Question 1

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-18 
-Refer to Figure 4-18. At a price of $35, there would be a

Accepted Answer

A)   shortage of 400 units.
B)   surplus of 200 units.
C)   surplus of 400 units.
D)   surplus of 600 units.E) B) and C)
F) A) and D)

Question 3

Figure 4-18 
-Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good?

Accepted Answer

A)   $15
B)   $20
C)   $30
D)   $35E) A) and C)
F) C) and D)

Question 4

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 5

In a market economy, supply and demand determine

Accepted Answer

A)   both the quantity of each good produced and the price at which it is sold.
B)   the quantity of each good produced but not the price at which it is sold.
C)   the price at which each good is sold but not the quantity of each good produced.
D)   neither the quantity of each good produced nor the price at which it is sold.E) A) and C)
F) All of the above

Question 6

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.E) C) and D)
F) All of the above

Question 7

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) All of the above
F) B) and C)

Question 8

The demand curve for a good is a line that relates

Accepted Answer

A)   price and quantity demanded.
B)   income and quantity demanded.
C)   quantity demanded and quantity supplied.
D)   price and income.E) A) and B)
F) A) and C)

Question 9

Table 4-8
 
-Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)   6 units.
B)   12 units.
C)   18 units.
D)   24 units.E) C) and D)
F) B) and C)

Question 10

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

A)   granite countertops to shift to the left.
B)   granite countertops to shift to the right.
C)   substitute products such as marble countertops to shift to the right.
D)   substitute products such as marble countertops to be unaffected by buyers' preferences for granite.E) All of the above
F) B) and C)

Question 11

If Miguel expects to earn a higher income next month, he may choose to

Accepted Answer

A)   save more now and spend less of his current income on goods and services.
B)   save less now and spend more of his current income on goods and services.
C)   decrease his current demand for goods and services.
D)   move along his current demand curves for goods and services.E) B) and C)
F) A) and D)

Question 12

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) B) and C)
F) C) and D)

Question 13

Figure 4-31
Consider the market for 2-packs of light bulbs below. 
-Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Accepted Answer

Equilibrium price de...

Question 14

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-23 
-Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

Accepted Answer

A)   increases and the equilibrium quantity decreases.
B)   decreases and the equilibrium quantity is ambiguous.
C)   and quantity both increase.
D)   and quantity both decrease.E) C) and D)
F) All of the above

Question 16

If a firm is a price taker, it operates in a

Accepted Answer

A)   competitive market.
B)   monopoly market.
C)   oligopoly market.
D)   monopolistically competitive market.E) None of the above
F) B) and D)

Question 17

If muffins and bagels are substitutes, a higher price for bagels would result in an)

Accepted Answer

A)   increase in the demand for bagels.
B)   decrease in the demand for bagels.
C)   increase in the demand for muffins.
D)   decrease in the demand for muffins.E) B) and C)
F) A) and B)

Question 18

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)   The number of people who purchase olives decreases.
B)   Consumer income decreases, and olives are a normal good.
C)   The price of pickles decreases, and pickles are a substitute for olives.
D)   The price of olives rises.E) B) and C)
F) C) and D)

Question 19

Figure 4-21 
-Refer to Figure 4-21. What is the equilibrium price in this market?

Accepted Answer

A)   $0
B)   $5
C)   $10
D)   $20E) A) and B)
F) All of the above

Question 20

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A)   the prices of related goods
B)   income
C)   tastes
D)   the prices of the inputs used to produce the goodE) All of the above
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Figure 4-18 -Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good?

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

Figure 4-23 -Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

Correct AnswerverifiedShow Answer

The demand curve for a good is a line that relates

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine

Correct AnswerverifiedShow Answer

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Correct AnswerverifiedShow Answer

If muffins and bagels are substitutes, a higher price for bagels would result in an)

Correct AnswerverifiedShow Answer

Which of the following is not a determinant of the demand for a particular good?

Correct AnswerverifiedShow Answer

If a shortage exists in a market, then we know that the actual price is

Correct AnswerverifiedShow Answer

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium price in this market?

Correct AnswerverifiedShow Answer

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Correct AnswerverifiedShow Answer

The demand curve is the upward-sloping line relating price and quantity demanded.

Correct AnswerverifiedShow Answer

If a firm is a price taker, it operates in a

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be a

Correct AnswerverifiedShow Answer

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Correct AnswerverifiedShow Answer

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Correct AnswerverifiedEquilibrium price de...View AnswerShow Answer

If Miguel expects to earn a higher income next month, he may choose to

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

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