Question 1

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)   an increase in the price of mp3 players
B)   a decrease in the number of sellers of mp3 players
C)   an increase in the price of plastic, an input into the production of mp3 players
D)   an improvement in the technology used to produce mp3 playersE) A) and B)
F) A) and D)

Question 3

In a perfectly competitive market, at the market price, buyers

Accepted Answer

A)   cannot buy all they want, and sellers cannot sell all they want.
B)   cannot buy all they want, but sellers can sell all they want.
C)   can buy all they want, but sellers cannot sell all they want.
D)   can buy all they want, and sellers can sell all they want.E) B) and D)
F) None of the above

Question 4

In competitive markets,

Accepted Answer

A)   firms produce identical products.
B)   buyers can influence the market price more easily than sellers.
C)   markets are more likely to be in equilibrium.
D)   sellers are price setters.E) B) and C)
F) None of the above

Question 5

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)   a shortage will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity demanded exceeds quantity supplied.E) All of the above
F) A) and B)

Question 6

Figure 4-12
Firm A Firm B
  
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)   2 units.
B)   10 units.
C)   12 units.
D)   22 units.E) A) and C)
F) C) and D)

Question 7

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

Accepted Answer

A)   an increase in the price of wool shirts and a decrease in the price of raw cotton
B)   a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)   an increase in the price of wool shirts and an increase in the price of raw cotton
D)   a decrease in the price of wool shirts and an increase in the price of raw cottonE) A) and C)
F) A) and B)

Question 8

An improvement in production technology will

Accepted Answer

A)   increase a firm's costs and increase its supply.
B)   increase a firm's costs and decrease its supply.
C)   decrease a firm's costs and increase its supply.
D)   decrease a firm's costs and decrease its supply.E) A) and B)
F) A) and C)

Question 9

The supply of a good or service is determined by

Accepted Answer

A)   those who buy the good or service.
B)   the government.
C)   those who sell the good or service.
D)   both those who buy and those who sell the good or service.E) All of the above
F) A) and B)

Question 10

Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
 
-Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be

Accepted Answer

A)   a shortage of 300 tickets.
B)   a surplus of 300 tickets.
C)   300 tickets sold.
D)   600 tickets unsold.E) A) and B)
F) A) and C)

Question 11

Which of the following would not shift the demand curve for mp3 players?

Accepted Answer

A)   a decrease in the price of mp3 players
B)   a fad that makes mp3 players more popular among 12-25 year olds
C)   an increase in the price of digital music downloads, a complement for mp3 players
D)   a decrease in the price of satellite radio, a substitute for mp3 playersE) C) and D)
F) B) and C)

Question 12

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   None of the above is correct.E) B) and C)
F) C) and D)

Question 13

The following table contains a demand schedule for a good.  If the law of demand applies to this good, then A could be

Accepted Answer

A)   0.
B)   100.
C)   200.
D)   400.E) None of the above
F) A) and B)

Question 14

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Accepted Answer

The answer of Studies show that lower cigarette prices are...

Question 15

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Accepted Answer

A)   hair gel to increase.
B)   razors to increase.
C)   combs to increase.
D)   shampoo to increase.E) None of the above
F) A) and B)

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. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium price?

Accepted Answer

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

Question 17

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 18

The forces that make market economies work are

Accepted Answer

A)   work and leisure.
B)   politics and religion.
C)   supply and demand.
D)   taxes and government spending.E) B) and C)
F) A) and C)

Question 19

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 20

The market supply curve

Accepted Answer

A)   is found by vertically adding the individual supply curves.
B)   slopes downward.
C)   represents the sum of the prices that all the sellers are willing to accept for a given quantity of the good.
D)   represents the sum of the quantities supplied by all the sellers at each price of the good.E) A) and C)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct Answer
verified

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct Answer
verified

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Correct Answer
verified

Which of the following would not shift the demand curve for mp3 players?

Correct Answer
verified

The market supply curve

Correct Answer
verified

An improvement in production technology will

Correct Answer
verified

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

Correct Answer
verified

The forces that make market economies work are

Correct Answer
verified

The supply of a good or service is determined by

Correct Answer
verified

In competitive markets,

Correct Answer
verified

Which of the following would not shift the supply curve for mp3 players?

Correct Answer
verified

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Correct Answer
verified

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Correct Answer
verified

The following table contains a demand schedule for a good. If the law of demand applies to this good, then A could be

Correct Answer
verified

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

Correct Answer
verified

When the price of a good is higher than the equilibrium price,

Correct Answer
verified

In a perfectly competitive market, at the market price, buyers

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct AnswerverifiedShow Answer

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct AnswerverifiedShow Answer

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Correct AnswerverifiedShow Answer

Which of the following would not shift the demand curve for mp3 players?

Correct AnswerverifiedShow Answer

The market supply curve

Correct AnswerverifiedShow Answer

An improvement in production technology will

Correct AnswerverifiedShow Answer

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

Correct AnswerverifiedShow Answer

The forces that make market economies work are

Correct AnswerverifiedShow Answer

The supply of a good or service is determined by

Correct AnswerverifiedShow Answer

In competitive markets,

Correct AnswerverifiedShow Answer

Which of the following would not shift the supply curve for mp3 players?

Correct AnswerverifiedShow Answer

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Correct AnswerverifiedShow Answer

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Correct AnswerverifiedShow Answer

The following table contains a demand schedule for a good. If the law of demand applies to this good, then A could be

Correct AnswerverifiedShow Answer

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

Correct AnswerverifiedShow Answer

When the price of a good is higher than the equilibrium price,

Correct AnswerverifiedShow Answer

In a perfectly competitive market, at the market price, buyers

Correct AnswerverifiedShow Answer

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