Question 1

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A) the idea that tobacco and marijuana are substitutes. 
B) the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C) the idea that lower cigarette prices are associated with less use of marijuana. 
D) most of the available evidence. 
A) the idea that tobacco and marijuana are substitutes. 
B) the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C) the idea that lower cigarette prices are associated with less use of marijuana. 
D) most of the available evidence.

Question 2

In competitive markets,

Accepted Answer

A) firms produce identical products. 
B) no individual buyer can influence the market price. 
C) no individual seller can influence the market price. 
D) All of the above are correct. 
A) firms produce identical products. 
B) no individual buyer can influence the market price. 
C) no individual seller can influence the market price. 
D) All of the above are correct.

Question 3

At the equilibrium price, quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

The difference between a supply schedule and a supply curve is that a supply schedule

Accepted Answer

A) incorporates demand and a supply curve does not. 
B) incorporates profit and a supply curve does not. 
C) can shift, but a supply curve cannot shift. 
D) is a table, and a supply curve is drawn on a graph. 
A) incorporates demand and a supply curve does not. 
B) incorporates profit and a supply curve does not. 
C) can shift, but a supply curve cannot shift. 
D) is a table, and a supply curve is drawn on a graph.

Question 5

When a surplus exists in a market, sellers

Accepted Answer

A) raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B) raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C) lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D) lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
A) raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B) raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C) lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D) lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.

Question 6

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed.  
-Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 500 cases when the price is $5.00, which of the following statements is correct?

Accepted Answer

A) The market is in equilibrium at a price of $5.00. 
B) There is a surplus of 100 cases at a price of $5.00. 
C) There is a shortage of 100 cases at a price of $5.00. 
D) There is a shortage of 50 cases at a price of $5.00. 
A) The market is in equilibrium at a price of $5.00. 
B) There is a surplus of 100 cases at a price of $5.00. 
C) There is a shortage of 100 cases at a price of $5.00. 
D) There is a shortage of 50 cases at a price of $5.00.

Question 7

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

Accepted Answer

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

Question 8

Table 4-16
The following table shows the supply and demand schedules in a market.  
-Refer to Table 4-16. At a price of $2, will there be a surplus or shortage of units in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 9

Figure 4-29
​  
-Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Accepted Answer

The answer of Figure 4-29
​  
-Refer to Figure 4-29....

Question 10

Figure 4-1  
-Refer to Figure 4-1. It is apparent from the figure that the

Accepted Answer

A) good is inferior. 
B) demand for the good decreases as income increases. 
C) demand for the good conforms to the law of demand. 
D) All of the above are correct. 
A) good is inferior. 
B) demand for the good decreases as income increases. 
C) demand for the good conforms to the law of demand. 
D) All of the above are correct.

Question 11

A market includes

Accepted Answer

A) buyers only. 
B) sellers only. 
C) both buyers and sellers. 
D) the place where transactions occur but not the people involved. 
A) buyers only. 
B) sellers only. 
C) both buyers and sellers. 
D) the place where transactions occur but not the people involved.

Question 12

A leftward shift of a demand curve is called a(n)

Accepted Answer

A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded. 
A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded.

Question 13

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Accepted Answer

A) be willing and able to produce less jewelry than before at each possible price. 
B) be willing and able to produce more jewelry than before at each possible price. 
C) face a greater demand for your jewelry. 
D) face a weaker demand for your jewelry. 
A) be willing and able to produce less jewelry than before at each possible price. 
B) be willing and able to produce more jewelry than before at each possible price. 
C) face a greater demand for your jewelry. 
D) face a weaker demand for your jewelry.

Question 14

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Accepted Answer

A) The government would provide tax incentives to encourage people to become farmers. 
B) The government would subsidize the production of food. 
C) The prices of food and the wages of farmers would adjust. 
D) There are no mechanisms to remove the shortage. 
A) The government would provide tax incentives to encourage people to become farmers. 
B) The government would subsidize the production of food. 
C) The prices of food and the wages of farmers would adjust. 
D) There are no mechanisms to remove the shortage.

Question 15

Suppose that Amanda receives a pay increase. We would expect

Accepted Answer

A) to observe Amanda moving down and to the right along her given demand curve. 
B) Amanda's demand for inferior goods to decrease. 
C) Amanda's demand for each of two goods that are complements to increase. 
D) Amanda's demand for normal goods to decrease. 
A) to observe Amanda moving down and to the right along her given demand curve. 
B) Amanda's demand for inferior goods to decrease. 
C) Amanda's demand for each of two goods that are complements to increase. 
D) Amanda's demand for normal goods to decrease.

Question 16

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following events must cause equilibrium price to rise?

Accepted Answer

A) demand increases and supply decreases 
B) demand and supply both decrease 
C) demand decreases and supply increases 
D) demand and supply both increase 
A) demand increases and supply decreases 
B) demand and supply both decrease 
C) demand decreases and supply increases 
D) demand and supply both increase

Question 18

When it comes to people's tastes, economists generally believe that

Accepted Answer

A) tastes are based on forces that are well within the realm of economics. 
B) tastes are based on historical and psychological forces that are beyond the realm of economics. 
C) tastes can only be studied through well-constructed, real-life models. 
D) because tastes do not directly affect demand, there is little need to explain people's tastes. 
A) tastes are based on forces that are well within the realm of economics. 
B) tastes are based on historical and psychological forces that are beyond the realm of economics. 
C) tastes can only be studied through well-constructed, real-life models. 
D) because tastes do not directly affect demand, there is little need to explain people's tastes.

Question 19

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

Accepted Answer

A) production technology. 
B) input prices. 
C) expectations about future prices. 
D) the price of the good or service that is being supplied. 
A) production technology. 
B) input prices. 
C) expectations about future prices. 
D) the price of the good or service that is being supplied.

Question 20

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

Accepted Answer

A) a surplus 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 supplied exceeds quantity demanded. 
A) a surplus 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 supplied exceeds quantity demanded.

Exam 4: The Market Forces of Supply and Demand

The belief that tobacco is a "gateway drug" is consistent with

In competitive markets,

At the equilibrium price, quantity demanded is equal to quantity supplied.

The difference between a supply schedule and a supply curve is that a supply schedule

When a surplus exists in a market, sellers

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

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $2, will there be a surplus or shortage of units in this market?

Figure 4-29 ​ -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Figure 4-1 -Refer to Figure 4-1. It is apparent from the figure that the

A market includes

A leftward shift of a demand curve is called a(n)

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Suppose that Amanda receives a pay increase. We would expect

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

Which of the following events must cause equilibrium price to rise?

When it comes to people's tastes, economists generally believe that

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

When the price of a good is lower than 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

Filters

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?