Question 1

Which of the following demonstrates the law of supply?

Accepted Answer

A) When leather became more expensive, belt producers decreased their supply of 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 increased their quantity supplied of ketchup. 
A) When leather became more expensive, belt producers decreased their supply of 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 increased their quantity supplied of ketchup.

Question 2

Which of the following would shift the supply of Green Bay Packers football jerseys to the left?

Accepted Answer

A) The Green Bay Packers make it to the Super Bowl. 
B) The price of the jerseys increases by $15. 
C) The technology of sewing machines use to make the jerseys improves. 
D) The cost of the fabric used to make the jerseys increases. 
A) The Green Bay Packers make it to the Super Bowl. 
B) The price of the jerseys increases by $15. 
C) The technology of sewing machines use to make the jerseys improves. 
D) The cost of the fabric used to make the jerseys increases.

Question 3

Figure 4-19  
-Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)

Accepted Answer

A) surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B) excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C) surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D) excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
A) surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B) excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C) surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D) excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.

Question 4

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

Accepted Answer

A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips cause cancer. 
D) increase in the price of a pretzels. 
A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips cause cancer. 
D) increase in the price of a pretzels.

Question 5

Figure 4-20  
-Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

Accepted Answer

A) 500 units and 500 units. 
B) 500 units and 800 units. 
C) 600 units and 600 units. 
D) 800 units and 500 units. 
A) 500 units and 500 units. 
B) 500 units and 800 units. 
C) 600 units and 600 units. 
D) 800 units and 500 units.

Question 6

In a competitive market, the quantity of a product produced and the price of the product are determined by

Accepted Answer

A) a single buyer. 
B) a single seller. 
C) one buyer and one seller working together. 
D) all buyers and all sellers. 
A) a single buyer. 
B) a single seller. 
C) one buyer and one seller working together. 
D) all buyers and all sellers.

Question 7

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Accepted Answer

The equilibrium pric

Question 8

Table 4-1  
-Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A) 2 units. 
B) 3 units. 
C) 4 units. 
D) 5 units. 
A) 2 units. 
B) 3 units. 
C) 4 units. 
D) 5 units.

Question 9

Figure 4-11  
-Refer to Figure 4-11. The movement from point A to point B on the graph is called

Accepted Answer

A) a decrease in supply. 
B) an increase in supply. 
C) an increase in the quantity supplied. 
D) a decrease in the quantity supplied. 
A) a decrease in supply. 
B) an increase in supply. 
C) an increase in the quantity supplied. 
D) a decrease in the quantity supplied.

Question 10

Figure 4-27
Panel (a)
Panel (b)     Panel (c)
Panel (d)    
-Refer to Figure 4-27. Panel (a) shows which of the following?

Accepted Answer

A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply 
A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply

Question 11

A decrease in quantity supplied

Accepted Answer

A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right. 
A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right.

Question 12

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 13

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

A) decreases the demand for the other good. 
B) decreases the quantity demanded of the other good. 
C) increases the demand for the other good. 
D) increases the quantity demanded of the other good. 
A) decreases the demand for the other good. 
B) decreases the quantity demanded of the other good. 
C) increases the demand for the other good. 
D) increases the quantity demanded of the other good.

Question 14

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

Accepted Answer

A) increase in the demand for Nooks. 
B) decrease in the demand for Nooks. 
C) increase in the demand for Kindles. 
D) decrease in the demand for Kindles. 
A) increase in the demand for Nooks. 
B) decrease in the demand for Nooks. 
C) increase in the demand for Kindles. 
D) decrease in the demand for Kindles.

Question 15

You wear either shorts or sweatpants every day. You notice that sweatpants have gone on sale, so your demand for

Accepted Answer

A) sweatpants will increase. 
B) sweatpants will decrease. 
C) shorts will increase. 
D) shorts will decrease. 
A) sweatpants will increase. 
B) sweatpants will decrease. 
C) shorts will increase. 
D) shorts will decrease.

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

Question 17

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?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d) 
A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Question 18

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Accepted Answer

A) shift rightward. 
B) shift leftward. 
C) become flatter. 
D) remain unchanged. 
A) shift rightward. 
B) shift leftward. 
C) become flatter. 
D) remain unchanged.

Question 19

If textbooks and study guides are complements, then an increase in the price of textbooks will result in

Accepted Answer

A) more textbooks being sold. 
B) more study guides being sold. 
C) fewer study guides being sold. 
D) no difference in the quantity sold of either good. 
A) more textbooks being sold. 
B) more study guides being sold. 
C) fewer study guides being sold. 
D) no difference in the quantity sold of either good.

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 good 
A) the prices of related goods 
B) income 
C) tastes 
D) the prices of the inputs used to produce the good

Exam 4: The Market Forces of Supply and Demand

Which of the following demonstrates the law of supply?

Which of the following would shift the supply of Green Bay Packers football jerseys to the left?

Figure 4-19 -Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)

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

Figure 4-20 -Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

In a competitive market, the quantity of a product produced and the price of the product are determined by

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph is called

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (a) shows which of the following?

A decrease in quantity supplied

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Two goods are substitutes when a decrease in the price of one good

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

You wear either shorts or sweatpants every day. You notice that sweatpants have gone on sale, so your demand for

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?

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

If textbooks and study guides are complements, then an increase in the price of textbooks will result in

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

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

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