Question 1

Figure 4-3
  
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

Accepted Answer

A) 0 units. 
B) 10 units. 
C) 15 units. 
D) 25 units. 
A) 0 units. 
B) 10 units. 
C) 15 units. 
D) 25 units.

Question 2

Equilibrium quantity must increase when demand

Accepted Answer

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

Question 3

Figure 4-13  
-Refer to Figure 4-13. The shift from S to S' in the market for peaches could be caused by a(n)

Accepted Answer

A) increase in the price of peaches. 
B) decrease in the price of pears. 
C) increase in income. 
D) decrease in the labor costs of the workers who pick peaches. 
A) increase in the price of peaches. 
B) decrease in the price of pears. 
C) increase in income. 
D) decrease in the labor costs of the workers who pick peaches.

Question 4

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 5

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 6

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Accepted Answer

A) True 
 B)False

Question 7

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Accepted Answer

A) True 
 B)False

Question 8

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-16  
-Refer to Figure 4-16. If price in this market is currently $14, then there would be a(n)

Accepted Answer

A) surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B) excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C) surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D) excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
A) surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B) excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C) surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D) excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.

Question 10

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 a decrease 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 11

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

A) decreases the demand for the other good. 
B) decreases the quantity demanded of the other good. 
C) increases the demand for the other good. 
D) increases the quantity demanded of the other good. 
A) decreases the demand for the other good. 
B) decreases the quantity demanded of the other good. 
C) increases the demand for the other good. 
D) increases the quantity demanded of the other good.

Question 12

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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 13

A improvement in production technology will shift the

Accepted Answer

A) supply curve to the right. 
B) supply curve to the left. 
C) demand curve to the right. 
D) demand curve to the left. 
A) supply curve to the right. 
B) supply curve to the left. 
C) demand curve to the right. 
D) demand curve to the left.

Question 14

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 15

Two goods are complements when a decrease in the price of one good

Accepted Answer

A) decreases the quantity demanded of the other good. 
B) decreases the demand for the other good. 
C) increases the quantity demanded of the other good. 
D) increases the demand for the other good. 
A) decreases the quantity demanded of the other good. 
B) decreases the demand for the other good. 
C) increases the quantity demanded of the other good. 
D) increases the demand for the other good.

Question 16

A monopoly is a market with one

Accepted Answer

A) seller, and that seller is a price taker. 
B) seller, and that seller sets the price. 
C) buyer, and that buyer is a price taker. 
D) buyer, and that buyer sets the price. 
A) seller, and that seller is a price taker. 
B) seller, and that seller sets the price. 
C) buyer, and that buyer is a price taker. 
D) buyer, and that buyer sets the price.

Question 17

"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 is referred to as

Accepted Answer

A) equilibrium. 
B) the law of demand. 
C) the relationship between supply and demand. 
D) the definition of an inferior good. 
A) equilibrium. 
B) the law of demand. 
C) the relationship between supply and demand. 
D) the definition of an inferior good.

Question 18

Figure 4-14  
-Refer to Figure 4-14. At a price of

Accepted Answer

A) $2, there is a surplus of 6 units. 
B) $5, there is a surplus of 25 units. 
C) $5, there is a shortage of $25. 
D) $7, there is a surplus of 4 units. 
A) $2, there is a surplus of 6 units. 
B) $5, there is a surplus of 25 units. 
C) $5, there is a shortage of $25. 
D) $7, there is a surplus of 4 units.

Question 19

A market is a group of buyers and sellers of a particular good or service.

Accepted Answer

A) True 
 B)False

Question 20

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A) increase the number of skiers. 
B) increase the price of skis. 
C) decrease the number of skis sold. 
D) decrease the demand for other winter recreational activities. 
A) increase the number of skiers. 
B) increase the price of skis. 
C) decrease the number of skis sold. 
D) decrease the demand for other winter recreational activities.

Exam 4: The Market Forces of Supply and Demand

Figure 4-3 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

Equilibrium quantity must increase when demand

Figure 4-13 -Refer to Figure 4-13. The shift from S to S' in the market for peaches could be caused by a(n)

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Figure 4-16 -Refer to Figure 4-16. If price in this market is currently $14, then there would be a(n)

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 a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Two goods are substitutes when a decrease in the price of one good

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

A improvement in production technology will shift the

It is not possible for demand and supply to shift at the same time.

Two goods are complements when a decrease in the price of one good

A monopoly is a market with one

"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 is referred to as

Figure 4-14 -Refer to Figure 4-14. At a price of

A market is a group of buyers and sellers of a particular good or service.

Holding all other things constant, a higher price for ski lift tickets would

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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