Question 1

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

Accepted Answer

A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply 
A) an increase in demand and an increase in quantity supplied 
B) an increase in demand and an increase in supply 
C) an increase in quantity demanded and an increase in quantity supplied 
D) an increase in quantity demanded and an increase in supply

Question 2

Table 4-2
 $$\begin{array} { | c | c | c | c | c } 
\hline \text { Price } & \begin{array} { c } 
\text { Willim's } \
\text { Quantity } \
\text { Denanded }
\end{array} & \begin{array} { c } 
\text { Ferpie's } \
\text { Quantity } \
\text { Dennanded }
\end{array} & \begin{array} { c } 
\text { Tabod's } \
\text { Quantity } \
\text { Denanded }
\end{array} & \begin{array} { c } 
\text { apl de.ap's } \
\text { Quantity } \
\text { Denanded }
\end{array} \
\hline \$ 12 & 2 & 1 & 3 & 4 \
\hline \$ 10 & 4 & 4 & 4 & 5 \
\hline \$ 8 & 6 & 7 & 5 & 6 \
\hline \$ 6 & 8 & 8 & 4 & 7 \
\hline \$ 4 & 10 & 9 & 3 & 8 \
\hline \$ 2 & 12 & 10 & 2 & 9 \
\hline
\end{array}$$
-Refer to Table 4-2. Whose demand does not obey the law of demand?

Accepted Answer

A) William's 
B) Fergie's 
C) Taboo's 
D) apl.de.ap's 
A) William's 
B) Fergie's 
C) Taboo's 
D) apl.de.ap's

Question 3

Which of the following events would cause the price of oranges to fall?

Accepted Answer

A) There is a shortage of oranges. 
B) The FDA announces that bananas cause strokes, and oranges and bananas are substitutes. 
C) The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. 
D) All of the above are correct. 
A) There is a shortage of oranges. 
B) The FDA announces that bananas cause strokes, and oranges and bananas are substitutes. 
C) The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. 
D) All of the above are correct.

Question 4

The law of supply states that, other things equal, when the price of a good

Accepted Answer

A) falls, the supply of the good rises. 
B) rises, the quantity supplied of the good rises. 
C) rises, the supply of the good falls. 
D) falls, the quantity supplied of the good rises. 
A) falls, the supply of the good rises. 
B) rises, the quantity supplied of the good rises. 
C) rises, the supply of the good falls. 
D) falls, the quantity supplied of the good rises.

Question 5

Suppose that Amanda receives a pay increase. We would expect

Accepted Answer

A) to observe Amanda moving down and to the right along her given demand curve. 
B) Amanda's demand for inferior goods to decrease. 
C) Amanda's demand for each of two goods that are complements to increase. 
D) Amanda's demand for normal goods to decrease. 
A) to observe Amanda moving down and to the right along her given demand curve. 
B) Amanda's demand for inferior goods to decrease. 
C) Amanda's demand for each of two goods that are complements to increase. 
D) Amanda's demand for normal goods to decrease.

Question 6

When we move along a given demand curve,

Accepted Answer

A) only price is held constant. 
B) income and price are held constant. 
C) all nonprice determinants of demand are held constant. 
D) all determinants of quantity demanded are held constant. 
A) only price is held constant. 
B) income and price are held constant. 
C) all nonprice determinants of demand are held constant. 
D) all determinants of quantity demanded are held constant.

Question 7

The two words most often used by economists are

Accepted Answer

A) prices and quantities. 
B) resources and allocation. 
C) supply and demand. 
D) efficiency and equity. 
A) prices and quantities. 
B) resources and allocation. 
C) supply and demand. 
D) efficiency and equity.

Question 8

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?

Accepted Answer

A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. 
D) The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous. 
A) Both the equilibrium price and quantity would increase. 
B) Both the equilibrium price and quantity would decrease. 
C) The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. 
D) The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.

Question 9

An increase in which of the following would shift the supply curve for gasoline to the right?

Accepted Answer

A) demand for gasoline 
B) price of gasoline 
C) number of producers of gasoline 
D) price of oil, an input into the production of gasoline 
A) demand for gasoline 
B) price of gasoline 
C) number of producers of gasoline 
D) price of oil, an input into the production of gasoline

Question 10

Figure 4-6  
-Refer to Figure 4-6. The movement from D' to D in the market for potato chips could be caused by a(n)

Accepted Answer

A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips cause cancer. 
D) increase in the price of a pretzels. 
A) decrease in the price of potato chips. 
B) decrease in income, assuming that potato chips are a normal good. 
C) announcement by the FDA that potato chips cause cancer. 
D) increase in the price of a pretzels.

Question 11

Figure 4-4  
-Refer to Figure 4-4. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

Accepted Answer

A) a freeze in Florida 
B) a technological advance that allows oranges to ripen faster 
C) a decrease in the price of apples 
D) an announcement by the FDA that oranges prevent heart disease 
A) a freeze in Florida 
B) a technological advance that allows oranges to ripen faster 
C) a decrease in the price of apples 
D) an announcement by the FDA that oranges prevent heart disease

Question 12

When a supply curve or a demand curve shifts, the equilibrium price and equilibrium quantity change.

Accepted Answer

A) True 
 B)False

Question 13

In a competitive market, each seller has limited control over the price of his product because

Accepted Answer

A) other sellers are offering similar products. 
B) buyers exert more control over the price than do sellers. 
C) these markets are highly regulated by the government. 
D) sellers usually agree to set a common price that will allow each seller to earn a comfortable profit. 
A) other sellers are offering similar products. 
B) buyers exert more control over the price than do sellers. 
C) these markets are highly regulated by the government. 
D) sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.

Question 14

The market for ice cream is a

Accepted Answer

A) monopolistic market. 
B) highly competitive market. 
C) highly organized market. 
D) Both b) and c) are correct. 
A) monopolistic market. 
B) highly competitive market. 
C) highly organized market. 
D) Both b) and c) are correct.

Question 15

The quantity demanded of a good is the amount that buyers are

Accepted Answer

A) willing to purchase. 
B) willing and able to purchase. 
C) willing, able, and need to purchase. 
D) able to purchase. 
A) willing to purchase. 
B) willing and able to purchase. 
C) willing, able, and need to purchase. 
D) able to purchase.

Question 16

The market demand curve

Accepted Answer

A) is found by vertically adding the individual demand curves. 
B) slopes upward. 
C) represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D) represents the sum of the quantities demanded by all the buyers at each price of the good. 
A) is found by vertically adding the individual demand curves. 
B) slopes upward. 
C) represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D) represents the sum of the quantities demanded by all the buyers at each price of the good.

Question 17

A competitive market is one in which there

Accepted Answer

A) is only one seller, but there are many buyers. 
B) are many sellers, and each seller has the ability to set the price of his product. 
C) are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market. 
D) are so many buyers and so many sellers that each has a negligible impact on the price of the product. 
A) is only one seller, but there are many buyers. 
B) are many sellers, and each seller has the ability to set the price of his product. 
C) are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market. 
D) are so many buyers and so many sellers that each has a negligible impact on the price of the product.

Question 18

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A) a change in income 
B) a change in the price of the good or service 
C) a change in expectations about the future price of the good or service 
D) a change in the price of a related good or service 
A) a change in income 
B) a change in the price of the good or service 
C) a change in expectations about the future price of the good or service 
D) a change in the price of a related good or service

Question 19

A decrease in supply is represented by a

Accepted Answer

A) movement downward and to the left along a supply curve. 
B) movement upward and to the right along a supply curve. 
C) rightward shift of a supply curve. 
D) leftward shift of a supply curve. 
A) movement downward and to the left along a supply curve. 
B) movement upward and to the right along a supply curve. 
C) rightward shift of a supply curve. 
D) leftward shift of a supply curve.

Question 20

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

Accepted Answer

A) applies to most goods in the economy. 
B) is represented by a downward-sloping demand curve. 
C) is referred to as the law of demand. 
D) All of the above are correct. 
A) applies to most goods in the economy. 
B) is represented by a downward-sloping demand curve. 
C) is referred to as the law of demand. 
D) All of the above are correct.

Exam 4: The Market Forces of Supply and Demand

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

Table 4-2 Price Willim's Quantity Denanded Ferpie's Quantity Dennanded Tabod's Quantity Denanded apl de.ap's Quantity Denanded \ 12 2 1 3 4 \ 10 4 4 4 5 \ 8 6 7 5 6 \ 6 8 8 4 7 \ 4 10 9 3 8 \ 2 12 10 2 9 -Refer to Table 4-2. Whose demand does not obey the law of demand?

Which of the following events would cause the price of oranges to fall?

The law of supply states that, other things equal, when the price of a good

Suppose that Amanda receives a pay increase. We would expect

When we move along a given demand curve,

The two words most often used by economists are

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?

An increase in which of the following would shift the supply curve for gasoline to the right?

Figure 4-6 -Refer to Figure 4-6. The movement from D' to D in the market for potato chips could be caused by a(n)

Figure 4-4 -Refer to Figure 4-4. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

When a supply curve or a demand curve shifts, the equilibrium price and equilibrium quantity change.

In a competitive market, each seller has limited control over the price of his product because

The market for ice cream is a

The quantity demanded of a good is the amount that buyers are

The market demand curve

A competitive market is one in which there

Which of the following changes would not shift the demand curve for a good or service?

A decrease in supply is represented by a

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

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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