Question 1

According to the law of demand, only the price of a good influences the amount people will choose to purchase.

Accepted Answer

A) True 
 B)False

Question 2

One reason economists distinguish between micro and macro is supply and demand are:

Accepted Answer

A)  unrelated to one another. 
B)  more interdependent in the aggregate (macro). 
C)  more interdependent in individual markets (micro). 
D)  never interdependent. 
A)  unrelated to one another. 
B)  more interdependent in the aggregate (macro). 
C)  more interdependent in individual markets (micro). 
D)  never interdependent.

Question 3

Refer to the graphs shown. The market is caviar. Which graph best represents the impact of an increase in consumer incomes on the market for caviar?

Accepted Answer

A)  Graph a 
B)  Graph b 
C)  Graph c 
D)  Graph d 
A)  Graph a 
B)  Graph b 
C)  Graph c 
D)  Graph d

Question 4

Refer to the table that presents Mike and Janet's demand for apples by the bushel. If they are the only two in the market, which of the following represents a point on the market demand curve? $\begin{array}{|c|c|c|}
\hline \text { Price per peck } & \text { Mike Quantity in pecks } & \text { Janet Quantity in pecks } \
\hline \$ 1 & 22 & 6 \
\hline \$ 2 & 18 & 3 \
\hline \$ 3 & 14 & 0 \
\hline \$ 4 & 10 & 0 \
\hline \$ 5 & 6 & 0 \
\hline
\end{array}$

Accepted Answer

A)  price = $1, quantity = 18 
B)  price = $2, quantity = 21 
C)  price = $4, quantity = 0 
D)  price = $4, quantity = 21 
A)  price = $1, quantity = 18 
B)  price = $2, quantity = 21 
C)  price = $4, quantity = 0 
D)  price = $4, quantity = 21

Question 5

Which of the following would best explain a decrease in the supply of squash?

Accepted Answer

A)  An increase in the price of other vegetables 
B)  An increase in the price of squash 
C)  A decrease in the price of squash 
D)  A decrease in the cost of growing squash 
A)  An increase in the price of other vegetables 
B)  An increase in the price of squash 
C)  A decrease in the price of squash 
D)  A decrease in the cost of growing squash

Question 6

Given the graph shown, the quantity that would be associated with the price of $1 in a supply table would be:

Accepted Answer

A)  3. 
B)  2. 
C)  1. 
D)  0. 
A)  3. 
B)  2. 
C)  1. 
D)  0.

Question 7

Suppose the supply and demand tables shown reflect the supply and demand for milk per week. At a price of $4, there is a: $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Price } \
\text { (per gallon) }
\end{array} & \begin{array}{c}
\text { Quantity demanded (gallons per } \
\text { week) }
\end{array} & \begin{array}{c}
\text { Quantity Supplied (gallons per } \
\text { week) }
\end{array} \
\hline \$ 1 & 2,000 & 1,000 \
\hline \$ 2 & 1,500 & 1,500 \
\hline \$ 3 & 1,000 & 2,000 \
\hline \$ 4 & 500 & 2,500 \
\hline
\end{array}$

Accepted Answer

A)  surplus of 1,000 gallons per week. 
B)  surplus of 2,000 gallons per week. 
C)  shortage of 1,000 gallons per week. 
D)  shortage of 2,000 gallons per week. 
A)  surplus of 1,000 gallons per week. 
B)  surplus of 2,000 gallons per week. 
C)  shortage of 1,000 gallons per week. 
D)  shortage of 2,000 gallons per week.

Question 8

Which of the following would cause quantity demanded to change without changing the demand curve?

Accepted Answer

A)  A change in income 
B)  A change in the price of the good 
C)  A change in tastes and preferences 
D)  A change in the price of a substitute good 
A)  A change in income 
B)  A change in the price of the good 
C)  A change in tastes and preferences 
D)  A change in the price of a substitute good

Question 9

Given the graph, the quantity that would be associated with the price of $1 in a demand table would be:

Accepted Answer

A)  6. 
B)  5. 
C)  4. 
D)  3. 
A)  6. 
B)  5. 
C)  4. 
D)  3.

Question 10

Suppose the given supply and demand tables reflect the supply and demand for milk per week. At a price of $1, there is a: $\begin{array}{|c|c|c|}
\hline \begin{array}{c}
\text { Price } \
\text { (per gallon) }
\end{array} & \begin{array}{c}
\text { Quantity demanded (gallons per } \
\text { week) }
\end{array} & \begin{array}{c}
\text { Quantity Supplied (gallons per } \
\text { week) }
\end{array} \
\hline \$ 1 & 2,000 & 1,000 \
\hline \$ 2 & 1,500 & 1,500 \
\hline \$ 3 & 1,000 & 2,000 \
\hline \$ 4 & 500 & 2,500 \
\hline
\end{array}$

Accepted Answer

A)  surplus of 500 gallons per week. 
B)  surplus of 1,000 gallons per week. 
C)  shortage of 2,500 gallons per week. 
D)  shortage of 1,000 gallons per week. 
A)  surplus of 500 gallons per week. 
B)  surplus of 1,000 gallons per week. 
C)  shortage of 2,500 gallons per week. 
D)  shortage of 1,000 gallons per week.

Question 11

The law of demand states that consumers buy more of a good when its price declines:

Accepted Answer

A)  because their income increases at the same time. 
B)  only if their income increases at the same time. 
C)  even if other demand determinants change at the same time. 
D)  provided all else remains constant. 
A)  because their income increases at the same time. 
B)  only if their income increases at the same time. 
C)  even if other demand determinants change at the same time. 
D)  provided all else remains constant.

Question 12

An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of:

Accepted Answer

A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in supply. 
D)  a decrease in supply. 
A)  an increase in demand. 
B)  a decrease in demand. 
C)  an increase in supply. 
D)  a decrease in supply.

Question 13

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

Accepted Answer

A)  increase the demand for diesel cars. 
B)  decrease the demand for gasoline. 
C)  decrease the demand for diesel cars. 
D)  increase the demand for gasoline. 
A)  increase the demand for diesel cars. 
B)  decrease the demand for gasoline. 
C)  decrease the demand for diesel cars. 
D)  increase the demand for gasoline.

Question 14

Suppose that the table shown shows the demand and supply schedules for pork bellies. Based on the table, the equilibrium price of pork bellies is: $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Price } \
\text { (\$/lb.) }
\end{array} & \text { Quantity demanded (lbs.) } & \text { Quantity Supplied (lbs.) } \
\hline \$ 0.10 & 30,000 & 5,000 \
\hline \$ 0.20 & 25,000 & 10,000 \
\hline \$ 0.50 & 20,000 & 20,000 \
\hline \$ 0.75 & 15,000 & 30,000 \
\hline \$ 0.95 & 5,000 & 40,000 \
\hline
\end{array}$$

Accepted Answer

A)  $0.10/lb. 
B)  $0.25/lb. 
C)  $0.50/lb. 
D)  $0.75/lb. 
A)  $0.10/lb. 
B)  $0.25/lb. 
C)  $0.50/lb. 
D)  $0.75/lb.

Question 15

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

Accepted Answer

A)  decrease the equilibrium price and increase the equilibrium quantity of diesel cars. 
B)  increase the equilibrium price and decrease the equilibrium quantity of diesel cars. 
C)  decrease the equilibrium price and quantity of diesel cars. 
D)  increase the equilibrium price and quantity of diesel cars. 
A)  decrease the equilibrium price and increase the equilibrium quantity of diesel cars. 
B)  increase the equilibrium price and decrease the equilibrium quantity of diesel cars. 
C)  decrease the equilibrium price and quantity of diesel cars. 
D)  increase the equilibrium price and quantity of diesel cars.

Question 16

The law of supply states that more of a good will be supplied the lower its price, other things constant.

Accepted Answer

A) True 
 B)False

Question 17

The supply of leather jackets would be expected to increase as a result of:

Accepted Answer

A)  a decrease in the cost of producing leather jackets. 
B)  an increase in the price of leather jackets. 
C)  an increase in the popularity of leather jackets. 
D)  the expectation that the price of leather jackets will rise in the future. 
A)  a decrease in the cost of producing leather jackets. 
B)  an increase in the price of leather jackets. 
C)  an increase in the popularity of leather jackets. 
D)  the expectation that the price of leather jackets will rise in the future.

Question 18

Given the following supply table, an increase in the price of pants from $30 to $50 per pair will increase the:

Accepted Answer

A)  supply of pants by 200 pairs. 
B)  quantity of pants supplied by 200 pairs. 
C)  supply of pants by 700 pairs. 
D)  quantity supplied of pants by 500 pairs. 
A)  supply of pants by 200 pairs. 
B)  quantity of pants supplied by 200 pairs. 
C)  supply of pants by 700 pairs. 
D)  quantity supplied of pants by 500 pairs.

Question 19

According to the law of supply:

Accepted Answer

A)  supply curves slope upward. 
B)  supply curves slope downward. 
C)  price and quantity supplied are negatively related. 
D)  price and quantity supplied are inversely related. 
A)  supply curves slope upward. 
B)  supply curves slope downward. 
C)  price and quantity supplied are negatively related. 
D)  price and quantity supplied are inversely related.

Question 20

The fallacy of composition refers to the false assumption:

Accepted Answer

A)  that if A happens before B, then A caused B. 
B)  that what is true for a part will also be true for the whole. 
C)  that what is true for the whole must also be true for a part. 
D)  of all other things held constant. 
A)  that if A happens before B, then A caused B. 
B)  that what is true for a part will also be true for the whole. 
C)  that what is true for the whole must also be true for a part. 
D)  of all other things held constant.

Exam 4: Supply and Demand

According to the law of demand, only the price of a good influences the amount people will choose to purchase.

One reason economists distinguish between micro and macro is supply and demand are:

Refer to the graphs shown. The market is caviar. Which graph best represents the impact of an increase in consumer incomes on the market for caviar?

Refer to the table that presents Mike and Janet's demand for apples by the bushel. If they are the only two in the market, which of the following represents a point on the market demand curve? Price per peck Mike Quantity in pecks Janet Quantity in pecks \ 1 22 6 \ 2 18 3 \ 3 14 0 \ 4 10 0 \ 5 6 0

Which of the following would best explain a decrease in the supply of squash?

Given the graph shown, the quantity that would be associated with the price of $1 in a supply table would be:

Suppose the supply and demand tables shown reflect the supply and demand for milk per week. At a price of $4, there is a: Price (per gallon) Quantity demanded (gallons per week) Quantity Supplied (gallons per week) \ 1 2,000 1,000 \ 2 1,500 1,500 \ 3 1,000 2,000 \ 4 500 2,500

Which of the following would cause quantity demanded to change without changing the demand curve?

Given the graph, the quantity that would be associated with the price of $1 in a demand table would be:

Suppose the given supply and demand tables reflect the supply and demand for milk per week. At a price of $1, there is a: Price (per gallon) Quantity demanded (gallons per week) Quantity Supplied (gallons per week) \ 1 2,000 1,000 \ 2 1,500 1,500 \ 3 1,000 2,000 \ 4 500 2,500

The law of demand states that consumers buy more of a good when its price declines:

An increase in equilibrium price and a decrease in equilibrium quantity is most likely the result of:

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

Given that diesel cars get much better gas mileage than the typical car, an increase in the price of gasoline would be expected to:

The law of supply states that more of a good will be supplied the lower its price, other things constant.

The supply of leather jackets would be expected to increase as a result of:

Given the following supply table, an increase in the price of pants from $30 to $50 per pair will increase the:

According to the law of supply:

The fallacy of composition refers to the false assumption:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

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