9.

Supply curves are generally _______ sloping because _______________

downward; more consumers will buy the good if the price falls.
YES upward; of the principle of increasing opportunity costs
downward; it is less expensive to mass produce goods
NO upward; of inflation
downward; prices fall when firms specialize
Feedback

For more information, see p. 64 of your textbook.

8. Jessica's marginal cost for producing a pitcher of lemonade is $0.25.

Therefore, $0.25 can also be called her
marginal revenue
equilibrium price
YES reservation price
producers surplus
NO total cost of lemonade production
Feedback

For more information, see p. 65 of your textbook

4.

Assume that column A and column B are the initial demand and supply curves. At a
price of $50, the market would experience
an equilibrium.
excess demand of 5 units
NO excess supply of 70 units.
excess demand of 65 units.
YES excess supply of 5 units.
Feedback

For more information, see p. 67 of your textbook.

1. Suppose you bought a concert ticket from Ticketmaster for $50, but when you
got to the concert scalpers were selling tickets in the same seating area as yours
for $25. What is probably true?
NO There is excess demand for this concert at the Ticketmaster price.
the ticket you bought was under-priced for the market.
YES There is an excess supply of tickets for this concert at the
Ticketmaster price.
The Ticketmaster price is an equilibrium price.
The concert completely sold out at the Ticketmaster price.
Feedback

For more information, see p. 68 of your textbook.

3. The buyer's reservation price of a particular good or service is the

minimum amount one would be willing to pay for it.
same as the market price.
YES maximum amount one would be willing to pay for it.
NO price at which one develops reservations about its quality.
price one must pay to ensure one gets it.
Feedback

For more information, see p. 64 of your textbook.

6. Almost every holiday season at least one gift idea achieves fad status. When
that happens, prices tend to increase dramatically. Why?
Irrationality in markets during the holidays
Sellers want to take advantage of people who received a year-end bonus.
YES Quantity demanded exceeds quantity supplied.
Too much government regulation in the market
NO The demand curve for fad items is upward-sloping.
Feedback

For more information, see p. 68 of your textbook.

7. "Holding all other relevant factors constant, consumers will purchase more
of a good as its price falls." This statement reflects the behavior underlying
YES the demand curve.
an increase in demand.
the supply curve.
a decrease in the demand curve.
NO the production possibilities curve.
Feedback

For more information, see p. 63 of your textbook.

8. The shape, slope, and position of a demand curve is determined by

competition in the marketplace.
consumers' preferences.
consumers' wealth.
NO by (a), (b), and (c).
YES by (b) and (c).
Feedback

For more information, see p. 63 of your textbook.