Question 1

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 2

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A) a bakery in a large city 
B) a bank in a large city 
C) a local cable television company 
D) a small group of corn farmers 
A) a bakery in a large city 
B) a bank in a large city 
C) a local cable television company 
D) a small group of corn farmers

Question 3

This question deals with demand and supply and refers you to the table below.
a.Given the table, graph the demand and supply curves for flashlights.Make certain to label equilibrium price and equilibrium quantity.
   
b.What is the equilibrium price and equilibrium quantity?
c.Suppose the price is currently at $5.What problem would exist in the economy? What would you expect to happen to price? Show this on your graph.
d.Suppose the price is currently $2.What problem exists in the economy? What would you expect to happen to price? Show this on your graph.

Accepted Answer

a.
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b. Equilibrium price would be $4 a

Question 4

Table 4-2
  
-Refer to Table 4-2.If the price were $2,a

Accepted Answer

A) shortage of 25 units would exist and price would tend to fall. 
B) surplus of 50 units would exist and price would tend to rise. 
C) surplus of 25 units would exist and price would tend to fall. 
D) shortage of 50 units would exist and price would tend to rise. 
A) shortage of 25 units would exist and price would tend to fall. 
B) surplus of 50 units would exist and price would tend to rise. 
C) surplus of 25 units would exist and price would tend to fall. 
D) shortage of 50 units would exist and price would tend to rise.

Question 5

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 6

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Accepted Answer

A) decide which direction to shift the curve. 
B) decide whether the fires affected demand or supply. 
C) graph the shift to see the affect on equilibrium. 
D) None of the above are correct. 
A) decide which direction to shift the curve. 
B) decide whether the fires affected demand or supply. 
C) graph the shift to see the affect on equilibrium. 
D) None of the above are correct.

Question 7

Which of the following events would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Accepted Answer

A) an increase in supply and an increase in demand 
B) an increase in supply and a decrease in demand 
C) a decrease in supply and an increase in demand 
D) a decrease in supply and a decrease in demand 
A) an increase in supply and an increase in demand 
B) an increase in supply and a decrease in demand 
C) a decrease in supply and an increase in demand 
D) a decrease in supply and a decrease in demand

Question 8

Quantity demanded falls as the price rises and rises as the price falls,so we say that

Accepted Answer

A) quantity demanded is determined by quantity supplied. 
B) price is determined by quantity demanded. 
C) quantity demanded is a function of demand. 
D) quantity demanded is negatively related to the price. 
A) quantity demanded is determined by quantity supplied. 
B) price is determined by quantity demanded. 
C) quantity demanded is a function of demand. 
D) quantity demanded is negatively related to the price.

Question 9

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Accepted Answer

A) Consumers have experienced an increase in income and beef-production technology has improved. 
B) The price of chicken has risen and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and his or her longevity. 
D) The demand curve for beef must be positively sloped. 
A) Consumers have experienced an increase in income and beef-production technology has improved. 
B) The price of chicken has risen and the price of steak sauce has fallen. 
C) New medical evidence has been released that indicates a negative correlation between a person's beef consumption and his or her longevity. 
D) The demand curve for beef must be positively sloped.

Question 10

The line that relates the price of a good to the quantity demanded of that good is called the

Accepted Answer

A) demand schedule, and it usually slopes upward. 
B) demand schedule, and it usually slopes downward. 
C) demand curve, and it usually slopes upward. 
D) demand curve, and it usually slopes downward. 
A) demand schedule, and it usually slopes upward. 
B) demand schedule, and it usually slopes downward. 
C) demand curve, and it usually slopes upward. 
D) demand curve, and it usually slopes downward.

Question 11

If suppliers expect the price of their product to fall in the future they will

Accepted Answer

A) decrease supply now. 
B) increase supply now. 
C) decrease supply in the future but not now. 
D) increase supply in the future but not now. 
A) decrease supply now. 
B) increase supply now. 
C) decrease supply in the future but not now. 
D) increase supply in the future but not now.

Question 12

When quantity demanded has increased at every price,it might be because

Accepted Answer

A) the number of buyers in the market has decreased. 
B) income has increased and the good is an inferior good. 
C) the costs incurred by sellers in producing the good have decreased. 
D) the price of a complementary good has decreased. 
A) the number of buyers in the market has decreased. 
B) income has increased and the good is an inferior good. 
C) the costs incurred by sellers in producing the good have decreased. 
D) the price of a complementary good has decreased.

Question 13

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 14

If a decrease in income increases the demand for a good,then the good is

Accepted Answer

A) a substitute good. 
B) a complement good. 
C) a normal good. 
D) an inferior good. 
A) a substitute good. 
B) a complement good. 
C) a normal good. 
D) an inferior good.

Question 15

Economists in general

Accepted Answer

A) do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B) believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C) do not believe that people's tastes determine demand and therefore they ignore the subject of tastes. 
D) incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements. 
A) do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B) believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C) do not believe that people's tastes determine demand and therefore they ignore the subject of tastes. 
D) incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.

Question 16

If there is an improvement in the technology used to produce a good,the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 17

When supply and demand both increase,equilibrium

Accepted Answer

A) price will increase. 
B) price will decrease. 
C) quantity may increase, decrease, or remain unchanged. 
D) price may increase, decrease, or remain unchanged. 
A) price will increase. 
B) price will decrease. 
C) quantity may increase, decrease, or remain unchanged. 
D) price may increase, decrease, or remain unchanged.

Question 18

A likely example of substitute goods for most people would be

Accepted Answer

A) peanut butter and jelly. 
B) tennis balls and tennis rackets. 
C) televisions and subscriptions to cable television services. 
D) pencils and pens. 
A) peanut butter and jelly. 
B) tennis balls and tennis rackets. 
C) televisions and subscriptions to cable television services. 
D) pencils and pens.

Question 19

When the number of buyers in a market increases,

Accepted Answer

A) the market demand curve shifts to the right. 
B) the demand curves of the individual demanders in the market are unaffected. 
C) the market demand for the good in question increases. 
D) Al of the above are correct. 
A) the market demand curve shifts to the right. 
B) the demand curves of the individual demanders in the market are unaffected. 
C) the market demand for the good in question increases. 
D) Al of the above are correct.

Question 20

Wheat is the main input in the production of flour.If the price of wheat decreases,all else equal,we would expect the

Accepted Answer

A) demand for flour to increase. 
B) demand for flour to decrease. 
C) supply of flour to increase. 
D) supply of flour to decrease. 
A) demand for flour to increase. 
B) demand for flour to decrease. 
C) supply of flour to increase. 
D) supply of flour to decrease.

Exam 4: The Market Forces of Supply and Demand

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

Which of the following would most likely serve as an example of a monopoly?

Table 4-2 -Refer to Table 4-2.If the price were $2,a

An increase in the price of pizza will shift the demand curve for pizza to the left.

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Which of the following events would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Quantity demanded falls as the price rises and rises as the price falls,so we say that

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

The line that relates the price of a good to the quantity demanded of that good is called the

If suppliers expect the price of their product to fall in the future they will

When quantity demanded has increased at every price,it might be because

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

If a decrease in income increases the demand for a good,then the good is

Economists in general

If there is an improvement in the technology used to produce a good,the supply curve for that good will shift to the left.

When supply and demand both increase,equilibrium

A likely example of substitute goods for most people would be

When the number of buyers in a market increases,

Wheat is the main input in the production of flour.If the price of wheat decreases,all else equal,we would expect the

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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