Question 1

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Accepted Answer

A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would increase, and the equilibrium quantity would decrease. 
D) The equilibrium price would decrease, and the equilibrium quantity would increase. 
A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would increase, and the equilibrium quantity would decrease. 
D) The equilibrium price would decrease, and the equilibrium quantity would increase.

Question 2

Price cannot fall so low that some sellers choose to supply a quantity of zero.

Accepted Answer

A) True 
 B)False

Question 3

A movement upward and to the right along a supply curve is called a(n)

Accepted Answer

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

Question 4

A competitive market is a market in which

Accepted Answer

A) an auctioneer helps set prices and arrange sales. 
B) there are only a few sellers. 
C) the forces of supply and demand do not apply. 
D) no individual buyer or seller has any significant impact on the market price. 
A) an auctioneer helps set prices and arrange sales. 
B) there are only a few sellers. 
C) the forces of supply and demand do not apply. 
D) no individual buyer or seller has any significant impact on the market price.

Question 5

Table 4-3  
-Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

Accepted Answer

A) decreases by 1.75 units. 
B) increases by 2 units. 
C) decreases by 7 units. 
D) decreases by 24 units. 
A) decreases by 1.75 units. 
B) increases by 2 units. 
C) decreases by 7 units. 
D) decreases by 24 units.

Question 6

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. Which of the following could cause all four families to demand more Mt. Dew at all prices?

Accepted Answer

A) The price of sugar decreases. 
B) All four family incomes increase, and Mt. Dew is a normal good. 
C) A major university study reveals that drinking Mt. Dew can cause diabetes. 
D) The technology for bottling carbonated beverages improves. 
A) The price of sugar decreases. 
B) All four family incomes increase, and Mt. Dew is a normal good. 
C) A major university study reveals that drinking Mt. Dew can cause diabetes. 
D) The technology for bottling carbonated beverages improves.

Question 7

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

A) granite countertops to shift to the left. 
B) granite countertops to shift to the right. 
C) substitute products such as marble countertops to shift to the right. 
D) substitute products such as marble countertops to be unaffected by buyers' preferences for granite. 
A) granite countertops to shift to the left. 
B) granite countertops to shift to the right. 
C) substitute products such as marble countertops to shift to the right. 
D) substitute products such as marble countertops to be unaffected by buyers' preferences for granite.

Question 8

For the general population, 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 9

Which of the following would increase in response to a increase in the price of ironing boards?

Accepted Answer

A) the quantity of irons demanded at each possible price of irons 
B) the equilibrium quantity of irons 
C) the equilibrium price of irons 
D) None of the above is correct. 
A) the quantity of irons demanded at each possible price of irons 
B) the equilibrium quantity of irons 
C) the equilibrium price of irons 
D) None of the above is correct.

Question 10

A market supply curve is determined by

Accepted Answer

A) vertically summing individual supply curves. 
B) horizontally summing individual supply curves. 
C) finding the average quantity supplied by sellers at each possible price. 
D) finding the average price at which sellers are willing and able to sell a particular quantity of the good. 
A) vertically summing individual supply curves. 
B) horizontally summing individual supply curves. 
C) finding the average quantity supplied by sellers at each possible price. 
D) finding the average price at which sellers are willing and able to sell a particular quantity of the good.

Question 11

Table 4-6  
-Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Accepted Answer

A) 3 units. 
B) 11 units. 
C) 25 units. 
D) 44 units. 
A) 3 units. 
B) 11 units. 
C) 25 units. 
D) 44 units.

Question 12

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 13

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A) decrease in equilibrium price and an increase in equilibrium quantity. 
B) decrease in equilibrium price and a decrease in equilibrium quantity. 
C) increase in equilibrium price and a decrease in equilibrium quantity. 
D) increase in equilibrium price and an increase in equilibrium quantity. 
A) decrease in equilibrium price and an increase in equilibrium quantity. 
B) decrease in equilibrium price and a decrease in equilibrium quantity. 
C) increase in equilibrium price and a decrease in equilibrium quantity. 
D) increase in equilibrium price and an increase in equilibrium quantity.

Question 14

An increase in quantity demanded

Accepted Answer

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

Question 15

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a 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 16

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a 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 17

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 18

Figure 4-18  
-Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good?

Accepted Answer

A) $15 
B) $20 
C) $30 
D) $35 
A) $15 
B) $20 
C) $30 
D) $35

Question 19

Figure 4-10  
-Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Accepted Answer

A) shift in the supply curve. 
B) decrease in the quantity supplied. 
C) increase in the quantity supplied. 
D) Both a and b are correct. 
A) shift in the supply curve. 
B) decrease in the quantity supplied. 
C) increase in the quantity supplied. 
D) Both a and b are correct.

Question 20

A higher price for batteries would result in a(n)

Accepted Answer

A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries. 
A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries.

Exam 4: The Market Forces of Supply and Demand

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Price cannot fall so low that some sellers choose to supply a quantity of zero.

A movement upward and to the right along a supply curve is called a(n)

A competitive market is a market in which

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

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. Which of the following could cause all four families to demand more Mt. Dew at all prices?

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

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

Which of the following would increase in response to a increase in the price of ironing boards?

A market supply curve is determined by

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Which of the following demonstrates the law of supply?

A decrease in input costs to firms in a market will result in a(n)

An increase in quantity demanded

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would cause a move from

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from

A decrease in quantity supplied

Figure 4-18 -Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the good?

Figure 4-10 -Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

A higher price for batteries would result in a(n)

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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