Question 1

A improvement in production technology will shift the

Accepted Answer

A) supply curve to the right. 
B) supply curve to the left. 
C) demand curve to the right. 
D) demand curve to the left. 
A) supply curve to the right. 
B) supply curve to the left. 
C) demand curve to the right. 
D) demand curve to the left.

Question 2

Table 4-6  
-Refer to Table 4-6. Which supply schedules obey the law of supply?

Accepted Answer

A) Firm A's only 
B) Firm B's, Firm C's, and Firm D's only 
C) Firm A's and Firm C's only 
D) Firm B's and Firm D's only 
A) Firm A's only 
B) Firm B's, Firm C's, and Firm D's only 
C) Firm A's and Firm C's only 
D) Firm B's and Firm D's only

Question 3

If a seller in a competitive market chooses to charge more than the going price, then

Accepted Answer

A) the sellers' profits must increase. 
B) the owners of the raw materials used in production would raise the prices for the raw materials. 
C) other sellers would also raise their prices. 
D) buyers will make purchases from other sellers. 
A) the sellers' profits must increase. 
B) the owners of the raw materials used in production would raise the prices for the raw materials. 
C) other sellers would also raise their prices. 
D) buyers will make purchases from other sellers.

Question 4

The sum of all the individual demand curves for a product is called

Accepted Answer

A) income demand. 
B) equilibrium demand. 
C) complementary demand. 
D) market demand. 
A) income demand. 
B) equilibrium demand. 
C) complementary demand. 
D) market demand.

Question 5

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Accepted Answer

A) True 
 B)False

Question 6

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

Accepted Answer

A) complementary goods. 
B) normal goods. 
C) inferior goods. 
D) substitute goods. 
A) complementary goods. 
B) normal goods. 
C) inferior goods. 
D) substitute goods.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-15  
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

Accepted Answer

A) a decrease in the price of beer 
B) an expectation by firms that the price of beer will increase in the very near future 
C) a decrease in the price of hops 
D) an improvement in technology that allows firms to use less labor in the production of beer 
A) a decrease in the price of beer 
B) an expectation by firms that the price of beer will increase in the very near future 
C) a decrease in the price of hops 
D) an improvement in technology that allows firms to use less labor in the production of beer

Question 9

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Accepted Answer

A) True 
 B)False

Question 10

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

Accepted Answer

A) True 
 B)False

Question 11

When a supply curve or a demand curve shifts, the equilibrium price and equilibrium quantity change.

Accepted Answer

A) True 
 B)False

Question 12

An increase 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 13

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Accepted Answer

A) Consumers have experienced an increase in income, and beef-production technology has improved. 
B) The price of chicken has risen, and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. 
D) The demand curve for beef must be positively sloped. 
A) Consumers have experienced an increase in income, and beef-production technology has improved. 
B) The price of chicken has risen, and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. 
D) The demand curve for beef must be positively sloped.

Question 14

An improvement in production technology will

Accepted Answer

A) increase a firm's costs and increase its supply. 
B) increase a firm's costs and decrease its supply. 
C) decrease a firm's costs and increase its supply. 
D) decrease a firm's costs and decrease its supply. 
A) increase a firm's costs and increase its supply. 
B) increase a firm's costs and decrease its supply. 
C) decrease a firm's costs and increase its supply. 
D) decrease a firm's costs and decrease its supply.

Question 15

Table 4-5
The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices.  
-Refer to Table 4-5. Suppose the four families listed in the table are the only demanders of Mt. Dew in the market. If the price of a case of Mt. Dew decreases by $1, the

Accepted Answer

A) market quantity demanded decreases by 10. 
B) market quantity demanded increases by 10. 
C) Adams family increases its quantity demanded by more than the Smith family. 
D) Jones family increases its quantity demanded by more than the Williams family. 
A) market quantity demanded decreases by 10. 
B) market quantity demanded increases by 10. 
C) Adams family increases its quantity demanded by more than the Smith family. 
D) Jones family increases its quantity demanded by more than the Williams family.

Question 16

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 17

Good X and good Y are substitutes. If the price of good Y increases, then the

Accepted Answer

A) demand for good X will decrease. 
B) quantity demanded of good X will decrease. 
C) demand for good X will increase. 
D) quantity demanded of good X will increase. 
A) demand for good X will decrease. 
B) quantity demanded of good X will decrease. 
C) demand for good X will increase. 
D) quantity demanded of good X will increase.

Question 18

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

Accepted Answer

A) applies to most goods in the economy. 
B) is represented by a downward-sloping demand curve. 
C) is referred to as the law of demand. 
D) All of the above are correct. 
A) applies to most goods in the economy. 
B) is represented by a downward-sloping demand curve. 
C) is referred to as the law of demand. 
D) All of the above are correct.

Question 19

Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would

Accepted Answer

A) rise. 
B) fall. 
C) stay the same. 
D) could rise, fall, or remain unchanged. 
A) rise. 
B) fall. 
C) stay the same. 
D) could rise, fall, or remain unchanged.

Question 20

Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of

Accepted Answer

A) price. 
B) supply. 
C) demand. 
D) income. 
A) price. 
B) supply. 
C) demand. 
D) income.

Exam 4: The Market Forces of Supply and Demand

A improvement in production technology will shift the

Table 4-6 -Refer to Table 4-6. Which supply schedules obey the law of supply?

If a seller in a competitive market chooses to charge more than the going price, then

The sum of all the individual demand curves for a product is called

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

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

Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

When a supply curve or a demand curve shifts, the equilibrium price and equilibrium quantity change.

An increase in quantity supplied

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

An improvement in production technology will

Table 4-5 The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. -Refer to Table 4-5. Suppose the four families listed in the table are the only demanders of Mt. Dew in the market. If the price of a case of Mt. Dew decreases by $1, the

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Good X and good Y are substitutes. If the price of good Y increases, then the

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would

Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of

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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