Question 1

Even though prices may change frequently,they can be expected to gravitate toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 2

If the government puts price controls on medical care,this will increase the supply of affordable care in the United States.

Accepted Answer

A) True 
 B)False

Question 3

If the price of hamburger rises,we would expect the demand for steak to shift to the right.

Accepted Answer

A) True 
 B)False

Question 4

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

Accepted Answer

A)  wage floors for soldiers in the army. 
B)  bonuses for soldiers who re-enlisted. 
C)  laws to buy food for the soldiers stationed in Pennsylvania. 
D)  price controls on essential commodities. 
E)  All of the above are correct. 
A)  wage floors for soldiers in the army. 
B)  bonuses for soldiers who re-enlisted. 
C)  laws to buy food for the soldiers stationed in Pennsylvania. 
D)  price controls on essential commodities. 
E)  All of the above are correct.

Question 5

What is the economic reasoning behind the proposal to legalize drugs?

Accepted Answer

A)  Legal drugs will greatly increase the supply,which will reduce the price Americans pay to foreign producers of the drugs. 
B)  All forms of government restrictions on behavior are immoral,and ought to be removed. 
C)  Legal drugs will be much cheaper than illegal drugs,which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses." 
D)  Legal drugs will be more expensive than illegal drugs,and the market system will encourage more production,thus lowering the price. 
E)  Dealing with supply is always easier than dealing with demand,and legalization accomplishes that. 
A)  Legal drugs will greatly increase the supply,which will reduce the price Americans pay to foreign producers of the drugs. 
B)  All forms of government restrictions on behavior are immoral,and ought to be removed. 
C)  Legal drugs will be much cheaper than illegal drugs,which will reduce incentive for crime to obtain money for drugs and to protect drug "businesses." 
D)  Legal drugs will be more expensive than illegal drugs,and the market system will encourage more production,thus lowering the price. 
E)  Dealing with supply is always easier than dealing with demand,and legalization accomplishes that.

Question 6

Each point on the demand curve is

Accepted Answer

A)  demand for the product. 
B)  a quantity demanded at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to buy at different income levels. 
E)  All of the above are correct. 
A)  demand for the product. 
B)  a quantity demanded at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to buy at different income levels. 
E)  All of the above are correct.

Question 7

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Accepted Answer

A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded. 
A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded.

Question 8

If supply increases,the equilibrium price will rise and the equilibrium quantity will fall.

Accepted Answer

A) True 
 B)False

Question 9

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  It depends entirely on the interest rate. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  It depends entirely on the interest rate.

Question 10

Advertising has no effect on the demand schedule for a good.

Accepted Answer

A) True 
 B)False

Question 11

Economists use the mechanism of supply and demand to study: ​

Accepted Answer

A)  ​inflation 
B)  ​unemployment 
C)  ​environmental protection 
D)  ​both a and b 
E)  ​all of these 
A)  ​inflation 
B)  ​unemployment 
C)  ​environmental protection 
D)  ​both a and b 
E)  ​all of these

Question 12

A common misconception about supply is that

Accepted Answer

A)  supply depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct. 
A)  supply depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct.

Question 13

Normally,to the extent that a governmental control mechanism succeeds in affecting price,it can be expected to lead to a corresponding

Accepted Answer

A)  reduction in the volume of sales only if the price is forced down. 
B)  reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up. 
C)  decrease in the volume of sales whether the price is forced up or down. 
D)  increase in the volume of sales whether the price is forced up or down. 
A)  reduction in the volume of sales only if the price is forced down. 
B)  reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up. 
C)  decrease in the volume of sales whether the price is forced up or down. 
D)  increase in the volume of sales whether the price is forced up or down.

Question 14

Suppose the numbers in parentheses represent two points on a line: (59 billion quarts; $4)and (78 billion quarts; $6).The line is most likely a

Accepted Answer

A)  production possibilities frontier for milk. 
B)  supply curve for milk. 
C)  demand curve for milk. 
D)  ray through the origin. 
E)  time series line. 
A)  production possibilities frontier for milk. 
B)  supply curve for milk. 
C)  demand curve for milk. 
D)  ray through the origin. 
E)  time series line.

Question 15

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question.

Question 16

Which of the following will shift the demand curve for milk?

Accepted Answer

A)  change in the income of buyers of milk 
B)  change in the price of milk 
C)  change in input prices for milk 
D)  All of the above are correct. 
A)  change in the income of buyers of milk 
B)  change in the price of milk 
C)  change in input prices for milk 
D)  All of the above are correct.

Question 17

A surplus occurs when price is higher than the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 18

The United States typically experiences a large surplus of milk annually.This is caused by

Accepted Answer

A)  a price ceiling in the market. 
B)  not enough demand for milk. 
C)  a price floor in the market. 
D)  overproduction of milk by the cows. 
A)  a price ceiling in the market. 
B)  not enough demand for milk. 
C)  a price floor in the market. 
D)  overproduction of milk by the cows.

Question 19

Since rent controls have been in effect in New York City,apartments have been more plentiful.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-4  
-Assume that Figure 4-4 shows demand for orange juice.An increase in the price of soda will change demand from

Accepted Answer

A)  D1 to D2. 
B)  D2 to D1. 
C)  D3 to D2. 
D)  D3 to D1. 
A)  D1 to D2. 
B)  D2 to D1. 
C)  D3 to D2. 
D)  D3 to D1.

Even though prices may change frequently,they can be expected to gravitate toward equilibrium.

If the government puts price controls on medical care,this will increase the supply of affordable care in the United States.

If the price of hamburger rises,we would expect the demand for steak to shift to the right.

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

What is the economic reasoning behind the proposal to legalize drugs?

Each point on the demand curve is

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

If supply increases,the equilibrium price will rise and the equilibrium quantity will fall.

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Advertising has no effect on the demand schedule for a good.

Economists use the mechanism of supply and demand to study:

A common misconception about supply is that

Normally,to the extent that a governmental control mechanism succeeds in affecting price,it can be expected to lead to a corresponding

Suppose the numbers in parentheses represent two points on a line: (59 billion quarts; $4)and (78 billion quarts; $6).The line is most likely a

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Which of the following will shift the demand curve for milk?

A surplus occurs when price is higher than the market equilibrium.

The United States typically experiences a large surplus of milk annually.This is caused by

Since rent controls have been in effect in New York City,apartments have been more plentiful.

Figure 4-4 -Assume that Figure 4-4 shows demand for orange juice.An increase in the price of soda will change demand from

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 4: Supply and Demand An Initial Look

Even though prices may change frequently,they can be expected to gravitate toward equilibrium.

If the government puts price controls on medical care,this will increase the supply of affordable care in the United States.

If the price of hamburger rises,we would expect the demand for steak to shift to the right.

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

What is the economic reasoning behind the proposal to legalize drugs?

Each point on the demand curve is

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

If supply increases,the equilibrium price will rise and the equilibrium quantity will fall.

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to the quantity of money supplied if the interest rate increases?

Advertising has no effect on the demand schedule for a good.

Economists use the mechanism of supply and demand to study: ​

A common misconception about supply is that

Normally,to the extent that a governmental control mechanism succeeds in affecting price,it can be expected to lead to a corresponding

Suppose the numbers in parentheses represent two points on a line: (59 billion quarts; $4)and (78 billion quarts; $6).The line is most likely a

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Which of the following will shift the demand curve for milk?

A surplus occurs when price is higher than the market equilibrium.

The United States typically experiences a large surplus of milk annually.This is caused by

Since rent controls have been in effect in New York City,apartments have been more plentiful.

Figure 4-4 -Assume that Figure 4-4 shows demand for orange juice.An increase in the price of soda will change demand from

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Economists use the mechanism of supply and demand to study: