Question 1

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices. 
A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  $2, there is a surplus 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 surplus of 4 units. 
A)  $2, there is a surplus 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 surplus of 4 units.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A leftward shift of a supply curve is called a(n)

Accepted Answer

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

Question 6

Equilibrium quantity must increase when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase. 
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
C)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase. 
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. 
A)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase. 
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
C)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase. 
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

Question 7

If a shortage exists in a market,then we know that the actual price is

Accepted Answer

A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 8

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-9.Suppose Harry,Darby,and Jake are the only demanders of sandwiches.Also suppose the following: • x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 4.
• The slope of the supply curve is 2.
Then there is currently a

Accepted Answer

A)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
A)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.

Question 9

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant. 
A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant.

Question 10

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,the equilibrium price rises,but the effect on the equilibrium quantity is ambiguous.

Accepted Answer

A) True 
 B)False

Question 11

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-9.Suppose Harry,Darby,and Jake are the only demanders of sandwiches.Also suppose x = 2.Then

Accepted Answer

A)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -5/2. 
B)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -2/5. 
C)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -5/2. 
D)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -2/5. 
A)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -5/2. 
B)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -2/5. 
C)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -5/2. 
D)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -2/5.

Question 12

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.
  
-Refer to Figure 4-19.All else equal,a large number of people becoming vegetarians 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 13

If there is a shortage of farm laborers,we would expect

Accepted Answer

A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor. 
A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor.

Question 14

Figure 4-22

-Refer to Figure 4-22.Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 15

An increase in supply will cause a decrease in price,which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 16

The law of supply states that,other things equal,an increase in

Accepted Answer

A)  price causes quantity supplied to increase. 
B)  price causes quantity supplied to decrease. 
C)  quantity supplied causes price to increase. 
D)  quantity supplied causes price to decrease. 
A)  price causes quantity supplied to increase. 
B)  price causes quantity supplied to decrease. 
C)  quantity supplied causes price to increase. 
D)  quantity supplied causes price to decrease.

Question 17

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of sellers of gasoline. 
D)  All of the above are correct. 
A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of sellers of gasoline. 
D)  All of the above are correct.

Question 18

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  luxury good. 
B)  inferior good. 
C)  normal good. 
D)  complementary good. 
A)  luxury good. 
B)  inferior good. 
C)  normal good. 
D)  complementary good.

Question 20

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand.

The signals that guide the allocation of resources in a market economy are

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

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

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

A leftward shift of a supply curve is called a(n)

Equilibrium quantity must increase when demand

If a shortage exists in a market,then we know that the actual price is

The dictionary defines equilibrium as a situation in which forces

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,the equilibrium price rises,but the effect on the equilibrium quantity is ambiguous.

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-9.Suppose Harry,Darby,and Jake are the only demanders of sandwiches.Also suppose x = 2.Then

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19.All else equal,a large number of people becoming vegetarians would cause a move from

If there is a shortage of farm laborers,we would expect

Figure 4-22 -Refer to Figure 4-22.Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

An increase in supply will cause a decrease in price,which will cause an increase in demand.

The law of supply states that,other things equal,an increase in

Today's demand curve for gasoline could shift in response to a change in

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

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

A yard sale is an example of a market.

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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