Question 1

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $5 to $7,what is the price elasticity of demand

Accepted Answer

A) 0.1 
B) 0.9 
C) 1.1 
D) 2.4 
A) 0.1 
B) 0.9 
C) 1.1 
D) 2.4

Question 2

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase 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) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D) Equilibrium quantity would decrease, 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) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

Question 3

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $4 to $8,what is the price elasticity of demand

Accepted Answer

A) 0.1 
B) 0.8 
C) 1.9 
D) 2.3 
A) 0.1 
B) 0.8 
C) 1.9 
D) 2.3

Question 4

Funsters Inc.sells its most popular doll for $35.It has just learned that its leading competitor is mass producing an excellent copy and plans to flood the market with their $10 doll in six weeks.What should Funsters do

Accepted Answer

A) increase the supply of their doll now before the other doll hits the market 
B) fight fire with fire and decrease supply for six weeks, then increase the supply of its doll too 
C) continue business as usual, since consumers will not buy the cheaper imitation 
D) discontinue their doll 
A) increase the supply of their doll now before the other doll hits the market 
B) fight fire with fire and decrease supply for six weeks, then increase the supply of its doll too 
C) continue business as usual, since consumers will not buy the cheaper imitation 
D) discontinue their doll

Question 5

What impact would a higher price for batteries tend to have

Accepted Answer

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

Question 6

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 7

Quantity demanded is equal to quantity supplied,at the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 8

Table 4-2
  
-Refer to the Table 4-2.What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity

Accepted Answer

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

Question 9

Figure 4-1
  
-Refer to the Figure 4-1.What is the movement from S to S₁ called

Accepted Answer

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

Question 10

What is market demand

Accepted Answer

A) It is a vertical summation of individual demand curves. 
B) It is a horizontal summation of individual demand curves. 
C) It is not responsive to change in tastes and preferences. 
D) It is determined solely by the number of buyers and sellers in the market. 
A) It is a vertical summation of individual demand curves. 
B) It is a horizontal summation of individual demand curves. 
C) It is not responsive to change in tastes and preferences. 
D) It is determined solely by the number of buyers and sellers in the market.

Question 11

Figure 4-2
  
-Refer to the Figure 4-2.What would happen at a price of $35

Accepted Answer

A) There would be a shortage of 400 units. 
B) There would be a shortage of 200 units. 
C) There would be a surplus of 200 units. 
D) There would be a surplus of 400 units. 
A) There would be a shortage of 400 units. 
B) There would be a shortage of 200 units. 
C) There would be a surplus of 200 units. 
D) There would be a surplus of 400 units.

Question 12

What will happen in the rice market if buyers are expecting higher prices in the near future

Accepted Answer

A) Demand increases and supply decreases. 
B) Both demand and supply increase. 
C) Demand decreases and supply increases. 
D) Both demand and supply decrease. 
A) Demand increases and supply decreases. 
B) Both demand and supply increase. 
C) Demand decreases and supply increases. 
D) Both demand and supply decrease.

Question 13

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $14 to $18,what is the price elasticity of demand

Accepted Answer

A) 0.7 
B) 1.0 
C) 1.9 
D) 4 
A) 0.7 
B) 1.0 
C) 1.9 
D) 4

Question 14

Which of the following best resembles a perfectly competitive market

Accepted Answer

A) tap water market 
B) banana market 
C) tea market 
D) smart phone market 
A) tap water market 
B) banana market 
C) tea market 
D) smart phone market

Question 15

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell,the price of jelly (a complementary good) fell,more firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you

Accepted Answer

A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous 
A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous

Question 16

When evaluating differences or similarities between an increase in supply and an increase in quantity supplied,what do we know

Accepted Answer

A) The former is a shift of the curve and the latter is a movement along the curve. 
B) The former is a movement along the curve and the latter is a shift of the curve. 
C) Both are shifts of the supply curve. 
D) Both are movements along the curve. 
A) The former is a shift of the curve and the latter is a movement along the curve. 
B) The former is a movement along the curve and the latter is a shift of the curve. 
C) Both are shifts of the supply curve. 
D) Both are movements along the curve.

Question 17

Figure 4-3
​
  
-Refer to the Figure 4-3.If price in this market is currently $8,what would happen

Accepted Answer

A) Quantity supplied would be 40 and quantity demanded would be 60. 
B) Quantity supplied would be 60 and quantity demanded would be 40. 
C) Quantity supplied would be 50 and quantity demanded would be 50. 
D) Quantity supplied would be 70 and quantity demanded would be 30. 
A) Quantity supplied would be 40 and quantity demanded would be 60. 
B) Quantity supplied would be 60 and quantity demanded would be 40. 
C) Quantity supplied would be 50 and quantity demanded would be 50. 
D) Quantity supplied would be 70 and quantity demanded would be 30.

Question 18

Why do markets move toward equilibrium of supply and demand

Accepted Answer

A) because of the actions of buyers and sellers 
B) because of government regulations placed on market participants 
C) because of increased competition among sellers 
D) because of buyers' ability to affect market decisions 
A) because of the actions of buyers and sellers 
B) because of government regulations placed on market participants 
C) because of increased competition among sellers 
D) because of buyers' ability to affect market decisions

Question 19

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell

Accepted Answer

A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous 
A) price will fall and the effect on quantity is ambiguous 
B) price will rise and the effect on quantity is ambiguous 
C) quantity will fall and the effect on price is ambiguous 
D) quantity will rise and the effect on price is ambiguous

Question 20

Which of the following demonstrates the law of demand

Accepted Answer

A) Jon buys more pretzels at $1.50 each since he got a $1 raise at work. 
B) Melissa buys fewer muffins at $0.75 each than at $1 each. 
C) Johan buys more burgers at $2 each than at $4 each. 
D) Kendra buys fewer milk chocolate bars at $0.60 each since the price of white chocolate bars fell to $0.50 each. 
A) Jon buys more pretzels at $1.50 each since he got a $1 raise at work. 
B) Melissa buys fewer muffins at $0.75 each than at $1 each. 
C) Johan buys more burgers at $2 each than at $4 each. 
D) Kendra buys fewer milk chocolate bars at $0.60 each since the price of white chocolate bars fell to $0.50 each.

Exam 4: The Market Forces of Supply and Demand

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $5 to $7,what is the price elasticity of demand

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

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $4 to $8,what is the price elasticity of demand

Funsters Inc.sells its most popular doll for $35.It has just learned that its leading competitor is mass producing an excellent copy and plans to flood the market with their $10 doll in six weeks.What should Funsters do

What impact would a higher price for batteries tend to have

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

Quantity demanded is equal to quantity supplied,at the equilibrium price.

Table 4-2 -Refer to the Table 4-2.What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity

Figure 4-1 -Refer to the Figure 4-1.What is the movement from S to S₁ called

What is market demand

Figure 4-2 -Refer to the Figure 4-2.What would happen at a price of $35

What will happen in the rice market if buyers are expecting higher prices in the near future

Market demand is given as QD = 40 - 2P.Market supply is given as QS = 2P.If price increases from $14 to $18,what is the price elasticity of demand

Which of the following best resembles a perfectly competitive market

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell,the price of jelly (a complementary good) fell,more firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you

When evaluating differences or similarities between an increase in supply and an increase in quantity supplied,what do we know

Figure 4-3 ​ -Refer to the Figure 4-3.If price in this market is currently $8,what would happen

Why do markets move toward equilibrium of supply and demand

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell

Which of the following demonstrates the law of demand

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Q_D= 60 - P.Market supply is given as Q_S= 3P.If price increases from $5 to $7,what is the price elasticity of demand

Market demand is given as Q_D= 60 - P.Market supply is given as Q_S= 3P.If price increases from $4 to $8,what is the price elasticity of demand

Market demand is given as Q_D= 40 - 2P.Market supply is given as Q_S= 2P.If price increases from $14 to $18,what is the price elasticity of demand

Figure 4-3 -Refer to the Figure 4-3.If price in this market is currently $8,what would happen