)
2nd
11
7
(B)
3rd
10
8
(C)
4th
9
9
(D)
5th
8
10
(E)
6th
7
11
(F)
196. Refer to Exhibit 3-11. Fill in blanks (A) and (B) respectively with “Exchange” or “No Exchange” to indicate
whether or not exchange would take place at the given prices.
a.
Exchange; Exchange
b.
Exchange; No Exchange
c.
No Exchange; Exchange
d.
No Exchange; No Exchange
197. Refer to Exhibit 3-11. Fill in blanks (C) and (D) respectively with “Exchange” or “No Exchange”to indicate whether
or not exchange would take place at the given prices.
a.
Exchange; Exchange
b.
Exchange; No Exchange
c.
No Exchange; Exchange
d.
No Exchange; No Exchange
198. Refer to Exhibit 3-11. Fill in blanks (E) and (F) respectively with “Exchange” or “No Exchange”to indicate whether
or not exchange would take place at the given prices.
a.
Exchange; Exchange
b.
Exchange; No Exchange
c.
No Exchange; Exchange
d.
No Exchange; No Exchange
Exhibit 3-12
-----------------------------Quantity Supplied --------------------------------------
Price
Aline
Bentley
Calvin
Daniel
Market
$6
20
21
8
0
(A)
7
22
23
10
4
(B)
8
24
25
13
9
(C)
9
26
27
17
14
(D)
10
28
29
22
20
(E)
11
30
31
32
38
(F)
Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market.
199. Refer to Exhibit 3-12. Fill in blanks (A) and (B) respectively with the market quantity supplied at each given price.
a.
12.25; 14.75
b.
49; 59
c.
37; 45
d.
39; 49
e.
none of the above
200. Refer to Exhibit 3-12. Fill in blanks (C) and (D) respectively with the market quantity supplied at each given price.
a.
17.75; 21.00
b.
47; 52
c.
50; 55
d.
71; 84
e.
none of the above
201. Refer to Exhibit 3-12. Fill in blanks (E) and (F) respectively with the market quantity supplied at given each price.
a.
24.75; 32.75
b.
47; 52
c.
99; 131
d.
48; 65
e.
none of the above
202. Refer to Exhibit 3-12. Each individual seller’s supply curve is ________________ sloping and the market supply
curve is _________________ sloping.
a.
upward; also upward
b.
downward; also downward
c.
upward; downward
d.
downward; upward
Exhibit 3-13
-----------------------------Quantity Demanded-------------------------------------
Price
Jose
Kaitlyn
Leah
Maria
Market
$5
30
11
25
30
(A)
6
27
10
23
26
(B)
7
23
9
20
22
(C)
8
19
8
17
18
(D)
9
14
7
14
13
(E)
10
4
6
10
7
(F)
Assume that Jose, Kaitlyn, Leah, and Maria are the only buyers in this market.
203. Refer to Exhibit 3-13. Fill in blanks (A) and (B) respectively with the market quantity demanded at each given price.
a.
96; 86
b.
24; 21.5
c.
75; 64
d.
82; 72
e.
none of the above
204. Refer to Exhibit 3-13. Fill in blanks (C) and (D) respectively with the market quantity demanded at each given price.
a.
18.5; 15.5
b.
74; 62
c.
75; 64
d.
50; 43
e.
none of the above
205. Refer to Exhibit 3-13. Fill in blanks (E) and (F) respectively with the market quantity demanded at each given price.
a.
12; 6.75
b.
25; 19
c.
75; 64
d.
48; 27
e.
none of the above
206. Refer to Exhibit 3-13. Each individual consumer’s demand curve is ________________ sloping and the market
demand curve is _________________ sloping.
a.
upward; also upward
b.
downward; also downward
c.
upward; downward
d.
downward; upward
Exhibit 3-14
Price of Good X
Quantity
Demanded
Quantity
Supplied
$10
400
60
11
360
70
12
310
80
13
230
90
14
130
130
15
70
110
207. Refer to Exhibit 3-14. At a price of $10, there is a ____________ unit ____________ of good X.
a.
340; surplus
b.
230; shortage
c.
60; surplus
d.
340; shortage
e.
270; shortage
208. Refer to Exhibit 3-14. At a price of $11, there is a ____________ unit ____________ of good X.
a.
290; shortage
b.
215; shortage
c.
40; surplus
d.
290; surplus
e.
230; shortage
209. Refer to Exhibit 3-14. At a price of $12, there is a ____________ unit ____________ of good X.
a.
195; shortage
b.
230; shortage
c.
195; surplus
d.
230; surplus
e.
180; shortage
210. Refer to Exhibit 3-14. At a price of $13, there is a ____________ unit ____________ of good X.
a.
140; shortage
b.
160; shortage
c.
140; surplus
d.
20; surplus
e.
100; surplus
211. Refer to Exhibit 3-14. At a price of $15, there is a ____________ unit ____________ of good X.
a.
40; shortage
b.
90; surplus
c.
40; surplus
d.
20; shortage
e.
20; surplus
212. Which of the following is an example of a service?
a.
medical care
b.
dental care
c.
a psychology lecture
d.
a television set
e.
a, b and c
213. Equilibrium and disequilibrium
a.
are real world states.
b.
are mental constructs used by economists.
c.
foreshadow what is about to happen in a market.
d.
a and b
e.
a, b and c
214. A change in price will lead to a change in __________ and to a change in __________, while a change in
government subsidies will lead to a change in __________ and a change in the number of buyers will lead to a change in
__________.
a.
quantity demanded; quantity supplied; supply; demand
b.
demand; quantity supplied; supply; quantity demanded
c.
quantity demanded; supply; quantity supplied; demand
d.
quantity supplied; quantity demanded; demand; supply
e.
quantity demanded; demand; quantity supplied; supply
215. If a market is in disequilibrium, economists would predict that the product’s price would __________ to reach
equilibrium when the quantity demanded is __________ than the quantity supplied.
a.
rise; greater
b.
fall; less
c.
fall; greater
d.
rise; less
e.
a and b
NOTES:
New
Exhibit 3-17
Price of Good X
Quantity
Supplied
Quantity
Demanded
$20
400
260
19
360
290
18
310
310
17
230
350
16
130
400
15
70
450
216. Refer to Exhibit 3-17. At a price of $20, the quantity demanded of good X is ____________ than the quantity
supplied of good X, and economists would use this information to predict that the price of good X would soon
______________. This would push the price __________ the equilibrium price.
a.
greater; fall; toward
b.
greater; rise; toward
c.
less; fall; toward
d.
less; rise; away from
e.
less; fall; away from
217. Refer to Exhibit 3-17. At a price of $16, the quantity demanded of good X is ____________ than the quantity
supplied of good X, and economists would use this information to predict that the price of good X would soon
______________. This would push the price __________ the equilibrium price.
a.
greater; fall; toward
b.
greater; rise; toward
c.
less; fall; toward
d.
less; rise; away from
e.
greater; rise; away from
218. The law of demand states that price and ______________ are _____________ related, ceteris paribus.
a.
demand; inversely
b.
quantity demanded; inversely
c.
demand; directly
d.
quantity demanded; directly
e.
quantity supplied; directly
219. According to the law of demand, the higher the price of an assigned textbook, the _______________ the quantity
demanded of assigned textbooks will be, ceteris paribus, and the ______________ likely students will seek out an
alternative to the assigned textbook.
a.
lower; less
b.
lower; more
c.
higher; less
d.
higher; more
Essay
220. Explain the difference between a change in supply and a change in quantity supplied. Be sure to state what causes
each to change and how they differ when graphed.
221. Suppose that the average price of refrigerators has fallen over the past few years, yet the refrigerator companies have
offered more and more of them for sale. Does this mean that the supply curve for refrigerators is downward sloping?
Explain.
222. When Hurricane Katrina hit the Gulf Coast of the United States in 2005 it destroyed 5,000,000 acres of
timber. Given that lumber is timber that has been sawed or split into planks and boards, explain in terms of supply and/or
demand how the hurricane impacted each of the following markets (be sure to note the expected resulting impact on
equilibrium price and quantity):
a.
Domestic lumber
b.
Imported lumber
c.
New home construction
223. Explain the difference between a change in demand and a change in quantity demanded. Be sure to specify what
causes each to change and how they differ when graphed.
224. Describe one of the two reasons given in the textbook to help explain why price and quantity demanded are inversely
related.
225. Explain why the price of a good tends to fall when there is a surplus of the good. Give a hypothetical numerical
example to help support your answer.
226. Explain why the price of a good tends to rise when there is a shortage of the good. Give a hypothetical numerical
example to help support your answer.
227. Explain what it means to say that “the market” feeds Cleveland. Give an example using a specific food item to help
support your answer.
228. With respect to the supply and demand for a given product, describe the connection that exists between
equilibrium/disequilibrium and predictions. Cite your own unique example in order to help support your answer.
