Question 1

Figure 4-9
  
-Refer to Figure 4-9.At a price of $20,which of the following statements is not correct?

Accepted Answer

A) The market is in equilibrium. 
B) Equilibrium price is equal to equilibrium quantity. 
C) There is no pressure for price to change. 
D) The quantity of the good that is bought and sold is 600. 
A) The market is in equilibrium. 
B) Equilibrium price is equal to equilibrium quantity. 
C) There is no pressure for price to change. 
D) The quantity of the good that is bought and sold is 600.

Question 2

Suppose you make jewelry.If the price of gold falls,we would expect you to

Accepted Answer

A) be willing and able to produce less jewelry than before at each possible price. 
B) be willing and able to produce more jewelry than before at each possible price. 
C) face a greater demand for your jewelry. 
D) face a weaker demand for your jewelry. 
A) be willing and able to produce less jewelry than before at each possible price. 
B) be willing and able to produce more jewelry than before at each possible price. 
C) face a greater demand for your jewelry. 
D) face a weaker demand for your jewelry.

Question 3

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

Table 4-4
  
-Refer to Table 4-4.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A) a. 
B) B. 
C) C. 
D) D. 
A) a. 
B) B. 
C) C. 
D) D.

Question 5

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 an hour it is likely that the

Accepted Answer

A) demand for bicycle assembly workers will increase. 
B) supply of bicycles will shift to the right. 
C) supply of bicycles will shift to the left. 
D) firm must increase output to maintain profit levels. 
A) demand for bicycle assembly workers will increase. 
B) supply of bicycles will shift to the right. 
C) supply of bicycles will shift to the left. 
D) firm must increase output to maintain profit levels.

Question 6

Nancy likes pasta today more than she did yesterday.This fact leads us to conclude that

Accepted Answer

A) Nancy must now consider pasta a luxury. 
B) Nancy must have experienced an increase in her income. 
C) Nancy is now willing to pay more than before for pasta at each relevant price of pasta. 
D) the supply of pasta must have increased and stimulated Nancy's enhanced taste for pasta. 
A) Nancy must now consider pasta a luxury. 
B) Nancy must have experienced an increase in her income. 
C) Nancy is now willing to pay more than before for pasta at each relevant price of pasta. 
D) the supply of pasta must have increased and stimulated Nancy's enhanced taste for pasta.

Question 7

At the equilibrium price,quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-7
  
-Refer to Figure 4-7.Equilibrium price and quantity are,respectively,

Accepted Answer

A) $35 and 200. 
B) $35 and 600. 
C) $25 and 400. 
D) $15 and 200. 
A) $35 and 200. 
B) $35 and 600. 
C) $25 and 400. 
D) $15 and 200.

Question 9

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Accepted Answer

A) Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B) Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C) Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the relative price of beef, making it less attractive to produce. 
D) Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace. 
A) Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B) Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C) Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the relative price of beef, making it less attractive to produce. 
D) Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.

Question 10

Figure 4-9
  
-Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A) $15 and 400. 
B) $20 and 600. 
C) $25 and 500. 
D) $25 and 800. 
A) $15 and 400. 
B) $20 and 600. 
C) $25 and 500. 
D) $25 and 800.

Question 11

Which of these statements best represents the law of demand?

Accepted Answer

A) When buyers' tastes for a good increase, they purchase more of the good. 
B) When income levels increase, buyers respond by purchasing more of most goods. 
C) When the price of a good falls, buyers respond by purchasing more of the good. 
D) When buyers' demands for a good increase, the price of the good will increase. 
A) When buyers' tastes for a good increase, they purchase more of the good. 
B) When income levels increase, buyers respond by purchasing more of most goods. 
C) When the price of a good falls, buyers respond by purchasing more of the good. 
D) When buyers' demands for a good increase, the price of the good will increase.

Question 12

When we compare an increase in supply with an increase in quantity supplied,we know that

Accepted Answer

A) the former is depicted by a movement along the supply curve and the latter is depicted by a shift of the curve. 
B) the former could be caused by a decrease in input costs and the latter would be caused by an increase in the price of the good. 
C) both are always caused by a change in demand. 
D) both are always caused by a change in the number of market participants. 
A) the former is depicted by a movement along the supply curve and the latter is depicted by a shift of the curve. 
B) the former could be caused by a decrease in input costs and the latter would be caused by an increase in the price of the good. 
C) both are always caused by a change in demand. 
D) both are always caused by a change in the number of market participants.

Question 13

Which of the following events would cause the price of oranges to fall?

Accepted Answer

A) There is a shortage of oranges. 
B) An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes. 
C) The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. 
D) All of the above are correct. 
A) There is a shortage of oranges. 
B) An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes. 
C) The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. 
D) All of the above are correct.

Question 14

Figure 4-9
  
-Refer to Figure 4-9.If price is $25,quantity demanded and quantity supplied,respectively,are

Accepted Answer

A) 400 and 600. 
B) 500 and 800. 
C) 600 and 600 
D) 800 and 500. 
A) 400 and 600. 
B) 500 and 800. 
C) 600 and 600 
D) 800 and 500.

Question 15

Which of the following events could shift the demand curve for gasoline to the left?

Accepted Answer

A) Income of gasoline buyers rises, and gasoline is a normal good. 
B) Income of gasoline buyers falls, and gasoline is an inferior good. 
C) Public service announcements are run on television, encouraging people to walk or ride bicycles instead of driving cars. 
D) The price of gasoline rises. 
A) Income of gasoline buyers rises, and gasoline is a normal good. 
B) Income of gasoline buyers falls, and gasoline is an inferior good. 
C) Public service announcements are run on television, encouraging people to walk or ride bicycles instead of driving cars. 
D) The price of gasoline rises.

Question 16

The law of demand states that the quantity demanded of a product is positively related to price.

Accepted Answer

A) True 
 B)False

Question 17

Two goods are complements if 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 18

A leftward shift of a supply curve is called

Accepted Answer

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

Question 19

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Accepted Answer

A) a substitute good. 
B) a normal good. 
C) an inferior good. 
D) a law-of-demand good. 
A) a substitute good. 
B) a normal good. 
C) an inferior good. 
D) a law-of-demand good.

Question 20

Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month.As a result of this information,today's demand curve for Mustangs

Accepted Answer

A) shifts to the right. 
B) shifts to the left. 
C) shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. 
D) will not shift; rather, the demand curve for Mustangs will shift to the right next month. 
A) shifts to the right. 
B) shifts to the left. 
C) shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. 
D) will not shift; rather, the demand curve for Mustangs will shift to the right next month.

Exam 4: The Market Forces of Supply and Demand

Figure 4-9 -Refer to Figure 4-9.At a price of $20,which of the following statements is not correct?

Suppose you make jewelry.If the price of gold falls,we would expect you to

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Table 4-4 -Refer to Table 4-4.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 an hour it is likely that the

Nancy likes pasta today more than she did yesterday.This fact leads us to conclude that

At the equilibrium price,quantity demanded is equal to quantity supplied.

Figure 4-7 -Refer to Figure 4-7.Equilibrium price and quantity are,respectively,

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Figure 4-9 -Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

Which of these statements best represents the law of demand?

When we compare an increase in supply with an increase in quantity supplied,we know that

Which of the following events would cause the price of oranges to fall?

Figure 4-9 -Refer to Figure 4-9.If price is $25,quantity demanded and quantity supplied,respectively,are

Which of the following events could shift the demand curve for gasoline to the left?

The law of demand states that the quantity demanded of a product is positively related to price.

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

A leftward shift of a supply curve is called

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month.As a result of this information,today's demand curve for Mustangs

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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