Question 1

Which of the following demonstrates the law of demand?

Accepted Answer

A) After Qyatt got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise. 
B) Benjamin buys fewer croissants at $0.75 per croissant than at $1 per croissant, other things equal. 
C) Ashlyn buys more donut holes at $0.25 per donut hole than at $0.50 per donut hole, other things equal. 
D) Ellie buys fewer Snickers at $0.60 per candy bar after the price of Skittles falls to $0.50 per bag. 
A) After Qyatt got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise. 
B) Benjamin buys fewer croissants at $0.75 per croissant than at $1 per croissant, other things equal. 
C) Ashlyn buys more donut holes at $0.25 per donut hole than at $0.50 per donut hole, other things equal. 
D) Ellie buys fewer Snickers at $0.60 per candy bar after the price of Skittles falls to $0.50 per bag.

Question 2

Two goods are complements when a decrease in the price of one good

Accepted Answer

A) decreases the quantity demanded of the other good. 
B) decreases the demand for the other good. 
C) increases the quantity demanded of the other good. 
D) increases the demand for the other good. 
A) decreases the quantity demanded of the other good. 
B) decreases the demand for the other good. 
C) increases the quantity demanded of the other good. 
D) increases the demand for the other good.

Question 3

Figure 4-14
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 4

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

Accepted Answer

A) falls, the supply of the good rises. 
B) rises, the quantity supplied of the good rises. 
C) rises, the supply of the good falls. 
D) falls, the quantity supplied of the good rises. 
A) falls, the supply of the good rises. 
B) rises, the quantity supplied of the good rises. 
C) rises, the supply of the good falls. 
D) falls, the quantity supplied of the good rises.

Question 5

When the quantity demanded has increased at every price, it might be because

Accepted Answer

A) the number of buyers in the market has decreased. 
B) income has increased, and the good is an inferior good. 
C) the costs incurred by sellers producing the good have decreased. 
D) the price of a complementary good has decreased. 
A) the number of buyers in the market has decreased. 
B) income has increased, and the good is an inferior good. 
C) the costs incurred by sellers producing the good have decreased. 
D) the price of a complementary good has decreased.

Question 6

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 18 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 7

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 8

When we move along a given supply curve,

Accepted Answer

A) only price is held constant. 
B) technology and price are held constant. 
C) all nonprice determinants of supply are held constant. 
D) all determinants of quantity supplied are held constant. 
A) only price is held constant. 
B) technology and price are held constant. 
C) all nonprice determinants of supply are held constant. 
D) all determinants of quantity supplied are held constant.

Question 9

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-12
​
   ​
-Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Accepted Answer

The answer of Figure 4-12
​
   ​
-Refer to Figure...

Question 11

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 12

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Accepted Answer

A) decreases, and the supply of tires increases. 
B) is unaffected, and the supply of tires decreases. 
C) is unaffected, and the supply of tires increases. 
D) is unaffected, and the supply of tires could increase, decrease, or stay the same. 
A) decreases, and the supply of tires increases. 
B) is unaffected, and the supply of tires decreases. 
C) is unaffected, and the supply of tires increases. 
D) is unaffected, and the supply of tires could increase, decrease, or stay the same.

Question 13

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-9   ​
-Refer to Figure 4-9. All else equal, an increase in the price of the pulp used in the paper production process would cause a 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

Figure 4-8  
-Refer to Figure 4-8. All else equal, the premature deaths of thousands of turkeys would cause a move from

Accepted Answer

A) Da to Db. 
B) Db to Da. 
C) x to y. 
D) y to x. 
A) Da to Db. 
B) Db to Da. 
C) x to y. 
D) y to x.

Question 16

The actions of buyers and sellers naturally move markets toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 17

Prices allocate a market economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 18

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Accepted Answer

A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would increase, and the equilibrium quantity would decrease. 
D) The equilibrium price would decrease, and the equilibrium quantity would increase. 
A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would increase, and the equilibrium quantity would decrease. 
D) The equilibrium price would decrease, and the equilibrium quantity would increase.

Question 19

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A) There is free entry and exit. 
B) There are many buyers and sellers. 
C) Sellers must accept the price the market determines. 
D) Different sellers sell differentiated products. 
A) There is free entry and exit. 
B) There are many buyers and sellers. 
C) Sellers must accept the price the market determines. 
D) Different sellers sell differentiated products.

Question 20

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Which of the following demonstrates the law of demand?

Two goods are complements when a decrease in the price of one good

Figure 4-14 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?

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

When the quantity demanded has increased at every price, it might be because

The law of demand is true for most goods in the economy.

When we move along a given supply curve,

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Figure 4-12 ​ ​ -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

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

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Figure 4-9 ​ -Refer to Figure 4-9. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

Figure 4-8 -Refer to Figure 4-8. All else equal, the premature deaths of thousands of turkeys would cause a move from

The actions of buyers and sellers naturally move markets toward equilibrium.

Prices allocate a market economy's scarce resources.

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Which of the following is not a characteristic of a perfectly competitive market?

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

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 4-14 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?

Figure 4-12 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Figure 4-9 -Refer to Figure 4-9. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from