Question 1

If macaroni and cheese is an inferior good, then an increase in

Accepted Answer

A) the price will cause the demand curve for macaroni and cheese to shift to the left. 
B) the price will cause the demand curve for macaroni and cheese to shift to the right. 
C) a consumer's income will cause the demand curve for macaroni and cheese to shift to the left. 
D) a consumer's income will cause the demand curve for macaroni and cheese to shift to the right. 
A) the price will cause the demand curve for macaroni and cheese to shift to the left. 
B) the price will cause the demand curve for macaroni and cheese to shift to the right. 
C) a consumer's income will cause the demand curve for macaroni and cheese to shift to the left. 
D) a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.

Question 2

Figure 4-15  
-Refer to Figure 4-15. At the equilibrium price,

Accepted Answer

A) 200 units would be supplied and demanded. 
B) 400 units would be supplied and demanded. 
C) 600 units would be supplied and demanded. 
D) 600 units would be supplied, but only 200 would be demanded. 
A) 200 units would be supplied and demanded. 
B) 400 units would be supplied and demanded. 
C) 600 units would be supplied and demanded. 
D) 600 units would be supplied, but only 200 would be demanded.

Question 3

If the number of sellers in a market increases, then the

Accepted Answer

A) demand in that market will increase. 
B) supply in that market will increase. 
C) supply in that market will decrease. 
D) demand in that market will decrease. 
A) demand in that market will increase. 
B) supply in that market will increase. 
C) supply in that market will decrease. 
D) demand in that market will decrease.

Question 4

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

A) increases. 
B) decreases. 
C) remains constant, but we observe a movement downward and to the right along the demand curve. 
D) remains constant, but we observe a movement upward and to the left along the demand curve. 
A) increases. 
B) decreases. 
C) remains constant, but we observe a movement downward and to the right along the demand curve. 
D) remains constant, but we observe a movement upward and to the left along the demand curve.

Question 5

Which of these statements does not apply to market economies?

Accepted Answer

A) Prices prevent decentralized decision making from degenerating into chaos. 
B) Prices coordinate the actions of millions of people with varying abilities and desires. 
C) Prices ensure that anyone who wants a product can get it. 
D) Prices ensure that what needs to get done does in fact get done. 
A) Prices prevent decentralized decision making from degenerating into chaos. 
B) Prices coordinate the actions of millions of people with varying abilities and desires. 
C) Prices ensure that anyone who wants a product can get it. 
D) Prices ensure that what needs to get done does in fact get done.

Question 6

Table 4-7
 $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Denanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 10 & 10 & 60 \
\hline \$ 8 & 20 & 45 \
\hline \$ 6 & 30 & 30 \
\hline \$ 4 & 40 & 15 \
\hline \$ 2 & 50 &0 \
\hline
\end{array}$$
-Refer to Table 4-7. If the price were $4, a

Accepted Answer

A) surplus of 15 units would exist, and price would tend to fall. 
B) shortage of 25 units would exist, and price would tend to rise. 
C) surplus of 25 units would exist, and price would tend to fall. 
D) shortage of 40 units would exist, and price would tend to rise. 
A) surplus of 15 units would exist, and price would tend to fall. 
B) shortage of 25 units would exist, and price would tend to rise. 
C) surplus of 25 units would exist, and price would tend to fall. 
D) shortage of 40 units would exist, and price would tend to rise.

Question 7

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 8

In a market economy, supply and demand determine

Accepted Answer

A) both the quantity of each good produced and the price at which it is sold. 
B) the quantity of each good produced but not the price at which it is sold. 
C) the price at which each good is sold but not the quantity of each good produced. 
D) neither the quantity of each good produced nor the price at which it is sold. 
A) both the quantity of each good produced and the price at which it is sold. 
B) the quantity of each good produced but not the price at which it is sold. 
C) the price at which each good is sold but not the quantity of each good produced. 
D) neither the quantity of each good produced nor the price at which it is sold.

Question 9

Table 4-4
 $\begin{array}{|c|c|c|c|c|}
\hline \text { Price } & \begin{array}{c}
\text { Firm A's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array}{c}
\text { Firm B's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array}{c}
\text { Firm C's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array}{c}
\text { Firm D's } \
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 0 & 10 & 0 & 0 & 0 \
\hline \$ 2 & 8 & 3 & 4 & 5 \
\hline \$ 4 & 6 & 6 & 8 & 10 \
\hline \$ 6 & 4 & 9 & 12 & 15 \
\hline \$ 8 & 2 & 12 & 8 & 20 \
\hline \$ 10 & 0 & 15 & 4 & 25 \
\hline
\end{array}$

-Refer to Table 4-4. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied

Accepted Answer

A) increases by 0.5 units. 
B) increases by 2 units. 
C) decreases by 4 units. 
D) increases by 42 units. 
A) increases by 0.5 units. 
B) increases by 2 units. 
C) decreases by 4 units. 
D) increases by 42 units.

Question 10

Which of the following is the least likely to be a competitive market?

Accepted Answer

A) ice cream 
B) soybeans 
C) cable television 
D) new houses 
A) ice cream 
B) soybeans 
C) cable television 
D) new houses

Question 11

In a competitive market, the quantity of a product produced and the price of the product are determined by

Accepted Answer

A) buyers. 
B) sellers. 
C) both buyers and sellers. 
D) None of the above is correct. 
A) buyers. 
B) sellers. 
C) both buyers and sellers. 
D) None of the above is correct.

Question 12

A movement downward and to the right along a demand curve is called a(n)

Accepted Answer

A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded. 
A) increase in demand. 
B) decrease in demand. 
C) decrease in quantity demanded. 
D) increase in quantity demanded.

Question 13

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

Accepted Answer

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

Question 14

Once the supply curve for a product or service is drawn, it

Accepted Answer

A) remains stable over time. 
B) can shift either rightward or leftward. 
C) is possible to move along the curve, but the curve will not shift. 
D) tends to become steeper over time. 
A) remains stable over time. 
B) can shift either rightward or leftward. 
C) is possible to move along the curve, but the curve will not shift. 
D) tends to become steeper over time.

Question 15

Advances in production technology typically reduce firms' costs.

Accepted Answer

A) True 
 B)False

Question 16

In a perfectly competitive market, at the market price, buyers

Accepted Answer

A) cannot buy all they want, and sellers cannot sell all they want. 
B) cannot buy all they want, but sellers can sell all they want. 
C) can buy all they want, but sellers cannot sell all they want. 
D) can buy all they want, and sellers can sell all they want. 
A) cannot buy all they want, and sellers cannot sell all they want. 
B) cannot buy all they want, but sellers can sell all they want. 
C) can buy all they want, but sellers cannot sell all they want. 
D) can buy all they want, and sellers can sell all they want.

Question 17

Suppose there is an earthquake that destroys several corn canneries. Which of the following would not be a direct result of this event?

Accepted Answer

A) Sellers would not be able to produce and sell as much as before at each relevant price. 
B) The supply would decrease. 
C) Buyers would not be willing to buy as much as before at each relevant price. 
D) The equilibrium price would rise. 
A) Sellers would not be able to produce and sell as much as before at each relevant price. 
B) The supply would decrease. 
C) Buyers would not be willing to buy as much as before at each relevant price. 
D) The equilibrium price would rise.

Question 18

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 19

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A) shortage to exist and the market price of roses to increase. 
B) shortage to exist and the market price of roses to decrease. 
C) surplus to exist and the market price of roses to increase. 
D) surplus to exist and the market price of roses to decrease. 
A) shortage to exist and the market price of roses to increase. 
B) shortage to exist and the market price of roses to decrease. 
C) surplus to exist and the market price of roses to increase. 
D) surplus to exist and the market price of roses to decrease.

Question 20

In a market economy,

Accepted Answer

A) supply determines demand and demand, in turn, determines prices. 
B) demand determines supply and supply, in turn, determines prices. 
C) the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. 
D) supply and demand determine prices and prices, in turn, allocate the economy's scarce resources. 
A) supply determines demand and demand, in turn, determines prices. 
B) demand determines supply and supply, in turn, determines prices. 
C) the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. 
D) supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.

Exam 4: The Market Forces of Supply and Demand

If macaroni and cheese is an inferior good, then an increase in

Figure 4-15 -Refer to Figure 4-15. At the equilibrium price,

If the number of sellers in a market increases, then the

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Which of these statements does not apply to market economies?

Table 4-7 Price Quantity Denanded Quantity Supplied \ 10 10 60 \ 8 20 45 \ 6 30 30 \ 4 40 15 \ 2 50 0 -Refer to Table 4-7. If the price were $4, a

In a perfectly competitive market, buyers and sellers are price setters.

In a market economy, supply and demand determine

Which of the following is the least likely to be a competitive market?

In a competitive market, the quantity of a product produced and the price of the product are determined by

A movement downward and to the right along a demand curve is called a(n)

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

Once the supply curve for a product or service is drawn, it

Advances in production technology typically reduce firms' costs.

In a perfectly competitive market, at the market price, buyers

Suppose there is an earthquake that destroys several corn canneries. Which of the following would not be a direct result of this event?

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

In a market economy,

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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