Question 1

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal, it is consistent that

Accepted Answer

A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased. 
A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased.

Question 2

Sugar price supports ensure an abundance of sugar, and hence reasonable prices for consumers.

Accepted Answer

A) True 
 B)False

Question 3

The demand for home computers has increased, yet the price has fallen.Explain this apparent paradox.

Accepted Answer

Supply has increased by more than demand

Question 4

The presence of scalpers (people selling tickets at a price above the quoted price, P*) at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 5

The more firms that are attracted to an industry, the greater will be the quantity of product supplied at any given price.

Accepted Answer

A) True 
 B)False

Question 6

Figure 4-5
  
-If the suppliers of a good will sell any amount at $30 but there are no sales, then the market can best be represented by which graph in Figure 4-5?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 7

Regulations are sometimes used to "correct" the failures of a market mechanism.

Accepted Answer

A) True 
 B)False

Question 8

If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of

Accepted Answer

A)  both products to the right. 
B)  both products to the left. 
C)  grapefruit to the right. 
D)  oranges to the left. 
A)  both products to the right. 
B)  both products to the left. 
C)  grapefruit to the right. 
D)  oranges to the left.

Question 9

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

Accepted Answer

A)  demand as consumers try to economize because of the shortage. 
B)  both the supply and demand curves. 
C)  the supply curve. 
D)  the supply curve and a rightward shift in the demand curve, which will result in a higher price. 
A)  demand as consumers try to economize because of the shortage. 
B)  both the supply and demand curves. 
C)  the supply curve. 
D)  the supply curve and a rightward shift in the demand curve, which will result in a higher price.

Question 10

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in demand will have what effect on equilibrium price and quantity?

Accepted Answer

A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease. 
A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease.

Question 12

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
 Demand:
$ Q_{d}=20-2 P $
Supply:
$ Q_{s}=5+3 P $
where $ Q_{d} $ is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-Refer to Exhibit 4-1.According to the data given, the equilibrium price of a weezil is

Accepted Answer

A)  $3. 
B)  $5. 
C)  $11. 
D)  $14. 
A)  $3. 
B)  $5. 
C)  $11. 
D)  $14.

Question 13

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

Accepted Answer

Quantity demanded is the number of units

Question 14

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

Accepted Answer

A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product 
A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product

Question 15

As price increases, additional suppliers are willing to produce a commodity.

Accepted Answer

A) True 
 B)False

Question 16

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to ____, and quantity sold to ____.

Accepted Answer

A)  rise; rise. 
B)  fall; fall. 
C)  rise; fall. 
D)  fall; remain the same. 
A)  rise; rise. 
B)  fall; fall. 
C)  rise; fall. 
D)  fall; remain the same.

Question 17

A decrease in price of a certain good most likely will lead to

Accepted Answer

A)  an increase in quantity demanded and an increase in demand. 
B)  an increase in quantity demanded but no change in demand. 
C)  an increase in demand but no change in quantity demanded. 
D)  no change in demand and no change in quantity demanded. 
A)  an increase in quantity demanded and an increase in demand. 
B)  an increase in quantity demanded but no change in demand. 
C)  an increase in demand but no change in quantity demanded. 
D)  no change in demand and no change in quantity demanded.

Question 18

An important assumption that is made when constructing a supply schedule is

Accepted Answer

A)  only price and quantity matter in determining supply. 
B)  firms always want to sell a certain amount of a product. 
C)  supply is too important to be left to the marketplace. 
D)  all other determinants of supply are held constant. 
E)  demand has a positive slope. 
A)  only price and quantity matter in determining supply. 
B)  firms always want to sell a certain amount of a product. 
C)  supply is too important to be left to the marketplace. 
D)  all other determinants of supply are held constant. 
E)  demand has a positive slope.

Question 19

Rent controls are designed to protect consumers from high rents.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-16
  
-In Figure 4-16, an increase in the number of producers will shift supply from

Accepted Answer

A)  S1 to S₂. 
B)  S₂ to S1. 
C)  S₃ to S₂. 
D)  S₃ to S1. 
A)  S1 to S₂. 
B)  S₂ to S1. 
C)  S₃ to S₂. 
D)  S₃ to S1.

Exam 4: Supply and Demand: An Initial Look

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal, it is consistent that

Sugar price supports ensure an abundance of sugar, and hence reasonable prices for consumers.

The demand for home computers has increased, yet the price has fallen.Explain this apparent paradox.

The presence of scalpers (people selling tickets at a price above the quoted price, P*) at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

The more firms that are attracted to an industry, the greater will be the quantity of product supplied at any given price.

Figure 4-5 -If the suppliers of a good will sell any amount at $30 but there are no sales, then the market can best be represented by which graph in Figure 4-5?

Regulations are sometimes used to "correct" the failures of a market mechanism.

If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.

A decrease in demand will have what effect on equilibrium price and quantity?

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

As price increases, additional suppliers are willing to produce a commodity.

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to ____, and quantity sold to ____.

A decrease in price of a certain good most likely will lead to

An important assumption that is made when constructing a supply schedule is

Rent controls are designed to protect consumers from high rents.

Figure 4-16 -In Figure 4-16, an increase in the number of producers will shift supply from

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

A demand schedule is a table showing how the of some product during a specified period of time changes as changes, holding all other determinants of quantity demanded constant.

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to , and quantity sold to .