Question 1

If a good is normal, then an increase in income will result in a(n)

Accepted Answer

A) increase in the demand for the good. 
B) decrease in the demand for the good. 
C) movement down and to the right along the demand curve for the good. 
D) movement up and to the left along the demand curve for the good. 
A) increase in the demand for the good. 
B) decrease in the demand for the good. 
C) movement down and to the right along the demand curve for the good. 
D) movement up and to the left along the demand curve for the good.

Question 2

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. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

Accepted Answer

There is a

Question 3

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for convertible automobiles of an increase in the price of steel?

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 4

The supply curve for portable charcoal grills shifts

Accepted Answer

A) only when production technology changes. 
B) when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C) when any determinant of the supply of portable charcoal grills changes. 
D) only when the number of sellers of portable charcoal grills changes. 
A) only when production technology changes. 
B) when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C) when any determinant of the supply of portable charcoal grills changes. 
D) only when the number of sellers of portable charcoal grills changes.

Question 5

A decrease in the price of a good will

Accepted Answer

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

Question 6

Figure 4-8  
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. 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 7

Pizza is a normal good if the demand

Accepted Answer

A) for pizza rises when income rises. 
B) for pizza rises when the price of pizza falls. 
C) curve for pizza slopes upward. 
D) curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes. 
A) for pizza rises when income rises. 
B) for pizza rises when the price of pizza falls. 
C) curve for pizza slopes upward. 
D) curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.

Question 8

Table 4-16
The following table shows the supply and demand schedules in a market.  
-Refer to Table 4-16. If the supply curve shifts to the right, will the price in this market rise or fall?

Accepted Answer

The price

Question 9

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-22  
-Refer to Figure 4-22. At a price of $24, there is a

Accepted Answer

A) surplus of 4 units. 
B) surplus of 8 units. 
C) shortage of 4 units. 
D) shortage of 8 units. 
A) surplus of 4 units. 
B) surplus of 8 units. 
C) shortage of 4 units. 
D) shortage of 8 units.

Question 11

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 12

Table 4-3  
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Accepted Answer

A) 0 units. 
B) 3.5 units. 
C) 12 units. 
D) 14 units. 
A) 0 units. 
B) 3.5 units. 
C) 12 units. 
D) 14 units.

Question 13

Surpluses drive price up, while shortages drive price down.

Accepted Answer

A) True 
 B)False

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

Figure 4-4
Yasmine
Mercedes    
-Refer to Figure 4-4. Which of the following statements is correct?

Accepted Answer

A) If the price is $6, the market quantity demanded is 15 units. 
B) If the price is $9, the market quantity demanded is 24 units. 
C) If the price is $12, the market quantity demanded is 9 units. 
D) If the price is $15, the market quantity demanded is 39 units. 
A) If the price is $6, the market quantity demanded is 15 units. 
B) If the price is $9, the market quantity demanded is 24 units. 
C) If the price is $12, the market quantity demanded is 9 units. 
D) If the price is $15, the market quantity demanded is 39 units.

Question 16

The market demand curve

Accepted Answer

A) is found by vertically adding the individual demand curves. 
B) slopes upward. 
C) represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D) represents the sum of the quantities demanded by all the buyers at each price of the good. 
A) is found by vertically adding the individual demand curves. 
B) slopes upward. 
C) represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D) represents the sum of the quantities demanded by all the buyers at each price of the good.

Question 17

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

Accepted Answer

A) shifts to the right. 
B) shifts to the left. 
C) shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. 
D) will not shift; rather, the demand curve for Mustangs will shift to the right next month. 
A) shifts to the right. 
B) shifts to the left. 
C) shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. 
D) will not shift; rather, the demand curve for Mustangs will shift to the right next month.

Question 18

If something happens to alter the quantity supplied at any given price, then

Accepted Answer

A) we move along the supply curve. 
B) the supply curve shifts. 
C) the supply curve becomes steeper. 
D) the supply curve becomes flatter. 
A) we move along the supply curve. 
B) the supply curve shifts. 
C) the supply curve becomes steeper. 
D) the supply curve becomes flatter.

Question 19

Which of the following would increase in response to a decrease 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) All of the above are 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) All of the above are correct.

Question 20

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

If a good is normal, then an increase in income will result in a(n)

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for convertible automobiles of an increase in the price of steel?

The supply curve for portable charcoal grills shifts

A decrease in the price of a good will

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

Pizza is a normal good if the demand

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. If the supply curve shifts to the right, will the price in this market rise or fall?

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Figure 4-22 -Refer to Figure 4-22. At a price of $24, there is a

Price will rise to eliminate a shortage.

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Surpluses drive price up, while shortages drive price down.

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

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. Which of the following statements is correct?

The market demand curve

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, today's demand curve for Mustangs

If something happens to alter the quantity supplied at any given price, then

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

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

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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