3. A vertical supply curve means:
(Chantel Blyskal)
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Demand is perfectly elastic
Supply is Increasing
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Perfectly Elastic
Perfectly Inelastic
(Optional) Explain your answer for partial credit
4. Which choice below is not correctly paired with their model of supply and demand?
(Alexa Cucolo)
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"Rocking Horse" (Impulse-Propagation) -- Leon Walras
"Cobweb" -- Nicholas Kaldor
"Corridor" (Disequilibrium Economics) -- Axel Leijonhufvud
Omit
"Disco" (Search Equilibrium) -- Peter Diamond
(Optional) Explain your answer for partial credit
5. In the videos above, economist Dan Ariely discusses how consumers react to the price of free. What concept can explain consumers'
demand?
The lower the price, the less people demand
Omit
People are irrational; they like free anything
Free is a perfectly elastic price
De gustibus non est disputandum
(Optional) Explain your answer for partial credit
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6. In the video (Up to 2:00) above, liberal talk show host, Sam Seder, explains why universal healthcare is cheaper than private insurance to a EditMore
conservative caller. One possible supply and demand model that would support Seder's argument is the
Cobweb Model
Corridor Model
Disco (Search Equilibrium) Model
Omit
Tatonnement (Auctioneer) Model
(Optional) Explain your answer for partial credit
7. The demand for bananas can be represented by the following equation: f(x) = 32/x^2 [x^2 = x squared]. Brunelli's Bananas cost structure can EditMore
be represented by the following equation: f(x) = 2x^2 due to the diminishing returns to scale of growing bananas in the Northeast United
States. Assuming the monetary unit of these equations is cents, at what price should Mr. Brunelli charge for bananas to clear the market?
2 cents
64 cents
4 cents
8 cents
Omit
(Optional) Explain your answer for partial credit
8. What is an example of diminishing returns to scale?
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Congestion Effects of standing in line for a Bagel
Omit
The behavior of an obsessive, compulsive dieter
Decreasing unit costs due to the division of labor
Bulk Discounts at BJ's or Costco
(Optional) Explain your answer for partial credit
9. Mr. Brunelli's demand for sweater vests can be represented as a function of temperature. Between 50 and 32 degrees Fahrenheit, it is an
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inverse power function (demand = 1/2^x) of temperature, while it is a natural logarithm of temperature (demand = ln x) when the temperature
is below freezing (< 32 degrees Fahrenheit). What could explain Mr. Brunelli's demand curve for sweater vests?
Omit
This is a trick question, Mr. Brunelli has a perfectly elastic demand for sweater vests
In extreme cold temperatures, Mr. Brunelli substitutes sweater vests for long-sleeve sweaters
Mr. Brunelli's demand for sweater vests can be explained by the Cobweb Model.
Mr. Brunelli must buy holiday presents when the weather is cold, decreasing his demand for sweater vests
(Optional) Explain your answer for partial credit
10. The video above (start at 3:00) shows the classic scene of Charlie Brown trying to kick a football. This illustrates what economic idea?
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Omit
Deflationary Spiral; Negative Thoughts feed on themselves by undermining confidence.
Self-Fulfilling Prophecy; Expectations determine Outcomes
Inelastic Demand; Charlies Brown is addicted to kicking the football
Veblen Good; The higher the price, the more desirable kicking the football is.
(Optional) Explain your answer for partial credit
11. What country below did not experience hyperinflation in the last 40 years?
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Zimbabwe
Brazil
Japan
Omit
Former Yugoslavia
(Optional) Explain your answer for partial credit
12. The "Rocking Horse" (Impulse-Propagation) model states that
(Rachael Lerner)
the price system propagates exogenous shocks, but tends toward long-run equilibrium
inward and outward spirals based on the mismatch of long-run and short-run supply
The economy fluctuates in small bands or corridors
"What you want, you can't have; what you have, you don't want"
Omit
(Optional) Explain your answer for partial credit
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13. What statement below is ALWAYS true?
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The optimal equilibrium is also the most stable equilibrium
The supply and demand curves only cross in one place
Omit
Demand curves slope downward
The intersection of supply and demand determine the market equilibrium
(Optional) Explain your answer for partial credit
14. What factor does NOT influence the SHAPE of the demand curve?
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Diminishing Marginal Utility
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Price
Availability of Substitutes
Changes in Wealth or Income
(Optional) Explain your answer for partial credit
15. What is not an example of the "Disco" (Search Equilibrium) model of supply and demand?
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College Visits
Less than universal health insurance coverage in the United States
The Lotka-Volterra Equations (Predator-Prey Model)
Omit
The Nursing Shortage
(Optional) Explain your answer for partial credit
16. Which statement about the American Health Insurance system is NOT true today (10/12/2012)?
The US spends more per person on healthcare than any other developed country
All doctors must accept Medicaid and Medicare coverage
Women pay more than men for individual health insurance coverage
The US spends a greater share of its national income healthcare than any other developed nation
Omit
(Optional) Explain your answer for partial credit
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17. What is NOT a supply and demand explanation for rising physician compensation in the United States during the 20th Century?
Restricted slots at medical schools limit the supply of physicians
The rising cost of prescription drugs
The development of private and public health insurance
The "invention" of new diseases to treat
Omit
(Optional) Explain your answer for partial credit
18. If the chart of supply and demand above is correctly labeled, what should the label be for "A"
Price
Supply
Demand
Y-Axis
Omit
(Optional) Explain your answer for partial credit
19. If the chart of supply and demand above is correctly labeled, what should the label be for "B"
Omit
Quantity
Price
X-Axis
Supply
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(Optional) Explain your answer for partial credit
20. If the chart of supply and demand above is correctly labeled, what should the label be for "C"
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Price
X-Axis
Omit
Supply
Demand
(Optional) Explain your answer for partial credit
21. If the chart of supply and demand above is correctly labeled, what should the label be for "D"?
Demand
Omit
Quantity
X-Axis
Supply
(Optional) Explain your answer for partial credit
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22. The chart above shows a market in disequilibrium with the price-quantity pair shifted away from the intersection of the supply and demand EditMore
curves. If the Cobweb model of supply and demand is correct, what shape will the movement path of the price take over time?
The following applet may help you with your answer. You will need to install the CDF player to view it.
http://demonstrations.wolfram.com/CobwebModel/
A clockwise spiral converging on the equilibrium
Omit
A counter-clockwise spiral away from the equilibrium
A clockwise spiral away from the equilibrium
A regular and stable ellipse centered on the equilibrium
(Optional) Explain your answer for partial credit
23. The model of supply and demand discussed in the video above is?
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The "Corridor" (Disequilibrium) Model
Omit
The "Disco" (Search Equilibrium) Model
The "Cobweb" (Temporal Mismatch) Model
The "Auctioneer" Model
(Optional) Explain your answer for partial credit
24. What model of Supply and Demand predicts that there will be a single, unique ("one price") price-quantity pair in the market?
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The Cobweb Model
Omit
The Rocking Horse Model
The Auctioneer Model
The Disco Model
(Optional) Explain your answer for partial credit
26. The term "conspicuous consumption" is most commonly associated with which economist?
John Kenneth Galbraith
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John Maynard Keynes
Thorstein Veblen
Karl Marx
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(Optional) Explain your answer for partial credit
27. In the 1970s, the Oil Embargo sent a major supply shock through the economies of the developed nations. What model of supply and demand EditMore
would have the most difficulty explaining this development?
The Auctioneer Model
Omit
The Cobweb Model
The Rocking Horse Model
The Corridor Model
(Optional) Explain your answer for partial credit
28. In the short-run, supply curves slope ________________, but in the long-run, they are ________________.
(Armando Allan)
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Downwards; Inelastic
Upwards; Inelastic
Upwards; elastic
Omit
Downwards; elastic
(Optional) Explain your answer for partial credit
29. What country below did not experience hyperinflation in the last 40 years?
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Zimbabwe
Japan
Brazil
Omit
Former Yugoslavia
(Optional) Explain your answer for partial credit
30. SUNY (WCC) charges $60 per concurrent college credit for English 101, while Syracuse University charges $120 per college credit for
Public Affairs 101. Both classes are taught by the same teacher and are equally transferable to other collegiate institutions. The ability to
charge different prices could be because the Syracuse credits are a
Merit Good: WCC is a public institution, while Syracuse is private.
Public Good: Educators want students to study more English than Social Studies
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Status Good: People believe that Syracuse is more prestigious than WCC
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Giffen Good: Students "consume" more English than Social Studies because it is an inferior good
(Optional) Explain your answer for partial credit
31. An economy only has two companies: Evan's Engineers and Larry's Law Enforcers. Evan employs Adam, Andriana, Casey, Christian, and
Steven. Larry employs Joe, Megan, Frank, Ben, Amanda, and Nick. Everyone buys both engineering and law enforcement, there is no
unemployment, and the elasticities of engineering and law enforcement are the same. Joe decides to unionize Larry's employees and
successfully negotiates higher pay. What is the likely impact of this?
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The price of engineering services will stay the same
Omit
The price of engineering services will decrease
Engineering services will adjust by the ratio of employees (5:6)
The price of engineering services will increase
(Optional) Explain your answer for partial credit
32. What is an example of perfectly elastic supply?
The "Endless Shrimp" special at Red Lobster
Grades in Mr. Brunelli's Class
Fiat Currency (Paper Money)
Omit
Nonrenewable resources
(Optional) Explain your answer for partial credit
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