Question 1

Each of the following is a determinant of demand except

Accepted Answer

A) tastes. 
B) technology. 
C) expectations. 
D) the prices of related goods. 
A) tastes. 
B) technology. 
C) expectations. 
D) the prices of related goods.

Question 2

Figure 4-7
  
-Refer to Figure 4-7.At a price of $35,

Accepted Answer

A) a shortage would exist and the price would tend to fall from $35 to a lower price. 
B) a surplus would exist and the price would tend to rise from $35 to a higher price. 
C) a surplus would exist and the price would tend to fall from $35 to a lower price. 
D) an excess demand would exist and the price would tend to fall from $35 to a lower price. 
A) a shortage would exist and the price would tend to fall from $35 to a lower price. 
B) a surplus would exist and the price would tend to rise from $35 to a higher price. 
C) a surplus would exist and the price would tend to fall from $35 to a lower price. 
D) an excess demand would exist and the price would tend to fall from $35 to a lower price.

Question 3

An early frost in the vineyards of Napa Valley would cause

Accepted Answer

A) an increase in the demand for wine, increasing price. 
B) an increase in the supply of wine, decreasing price. 
C) a decrease in the demand for wine, decreasing price. 
D) a decrease in the supply of wine, increasing price. 
A) an increase in the demand for wine, increasing price. 
B) an increase in the supply of wine, decreasing price. 
C) a decrease in the demand for wine, decreasing price. 
D) a decrease in the supply of wine, increasing price.

Question 4

Table 4-2
  
-Refer to Table 4-2.If the price were $8,a

Accepted Answer

A) surplus of 50 units would exist and price would tend to fall. 
B) surplus of 10 units would exist and price would tend to fall. 
C) surplus of 25 units would exist and price would tend to fall. 
D) shortage of 25 units would exist and price would tend to rise. 
A) surplus of 50 units would exist and price would tend to fall. 
B) surplus of 10 units would exist and price would tend to fall. 
C) surplus of 25 units would exist and price would tend to fall. 
D) shortage of 25 units would exist and price would tend to rise.

Question 5

Despite the fact that not all markets are perfectly competitive,the study of perfect competition is worthwhile,in part because

Accepted Answer

A) buyers and sellers are price takers in all markets, not just in perfectly competitive markets. 
B) buyers find it difficult to buy all they want to buy, and sellers find it difficult to sell all they want to sell, in all markets, not just in perfectly competitive markets. 
C) some degree of competition is present in most markets, not just in perfectly competitive markets. 
D) perfectly competitive markets are the most difficult markets to analyze, and this makes the study of other types of markets easy in comparison. 
A) buyers and sellers are price takers in all markets, not just in perfectly competitive markets. 
B) buyers find it difficult to buy all they want to buy, and sellers find it difficult to sell all they want to sell, in all markets, not just in perfectly competitive markets. 
C) some degree of competition is present in most markets, not just in perfectly competitive markets. 
D) perfectly competitive markets are the most difficult markets to analyze, and this makes the study of other types of markets easy in comparison.

Question 6

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 and that the market demand violates the law of demand.Then,in the table,

Accepted Answer

A) x  5. 
C) x > 7. 
D) x > 10. 
A) x  5. 
C) x > 7. 
D) x > 10.

Question 7

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages and automobile insurance becomes more expensive?

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 8

If the demand for a good falls when income falls,the good is called an inferior good.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-7
  
-Refer to Figure 4-7.At what price would there be an excess demand amounting to 200 units of the good?

Accepted Answer

A) $15 
B) $20 
C) $30 
D) $35 
A) $15 
B) $20 
C) $30 
D) $35

Question 10

The downward slope of the typical demand curve reflects which of the following concepts?

Accepted Answer

A) Price is positively related to quantity supplied. 
B) There is a negative relationship between price and quantity demanded. 
C) There is a direct relationship between price and quantity demanded. 
D) When the price falls, buyers are willing to buy more but they are able to buy less. 
A) Price is positively related to quantity supplied. 
B) There is a negative relationship between price and quantity demanded. 
C) There is a direct relationship between price and quantity demanded. 
D) When the price falls, buyers are willing to buy more but they are able to buy less.

Question 11

If the supply of a product decreases,we would expect

Accepted Answer

A) equilibrium price to increase and equilibrium quantity to decrease. 
B) equilibrium price to decrease and equilibrium quantity to increase. 
C) equilibrium price and equilibrium quantity both to increase. 
D) equilibrium price and equilibrium quantity both to decrease. 
A) equilibrium price to increase and equilibrium quantity to decrease. 
B) equilibrium price to decrease and equilibrium quantity to increase. 
C) equilibrium price and equilibrium quantity both to increase. 
D) equilibrium price and equilibrium quantity both to decrease.

Question 12

According to the law of supply,

Accepted Answer

A) the quantity supplied of a good is negatively related to the price of the good. 
B) when the price of a good falls, the quantity supplied of the good rises. 
C) the supply curve for a good is upward-sloping. 
D) All of the above are correct. 
A) the quantity supplied of a good is negatively related to the price of the good. 
B) when the price of a good falls, the quantity supplied of the good rises. 
C) the supply curve for a good is upward-sloping. 
D) All of the above are correct.

Question 13

An increase in the price of a good would

Accepted Answer

A) increase the supply of the good. 
B) increase the amount purchased by buyers. 
C) give producers an incentive to produce more. 
D) decrease both the quantity demanded of the good and the quantity supplied of the good. 
A) increase the supply of the good. 
B) increase the amount purchased by buyers. 
C) give producers an incentive to produce more. 
D) decrease both the quantity demanded of the good and the quantity supplied of the good.

Question 14

Funsters,Inc.,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

Accepted Answer

A) "fight fire with fire" by decreasing supply of its doll for 6 weeks and then increasing the supply. 
B) increase the supply of their doll now before the other doll hits the market. 
C) increase the price of their doll now. 
D) discontinue their doll. 
A) "fight fire with fire" by decreasing supply of its doll for 6 weeks and then increasing the supply. 
B) increase the supply of their doll now before the other doll hits the market. 
C) increase the price of their doll now. 
D) discontinue their doll.

Question 15

A higher price for batteries would result in a(n)

Accepted Answer

A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries. 
A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries.

Question 16

If a company making frozen orange juice expects the price of their product to be higher next month,it will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Question 17

Pens are normal goods.What will happen to the equilibrium price of pens if the price of pencils rises,consumers experience an increase in income,writing in ink becomes fashionable,people expect the price of pens to rise in the near future,the population increases,fewer firms manufacture pens,and the wages of pen-makers increase?

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

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a determinant of market supply curve but not a determinant of an individual seller's supply?

Accepted Answer

A) technology 
B) expectations 
C) input prices 
D) the number of sellers 
A) technology 
B) expectations 
C) input prices 
D) the number of sellers

Question 20

A market demand curve represents

Accepted Answer

A) the fact that the level of income is inversely related to quantity demanded. 
B) how quantity demanded changes when the number of buyers changes. 
C) the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D) how much of a good all buyers are willing and able to buy at each possible price. 
A) the fact that the level of income is inversely related to quantity demanded. 
B) how quantity demanded changes when the number of buyers changes. 
C) the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D) how much of a good all buyers are willing and able to buy at each possible price.

Exam 4: The Market Forces of Supply and Demand

Each of the following is a determinant of demand except

Figure 4-7 -Refer to Figure 4-7.At a price of $35,

An early frost in the vineyards of Napa Valley would cause

Table 4-2 -Refer to Table 4-2.If the price were $8,a

Despite the fact that not all markets are perfectly competitive,the study of perfect competition is worthwhile,in part because

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 and that the market demand violates the law of demand.Then,in the table,

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages and automobile insurance becomes more expensive?

If the demand for a good falls when income falls,the good is called an inferior good.

Figure 4-7 -Refer to Figure 4-7.At what price would there be an excess demand amounting to 200 units of the good?

The downward slope of the typical demand curve reflects which of the following concepts?

If the supply of a product decreases,we would expect

According to the law of supply,

An increase in the price of a good would

Funsters,Inc.,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

A higher price for batteries would result in a(n)

If a company making frozen orange juice expects the price of their product to be higher next month,it will supply more to the market this month.

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Which of the following is a determinant of market supply curve but not a determinant of an individual seller's supply?

A market demand curve represents

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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