Question 1

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 2

A decrease in demand shifts the demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 3

Local cable television companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Question 4

The highest form of competition is called

Accepted Answer

A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition. 
A) absolute competition. 
B) cutthroat competition. 
C) perfect competition. 
D) market competition.

Question 5

Equilibrium quantity must decrease when demand

Accepted Answer

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

Question 6

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Accepted Answer

A) Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B) Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C) Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce. 
D) Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace. 
A) Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B) Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C) Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce. 
D) Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.

Question 7

A supply schedule is a table that shows the relationship between

Accepted Answer

A) price and quantity supplied. 
B) input costs and quantity supplied. 
C) quantity demanded and quantity supplied. 
D) profit and quantity supplied. 
A) price and quantity supplied. 
B) input costs and quantity supplied. 
C) quantity demanded and quantity supplied. 
D) profit and quantity supplied.

Question 8

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 x = 2. Then

Accepted Answer

A) the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -5/2. 
B) the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -2/5. 
C) the slope of Jake's demand curve is -2, and the slope of the market demand curve is -5/2. 
D) the slope of Jake's demand curve is -2, and the slope of the market demand curve is -2/5. 
A) the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -5/2. 
B) the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -2/5. 
C) the slope of Jake's demand curve is -2, and the slope of the market demand curve is -5/2. 
D) the slope of Jake's demand curve is -2, and the slope of the market demand curve is -2/5.

Question 9

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A) The number of people who purchase olives decreases. 
B) Consumer income decreases, and olives are a normal good. 
C) The price of pickles decreases, and pickles are a substitute for olives. 
D) The price of olives rises. 
A) The number of people who purchase olives decreases. 
B) Consumer income decreases, and olives are a normal good. 
C) The price of pickles decreases, and pickles are a substitute for olives. 
D) The price of olives rises.

Question 10

Figure 4-22
  
-Refer to Figure 4-22. Panel (b) shows which of the following?

Accepted Answer

A) a decrease in demand and a decrease in quantity supplied 
B) a decrease in demand and a decrease in supply 
C) a decrease in quantity demanded and a decrease in quantity supplied 
D) a decrease in quantity demanded and a decrease in supply 
A) a decrease in demand and a decrease in quantity supplied 
B) a decrease in demand and a decrease in supply 
C) a decrease in quantity demanded and a decrease in quantity supplied 
D) a decrease in quantity demanded and a decrease in supply

Question 11

Which of the following events must cause equilibrium quantity to rise?

Accepted Answer

A) demand increases and supply decreases 
B) demand and supply both decrease 
C) demand decreases and supply increases 
D) demand and supply both increase 
A) demand increases and supply decreases 
B) demand and supply both decrease 
C) demand decreases and supply increases 
D) demand and supply both increase

Question 12

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 13

A leftward shift of a supply curve is called a(n)

Accepted Answer

A) increase in supply. 
B) decrease in supply. 
C) decrease in quantity supplied. 
D) increase in quantity supplied. 
A) increase in supply. 
B) decrease in supply. 
C) decrease in quantity supplied. 
D) increase in quantity supplied.

Question 14

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Accepted Answer

A) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
A) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 15

Table 4-6
 $$\begin{array} { | c | c | c | } 
\hline & \text { An Ineatse in Supply } & \text { A Decrense in Supply } \
\hline \text { An Inerease in Denend } & \text { A } & \mathbf { B } \
\hline \text { A Decrense in Denand } & \text { C } & \text { D } \
\hline
\end{array}$$
-Refer to Table 4-6. Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

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

Question 16

Figure 4-17  
-Refer to Figure 4-17. If price is $25, then quantity demanded and quantity supplied, respectively, are

Accepted Answer

A) 500 units and 500 units. 
B) 500 units and 800 units. 
C) 600 units and 600 units. 
D) 800 units and 500 units. 
A) 500 units and 500 units. 
B) 500 units and 800 units. 
C) 600 units and 600 units. 
D) 800 units and 500 units.

Question 17

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Accepted Answer

A) supply curve for Matthew's pies will increase. 
B) supply curve for Matthew's pies will decrease. 
C) demand curve for Matthew's pies will increase. 
D) demand curve for Matthew's pies will decrease. 
A) supply curve for Matthew's pies will increase. 
B) supply curve for Matthew's pies will decrease. 
C) demand curve for Matthew's pies will increase. 
D) demand curve for Matthew's pies will decrease.

Question 18

Good X and good Y are substitutes. If the price of good Y increases, then the

Accepted Answer

A) demand for good X will decrease. 
B) quantity demanded of good X will decrease. 
C) demand for good X will increase. 
D) quantity demanded of good X will increase. 
A) demand for good X will decrease. 
B) quantity demanded of good X will decrease. 
C) demand for good X will increase. 
D) quantity demanded of good X will increase.

Question 19

When all market participants are price takers who have no influence over prices, the markets have

Accepted Answer

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

Question 20

Figure 4-22
  
-Refer to Figure 4-22. Which of the four panels illustrates an increase in quantity supplied?

Accepted Answer

A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d) 
A) Panel (a) 
B) Panel (b) 
C) Panel (c) 
D) Panel (d)

Exam 4: The Market Forces of Supply and Demand

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

A decrease in demand shifts the demand curve to the left.

Local cable television companies frequently are monopolists.

The highest form of competition is called

Equilibrium quantity must decrease when demand

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

A supply schedule is a table that shows the relationship between

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. Price Harry's Quantity Demanded Darby's Quantity Denanded Jake's Quantity Denanded \ 3 3 4 3 \ 5 1 2 x -Refer to Table 4-9. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose x = 2. Then

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Figure 4-22 -Refer to Figure 4-22. Panel (b) shows which of the following?

Which of the following events must cause equilibrium quantity to rise?

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

A leftward shift of a supply curve is called a(n)

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Table 4-6 An Ineatse in Supply A Decrense in Supply An Inerease in Denend A A Decrense in Denand C D -Refer to Table 4-6. Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Figure 4-17 -Refer to Figure 4-17. If price is $25, then quantity demanded and quantity supplied, respectively, are

Matthew bakes apple pies that he sells at the local farmer's market. If the price of apples increases, the

Good X and good Y are substitutes. If the price of good Y increases, then the

When all market participants are price takers who have no influence over prices, the markets have

Figure 4-22 -Refer to Figure 4-22. Which of the four panels illustrates an increase in quantity supplied?

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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