Question 1

Rent controls encourage investment in housing because they bring stability to the market.

Accepted Answer

A) True 
 B)False

Question 2

Consumer income changes can shift market demand.

Accepted Answer

A) True 
 B)False

Question 3

Why does quantity supplied increase when price increases?

Accepted Answer

A) Producers find it more profitable to make the item. 
B) People "drop out" of the market, so buyers find it more abundant. 
C) As demand decreases with a high price, surpluses appear. 
D) All of the above. 
A) Producers find it more profitable to make the item. 
B) People "drop out" of the market, so buyers find it more abundant. 
C) As demand decreases with a high price, surpluses appear. 
D) All of the above.

Question 4

As price increases, additional suppliers are willing to produce a commodity.

Accepted Answer

A) True 
 B)False

Question 5

Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter.Use supply and demand analysis, including graphical and verbal explanation, for these winter "sales."

Accepted Answer

Figure 4-26 @#IMG-DLM& 
A sample graph is shown (F

Question 6

The ____ the demand curve for a good, the ____ the change in equilibrium quantity after a shift of the supply curve.

Accepted Answer

A) flatter; greater 
B) flatter; smaller 
C) farther from the origin at every output level; greater 
D) farther from the origin at every output level; smaller 
A) flatter; greater 
B) flatter; smaller 
C) farther from the origin at every output level; greater 
D) farther from the origin at every output level; smaller

Question 7

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

Accepted Answer

A) outside forces disturbing an equilibrium 
B) persistent shortages or surpluses 
C) the market never moving from an equilibrium 
D) "other things" not always being equal 
A) outside forces disturbing an equilibrium 
B) persistent shortages or surpluses 
C) the market never moving from an equilibrium 
D) "other things" not always being equal

Question 8

While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

Accepted Answer

A) True 
 B)False

Question 9

To be effective, a price floor must be

Accepted Answer

A) above the equilibrium price. 
B) at the equilibrium price. 
C) below the equilibrium price. 
D) anywhere on the graph. 
A) above the equilibrium price. 
B) at the equilibrium price. 
C) below the equilibrium price. 
D) anywhere on the graph.

Question 10

An increase in the price of poultry would lead to

Accepted Answer

A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish. 
A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish.

Question 11

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

Accepted Answer

A) demand; the price of its complement 
B) demand; the quantity supplied 
C) quantity demanded; the price of its substitute 
D) quantity demanded; the price of that product 
A) demand; the price of its complement 
B) demand; the quantity supplied 
C) quantity demanded; the price of its substitute 
D) quantity demanded; the price of that product

Question 12

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal, the

Accepted Answer

A) price of grapes will rise. 
B) supply of grapes will fall. 
C) quantity supplied of grapes will fall. 
D) demand curve for grapes will shift to the right. 
A) price of grapes will rise. 
B) supply of grapes will fall. 
C) quantity supplied of grapes will fall. 
D) demand curve for grapes will shift to the right.

Question 13

A price above equilibrium always yields a surplus.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following will shift the demand curve for milk?

Accepted Answer

A) change in the income of buyers of milk 
B) change in the price of milk 
C) change in input prices for milk 
D) All of the above are correct. 
A) change in the income of buyers of milk 
B) change in the price of milk 
C) change in input prices for milk 
D) All of the above are correct.

Question 15

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Accepted Answer

A) True 
 B)False

Question 16

An increase in demand will have what effect on equilibrium price and quantity?

Accepted Answer

A) Price will increase; quantity will decrease. 
B) Price will decrease; quantity will increase. 
C) Both price and quantity will increase. 
D) Both price and quantity will decrease. 
A) Price will increase; quantity will decrease. 
B) Price will decrease; quantity will increase. 
C) Both price and quantity will increase. 
D) Both price and quantity will decrease.

Question 17

A demand curve can be thought of as

Accepted Answer

A) a graphical display of "market potential." 
B) a graphical representation of the information in a demand schedule. 
C) showing how much people want to buy. 
D) a forecasting tool. 
E) All of the above are correct. 
A) a graphical display of "market potential." 
B) a graphical representation of the information in a demand schedule. 
C) showing how much people want to buy. 
D) a forecasting tool. 
E) All of the above are correct.

Question 18

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Table 4-1.At $10, what is the surplus?

Accepted Answer

A) 4,500 
B) 3,000 
C) 1,500 
D) 0 
A) 4,500 
B) 3,000 
C) 1,500 
D) 0

Question 20

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price which borrowers pay.As a result, economists expected the quantity of money demanded to

Accepted Answer

A) increase. 
B) decrease. 
C) not change. 
D) not change, although the demand schedule itself will shift outward. 
A) increase. 
B) decrease. 
C) not change. 
D) not change, although the demand schedule itself will shift outward.

Exam 4: Supply and Demand: an Initial Look

Rent controls encourage investment in housing because they bring stability to the market.

Consumer income changes can shift market demand.

Why does quantity supplied increase when price increases?

As price increases, additional suppliers are willing to produce a commodity.

Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter.Use supply and demand analysis, including graphical and verbal explanation, for these winter "sales."

The ____ the demand curve for a good, the ____ the change in equilibrium quantity after a shift of the supply curve.

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

To be effective, a price floor must be

An increase in the price of poultry would lead to

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes, holding all other determinants of quantity demanded constant.

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal, the

A price above equilibrium always yields a surplus.

Which of the following will shift the demand curve for milk?

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

An increase in demand will have what effect on equilibrium price and quantity?

A demand curve can be thought of as

Rent controls and controls on other prices often aggravate the very problem they are intended to solve.

-Refer to Table 4-1.At $10, what is the surplus?

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price which borrowers pay.As a result, economists expected the quantity of money demanded to

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Filters

The the demand curve for a good, the the change in equilibrium quantity after a shift of the supply curve.

A demand schedule is a table showing how the of some product during a specified period of time changes as changes, holding all other determinants of quantity demanded constant.