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Exam 4: The Market Forces of Supply and Demand

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Question 301

True/False

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Price cannot fall so low that some sellers choose to supply a quantity of zero.

A) True
B) False

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Question 302

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Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da could be caused by

A) a decrease in price.
B) an increase in the price of a complement.
C) a technological advance.
D) an increase in the price of a substitute.

E) None of the above
F) A) and C)

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Question 303

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Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

Individual supply curves are summed vertically to obtain the market supply curve.

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good?

The law of demand states that, other things equal, an increase in

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)

Figure 4-22 -Refer to Figure 4-22. At a price of $20, there is a

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

An increase in which of the following would shift the supply curve for gasoline to the right?

Individual demand curves are summed vertically to obtain the market demand curve.

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring?

Which of the following would cause price to increase?

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied