Question 1

When a shortage exists in a market,sellers

Accepted Answer

A)  raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated. 
A)  raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.

Question 2

Table 4-5
  
-Refer to Table 4-5.If these are the only four sellers in the market,then the market quantity supplied at a price of $4 is

Accepted Answer

A)  4 units. 
B)  5 units. 
C)  20 units. 
D)  80 units. 
A)  4 units. 
B)  5 units. 
C)  20 units. 
D)  80 units.

Question 3

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)  production technology 
B)  the price of the good 
C)  the prices of inputs 
D)  expectations 
A)  production technology 
B)  the price of the good 
C)  the prices of inputs 
D)  expectations

Question 4

In competitive markets,which of the following is not correct?

Accepted Answer

A)  Firms produce identical products. 
B)  No individual buyer can influence the market price. 
C)  Some sellers can set prices. 
D)  Buyers are price takers. 
A)  Firms produce identical products. 
B)  No individual buyer can influence the market price. 
C)  Some sellers can set prices. 
D)  Buyers are price takers.

Question 5

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 6

Assume the market for tennis balls is perfectly competitive.When one tennis ball producer exits the market,

Accepted Answer

A)  the price of tennis balls increases. 
B)  the price of tennis balls decreases. 
C)  the price of tennis balls does not change. 
D)  there is no longer a market for tennis balls. 
A)  the price of tennis balls increases. 
B)  the price of tennis balls decreases. 
C)  the price of tennis balls does not change. 
D)  there is no longer a market for tennis balls.

Question 7

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 8

Figure 4-6
  
-Refer to Figure 4-6.The movement from D' to D could be caused by

Accepted Answer

A)  a decrease in price. 
B)  a decrease in income, assuming the good is inferior. 
C)  buyers expecting the price of the good to fall in the near future. 
D)  an increase in the price of a complement. 
A)  a decrease in price. 
B)  a decrease in income, assuming the good is inferior. 
C)  buyers expecting the price of the good to fall in the near future. 
D)  an increase in the price of a complement.

Question 9

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Accepted Answer

A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  greater government restrictions on agricultural chemicals 
D)  fewer government restrictions on agricultural chemicals 
A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  greater government restrictions on agricultural chemicals 
D)  fewer government restrictions on agricultural chemicals

Question 10

Figure 4-14
  
-Refer to Figure 4-14.At a price of

Accepted Answer

A)  $2, there is a shortage of 6 units. 
B)  $5, there is a surplus of 25 units. 
C)  $5, there is a shortage of $25. 
D)  $7, there is a shortage of 4 units. 
A)  $2, there is a shortage of 6 units. 
B)  $5, there is a surplus of 25 units. 
C)  $5, there is a shortage of $25. 
D)  $7, there is a shortage of 4 units.

Question 11

Which of the following sets of events must cause an increase in the price of a new house?

Accepted Answer

A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future 
A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future

Question 12

In competitive markets,buyers

Accepted Answer

A)  are price takers, but sellers are price setters. 
B)  are price setters, but sellers are price takers. 
C)  and sellers are price takers. 
D)  and sellers are price setters. 
A)  are price takers, but sellers are price setters. 
B)  are price setters, but sellers are price takers. 
C)  and sellers are price takers. 
D)  and sellers are price setters.

Question 13

An example of a perfectly competitive market would be the market for

Accepted Answer

A)  electricity. 
B)  soybeans. 
C)  coffee shops. 
D)  restaurants. 
A)  electricity. 
B)  soybeans. 
C)  coffee shops. 
D)  restaurants.

Question 14

Table 4-1
  
-Refer to Table 4-1.If the market consists of Laura and Hillary only and the price falls by $1,the quantity demanded in the market increases by

Accepted Answer

A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units.

Question 15

When the price of a good or service changes,

Accepted Answer

A)  the demand curve shifts in the opposite direction. 
B)  the supply curve shifts in the opposite direction. 
C)  the supply curve shifts in the same direction. 
D)  there is a movement along a given supply curve. 
A)  the demand curve shifts in the opposite direction. 
B)  the supply curve shifts in the opposite direction. 
C)  the supply curve shifts in the same direction. 
D)  there is a movement along a given supply curve.

Question 16

A decrease in the price of a good will

Accepted Answer

A)  increase supply. 
B)  decrease supply. 
C)  increase quantity supplied. 
D)  decrease quantity supplied. 
A)  increase supply. 
B)  decrease supply. 
C)  increase quantity supplied. 
D)  decrease quantity supplied.

Question 17

A decrease in demand will cause a decrease in price,which will cause a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 18

In markets,prices move toward equilibrium because of

Accepted Answer

A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes. 
A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes.

Question 19

If a good or service has only one seller,then the seller is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 20

Table 4-2
  
-Refer to Table 4-2.If these are the only four buyers in the market,then when the price decreases from $6 to $4,the market quantity demanded

Accepted Answer

A)  increases by 0.75 units. 
B)  increases by 3 units. 
C)  increases by 8 units. 
D)  decreases by 27 units. 
A)  increases by 0.75 units. 
B)  increases by 3 units. 
C)  increases by 8 units. 
D)  decreases by 27 units.

Exam 4: The Market Forces of Supply and Demand.

When a shortage exists in a market,sellers

Table 4-5 -Refer to Table 4-5.If these are the only four sellers in the market,then the market quantity supplied at a price of $4 is

Which of the following is not held constant in a supply schedule?

In competitive markets,which of the following is not correct?

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

Assume the market for tennis balls is perfectly competitive.When one tennis ball producer exits the market,

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

Figure 4-6 -Refer to Figure 4-6.The movement from D' to D could be caused by

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Figure 4-14 -Refer to Figure 4-14.At a price of

Which of the following sets of events must cause an increase in the price of a new house?

In competitive markets,buyers

An example of a perfectly competitive market would be the market for

Table 4-1 -Refer to Table 4-1.If the market consists of Laura and Hillary only and the price falls by $1,the quantity demanded in the market increases by

When the price of a good or service changes,

A decrease in the price of a good will

A decrease in demand will cause a decrease in price,which will cause a decrease in supply.

In markets,prices move toward equilibrium because of

If a good or service has only one seller,then the seller is called a monopoly.

Table 4-2 -Refer to Table 4-2.If these are the only four buyers in the market,then when the price decreases from $6 to $4,the market quantity demanded

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.

Application: 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 Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

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