Question 1

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Accepted Answer

A) Point A to Point B 
B) Point C to Point B 
C) Point C to Point D 
D) Point A to Point D 
A) Point A to Point B 
B) Point C to Point B 
C) Point C to Point D 
D) Point A to Point D

Question 2

Today, producers changed their expectations about the future. This change

Accepted Answer

A) can cause a movement along a supply curve. 
B) can affect future supply, but not today's supply. 
C) can affect today's supply. 
D) cannot affect either today's supply or future supply. 
A) can cause a movement along a supply curve. 
B) can affect future supply, but not today's supply. 
C) can affect today's supply. 
D) cannot affect either today's supply or future supply.

Question 3

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Question 4

Figure 4-13    
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $6 is

Accepted Answer

A) 4 units. 
B) 6 units. 
C) 12 units. 
D) 18 units. 
A) 4 units. 
B) 6 units. 
C) 12 units. 
D) 18 units.

Question 5

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A) coalition. 
B) economy. 
C) market. 
D) competition. 
A) coalition. 
B) economy. 
C) market. 
D) competition.

Question 6

Figure 4-22  
-Refer to Figure 4-22. What is the equilibrium quantity in this market?

Accepted Answer

A) 4 units 
B) 8 units 
C) 12 units 
D) 16 units 
A) 4 units 
B) 8 units 
C) 12 units 
D) 16 units

Question 7

Figure 4-17  
-Refer to Figure 4-17. At a price of

Accepted Answer

A) $2, there is a shortage of 6 units. 
B) $5, there is a surplus of 25 units. 
C) $5, there is a shortage of $25. 
D) $7, there is a shortage of 4 units. 
A) $2, there is a shortage of 6 units. 
B) $5, there is a surplus of 25 units. 
C) $5, there is a shortage of $25. 
D) $7, there is a shortage of 4 units.

Question 8

When quantity demanded increases at every possible price, the demand curve has

Accepted Answer

A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved along the demand curve to a new point on the same curve. 
D) not shifted; rather, the demand curve has become steeper. 
A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved along the demand curve to a new point on the same curve. 
D) not shifted; rather, the demand curve has become steeper.

Question 9

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Accepted Answer

A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x. 
A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x.

Question 10

Which of the following sets of events must cause an increase in the price of a new house?

Accepted Answer

A) higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B) lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C) lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D) higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future 
A) higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B) lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C) lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D) higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future

Question 11

Which of the following is not an expression for the sum of all the individual demand curves for a product?

Accepted Answer

A) total demand 
B) market demand 
C) equilibrium demand 
D) aggregate demand 
A) total demand 
B) market demand 
C) equilibrium demand 
D) aggregate demand

Question 12

Once the demand curve for a product or service is drawn, it

Accepted Answer

A) remains stable over time. 
B) can shift either rightward or leftward. 
C) is possible to move along the curve, but the curve will not shift. 
D) tends to become steeper over time. 
A) remains stable over time. 
B) can shift either rightward or leftward. 
C) is possible to move along the curve, but the curve will not shift. 
D) tends to become steeper over time.

Question 13

Figure 4-27
Panel (a)
Panel (b)     Panel (c)
Panel (d)    
-Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

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 14

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

A) True 
 B)False

Question 15

A movement along the demand curve might be caused by a change in

Accepted Answer

A) income. 
B) the prices of substitutes or complements. 
C) expectations about future prices. 
D) the price of the good or service that is being demanded. 
A) income. 
B) the prices of substitutes or complements. 
C) expectations about future prices. 
D) the price of the good or service that is being demanded.

Question 16

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 17

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 18

Table 4-11  
-Refer to Table 4-11. If the price were $8, a

Accepted Answer

A) shortage of 20 units would exist, and price would tend to rise. 
B) surplus of 25 units would exist, and price would tend to fall. 
C) shortage of 25 units would exist, and price would tend to rise. 
D) surplus of 45 units would exist, and price would tend to fall. 
A) shortage of 20 units would exist, and price would tend to rise. 
B) surplus of 25 units would exist, and price would tend to fall. 
C) shortage of 25 units would exist, and price would tend to rise. 
D) surplus of 45 units would exist, and price would tend to fall.

Question 19

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Accepted Answer

A) decreases, and the supply of tires increases. 
B) is unaffected, and the supply of tires decreases. 
C) is unaffected, and the supply of tires increases. 
D) None of the above is necessarily correct. 
A) decreases, and the supply of tires increases. 
B) is unaffected, and the supply of tires decreases. 
C) is unaffected, and the supply of tires increases. 
D) None of the above is necessarily correct.

Question 20

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. 
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.

Exam 4: The Market Forces of Supply and Demand

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Today, producers changed their expectations about the future. This change

A yard sale is an example of a market.

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $6 is

A group of buyers and sellers of a particular good or service is called a(n)

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

Figure 4-17 -Refer to Figure 4-17. At a price of

When quantity demanded increases at every possible price, the demand curve has

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Which of the following sets of events must cause an increase in the price of a new house?

Which of the following is not an expression for the sum of all the individual demand curves for a product?

Once the demand curve for a product or service is drawn, it

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

A decrease in income will shift the demand curve for an inferior good to the right.

A movement along the demand curve might be caused by a change in

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Table 4-11 -Refer to Table 4-11. If the price were $8, a

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

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

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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