Question 1

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A) increase the supply of education. 
B) decrease the supply of education. 
C) increase the demand for education. 
D) decrease the demand for education. 
A) increase the supply of education. 
B) decrease the supply of education. 
C) increase the demand for education. 
D) decrease the demand for education.

Question 2

Step one in the Three-Step program for analyzing changes in equilibrium is as follows:

Accepted Answer

A) Decide which direction the curve shifts. 
B) Decide whether the event shifts the supply or demand curve. 
C) Use the supply-and-demand diagram to see how the shift changes the equilibrium. 
D) Any of these could be used first. 
A) Decide which direction the curve shifts. 
B) Decide whether the event shifts the supply or demand curve. 
C) Use the supply-and-demand diagram to see how the shift changes the equilibrium. 
D) Any of these could be used first.

Question 3

When quantity demanded decreases at every possible price,we know that the demand curve has

Accepted Answer

A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved down the demand curve to a new point on the same curve. 
D) not shifted; rather, the demand curve has become flatter. 
A) shifted to the left. 
B) shifted to the right. 
C) not shifted; rather, we have moved down the demand curve to a new point on the same curve. 
D) not shifted; rather, the demand curve has become flatter.

Question 4

A surplus exists in a market if

Accepted Answer

A) there is an excess demand for the good. 
B) the situation is such that the law of supply and demand would predict an increase in the price of the good from its current level. 
C) the current price is above its equilibrium price. 
D) None of the above is correct. 
A) there is an excess demand for the good. 
B) the situation is such that the law of supply and demand would predict an increase in the price of the good from its current level. 
C) the current price is above its equilibrium price. 
D) None of the above is correct.

Question 5

Lead is an important input in the production of crystal.If the price of lead decreases,other things equal,we would expect the supply of

Accepted Answer

A) crystal to be unaffected. 
B) crystal to decrease. 
C) crystal to increase. 
D) lead to increase. 
A) crystal to be unaffected. 
B) crystal to decrease. 
C) crystal to increase. 
D) lead to increase.

Question 6

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure.We could expect the current demand for

Accepted Answer

A) hair gel to increase. 
B) razors to increase. 
C) combs to increase. 
D) None of the above is correct. 
A) hair gel to increase. 
B) razors to increase. 
C) combs to increase. 
D) None of the above is correct.

Question 7

The term market always refers to

Accepted Answer

A) an arrangement in which buyers and sellers meet at a specific time and place. 
B) an arrangement in which an auctioneer plays at least a limited role in setting prices. 
C) a group of buyers and sellers of a particular good or service. 
D) All of the above are correct. 
A) an arrangement in which buyers and sellers meet at a specific time and place. 
B) an arrangement in which an auctioneer plays at least a limited role in setting prices. 
C) a group of buyers and sellers of a particular good or service. 
D) All of the above are correct.

Question 8

A competitive market is one in which

Accepted Answer

A) there is only one seller, but there are many buyers. 
B) there are many sellers and each seller has the ability to set the price of his product. 
C) there are many sellers and they compete with one another in such a way that some sellers are always being forced out of the market. 
D) there are so many buyers and so many sellers that each has a negligible impact on the price of the product. 
A) there is only one seller, but there are many buyers. 
B) there are many sellers and each seller has the ability to set the price of his product. 
C) there are many sellers and they compete with one another in such a way that some sellers are always being forced out of the market. 
D) there are so many buyers and so many sellers that each has a negligible impact on the price of the product.

Question 9

Figure 4-9
  
-Refer to Figure 4-9.At a price of $15,

Accepted Answer

A) quantity demanded exceeds quantity supplied. 
B) there is a shortage. 
C) there is an excess demand. 
D) All of the above are correct. 
A) quantity demanded exceeds quantity supplied. 
B) there is a shortage. 
C) there is an excess demand. 
D) All of the above are correct.

Question 10

A market is always characterized by

Accepted Answer

A) a high degree of organization. 
B) an individual or small group of individuals who set the price of the product for all buyers and sellers. 
C) the presence of buyers and sellers. 
D) All of the above are correct. 
A) a high degree of organization. 
B) an individual or small group of individuals who set the price of the product for all buyers and sellers. 
C) the presence of buyers and sellers. 
D) All of the above are correct.

Question 11

The relationship between price and quantity supplied is

Accepted Answer

A) negative. 
B) positive. 
C) the same as the relationship between price and quantity demanded. 
D) not well understood by economists because laboratory-type experiments have not been conducted. 
A) negative. 
B) positive. 
C) the same as the relationship between price and quantity demanded. 
D) not well understood by economists because laboratory-type experiments have not been conducted.

Question 12

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a(n)

Accepted Answer

A) price-quantity table. 
B) complementary table. 
C) demand schedule. 
D) equilibrium schedule. 
A) price-quantity table. 
B) complementary table. 
C) demand schedule. 
D) equilibrium schedule.

Question 13

Table 4-3. The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-3.Suppose Alfred,Belinda,and Charissa are the only demanders of sandwiches.Also suppose x = 2.Then

Accepted Answer

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

Question 14

Figure 4-5
  
-Refer to Figure 4-5.The movement from point A to point B on the graph would be caused by

Accepted Answer

A) a decrease in the price of the good. 
B) an increase in the price of the good. 
C) an advance in technology. 
D) a decrease in input prices. 
A) a decrease in the price of the good. 
B) an increase in the price of the good. 
C) an advance in technology. 
D) a decrease in input prices.

Question 15

Which of the following events could shift both the demand curve and the supply curve for a good?

Accepted Answer

A) A technological advance pertaining to the production of the good is observed. 
B) Incomes of all buyers of the good increase. 
C) The number of sellers of the good increases. 
D) Everyone revises upward their expectation of next month's price of the good. 
A) A technological advance pertaining to the production of the good is observed. 
B) Incomes of all buyers of the good increase. 
C) The number of sellers of the good increases. 
D) Everyone revises upward their expectation of next month's price of the good.

Question 16

Fill in the accompanying table,showing whether equilibrium price and equilibrium quantity go up,down or stay the same.

Accepted Answer

The answer of Fill in the accompanying table,showing whether equilibrium...

Question 17

Whenever a determinant of demand other than price changes,the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 18

In a market,to find the total amount supplied at a particular price,

Accepted Answer

A) we must add up all of the amounts that firms are willing and able to supply at that price. 
B) we must take the average of the amounts that firms are willing and able to supply at that price. 
C) the tastes and preferences of buyers must be established. 
D) all determinants of demand must be taken into account. 
A) we must add up all of the amounts that firms are willing and able to supply at that price. 
B) we must take the average of the amounts that firms are willing and able to supply at that price. 
C) the tastes and preferences of buyers must be established. 
D) all determinants of demand must be taken into account.

Question 19

Which of the following statements about people's tastes is correct?

Accepted Answer

A) Generally, economists are interested in explaining people's tastes. 
B) Generally, economists are interested in how changes in people's tastes affect markets. 
C) Tastes never change enough over time to cause noticeable shifts in demand curves. 
D) All of the above are correct. 
A) Generally, economists are interested in explaining people's tastes. 
B) Generally, economists are interested in how changes in people's tastes affect markets. 
C) Tastes never change enough over time to cause noticeable shifts in demand curves. 
D) All of the above are correct.

Question 20

Table 4-3. The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-3.Suppose Alfred,Belinda,and Charissa are the only demanders of sandwiches.Also suppose: • x = 2;
• the current price of a sandwich is $5.00;
• the market quantity supplied of sandwiches is 10;
• the law of supply applies to the supply of sandwiches.
Then

Accepted Answer

A) there is a shortage of 3 sandwiches and the price would be expected to rise from its current level of $5.00. 
B) there is a shortage of 3 sandwiches and the price would be expected to fall from its current level of $5.00. 
C) there is a surplus of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
D) there is a surplus of 5 sandwiches and the price would be expected to fall from its current level of $5.00. 
A) there is a shortage of 3 sandwiches and the price would be expected to rise from its current level of $5.00. 
B) there is a shortage of 3 sandwiches and the price would be expected to fall from its current level of $5.00. 
C) there is a surplus of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
D) there is a surplus of 5 sandwiches and the price would be expected to fall from its current level of $5.00.

Exam 4: The Market Forces of Supply and Demand

An increase in the number of college scholarships issued by private foundations would

Step one in the Three-Step program for analyzing changes in equilibrium is as follows:

When quantity demanded decreases at every possible price,we know that the demand curve has

A surplus exists in a market if

Lead is an important input in the production of crystal.If the price of lead decreases,other things equal,we would expect the supply of

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure.We could expect the current demand for

The term market always refers to

A competitive market is one in which

Figure 4-9 -Refer to Figure 4-9.At a price of $15,

A market is always characterized by

The relationship between price and quantity supplied is

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a(n)

Table 4-3. The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-3.Suppose Alfred,Belinda,and Charissa are the only demanders of sandwiches.Also suppose x = 2.Then

Figure 4-5 -Refer to Figure 4-5.The movement from point A to point B on the graph would be caused by

Which of the following events could shift both the demand curve and the supply curve for a good?

Fill in the accompanying table,showing whether equilibrium price and equilibrium quantity go up,down or stay the same.

Whenever a determinant of demand other than price changes,the demand curve shifts.

In a market,to find the total amount supplied at a particular price,

Which of the following statements about people's tastes is correct?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Applications

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

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

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 Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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