question
A demand curve shows...
A. the willingness to pay for particular quantities.
B. the marginal value placed on particular quantities.
C. quantity demanded at different prices.
D. All of the above are correct
A. the willingness to pay for particular quantities.
B. the marginal value placed on particular quantities.
C. quantity demanded at different prices.
D. All of the above are correct
answer
D
question
If the price of wheat rises, then...
A. the quantity demanded of wheat falls.
B. the quantity supplied of wheat falls.
C. the demand curve for wheat shifts to the right, and the supply curve of wheat shifts to the left.
D. the demand curve for wheat shifts to the left, and the supply curve of wheat shifts to the right.
E. the demand curve for wheat shifts to the left, and the supply curve of wheat shifts to the left.
A. the quantity demanded of wheat falls.
B. the quantity supplied of wheat falls.
C. the demand curve for wheat shifts to the right, and the supply curve of wheat shifts to the left.
D. the demand curve for wheat shifts to the left, and the supply curve of wheat shifts to the right.
E. the demand curve for wheat shifts to the left, and the supply curve of wheat shifts to the left.
answer
A
question
Consumer surplus is represented by...
A. the area below the demand curve and above the horizontal axis.
B. the area below the demand curve and above the price.
C. the area above the supply curve and below the price.
D. the area below the supply curve and above the horizontal axis.
E. the area above the supply curve and below the demand curve.
A. the area below the demand curve and above the horizontal axis.
B. the area below the demand curve and above the price.
C. the area above the supply curve and below the price.
D. the area below the supply curve and above the horizontal axis.
E. the area above the supply curve and below the demand curve.
answer
B
question
Which of the following is correct?
A. Consumer surplus is the maximum price that a consumer is willing to pay.
B. Graphically, consumer surplus is the area beneath the demand curve and above the price.
C. Mr. Bill is willing to pay $10 for one pound of clay. If the price for one pound of clay is $2, then Mr. Bill
receives consumer surplus of $8.
D. Both (B) and (C) are true.
E. (A), (B), and (C) are true.
A. Consumer surplus is the maximum price that a consumer is willing to pay.
B. Graphically, consumer surplus is the area beneath the demand curve and above the price.
C. Mr. Bill is willing to pay $10 for one pound of clay. If the price for one pound of clay is $2, then Mr. Bill
receives consumer surplus of $8.
D. Both (B) and (C) are true.
E. (A), (B), and (C) are true.
answer
D
question
here are three identical vases available to be purchased. Susan is willing to pay $30 for the first, $25 for the second, and $20 for the third. If the price of each vase is $23, what is Susan's consumer surplus for the amount she chooses to purchase?
A. $2.
B. $7.
C. $9.
D. $55.
E. $75.
A. $2.
B. $7.
C. $9.
D. $55.
E. $75.
answer
C
question
Greg buys a stereo. He is willing to pay $750, but the price is only $500. The stereo cost $300 to produce. What is Greg's consumer surplus from this purchase?
A. $750
B. $500
C. $450
D. $300
E. $250
A. $750
B. $500
C. $450
D. $300
E. $250
answer
E
question
A good is "inferior" when...
A. it has a low price.
B. it is of low quality.
C. your demand for it is unchanged when its price falls.
D. your demand for it expands when its price falls.
E. your demand for it expands when your income falls.
A. it has a low price.
B. it is of low quality.
C. your demand for it is unchanged when its price falls.
D. your demand for it expands when its price falls.
E. your demand for it expands when your income falls.
answer
E
question
Canned tuna is an inferior good. Which of the following would cause the demand curve for canned tuna to shift down and to the left?
A. Fall in incomes
B. Fall in the price of canned tuna
C. Rise in the cost of producing canned tuna
D. Rise in incomes
E. Rise in the price of canned tuna
A. Fall in incomes
B. Fall in the price of canned tuna
C. Rise in the cost of producing canned tuna
D. Rise in incomes
E. Rise in the price of canned tuna
answer
D
question
Oak tables and maple tables are substitutes. Which of the following will happen as a result?Suppose the price of maple tables decreases
A. Demand curve for oak tables shifts up and to the right.
B. Demand curve for oak tables shifts down and to the left.
C. Demand curve for maple tables shifts up and to the right.
D. Demand curve for maple tables shifts down and to the left.
A. Demand curve for oak tables shifts up and to the right.
B. Demand curve for oak tables shifts down and to the left.
C. Demand curve for maple tables shifts up and to the right.
D. Demand curve for maple tables shifts down and to the left.
answer
B
question
Hot dogs and buns are complements. Which of the following would cause the demand curve for buns to shift up and to the right?
A. A fall in the price of buns
B. A fall in the price of hot dogs
C. A rise in the price of buns
D. A rise in the price of hot dogs
A. A fall in the price of buns
B. A fall in the price of hot dogs
C. A rise in the price of buns
D. A rise in the price of hot dogs
answer
B
question
You want to purchase a new Mini Cooper convertible.
rebate on Mini Coopers starting next month. As a result, your demand for Mini Coopers today...
A. does not shift.
B. shifts up and to the right.
C. shifts down and to the left.
D. could shift to the left or right, depending on whether it is a normal or inferior good.
rebate on Mini Coopers starting next month. As a result, your demand for Mini Coopers today...
A. does not shift.
B. shifts up and to the right.
C. shifts down and to the left.
D. could shift to the left or right, depending on whether it is a normal or inferior good.
answer
C
question
Producer surplus measures...
A. the seller's gains from trade.
B. the buyer's gains from trade.
C. production costs.
D. inefficiencies.
E. unsold inventories.
A. the seller's gains from trade.
B. the buyer's gains from trade.
C. production costs.
D. inefficiencies.
E. unsold inventories.
answer
A
question
Producer surplus is represented by...
A. the area below the demand curve and above the horizontal axis.
B. the area below the demand curve and above the price.
C. the area above the supply curve and below the price.
D. the area below the supply curve and above the horizontal axis.
E. the area above the supply curve and below the demand curve.
A. the area below the demand curve and above the horizontal axis.
B. the area below the demand curve and above the price.
C. the area above the supply curve and below the price.
D. the area below the supply curve and above the horizontal axis.
E. the area above the supply curve and below the demand curve.
answer
C
question
Suppose Stacy receives a producer surplus of $5 for each apple pie that she sells at a price of $11. This implies that Stacy's marginal cost of producing an apple pie is...
A. $5
B. $6
C. $11
D. $16
E. None of the above
A. $5
B. $6
C. $11
D. $16
E. None of the above
answer
B
question
Wheat is the main input in the production of flour. If the price of wheat increases, then...
A. the demand curve of flour will shift down and to the right.
B. the demand curve of flour will shift up and to the left.
C. the supply curve of flour will shift down and to the right.
D. the supply curve of flour will shift up and to the left.
A. the demand curve of flour will shift down and to the right.
B. the demand curve of flour will shift up and to the left.
C. the supply curve of flour will shift down and to the right.
D. the supply curve of flour will shift up and to the left.
answer
D
question
If the number of sellers of a good increases, the...
A. supply curve shifts up and to the left.
B. supply curve shifts down and to the right.
C. demand curve shifts down and to the left.
D. demand curve shifts up and to the right.
A. supply curve shifts up and to the left.
B. supply curve shifts down and to the right.
C. demand curve shifts down and to the left.
D. demand curve shifts up and to the right.
answer
B
question
If a firm expects the price of their product to increase in the future, then...
A. the demand today will decrease.
B. the price today will decrease.
C. the supply today will increase.
D. the supply today will decrease.
A. the demand today will decrease.
B. the price today will decrease.
C. the supply today will increase.
D. the supply today will decrease.
answer
D
question
Joe runs a landscaping company out of a spare bedroom that could've been rented to college students. If the average rents in Joe's neighborhood rise, then his company's supply curve will shift...
A. up and to the left because his opportunity cost of using the bedroom as an office increased.
B. up and to the left because his opportunity cost of using the bedroom as an office decreased.
C. down and to the right because his opportunity cost of using the bedroom as an office increased.
D. down and to the right because his opportunity cost of using the bedroom as an office decreased.
A. up and to the left because his opportunity cost of using the bedroom as an office increased.
B. up and to the left because his opportunity cost of using the bedroom as an office decreased.
C. down and to the right because his opportunity cost of using the bedroom as an office increased.
D. down and to the right because his opportunity cost of using the bedroom as an office decreased.
answer
A
question
Which of the following factors causes the supply curve for a product to shift down and to the right?
A. An increase in taxes on the product
B. A decrease in preferences for the product
C. A decrease in the costs of production
D. An increase in the price of a substitute.
E. A decrease in subsidies for the product
A. An increase in taxes on the product
B. A decrease in preferences for the product
C. A decrease in the costs of production
D. An increase in the price of a substitute.
E. A decrease in subsidies for the product
answer
C
question
Which of the following would increase producer surplus in the market for oak tables?
A. A price increase
B. A price decrease
C. Both (A) and (B) are correct.
D. None of the above are correct.
A. A price increase
B. A price decrease
C. Both (A) and (B) are correct.
D. None of the above are correct.
answer
A