Question 1

In a market, to find the total amount supplied at a particular price, we must

Accepted Answer

A)  sum the quantities that individual firms are willing and able to supply at that price.
B)  calculate the average of the quantities that individual firms are willing and able to supply at that price.
C)  sum the costs that individual firms incur to supply the product at that price.
D)  account for all determinants of demand.E) B) and D)
F) B) and C)

Question 2

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Accepted Answer

A)  supply curve for Matthew's pies will increase.
B)  supply curve for Matthew's pies will decrease.
C)  demand curve for Matthew's pies will increase.
D)  demand curve for Matthew's pies will decrease.E) A) and B)
F) A) and C)

Question 3

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Accepted Answer

A)  Price will fall, and the effect on quantity is ambiguous.
B)  Price will rise, and the effect on quantity is ambiguous.
C)  Quantity will fall, and the effect on price is ambiguous.
D)  Quantity will rise, and the effect on price is ambiguous.E) None of the above
F) All of the above

Question 4

The demand curve for coffee shifts

Accepted Answer

A)  only when income changes.
B)  when a determinant of the demand for coffee other than the price of coffee changes.
C)  when the price of coffee changes.
D)  Both b and c are correct.E) A) and B)
F) A) and C)

Question 5

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)  today's price of gasoline.
B)  the expected future price of gasoline.
C)  the number of sellers of gasoline.
D)  All of the above are correct.E) B) and D)
F) A) and B)

Question 6

If suppliers expect the price of their product to fall in the future, then they will

Accepted Answer

A)  decrease supply now.
B)  increase supply now.
C)  decrease supply in the future but not now.
D)  increase supply in the future but not now.E) A) and B)
F) C) and D)

Question 7

Equilibrium quantity must increase when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
C)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase.
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) C) and D)
F) A) and D)

Question 8

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Accepted Answer

A)  Both the equilibrium price and quantity would increase.
B)  Both the equilibrium price and quantity would decrease.
C)  The equilibrium price would increase, and the equilibrium quantity would decrease.
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.E) B) and C)
F) A) and D)

Question 9

Advances in production technology typically reduce firms' costs, which increases the quantity supplied at each price.

Accepted Answer

A) True 
 B)False

Question 10

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Accepted Answer

A)  an increase in consumer income
B)  a decrease in consumer income
C)  greater government restrictions on agricultural chemicals
D)  fewer government restrictions on agricultural chemicalsE) None of the above
F) C) and D)

Question 12

Figure 4-3
Consumer 1
Consumer 2  
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

Accepted Answer

A)  0 units.
B)  5 units.
C)  8.33 units.
D)  25 units.E) A) and B)
F) None of the above

Question 13

Soup is an inferior good if the demand

Accepted Answer

A)  for soup falls when the price of a substitute for soup rises.
B)  for soup rises when the price of soup falls.
C)  curve for soup slopes upward.
D)  for soup falls when income rises.E) C) and D)
F) B) and C)

Question 14

Pizza is a normal good if the demand

Accepted Answer

A)  for pizza rises when income rises.
B)  for pizza rises when the price of pizza falls.
C)  curve for pizza slopes upward.
D)  curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.E) A) and C)
F) A) and B)

Question 15

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

A) True 
 B)False

Question 16

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. If only Brook Mountain and Cascade Waters operate in this market, what is the market quantity supplied when the price is $3.00 per case?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 17

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

A)  increases.
B)  decreases.
C)  remains constant, but we observe a movement downward and to the right along the demand curve.
D)  remains constant, but we observe a movement upward and to the left along the demand curve.E) A) and D)
F) C) and D)

Question 18

Which of the following demonstrates the law of demand?

Accepted Answer

A)  After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise.
B)  Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal.
C)  Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal.
D)  Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way.E) A) and B)
F) A) and C)

Question 19

Once the supply curve for a product or service is drawn, it

Accepted Answer

A)  remains stable over time.
B)  can shift either rightward or leftward.
C)  is possible to move along the curve, but the curve will not shift.
D)  tends to become steeper over time.E) A) and B)
F) A) and C)

Question 20

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Today's demand curve for gasoline could shift in response to a change in

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Pizza is a normal good if the demand

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If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

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Once the supply curve for a product or service is drawn, it

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Which of the following demonstrates the law of demand?

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Table 4-15 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-15. If only Brook Mountain and Cascade Waters operate in this market, what is the market quantity supplied when the price is $3.00 per case?

Correct AnswerverifiedShow Answer

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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Equilibrium quantity must increase when demand

Correct AnswerverifiedShow Answer

An increase in the price of a substitute good will shift the demand curve for a good to the right.

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Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

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If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Correct AnswerverifiedShow Answer

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Correct AnswerverifiedShow Answer

Soup is an inferior good if the demand

Correct AnswerverifiedShow Answer

The demand curve for coffee shifts

Correct AnswerverifiedShow Answer

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Correct AnswerverifiedShow Answer

In a market, to find the total amount supplied at a particular price, we must

Correct AnswerverifiedShow Answer

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Correct AnswerverifiedShow Answer

Advances in production technology typically reduce firms' costs, which increases the quantity supplied at each price.

Correct AnswerverifiedShow Answer

If suppliers expect the price of their product to fall in the future, then they will

Correct AnswerverifiedShow Answer

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Correct AnswerverifiedShow Answer

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