Question 1

A downward-sloping demand curve illustrates

Accepted Answer

A) that demand decreases over time. 
B) that prices fall over time. 
C) the relationship between income and quantity demanded. 
D) the law of demand. 
A) that demand decreases over time. 
B) that prices fall over time. 
C) the relationship between income and quantity demanded. 
D) the law of demand.

Question 2

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. Regarding Harry and Darby, whose demand for sandwiches conforms to the law of demand?

Accepted Answer

A) only Harry's 
B) only Darby's 
C) both Harry's and Darby's 
D) neither Harry's nor Darby's 
A) only Harry's 
B) only Darby's 
C) both Harry's and Darby's 
D) neither Harry's nor Darby's

Question 3

When the price of hot dogs changes, the demand curve for hot dogs

Accepted Answer

A) shifts because the price of hot dogs is measured on the vertical axis of the graph. 
B) shifts because the quantity demanded of hot dogs is measured on the horizontal axis of the graph. 
C) does not shift because the price of hot dogs is measured on the vertical axis of the graph. 
D) does not shift because the price of hot dogs is measured on the horizontal axis of the graph. 
A) shifts because the price of hot dogs is measured on the vertical axis of the graph. 
B) shifts because the quantity demanded of hot dogs is measured on the horizontal axis of the graph. 
C) does not shift because the price of hot dogs is measured on the vertical axis of the graph. 
D) does not shift because the price of hot dogs is measured on the horizontal axis of the graph.

Question 4

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-19. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Accepted Answer

A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x. 
A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x.

Question 5

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

Accepted Answer

A) True 
 B)False

Question 6

The quantity supplied of a good is the amount that

Accepted Answer

A) buyers are willing and able to purchase. 
B) sellers are able to produce. 
C) buyers and sellers agree will be brought to market. 
D) sellers are willing and able to sell. 
A) buyers are willing and able to purchase. 
B) sellers are able to produce. 
C) buyers and sellers agree will be brought to market. 
D) sellers are willing and able to sell.

Question 7

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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

Question 8

Figure 4-16  
-Refer to Figure 4-16. If there is currently a shortage of 20 units of the good, then the law of

Accepted Answer

A) demand predicts that the price will rise by $2 to eliminate the shortage. 
B) supply predicts that the price will rise by $2 to eliminate the shortage. 
C) supply and demand predicts that the price will rise by $2 to eliminate the shortage. 
D) supply and demand predicts that the price will fall by $2 to eliminate the shortage. 
A) demand predicts that the price will rise by $2 to eliminate the shortage. 
B) supply predicts that the price will rise by $2 to eliminate the shortage. 
C) supply and demand predicts that the price will rise by $2 to eliminate the shortage. 
D) supply and demand predicts that the price will fall by $2 to eliminate the shortage.

Question 9

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Accepted Answer

A) The government would provide tax incentives to encourage people to become farmers. 
B) The government would subsidize the production of food. 
C) The prices of food and the wages of farmers would adjust. 
D) There are no mechanisms to remove the shortage. 
A) The government would provide tax incentives to encourage people to become farmers. 
B) The government would subsidize the production of food. 
C) The prices of food and the wages of farmers would adjust. 
D) There are no mechanisms to remove the shortage.

Question 10

Figure 4-15  
-Refer to Figure 4-15. At what price would there be an excess supply of 200 units of the good?

Accepted Answer

A) $15 
B) $20 
C) $30 
D) $35 
A) $15 
B) $20 
C) $30 
D) $35

Question 11

A shortage exists in a market if

Accepted Answer

A) there is an excess supply of the good. 
B) quantity supplied exceeds quantity demanded. 
C) the current price is below its equilibrium price. 
D) All of the above are correct. 
A) there is an excess supply of the good. 
B) quantity supplied exceeds quantity demanded. 
C) the current price is below its equilibrium price. 
D) All of the above are correct.

Question 12

Figure 4-15  
-Refer to Figure 4-15. At a price of $35, there would be a

Accepted Answer

A) shortage of 400 units. 
B) surplus of 200 units. 
C) surplus of 400 units. 
D) surplus of 600 units. 
A) shortage of 400 units. 
B) surplus of 200 units. 
C) surplus of 400 units. 
D) surplus of 600 units.

Question 13

Figure 4-15  
-Refer to Figure 4-15. At a price of $35, there would be

Accepted Answer

A) a shortage, and the price would tend to rise from $35 to a higher price. 
B) a surplus, and the price would tend to rise from $35 to a higher price. 
C) excess demand, and the price would tend to fall from $35 to a lower price. 
D) excess supply, and the price would tend to fall from $35 to a lower price. 
A) a shortage, and the price would tend to rise from $35 to a higher price. 
B) a surplus, and the price would tend to rise from $35 to a higher price. 
C) excess demand, and the price would tend to fall from $35 to a lower price. 
D) excess supply, and the price would tend to fall from $35 to a lower price.

Question 14

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 15

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) The price of marijuana, a complement to cigarettes, increased. 
B) Mandatory health warnings were placed on cigarette packages. 
C) Several foreign countries banned U.S. cigarettes in their countries. 
D) A tax was placed on cigarettes. 
A) The price of marijuana, a complement to cigarettes, increased. 
B) Mandatory health warnings were placed on cigarette packages. 
C) Several foreign countries banned U.S. cigarettes in their countries. 
D) A tax was placed on cigarettes.

Question 16

A surplus exists in a market if

Accepted Answer

A) there is an excess demand for the good. 
B) quantity demanded exceeds quantity supplied. 
C) the current price is above its equilibrium price. 
D) All of the above are correct. 
A) there is an excess demand for the good. 
B) quantity demanded exceeds quantity supplied. 
C) the current price is above its equilibrium price. 
D) All of the above are correct.

Question 17

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-19. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from

Accepted Answer

A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x. 
A) DA to DB. 
B) DB to DA. 
C) x to y. 
D) y to x.

Question 18

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 19

Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

Accepted Answer

A) Price will rise. 
B) Price will fall. 
C) Price will stay exactly the same. 
D) The price change will be ambiguous. 
A) Price will rise. 
B) Price will fall. 
C) Price will stay exactly the same. 
D) The price change will be ambiguous.

Question 20

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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.

Exam 4: The Market Forces of Supply and Demand

A downward-sloping demand curve illustrates

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. Regarding Harry and Darby, whose demand for sandwiches conforms to the law of demand?

When the price of hot dogs changes, the demand curve for hot dogs

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

The quantity supplied of a good is the amount that

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Figure 4-16 -Refer to Figure 4-16. If there is currently a shortage of 20 units of the good, then the law of

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Figure 4-15 -Refer to Figure 4-15. At what price would there be an excess supply of 200 units of the good?

A shortage exists in a market if

Figure 4-15 -Refer to Figure 4-15. At a price of $35, there would be a

Figure 4-15 -Refer to Figure 4-15. At a price of $35, there would be

The law of demand is true for most goods in the 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?

A surplus exists in a market if

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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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