Question 1

In a free market system,what coordinates the actions of millions of people with their varying abilities and desires?

Accepted Answer

A) producers 
B) prices 
C) consumers 
D) the government 
A) producers 
B) prices 
C) consumers 
D) the government

Question 2

Figure 4-8
  
-Refer to Figure 4-8.If there is currently a shortage of 30 units of the good,then

Accepted Answer

A) the law of demand predicts that the price will rise by $5 to eliminate the shortage. 
B) the law of supply predicts that the price will rise by $5 to eliminate the shortage. 
C) the law of supply and demand predicts that the price will rise by $3 to eliminate the shortage. 
D) the law of supply and demand predicts that the price will fall from its current level by an indeterminate amount, exacerbating the shortage. 
A) the law of demand predicts that the price will rise by $5 to eliminate the shortage. 
B) the law of supply predicts that the price will rise by $5 to eliminate the shortage. 
C) the law of supply and demand predicts that the price will rise by $3 to eliminate the shortage. 
D) the law of supply and demand predicts that the price will fall from its current level by an indeterminate amount, exacerbating the shortage.

Question 3

If goods A and B are complements,then an increase in the price of good A will result in

Accepted Answer

A) more of good A being sold. 
B) more of good B being sold. 
C) less of good B being sold. 
D) no difference in the quantity sold of either good. 
A) more of good A being sold. 
B) more of good B being sold. 
C) less of good B being sold. 
D) no difference in the quantity sold of either good.

Question 4

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 $3.00;
• the market quantity supplied of sandwiches is 4;
• the slope of the supply curve is 2.
Then

Accepted Answer

A) there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
B) there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00. 
C) there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
D) there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is higher than $5.00. 
A) there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
B) there is currently a shortage of 6 sandwiches and the equilibrium price of a sandwich is $5.00. 
C) there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
D) there is currently a shortage of 8 sandwiches and the equilibrium price of a sandwich is higher than $5.00.

Question 5

Which of the following would not affect an individual's demand curve?

Accepted Answer

A) expectations 
B) income 
C) prices of related goods 
D) the number of buyers 
A) expectations 
B) income 
C) prices of related goods 
D) the number of buyers

Question 6

The table shows individual demand schedules for a market.
Table 4-1
  
-Refer to Table 4-1.When the price of the good is $1.00,the quantity demanded in this market would be

Accepted Answer

A) 42 units. 
B) 31 units. 
C) 24 units. 
D) 14 units. 
A) 42 units. 
B) 31 units. 
C) 24 units. 
D) 14 units.

Question 7

Which of the following quantities would increase in response to a decrease in the price of ironing boards?

Accepted Answer

A) the quantity of irons demanded at each possible price of irons 
B) the equilibrium quantity of irons 
C) the equilibrium price of irons 
D) All of the above are correct. 
A) the quantity of irons demanded at each possible price of irons 
B) the equilibrium quantity of irons 
C) the equilibrium price of irons 
D) All of the above are correct.

Question 8

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C) Both equilibrium price and equilibrium quantity would increase. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C) Both equilibrium price and equilibrium quantity would increase. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 9

A competitive market is a market in which

Accepted Answer

A) an auctioneer helps set prices and arrange sales. 
B) there are only a few sellers. 
C) the forces of supply and demand do not apply. 
D) no individual buyer or seller has any significant impact on the market price. 
A) an auctioneer helps set prices and arrange sales. 
B) there are only a few sellers. 
C) the forces of supply and demand do not apply. 
D) no individual buyer or seller has any significant impact on the market price.

Question 10

Suppose buyers of computers and printers regard those two goods as complements.Then an increase in the price of computers will cause

Accepted Answer

A) a decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B) a decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C) a decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D) an increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers. 
A) a decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B) a decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C) a decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D) an increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

Question 11

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 12

Figure 4-10
  
-Refer to Figure 4-10.Which of the four graphs represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 13

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

Accepted Answer

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

Question 14

A market supply curve is determined by

Accepted Answer

A) vertically summing individual supply curves. 
B) horizontally summing individual supply curves. 
C) finding the average quantity supplied by sellers at each possible price. 
D) finding the average price at which sellers are willing and able to sell a particular quantity of the good. 
A) vertically summing individual supply curves. 
B) horizontally summing individual supply curves. 
C) finding the average quantity supplied by sellers at each possible price. 
D) finding the average price at which sellers are willing and able to sell a particular quantity of the good.

Question 15

Surpluses drive price up while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 16

Figure 4-10
  
-Refer to Figure 4-10.Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 17

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties and fewer used textbooks are sold?

Accepted Answer

A) Price will rise. 
B) Price will fall. 
C) Price will stay exactly the same. 
D) The price change will be ambiguous. 
A) Price will rise. 
B) Price will fall. 
C) Price will stay exactly the same. 
D) The price change will be ambiguous.

Question 18

For each good produced in a market economy,the interaction of demand and supply determines

Accepted Answer

A) the price of the good, but not the quantity. 
B) the quantity of the good, but not the price. 
C) both the price of the good and the quantity of the good. 
D) neither price nor quantity, because prices and quantities are determined by the sellers of the goods alone. 
A) the price of the good, but not the quantity. 
B) the quantity of the good, but not the price. 
C) both the price of the good and the quantity of the good. 
D) neither price nor quantity, because prices and quantities are determined by the sellers of the goods alone.

Question 19

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 20

Price takers have no influence over prices in markets that feature

Accepted Answer

A) only a few buyers and a few sellers. 
B) numerous sellers but only a few buyers. 
C) numerous buyers but only a few sellers. 
D) numerous buyers and numerous sellers. 
A) only a few buyers and a few sellers. 
B) numerous sellers but only a few buyers. 
C) numerous buyers but only a few sellers. 
D) numerous buyers and numerous sellers.

Exam 4: The Market Forces of Supply and Demand

In a free market system,what coordinates the actions of millions of people with their varying abilities and desires?

Figure 4-8 -Refer to Figure 4-8.If there is currently a shortage of 30 units of the good,then

If goods A and B are complements,then an increase in the price of good A will result in

Which of the following would not affect an individual's demand curve?

The table shows individual demand schedules for a market. Table 4-1 -Refer to Table 4-1.When the price of the good is $1.00,the quantity demanded in this market would be

Which of the following quantities would increase in response to a decrease in the price of ironing boards?

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

A competitive market is a market in which

Suppose buyers of computers and printers regard those two goods as complements.Then an increase in the price of computers will cause

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Figure 4-10 -Refer to Figure 4-10.Which of the four graphs represents the market for cars as a result of the adoption of new technology on assembly lines?

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

A market supply curve is determined by

Surpluses drive price up while shortages drive price down.

Figure 4-10 -Refer to Figure 4-10.Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing south?

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties and fewer used textbooks are sold?

For each good produced in a market economy,the interaction of demand and supply determines

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Price takers have no influence over prices in markets that feature

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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