Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

For a market for a good or service to exist, there must be a

Accepted Answer

A) group of buyers and sellers. 
B) specific time and place at which the good or service is traded. 
C) high degree of organization present. 
D) All of the above are correct. 
A) group of buyers and sellers. 
B) specific time and place at which the good or service is traded. 
C) high degree of organization present. 
D) All of the above are correct.

Question 3

Figure 4-5  
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for tennis balls in the United States?

Accepted Answer

A) an increase in the price of tennis balls 
B) a decrease in the price of tennis racquets 
C) an expectation by buyers that their incomes will increase in the very near future 
D) a decrease in the number of people in the United States under age 70 
A) an increase in the price of tennis balls 
B) a decrease in the price of tennis racquets 
C) an expectation by buyers that their incomes will increase in the very near future 
D) a decrease in the number of people in the United States under age 70

Question 4

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 $1 is

Accepted Answer

A) 4 units. 
B) 7.75 units. 
C) 14 units. 
D) 31 units. 
A) 4 units. 
B) 7.75 units. 
C) 14 units. 
D) 31 units.

Question 5

Figure 4-31
Consider the market for 2-packs of light bulbs below.
​  
-Refer to Figure 4-31. At a price of $6, is there a shortage or surplus, and how large is the shortage/surplus?

Accepted Answer

There is a

Question 6

A shortage is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 7

If, at the current price, there is a shortage of a good, then

Accepted Answer

A) sellers are producing more than buyers wish to buy. 
B) the market must be in equilibrium. 
C) the price is below the equilibrium price. 
D) quantity demanded equals quantity supplied. 
A) sellers are producing more than buyers wish to buy. 
B) the market must be in equilibrium. 
C) the price is below the equilibrium price. 
D) quantity demanded equals quantity supplied.

Question 8

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

Accepted Answer

A) Students would purchase fewer than 750 cups per day. 
B) Student would continue to purchase 750 cups per day. 
C) Students would purchase more than 750 cups per day. 
D) We do not have enough information to answer this question. 
A) Students would purchase fewer than 750 cups per day. 
B) Student would continue to purchase 750 cups per day. 
C) Students would purchase more than 750 cups per day. 
D) We do not have enough information to answer this question.

Question 9

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Accepted Answer

A) is greater than the quantity that sellers are willing and able to sell. 
B) exactly equals the quantity that sellers are willing and able to sell. 
C) is less than the quantity that sellers are willing and able to sell. 
D) Either a) or c) could be correct. 
A) is greater than the quantity that sellers are willing and able to sell. 
B) exactly equals the quantity that sellers are willing and able to sell. 
C) is less than the quantity that sellers are willing and able to sell. 
D) Either a) or c) could be correct.

Question 10

Which of the following might cause the supply curve for an inferior good to shift to the right?

Accepted Answer

A) an increase in input prices 
B) a decrease in consumer income 
C) an improvement in production technology that makes production of the good more profitable 
D) a decrease in the number of sellers in the market 
A) an increase in input prices 
B) a decrease in consumer income 
C) an improvement in production technology that makes production of the good more profitable 
D) a decrease in the number of sellers in the market

Question 11

Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)

Accepted Answer

A) increase in the demand for wine, increasing price. 
B) increase in the supply of wine, decreasing price. 
C) decrease in the demand for wine, decreasing price. 
D) decrease in the supply of wine, increasing price. 
A) increase in the demand for wine, increasing price. 
B) increase in the supply of wine, decreasing price. 
C) decrease in the demand for wine, decreasing price. 
D) decrease in the supply of wine, increasing price.

Question 12

The highest form of competition is called

Accepted Answer

A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition. 
A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition.

Question 13

A supply schedule is a table that shows the relationship between

Accepted Answer

A) price and quantity supplied. 
B) input costs and quantity supplied. 
C) quantity demanded and quantity supplied. 
D) profit and quantity supplied. 
A) price and quantity supplied. 
B) input costs and quantity supplied. 
C) quantity demanded and quantity supplied. 
D) profit and quantity supplied.

Question 14

Figure 4-9
Panel (a)
Panel (b)    
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

Accepted Answer

A) The price of marijuana, a complement to cigarettes, increased. 
B) Mandatory health warnings were placed on cigarette packages. 
C) Several foreign countries banned U.S. cigarettes in their countries. 
D) A tax was placed on cigarettes. 
A) The price of marijuana, a complement to cigarettes, increased. 
B) Mandatory health warnings were placed on cigarette packages. 
C) Several foreign countries banned U.S. cigarettes in their countries. 
D) A tax was placed on cigarettes.

Question 15

Figure 4-19  
-Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A) $10 and 30 units. 
B) $10 and 50 units. 
C) $10 and 70 units. 
D) $4 and 50 units. 
A) $10 and 30 units. 
B) $10 and 50 units. 
C) $10 and 70 units. 
D) $4 and 50 units.

Question 16

If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the

Accepted Answer

A) law of supply. 
B) law of demand. 
C) difference between normal and inferior goods. 
D) difference between substitute and complement goods. 
A) law of supply. 
B) law of demand. 
C) difference between normal and inferior goods. 
D) difference between substitute and complement goods.

Question 17

The two words economists use most often are

Accepted Answer

A) inflation and trade. 
B) supply and demand. 
C) competition and prices. 
D) markets and equilibrium. 
A) inflation and trade. 
B) supply and demand. 
C) competition and prices. 
D) markets and equilibrium.

Question 18

When quantity supplied increases at every possible price, we know that the supply curve has

Accepted Answer

A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D) not shifted; rather, the supply curve has become flatter. 
A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D) not shifted; rather, the supply curve has become flatter.

Question 19

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

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 20

When we move along a given demand curve,

Accepted Answer

A) only price is held constant. 
B) income and price are held constant. 
C) all nonprice determinants of demand are held constant. 
D) all determinants of quantity demanded are held constant. 
A) only price is held constant. 
B) income and price are held constant. 
C) all nonprice determinants of demand are held constant. 
D) all determinants of quantity demanded are held constant.

Exam 4: The Market Forces of Supply and Demand

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

For a market for a good or service to exist, there must be a

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for tennis balls in the United States?

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 $1 is

Figure 4-31 Consider the market for 2-packs of light bulbs below. ​ -Refer to Figure 4-31. At a price of $6, is there a shortage or surplus, and how large is the shortage/surplus?

A shortage is the same as an excess demand.

If, at the current price, there is a shortage of a good, then

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Which of the following might cause the supply curve for an inferior good to shift to the right?

Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)

The highest form of competition is called

A supply schedule is a table that shows the relationship between

Figure 4-9 Panel (a) Panel (b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

Figure 4-19 -Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are

The two words economists use most often are

When quantity supplied increases at every possible price, we know that the supply curve has

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

When we move along a given demand curve,

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

Filters

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. At a price of $6, is there a shortage or surplus, and how large is the shortage/surplus?