Question 1

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A) 1 percent reduction in the quantity demanded of cigarettes. 
B) 4 percent reduction in the quantity demanded of cigarettes. 
C) 10 percent reduction in the quantity demanded of cigarettes. 
D) 12 percent reduction in the quantity demanded of cigarettes. 
A) 1 percent reduction in the quantity demanded of cigarettes. 
B) 4 percent reduction in the quantity demanded of cigarettes. 
C) 10 percent reduction in the quantity demanded of cigarettes. 
D) 12 percent reduction in the quantity demanded of cigarettes.

Question 2

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 3

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Accepted Answer

A) True 
 B)False

Question 4

The line that relates the price of a good and the quantity supplied of that good is called the supply

Accepted Answer

A) schedule, and it usually slopes upward. 
B) schedule, and it usually slopes downward. 
C) curve, and it usually slopes upward. 
D) curve, and it usually slopes downward. 
A) schedule, and it usually slopes upward. 
B) schedule, and it usually slopes downward. 
C) curve, and it usually slopes upward. 
D) curve, and it usually slopes downward.

Question 5

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following:
• x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 4.
• The slope of the supply curve is 2.
Then there is currently a

Accepted Answer

A) shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B) shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C) surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D) surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
A) shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B) shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C) surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D) surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.

Question 6

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. Assume 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. If the price is $6 per case, is there a shortage or surplus, and how large is the shortage or surplus?

Accepted Answer

There is a

Question 7

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A) Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions. 
B) Some degree of competition is present in most markets. 
C) There are many buyers and many sellers in all types of markets. 
D) Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well. 
A) Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions. 
B) Some degree of competition is present in most markets. 
C) There are many buyers and many sellers in all types of markets. 
D) Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.

Question 8

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 9

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation   , where   is the quantity demanded and   is the price. Also, suppose the supply schedule can be represented by the equation   , where   is the quantity supplied.
-Refer to Scenario 4-1. What is the equilibrium price in this market?

Accepted Answer

The answer of Scenario 4-1
Suppose the demand schedule in a...

Question 10

A market demand curve shows

Accepted Answer

A) the relationship between price and the number of buyers in a market. 
B) how quantity demanded changes when the number of sellers changes. 
C) the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D) how much of a good all buyers are willing and able to buy at each possible price. 
A) the relationship between price and the number of buyers in a market. 
B) how quantity demanded changes when the number of sellers changes. 
C) the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D) how much of a good all buyers are willing and able to buy at each possible price.

Question 11

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A) government to allocate scarce resources. 
B) supply and demand to allocate scarce resources. 
C) credit cards to allocate scarce resources. 
D) nature to allocate scarce resources. 
A) government to allocate scarce resources. 
B) supply and demand to allocate scarce resources. 
C) credit cards to allocate scarce resources. 
D) nature to allocate scarce resources.

Question 12

Figure 4-8  
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Accepted Answer

A) a movement along D2 from point A to point B 
B) a movement along D2 from point B to point A 
C) a shift from D1 to D2 
D) a shift from D2 to D1 
A) a movement along D2 from point A to point B 
B) a movement along D2 from point B to point A 
C) a shift from D1 to D2 
D) a shift from D2 to D1

Question 13

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Accepted Answer

A) the ticket price is above the equilibrium price. 
B) the ticket price is below the equilibrium price. 
C) the ticket price is at the equilibrium price. 
D) nothing about the equilibrium price. 
A) the ticket price is above the equilibrium price. 
B) the ticket price is below the equilibrium price. 
C) the ticket price is at the equilibrium price. 
D) nothing about the equilibrium price.

Question 14

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Accepted Answer

The demand

Question 15

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Accepted Answer

A) The demand for shotgun-shell ammunition will increase. 
B) The demand for shotgun-shell ammunition will decrease. 
C) The demand for shotgun-shell ammunition will be unaffected. 
D) The supply of shotgun-shell ammunition will increase. 
A) The demand for shotgun-shell ammunition will increase. 
B) The demand for shotgun-shell ammunition will decrease. 
C) The demand for shotgun-shell ammunition will be unaffected. 
D) The supply of shotgun-shell ammunition will increase.

Question 16

Holding the nonprice determinants of demand constant, a change in price would

Accepted Answer

A) result in either a decrease in demand or an increase in demand. 
B) result in a movement along a stationary demand curve. 
C) result in a shift of supply. 
D) have no effect on the quantity demanded. 
A) result in either a decrease in demand or an increase in demand. 
B) result in a movement along a stationary demand curve. 
C) result in a shift of supply. 
D) have no effect on the quantity demanded.

Question 17

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 $8 is

Accepted Answer

A) 8 units. 
B) 16 units. 
C) 24 units. 
D) 32 units. 
A) 8 units. 
B) 16 units. 
C) 24 units. 
D) 32 units.

Question 18

The two words most often used by economists are

Accepted Answer

A) prices and quantities. 
B) resources and allocation. 
C) supply and demand. 
D) efficiency and equity. 
A) prices and quantities. 
B) resources and allocation. 
C) supply and demand. 
D) efficiency and equity.

Question 19

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 20

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Accepted Answer

A) an increase in demand for brown rice and a decrease in demand for white rice. 
B) a decrease in demand for brown rice and an increase in demand for white rice. 
C) an increase in demand for both brown and white rice. 
D) no change in demand for either type of rice because weight loss is not a determinant of demand. 
A) an increase in demand for brown rice and a decrease in demand for white rice. 
B) a decrease in demand for brown rice and an increase in demand for white rice. 
C) an increase in demand for both brown and white rice. 
D) no change in demand for either type of rice because weight loss is not a determinant of demand.

Exam 4: The Market Forces of Supply and Demand

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Individual supply curves are summed vertically to obtain the market supply curve.

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

The line that relates the price of a good and the quantity supplied of that good is called the supply

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

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

A market demand curve shows

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Holding the nonprice determinants of demand constant, a change in price would

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 $8 is

The two words most often used by economists are

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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