Question 1

A decrease in quantity demanded

Accepted Answer

A) results in a movement downward and to the right along a demand curve. 
B) results in a movement upward and to the left along a demand curve. 
C) shifts the demand curve to the left. 
D) shifts the demand curve to the right. 
A) results in a movement downward and to the right along a demand curve. 
B) results in a movement upward and to the left along a demand curve. 
C) shifts the demand curve to the left. 
D) shifts the demand curve to the right.

Question 2

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously. $$\begin{array} { | l | l | l | l | } 
\hline & \text { Na Change in Supply } & \text { An Ineease in Suggly } & \text { A Deaease in Sugply } \
\hline \begin{array} { l } 
\text { No Change in } \
\text { Denend }
\end{array} & & & \
\hline \begin{array} { l } 
\text { An Increase in } \
\text { Denend }
\end{array} & & & \
\hline \begin{array} { l } 
\text { A Decrease in } \
\text { Denand }
\end{array} & & & \
\hline
\end{array}$$

Accepted Answer

None

Question 5

An increase in quantity supplied

Accepted Answer

A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right. 
A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Table 4-5
 $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Firm A's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm B's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm C's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm D's } \
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 1 &0 & 0 &0 & 0 \
\hline \$ 2 & 3 & 4 & 2 & 1 \
\hline \$ 4 & 6 & 8 & 4 & 2 \
\hline \$ 6 & 9 & 12 & 6 & 3 \
\hline \$ 8 & 12 & 16 & 8 & 4 \
\hline \$ 10 & 15 & 20 & 10 & 5 \
\hline
\end{array}$$
-Refer to Table 4-5. If these are the only four sellers in the market, then when the price increases from $4 to $6, the market quantity supplied

Accepted Answer

A) decreases by 10 units. 
B) decreases by 20 units. 
C) increases by 10 units. 
D) increases by 20 units. 
A) decreases by 10 units. 
B) decreases by 20 units. 
C) increases by 10 units. 
D) increases by 20 units.

Question 8

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 9

Holding the nonprice determinants of demand constant, a change in price would

Accepted Answer

A) result in either a decrease in demand or an increase in demand. 
B) result in a movement along a stationary demand curve. 
C) result in a shift of supply. 
D) have no effect on the quantity demanded. 
A) result in either a decrease in demand or an increase in demand. 
B) result in a movement along a stationary demand curve. 
C) result in a shift of supply. 
D) have no effect on the quantity demanded.

Question 10

Which of the following demonstrates the law of supply?

Accepted Answer

A) When leather became more expensive, belt producers decreased their supply of belts. 
B) When car production technology improved, car producers increased their supply of cars. 
C) When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D) When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup. 
A) When leather became more expensive, belt producers decreased their supply of belts. 
B) When car production technology improved, car producers increased their supply of cars. 
C) When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D) When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.

Question 11

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

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 12

Figure 4-20
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-20. All else equal, the return of college students to campus in the fall would cause a move from

Accepted Answer

A) x to y. 
B) y to x. 
C) SA to SB. 
D) SB to SA. 
A) x to y. 
B) y to x. 
C) SA to SB. 
D) SB to SA.

Question 13

Who gets scarce resources in a market economy?

Accepted Answer

A) the government 
B) whoever the government decides gets them 
C) whoever wants them 
D) whoever is willing and able to pay the price 
A) the government 
B) whoever the government decides gets them 
C) whoever wants them 
D) whoever is willing and able to pay the price

Question 14

Figure 4-7
  
-Refer to Figure 4-7. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

Accepted Answer

A) Tobacco and marijuana are complements, and the price of marijuana decreased. 
B) Tobacco is a "gateway drug," and the price of marijuana increased. 
C) The price of cigarettes increased. 
D) The arrows are consistent with all of these events. 
A) Tobacco and marijuana are complements, and the price of marijuana decreased. 
B) Tobacco is a "gateway drug," and the price of marijuana increased. 
C) The price of cigarettes increased. 
D) The arrows are consistent with all of these events.

Question 15

The two words economists use most often are

Accepted Answer

A) inflation and trade. 
B) supply and demand. 
C) competition and prices. 
D) markets and equilibrium. 
A) inflation and trade. 
B) supply and demand. 
C) competition and prices. 
D) markets and equilibrium.

Question 16

If the demand for a product decreases, then we would expect equilibrium price

Accepted Answer

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

Question 17

Equilibrium price must decrease when demand

Accepted Answer

A) increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously. 
B) increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously. 
C) decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously. 
D) decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously. 
A) increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously. 
B) increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously. 
C) decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously. 
D) decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.

Question 18

Table 4-9
The demand schedule below pertains to sandwiches demanded per week. $$\begin{array} { | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Harry's } \
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Darby's } \
\text { Quantity } \
\text { Denanded }
\end{array} & \begin{array} { c } 
\text { Jake's } \
\text { Quantity } \
\text { Denanded }
\end{array} \
\hline \$ 3 & 3 & 4 & 3 \
\hline \$ 5 & 1 & 2 & x \
\hline
\end{array}$$
-Refer to Table 4-9. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • 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 there is currently a

Accepted Answer

A) shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B) shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C) surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D) surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
A) shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
B) shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00. 
C) surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00. 
D) surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.

Question 19

When it comes to people's tastes, economists generally believe that

Accepted Answer

A) tastes are based on forces that are well within the realm of economics. 
B) tastes are based on historical and psychological forces that are beyond the realm of economics. 
C) tastes can only be studied through well-constructed, real-life models. 
D) because tastes do not directly affect demand, there is little need to explain people's tastes. 
A) tastes are based on forces that are well within the realm of economics. 
B) tastes are based on historical and psychological forces that are beyond the realm of economics. 
C) tastes can only be studied through well-constructed, real-life models. 
D) because tastes do not directly affect demand, there is little need to explain people's tastes.

Question 20

Figure 4-6  
-Refer to Figure 4-6. If the demand curve shifts from D to D', then

Accepted Answer

A) firms would be willing to supply less of the good than before at each possible price. 
B) people are willing to buy less of the good than before at each possible price. 
C) people's incomes must have decreased. 
D) the price of the product has increased, causing consumers to buy less of the product. 
A) firms would be willing to supply less of the good than before at each possible price. 
B) people are willing to buy less of the good than before at each possible price. 
C) people's incomes must have decreased. 
D) the price of the product has increased, causing consumers to buy less of the product.

A decrease in quantity demanded

A decrease in the price of pizza will shift the supply curve for pizza to the left.

A competitive market is a market in which

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously. Na Change in Supply An Ineease in Suggly A Deaease in Sugply No Change in Denend An Increase in Denend A Decrease in Denand

An increase in quantity supplied

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

A likely example of substitute goods for most people would be

Holding the nonprice determinants of demand constant, a change in price would

Which of the following demonstrates the law of supply?

Figure 4-20 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-20. All else equal, the return of college students to campus in the fall would cause a move from

Who gets scarce resources in a market economy?

Figure 4-7 -Refer to Figure 4-7. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

The two words economists use most often are

If the demand for a product decreases, then we would expect equilibrium price

Equilibrium price must decrease when demand

When it comes to people's tastes, economists generally believe that

Figure 4-6 -Refer to Figure 4-6. If the demand curve shifts from D to D', then

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

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

A decrease in quantity demanded

A decrease in the price of pizza will shift the supply curve for pizza to the left.

A competitive market is a market in which

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously. Na Change in Supply An Ineease in Suggly A Deaease in Sugply No Change in Denend An Increase in Denend A Decrease in Denand

An increase in quantity supplied

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

A likely example of substitute goods for most people would be

Holding the nonprice determinants of demand constant, a change in price would

Which of the following demonstrates the law of supply?

Figure 4-20 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-20. All else equal, the return of college students to campus in the fall would cause a move from

Who gets scarce resources in a market economy?

Figure 4-7 -Refer to Figure 4-7. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

The two words economists use most often are

If the demand for a product decreases, then we would expect equilibrium price

Equilibrium price must decrease when demand

When it comes to people's tastes, economists generally believe that

Figure 4-6 -Refer to Figure 4-6. If the demand curve shifts from D to D', then

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

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 Macroeconomic Models

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

Six Debates Over Macroeconomic Policy

Filters