Question 1

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

A) above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A) above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 2

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A) an increase in the price of mp3 players 
B) a decrease in the number of sellers of mp3 players 
C) an increase in the price of plastic, an input into the production of mp3 players 
D) an improvement in the technology used to produce mp3 players 
A) an increase in the price of mp3 players 
B) a decrease in the number of sellers of mp3 players 
C) an increase in the price of plastic, an input into the production of mp3 players 
D) an improvement in the technology used to produce mp3 players

Question 3

Once the demand 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 4

Figure 4-22
  
-Refer to Figure 4-22. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

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)

Question 5

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

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 6

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Accepted Answer

A) True 
 B)False

Question 7

A decrease in quantity supplied

Accepted Answer

A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right. 
A) results in a movement downward and to the left along a fixed supply curve. 
B) results in a movement upward and to the right along a fixed supply curve. 
C) shifts the supply curve to the left. 
D) shifts the supply curve to the right.

Question 8

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A) decrease in equilibrium price and an increase in equilibrium quantity. 
B) decrease in equilibrium price and a decrease in equilibrium quantity. 
C) increase in equilibrium price and a decrease in equilibrium quantity. 
D) increase in equilibrium price and an increase in equilibrium quantity. 
A) decrease in equilibrium price and an increase in equilibrium quantity. 
B) decrease in equilibrium price and a decrease in equilibrium quantity. 
C) increase in equilibrium price and a decrease in equilibrium quantity. 
D) increase in equilibrium price and an increase in equilibrium quantity.

Question 9

Table 4-5
 $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Firm A's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm B's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm C's } \
\text { Quantity } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Firm D's } \
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 1 &0 & 0 &0 & 0 \
\hline \$ 2 & 3 & 4 & 2 & 1 \
\hline \$ 4 & 6 & 8 & 4 & 2 \
\hline \$ 6 & 9 & 12 & 6 & 3 \
\hline \$ 8 & 12 & 16 & 8 & 4 \
\hline \$ 10 & 15 & 20 & 10 & 5 \
\hline
\end{array}$$
-Refer to Table 4-5. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A) 4 units. 
B) 5 units. 
C) 20 units. 
D) 80 units. 
A) 4 units. 
B) 5 units. 
C) 20 units. 
D) 80 units.

Question 10

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Accepted Answer

A) production technology 
B) expectations 
C) input prices 
D) the number of sellers 
A) production technology 
B) expectations 
C) input prices 
D) the number of sellers

Question 11

Figure 4-22
  
-Refer to Figure 4-22. Panel (a) 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 12

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 13

Each of the following is a determinant of demand except

Accepted Answer

A) tastes. 
B) production technology. 
C) expectations. 
D) the prices of related goods. 
A) tastes. 
B) production technology. 
C) expectations. 
D) the prices of related goods.

Question 14

If the producers of canned green beans expect the price of canned green beans to increase in the future due to an increase in demand, they may put some of their current production into storage and supply less in the market today.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-5    
-Refer to Figure 4-5. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. If the warning labels are successful, we could illustrate the plan as producing a movement from

Accepted Answer

A) Point A to Point B in Panel 1. 
B) Point B to Point A in Panel 1. 
C) Point A to Point C in Panel 2. 
D) Point C to Point A in Panel 2. 
A) Point A to Point B in Panel 1. 
B) Point B to Point A in Panel 1. 
C) Point A to Point C in Panel 2. 
D) Point C to Point A in Panel 2.

Question 16

There is no shortage of scarce resources in a market economy because

Accepted Answer

A) the government makes shortages illegal. 
B) resources are abundant in market economies. 
C) prices adjust to eliminate shortages. 
D) quantity supplied is always greater than quantity demanded in market economies. 
A) the government makes shortages illegal. 
B) resources are abundant in market economies. 
C) prices adjust to eliminate shortages. 
D) quantity supplied is always greater than quantity demanded in market economies.

Question 17

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A) are in balance. 
B) are the same. 
C) clash. 
D) remain constant. 
A) are in balance. 
B) are the same. 
C) clash. 
D) remain constant.

Question 18

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 19

A rightward shift of 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 20

If car manufacturers begin using new labor-saving technology on their assembly lines, we would not expect

Accepted Answer

A) a smaller quantity of labor to be used. 
B) the supply of cars to increase. 
C) the firms' costs to fall. 
D) individual car manufacturers to move up and to the right along their individual supply curves. 
A) a smaller quantity of labor to be used. 
B) the supply of cars to increase. 
C) the firms' costs to fall. 
D) individual car manufacturers to move up and to the right along their individual supply curves.

Exam 4: The Market Forces of Supply and Demand

If a shortage exists in a market, then we know that the actual price is

Which of the following would not shift the supply curve for mp3 players?

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

Figure 4-22 -Refer to Figure 4-22. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

A decrease in quantity supplied

A decrease in input costs to firms in a market will result in a(n)

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

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

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Each of the following is a determinant of demand except

If the producers of canned green beans expect the price of canned green beans to increase in the future due to an increase in demand, they may put some of their current production into storage and supply less in the market today.

There is no shortage of scarce resources in a market economy because

The dictionary defines equilibrium as a situation in which forces

Price will rise to eliminate a shortage.

A rightward shift of a demand curve is called a(n)

If car manufacturers begin using new labor-saving technology on their assembly lines, we would not expect

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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