Question 1

Price will rise to eliminate a surplus.

Accepted Answer

A) True 
 B)False

Question 2

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 3

If the demand for a good falls when income falls, then the good is called

Accepted Answer

A) a normal good. 
B) a regular good. 
C) an ordinary good. 
D) an inferior good. 
A) a normal good. 
B) a regular good. 
C) an ordinary good. 
D) an inferior good.

Question 4

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 5

If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Question 6

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) could be greater or less than the quantity that sellers are willing and able to sell. 
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) could be greater or less than the quantity that sellers are willing and able to sell.

Question 7

The equilibrium price is the same as the market-clearing price.

Accepted Answer

A) True 
 B)False

Question 8

Assume Kalene buys notebooks in a competitive market. It follows that

Accepted Answer

A) Kalene has a limited number of sellers from which to buy notebooks. 
B) Kalene will negotiate with sellers whenever she buys notebooks. 
C) Kalene cannot influence the price of notebooks even if she buys a large quantity of them. 
D) Kalene might have trouble finding notebooks at her local store. 
A) Kalene has a limited number of sellers from which to buy notebooks. 
B) Kalene will negotiate with sellers whenever she buys notebooks. 
C) Kalene cannot influence the price of notebooks even if she buys a large quantity of them. 
D) Kalene might have trouble finding notebooks at her local store.

Question 9

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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 10

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 11

A group of buyers and sellers of a particular good or service is called

Accepted Answer

A) a coalition. 
B) an economy. 
C) a market. 
D) a competition. 
A) a coalition. 
B) an economy. 
C) a market. 
D) a competition.

Question 12

Figure 4-10  
-Refer to Figure 4-10. Which of the following movements would illustrate the effect of an increase in the price of microprocessors, a material used to make laptops, on the market for laptops?

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 13

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Accepted Answer

The demand

Question 14

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Accepted Answer

A) True 
 B)False

Question 15

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation QS1U1P1D S1S1P0= 500 - 10P, where QS1U1P1D S1S1P0 is the quantity demanded and P is the price. Also, suppose the supply schedule can be represented by the equation QS1U1P1S S1S1P0= 200 + 10P, where QS1U1P1S S1S1P0 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 16

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 17

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be

Accepted Answer

A) a substitute good. 
B) an inferior good. 
C) a normal good. 
D) a complementary good. 
A) a substitute good. 
B) an inferior good. 
C) a normal good. 
D) a complementary good.

Question 18

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation QS1U1P1D S1S1P0= 500 - 10P, where QS1U1P1D S1S1P0 is the quantity demanded and P is the price. Also, suppose the supply schedule can be represented by the equation QS1U1P1S S1S1P0= 200 + 10P, where QS1U1P1S S1S1P0 is the quantity supplied.
-Refer to Scenario 4-1. What is the equilibrium price in this market?

Accepted Answer

The answer of Scenario 4-1
Suppose the demand schedule in a...

Question 19

The law of demand states that, other things equal, when the price of a good

Accepted Answer

A) falls, the demand for the good rises. 
B) rises, the quantity demanded of the good rises. 
C) rises, the demand for the good falls. 
D) falls, the quantity demanded of the good rises. 
A) falls, the demand for the good rises. 
B) rises, the quantity demanded of the good rises. 
C) rises, the demand for the good falls. 
D) falls, the quantity demanded of the good rises.

Question 20

Figure 4-7   ​
-Refer to Figure 4-7. At a price of $15, there would be a

Accepted Answer

A) surplus of 200 units. 
B) surplus of 100 units. 
C) shortage of 200 units. 
D) shortage of 100 units. 
A) surplus of 200 units. 
B) surplus of 100 units. 
C) shortage of 200 units. 
D) shortage of 100 units.

Exam 4: The Market Forces of Supply and Demand

Price will rise to eliminate a surplus.

Most markets in the economy are highly competitive.

If the demand for a good falls when income falls, then the good is called

A supply schedule is a table that shows the relationship between

If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

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

The equilibrium price is the same as the market-clearing price.

Assume Kalene buys notebooks in a competitive market. It follows that

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

A group of buyers and sellers of a particular good or service is called

Figure 4-10 -Refer to Figure 4-10. Which of the following movements would illustrate the effect of an increase in the price of microprocessors, a material used to make laptops, on the market for laptops?

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Most studies have found that tobacco and marijuana are substitutes rather than complements.

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be

The law of demand states that, other things equal, when the price of a good

Figure 4-7 ​ -Refer to Figure 4-7. At a price of $15, there would be a

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 Nations 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 4-7 -Refer to Figure 4-7. At a price of $15, there would be a