Question 1

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Accepted Answer

A) True 
 B)False

Question 2

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 3

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Accepted Answer

A) True 
 B)False

Question 4

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Accepted Answer

A) and quantity both decrease. 
B) and quantity both increase. 
C) increases, and the equilibrium quantity decreases. 
D) decreases, and the equilibrium quantity increases. 
A) and quantity both decrease. 
B) and quantity both increase. 
C) increases, and the equilibrium quantity decreases. 
D) decreases, and the equilibrium quantity increases.

Question 5

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A) shortage to exist and the market price of roses to increase. 
B) shortage to exist and the market price of roses to decrease. 
C) surplus to exist and the market price of roses to increase. 
D) surplus to exist and the market price of roses to decrease. 
A) shortage to exist and the market price of roses to increase. 
B) shortage to exist and the market price of roses to decrease. 
C) surplus to exist and the market price of roses to increase. 
D) surplus to exist and the market price of roses to decrease.

Question 6

The following table contains a demand schedule for a good.   If the law of demand applies to this good, then A could be

Accepted Answer

A) 0. 
B) 100. 
C) 200. 
D) 400. 
A) 0. 
B) 100. 
C) 200. 
D) 400.

Question 7

Sellers respond to a shortage by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 8

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices.
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Accepted Answer

The answer of Table 4-14
The table below shows the quantities...

Question 9

Soup is an inferior good if the demand

Accepted Answer

A) for soup falls when the price of a substitute for soup rises. 
B) for soup rises when the price of soup falls. 
C) curve for soup slopes upward. 
D) for soup falls when income rises. 
A) for soup falls when the price of a substitute for soup rises. 
B) for soup rises when the price of soup falls. 
C) curve for soup slopes upward. 
D) for soup falls when income rises.

Question 10

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas.   If the law of demand applies to these pizzas, then A could be

Accepted Answer

A) 40. 
B) 35. 
C) 30. 
D) All of the above could be correct. 
A) 40. 
B) 35. 
C) 30. 
D) All of the above could be correct.

Question 11

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A) the prices of related goods 
B) income 
C) tastes 
D) the prices of the inputs used to produce the good 
A) the prices of related goods 
B) income 
C) tastes 
D) the prices of the inputs used to produce the good

Question 12

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Accepted Answer

A) the government 
B) prices 
C) subsidies 
D) the Federal Reserve 
A) the government 
B) prices 
C) subsidies 
D) the Federal Reserve

Question 13

When quantity supplied decreases 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 14

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

Accepted Answer

A) x to y. 
B) y to x. 
C) SA to SB. 
D) SB to SA. 
A) x to y. 
B) y to x. 
C) SA to SB. 
D) SB to SA.

Question 15

In a competitive market, each seller has limited control over the price of his product because

Accepted Answer

A) other sellers are offering similar products. 
B) buyers exert more control over the price than do sellers. 
C) these markets are highly regulated by the government. 
D) sellers usually agree to set a common price that will allow each seller to earn a comfortable profit. 
A) other sellers are offering similar products. 
B) buyers exert more control over the price than do sellers. 
C) these markets are highly regulated by the government. 
D) sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.

Question 16

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

Accepted Answer

A) Price will fall, and the effect on quantity is ambiguous. 
B) Price will rise, and the effect on quantity is ambiguous. 
C) Quantity will fall, and the effect on price is ambiguous. 
D) Quantity will rise, and the effect on price is ambiguous. 
A) Price will fall, and the effect on quantity is ambiguous. 
B) Price will rise, and the effect on quantity is ambiguous. 
C) Quantity will fall, and the effect on price is ambiguous. 
D) Quantity will rise, and the effect on price is ambiguous.

Question 17

Figure 4-11  
-Refer to Figure 4-11. The movement from point A to point B on the graph represents

Accepted Answer

A) an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B) an increase in the number of suppliers. 
C) a decrease in the price of a relevant input. 
D) an increase in the price of the good that is being supplied and the suppliers' responses to that price change. 
A) an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B) an increase in the number of suppliers. 
C) a decrease in the price of a relevant input. 
D) an increase in the price of the good that is being supplied and the suppliers' responses to that price change.

Question 18

An increase in demand is represented by a

Accepted Answer

A) movement downward and to the right along a demand curve. 
B) movement upward and to the left along a demand curve. 
C) rightward shift of a demand curve. 
D) leftward shift of a demand curve. 
A) movement downward and to the right along a demand curve. 
B) movement upward and to the left along a demand curve. 
C) rightward shift of a demand curve. 
D) leftward shift of a demand curve.

Question 19

Figure 4-7  
-Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)

Accepted Answer

A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips lower cholesterol. 
D) increase in the price of a pretzels. 
A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips lower cholesterol. 
D) increase in the price of a pretzels.

Question 20

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand

Exam 4: The Market Forces of Supply and Demand

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

The following table contains a demand schedule for a good. If the law of demand applies to this good, then A could be

Sellers respond to a shortage by cutting their prices.

Table 4-14 The table below shows the quantities demanded of milk per month by four families at various prices. -Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Soup is an inferior good if the demand

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas. If the law of demand applies to these pizzas, then A could be

Which of the following is not a determinant of the demand for a particular good?

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

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

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

In a competitive market, each seller has limited control over the price of his product because

Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph represents

An increase in demand is represented by a

Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n)

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

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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