| Chapter 03: Quiz |
| 1 | Quantity demanded: |
| A. | shows how much sellers are willing and able to sell at different prices. |
| B. | shows how much buyers are willing and able to buy at different prices. |
| C. | is the amount that buyers are willing and able to buy at a particular price. |
| D. | is the amount that sellers are willing and able to sell at a particular price. |
| 2 | Use the following figure to answer the question(s) bleow. |
| Figure: Producer Surplus |
| Reference: Ref 3-5 |
| (Figure: Producer Surplus) In the diagram the market price of coffee is $4. How much producer surplus do suppliers earn? |
| A. | $20 |
| B. | $22.50 |
| C. | $45 |
| D. | $15 |
| 3 | Consumer surplus is the amount that consumers: |
| A. | actually pay for a good. |
| B. | are willing to pay for a good minus what they actually pay for it. |
| C. | are willing to pay for a good plus the amount that they actually pay for it. |
| D. | are willing to pay for a good. |
| 4 | A farmer can grow soy or sorghum. If the price of soy increases, the opportunity cost of growing sorghum ______, shifting the supply curve of sorghum ______. |
| A. | decreases; down and to the right |
| B. | decreases; up and to the left |
| C. | increases; up and to the left |
| D. | increases; down and to the right |
| 5 | Which of the following does NOT shift demand? |
| A. | expectations |
| B. | population |
| C. | price |
| D. | income |
| 6 | There are 100 consumers, each of whom values a concert ticket at a unique whole number dollar amount between $1 and $100. One customer is willing to pay $1, a second is willing to pay $2, a third is willing to pay $3, and so on. An unlimited number of concert tickets are on sale for $15 each. What is the total consumer surplus in this market? |
| A. | $4,887.50 |
| B. | $5,000.00 |
| C. | $4,250.00 |
| D. | $3,612.50 |
| 7 | Use the following figure to answer the question(s) below. |
| Figure: Supply Shift 2 |
| Reference: Ref 3-7 |
| (Figure: Supply Shift 2) Refer to the figure. What would cause the supply curve to shift from S1 to S2? |
| A. | a $40 subsidy on each unit of output |
| B. | a $20 tax on each unit of output |
| C. | a $40 tax on each unit of output |
| D. | A $20 subsidy on each unit of output |
| 8 |
| 9 |
| 10 | If prices rise, what happens to producer surplus (all other things being equal)? |
| A. | It falls, because it encourages competition, which reduces profits. |
| B. | It falls, because fewer people buy goods. |
| 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. |
| 11 | Use this diagram for the question(s) below. |
| Figure: Quantity of Good X |
| Reference: Ref 3-3 |
| (Figure: Quantity of Good X) Refer to the figure. As the price falls from $200 to $100, consumer surplus changes by: |
| A. | $12,500.00 |
| B. | $5,000.00 |
| C. | $10,000.00 |
| D. | –$25,000. |
| 12 | In 2011, revolutions and uprisings spread across North Africa and the Middle East, where a lot of oil is pumped. How did this affect the oil market? |
| A. | Supply increased, causing the price to fall. |
| B. | Supply increased, causing the price to rise. |
| C. | Supply decreased, causing the price to rise. |
| D. | Supply decreased, causing the price to fall. |
| 13 | When the price of wood is high: |
| A. | consumers will be more likely to use wood in its least valuable uses. |
| B. | the quantity demanded of wood will also rise. |
| C. | the quantity demanded of wood will be unaffected. |
| D. | consumers will be more likely to use wood in its most valuable uses. |
| 14 | Use this diagram for the question(s) below. |
| Figure: Oil |
| Reference: Ref 3-4 |
| (Figure: Oil) Compared with producing the 20 millionth barrel of oil, the cost of producing the 40 millionth barrel of oil is: |
| A. | higher. |
| B. | lower. |
| C. | approximately the same. |
| D. | impossible to determine. |
| 15 | (Figure: Shifting Demand) |
| In the diagram, which of the following factors would cause the demand curve to shift from D1 to D2? |
| A. | an increase in the price of a substitute good |
| B. | an increase in the population |
| C. | an increase in income if this is an inferior good |
| D. | a decrease in the price of a complement good |
| 16 | If the demand for good A increases when the price of good B increases, then good A and good B are: |
| A. | both inferior goods. |
| B. | not related. |
| C. | substitutes for each other. |
| D. | complements to each other. |
| 17 | Anonymity on the Internet has lowered the cost of rudely confronting people. What has happened to the supply of rude confrontations? |
| A. | The supply has increased, shifting down and to the right. |
| B. | The supply has decreased, shifting up and to the left. |
| C. | The supply has decreased, shifting down and to the right. |
| D. | The supply has increased, shifting up and to the left. |
| 18 | Consumer surplus is a gain from exchange, but producer surplus is a loss from exchange. |
| 19 | For a normal good, higher income results in: |
| A. | a decrease in demand. |
| B. | an increase in demand. |
| C. | an increase in the quantity demanded. |
| D. | a decrease in the quantity demanded. |
| 20 | Zoey receives a big raise at work and decides to buy additional Precious Moments figurines. Which of the following statements is TRUE? |
| A. | Zoey considers Precious Moments figurines to be an inferior good. |
| B. | Zoey's demand for Precious Moments figurines decreased. |
| C. | Zoey considers Precious Moments figurines to be a normal good. |
| D. | Zoey's demand for Precious Moments figurines increased because they are relatively less expensive. |
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