Question 1

Most markets in the economy are

Accepted Answer

A) markets in which sellers, rather than buyers, control the price of the product. 
B) markets in which buyers, rather than sellers, control the price of the product. 
C) perfectly competitive. 
D) highly competitive. 
A) markets in which sellers, rather than buyers, control the price of the product. 
B) markets in which buyers, rather than sellers, control the price of the product. 
C) perfectly competitive. 
D) highly competitive.

Question 2

Table 4-8
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
 $$\begin{array} { | c | c | c | c } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity Denanded } \
\text { by Members }
\end{array} & \begin{array} { c } 
\text { Quantity Demanded } \
\text { by Nan-members }
\end{array} & \text { Quantity Supplied } \
\hline \$ 10 & 1000 & 500 & 600 \
\hline \$ 15 & 800 & 400 & 600 \
\hline \$ 20 & 600 & 300 & 600 \
\hline \$ 25 & 400 & 200 & 600 \
\hline \$ 30 & 200 & 100 & 600 \
\hline
\end{array}$$
-Refer to Table 4-8. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be

Accepted Answer

A) a shortage of 300 tickets. 
B) a surplus of 300 tickets. 
C) 300 tickets sold. 
D) 600 tickets unsold. 
A) a shortage of 300 tickets. 
B) a surplus of 300 tickets. 
C) 300 tickets sold. 
D) 600 tickets unsold.

Question 3

If the number of buyers in a market decreases, then

Accepted Answer

A) demand will increase. 
B) demand will decrease. 
C) supply will increase. 
D) supply will decrease. 
A) demand will increase. 
B) demand will decrease. 
C) supply will increase. 
D) supply will decrease.

Question 4

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of a market?

Accepted Answer

A) a gas station 
B) a garage sale 
C) a barber shop 
D) All of the above are examples of markets. 
A) a gas station 
B) a garage sale 
C) a barber shop 
D) All of the above are examples of markets.

Question 6

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Accepted Answer

A) True 
 B)False

Question 7

A demand schedule is a table that shows the relationship between

Accepted Answer

A) quantity demanded and quantity supplied. 
B) income and quantity demanded. 
C) price and quantity demanded. 
D) price and income. 
A) quantity demanded and quantity supplied. 
B) income and quantity demanded. 
C) price and quantity demanded. 
D) price and income.

Question 8

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-15  
-Refer to Figure 4-15. At a price of $20, there would be a(n)

Accepted Answer

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

Question 10

When the price of a good or service changes,

Accepted Answer

A) the demand curve shifts in the opposite direction. 
B) the supply curve shifts in the opposite direction. 
C) the supply curve shifts in the same direction. 
D) there is a movement along a given supply curve. 
A) the demand curve shifts in the opposite direction. 
B) the supply curve shifts in the opposite direction. 
C) the supply curve shifts in the same direction. 
D) there is a movement along a given supply curve.

Question 11

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos 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 12

A leftward 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 13

Figure 4-17  
-Refer to Figure 4-17. If the price is $25, then there would be an excess

Accepted Answer

A) supply of 100 units, and price would fall. 
B) supply of 300 units, and price would fall. 
C) demand of 100 units, and price would fall. 
D) demand of 300 units, and price would fall. 
A) supply of 100 units, and price would fall. 
B) supply of 300 units, and price would fall. 
C) demand of 100 units, and price would fall. 
D) demand of 300 units, and price would fall.

Question 14

Figure 4-21  
-Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins?

Accepted Answer

A) Point A to Point B 
B) Point C to Point B 
C) Point C to Point D 
D) Point A to Point D 
A) Point A to Point B 
B) Point C to Point B 
C) Point C to Point D 
D) Point A to Point D

Question 15

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 $6 is

Accepted Answer

A) 12 units. 
B) 14 units. 
C) 19 units. 
D) 21 units. 
A) 12 units. 
B) 14 units. 
C) 19 units. 
D) 21 units.

Question 16

A higher price for batteries would result in a(n)

Accepted Answer

A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries. 
A) increase in the demand for flashlights. 
B) decrease in the demand for flashlights. 
C) increase in the demand for batteries. 
D) decrease in the demand for batteries.

Question 17

Figure 4-8  
-Refer to Figure 4-8. The movement from Point A to Point B represents a(n)

Accepted Answer

A) increase in the price. 
B) decrease in the quantity supplied. 
C) shift in the supply curve. 
D) Both a) and b) are correct. 
A) increase in the price. 
B) decrease in the quantity supplied. 
C) shift in the supply curve. 
D) Both a) and b) are correct.

Question 18

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

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.

Question 19

If, at the current price, there is a surplus of a good, then

Accepted Answer

A) sellers are producing more than buyers wish to buy. 
B) the market must be in equilibrium. 
C) the price is below the equilibrium price. 
D) quantity demanded equals quantity supplied. 
A) sellers are producing more than buyers wish to buy. 
B) the market must be in equilibrium. 
C) the price is below the equilibrium price. 
D) quantity demanded equals quantity supplied.

Question 20

Figure 4-11
  
-Refer to Figure 4-11. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A) 2 units. 
B) 10 units. 
C) 12 units. 
D) 22 units. 
A) 2 units. 
B) 10 units. 
C) 12 units. 
D) 22 units.

Exam 4: The Market Forces of Supply and Demand

Most markets in the economy are

If the number of buyers in a market decreases, then

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Which of the following is an example of a market?

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

A demand schedule is a table that shows the relationship between

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Figure 4-15 -Refer to Figure 4-15. At a price of $20, there would be a(n)

When the price of a good or service changes,

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

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

Figure 4-17 -Refer to Figure 4-17. If the price is $25, then there would be an excess

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins?

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 $6 is

A higher price for batteries would result in a(n)

Figure 4-8 -Refer to Figure 4-8. The movement from Point A to Point B represents a(n)

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

If, at the current price, there is a surplus of a good, then

Figure 4-11 -Refer to Figure 4-11. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

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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