Question 1

A movement along the demand curve might be caused by a change in

Accepted Answer

A) income. 
B) the prices of substitutes or complements. 
C) expectations about future prices. 
D) the price of the good or service that is being demanded. 
A) income. 
B) the prices of substitutes or complements. 
C) expectations about future prices. 
D) the price of the good or service that is being demanded.

Question 2

Which of the following is an example of a less-than-highly-organized market?

Accepted Answer

A) the market for U.S. Treasury bonds 
B) the market for corn 
C) the market for soybeans 
D) the market for ice cream 
A) the market for U.S. Treasury bonds 
B) the market for corn 
C) the market for soybeans 
D) the market for ice cream

Question 3

Figure 4-17  
-Refer to Figure 4-17. At a price of

Accepted Answer

A) $8, there is a surplus of 6 units. 
B) $5, there is neither a shortage nor a surplus. 
C) $2, there is a shortage of 6 units. 
D) All of the above are correct. 
A) $8, there is a surplus of 6 units. 
B) $5, there is neither a shortage nor a surplus. 
C) $2, there is a shortage of 6 units. 
D) All of the above are correct.

Question 4

The supply curve for a good is a line that relates

Accepted Answer

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

Question 5

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A) an increase in the price of wool shirts and a decrease in the price of raw cotton 
B) a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C) an increase in the price of wool shirts and an increase in the price of raw cotton 
D) a decrease in the price of wool shirts and an increase in the price of raw cotton 
A) an increase in the price of wool shirts and a decrease in the price of raw cotton 
B) a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C) an increase in the price of wool shirts and an increase in the price of raw cotton 
D) a decrease in the price of wool shirts and an increase in the price of raw cotton

Question 7

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 Alpine Springs and Dew Good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?

Accepted Answer

A) -200 cases 
B) -100 cases 
C) 100 cases 
D) 200 cases 
A) -200 cases 
B) -100 cases 
C) 100 cases 
D) 200 cases

Question 8

A market supply curve shows how the total quantity supplied of a good varies as

Accepted Answer

A) production technology varies. 
B) price varies. 
C) input prices vary. 
D) demand varies. 
A) production technology varies. 
B) price varies. 
C) input prices vary. 
D) demand varies.

Question 9

Which of the following is not a determinant of demand?

Accepted Answer

A) the price of a resource that is used to produce the good 
B) the price of a complementary good 
C) the price of the good next month 
D) the price of a substitute good 
A) the price of a resource that is used to produce the good 
B) the price of a complementary good 
C) the price of the good next month 
D) the price of a substitute good

Question 10

An increase in supply is represented by a

Accepted Answer

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

Question 11

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Accepted Answer

A) Consumers have experienced an increase in income, and beef-production technology has improved. 
B) The price of chicken has risen, and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. 
D) The demand curve for beef must be positively sloped. 
A) Consumers have experienced an increase in income, and beef-production technology has improved. 
B) The price of chicken has risen, and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy. 
D) The demand curve for beef must be positively sloped.

Question 12

An increase in which of the following would shift the supply curve for gasoline to the right?

Accepted Answer

A) demand for gasoline 
B) price of gasoline 
C) number of producers of gasoline 
D) price of oil, an input into the production of gasoline 
A) demand for gasoline 
B) price of gasoline 
C) number of producers of gasoline 
D) price of oil, an input into the production of gasoline

Question 13

If suppliers expect the price of their product to fall in the future, then they will

Accepted Answer

A) decrease supply now. 
B) increase supply now. 
C) decrease supply in the future but not now. 
D) increase supply in the future but not now. 
A) decrease supply now. 
B) increase supply now. 
C) decrease supply in the future but not now. 
D) increase supply in the future but not now.

Question 14

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Accepted Answer

A) True 
 B)False

Question 15

In competitive markets,

Accepted Answer

A) firms produce identical products. 
B) no individual buyer can influence the market price. 
C) no individual seller can influence the market price. 
D) All of the above are correct. 
A) firms produce identical products. 
B) no individual buyer can influence the market price. 
C) no individual seller can influence the market price. 
D) All of the above are correct.

Question 16

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Accepted Answer

A) The demand for gasoline will increase. 
B) The demand for gasoline will decrease. 
C) The demand for gasoline will be unaffected. 
D) The supply of gasoline will increase. 
A) The demand for gasoline will increase. 
B) The demand for gasoline will decrease. 
C) The demand for gasoline will be unaffected. 
D) The supply of gasoline will increase.

Question 17

Figure 4-20  
-Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

Accepted Answer

A) The market is in equilibrium. 
B) Equilibrium price is equal to equilibrium quantity. 
C) There is no pressure for price to change. 
D) The quantity of the good that is bought and sold is 600 units. 
A) The market is in equilibrium. 
B) Equilibrium price is equal to equilibrium quantity. 
C) There is no pressure for price to change. 
D) The quantity of the good that is bought and sold is 600 units.

Question 18

Another term for equilibrium price is

Accepted Answer

A) dynamic price. 
B) market-clearing price. 
C) quantity-defining price. 
D) balance price. 
A) dynamic price. 
B) market-clearing price. 
C) quantity-defining price. 
D) balance price.

Question 19

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

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

Question 20

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

A movement along the demand curve might be caused by a change in

Which of the following is an example of a less-than-highly-organized market?

Figure 4-17 -Refer to Figure 4-17. At a price of

The supply curve for a good is a line that relates

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

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 Alpine Springs and Dew Good are the only two suppliers in this market, by how much does the market quantity supplied change with each $3 increase in price?

A market supply curve shows how the total quantity supplied of a good varies as

Which of the following is not a determinant of demand?

An increase in supply is represented by a

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

An increase in which of the following would shift the supply curve for gasoline to the right?

If suppliers expect the price of their product to fall in the future, then they will

A decrease in the price of sugar will shift the supply curve for cookies to the right.

In competitive markets,

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Figure 4-20 -Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

Another term for equilibrium price is

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

A decrease in the price of pizza will shift the supply curve for pizza to the left.

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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