Question 1

Which of the following is NOT one of the steps in analyzing how some event affects a market?

Accepted Answer

A) Determine the number of market participants. 
B) Decide whether the curve shifts to the right or to the left. 
C) Determine whether the event shifts the supply, the demand, or both curves. 
D) Use a supply-demand diagram to examine how the shift(s) affect the equilibrium. 
A) Determine the number of market participants. 
B) Decide whether the curve shifts to the right or to the left. 
C) Determine whether the event shifts the supply, the demand, or both curves. 
D) Use a supply-demand diagram to examine how the shift(s) affect the equilibrium.

Question 2

You love peanut butter. You hear on the news that 50% of the peanut crop in North America has been wiped out, which will cause the price to double by the end of the year. What happens as a result?

Accepted Answer

A) Your demand for peanut butter will increase by the end of the year. 
B) Your demand for peanut butter increases today. 
C) Your demand for peanut butter falls as you look for a substitute good. 
D) You decide to give up peanut butter completely. 
A) Your demand for peanut butter will increase by the end of the year. 
B) Your demand for peanut butter increases today. 
C) Your demand for peanut butter falls as you look for a substitute good. 
D) You decide to give up peanut butter completely.

Question 3

What does the number of buyers in a market affect?

Accepted Answer

A) the market demand for a good 
B) individual demand curves for a good 
C) both individual demand curves and the market demand for a good 
D) neither individual nor market demand 
A) the market demand for a good 
B) individual demand curves for a good 
C) both individual demand curves and the market demand for a good 
D) neither individual nor market demand

Question 4

What happens when there is a surplus in a market?

Accepted Answer

A) There is upward pressure on price. 
B) There is downward pressure on price. 
C) The market could still be in equilibrium. 
D) There are too many buyers chasing too few goods. 
A) There is upward pressure on price. 
B) There is downward pressure on price. 
C) The market could still be in equilibrium. 
D) There are too many buyers chasing too few goods.

Question 5

If a shortage exists in a market, what do we know?

Accepted Answer

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

Question 6

Complete the following: Two goods are substitutes if a decrease in the price of one good

Accepted Answer

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

Question 7

What are the forces that make market economies work?

Accepted Answer

A) price and quantity 
B) demand and supply 
C) cost and benefit 
D) employment and income 
A) price and quantity 
B) demand and supply 
C) cost and benefit 
D) employment and income

Question 8

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?

Accepted Answer

A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D) Both equilibrium price and equilibrium quantity would increase. 
A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. 
B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. 
C) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
D) Both equilibrium price and equilibrium quantity would increase.

Question 9

What is a table called that shows the relationship between the price of a good and the quantity demanded?

Accepted Answer

A) demand table 
B) demand schedule 
C) price-quantity table 
D) quantity demanded schedule 
A) demand table 
B) demand schedule 
C) price-quantity table 
D) quantity demanded schedule

Question 10

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 11

What relationship is shown by the supply schedule?

Accepted Answer

A) between price and quantity supplied 
B) between price and quantity demanded 
C) between supply and quantity 
D) between profit and price 
A) between price and quantity supplied 
B) between price and quantity demanded 
C) between supply and quantity 
D) between profit and price

Question 12

Table 4-3
  
-Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A) space A 
B) space B 
C) space C 
D) space D 
A) space A 
B) space B 
C) space C 
D) space D

Question 13

What would result from an increase in the number of scholarships issued for university education?

Accepted Answer

A) an increase the supply of education 
B) a decrease the supply of education 
C) an increase the demand for education 
D) a decrease the demand for education 
A) an increase the supply of education 
B) a decrease the supply of education 
C) an increase the demand for education 
D) a decrease the demand for education

Question 14

When it comes to people's tastes, what do economists generally believe?

Accepted Answer

A) Tastes are based on forces beyond the realm of economics. 
B) Tastes are based on historical and psychological forces. 
C) Tastes can only be studied through well-constructed, real-life models. 
D) Since tastes do not directly affect demand, there is little need to explain people's tastes. 
A) Tastes are based on forces beyond the realm of economics. 
B) Tastes are based on historical and psychological forces. 
C) Tastes can only be studied through well-constructed, real-life models. 
D) Since tastes do not directly affect demand, there is little need to explain people's tastes.

Question 15

Surpluses drive price up while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 16

If buyers now wanted to purchase larger quantities of Vanilla Coke, what do we know about its demand curve?

Accepted Answer

A) The demand curve for Vanilla Coke would shift to the left. 
B) We would move down the demand curve for Vanilla Coke. 
C) The demand curve for Vanilla Coke would shift to the right. 
D) We would move up the demand curve for Vanilla Coke. 
A) The demand curve for Vanilla Coke would shift to the left. 
B) We would move down the demand curve for Vanilla Coke. 
C) The demand curve for Vanilla Coke would shift to the right. 
D) We would move up the demand curve for Vanilla Coke.

Question 17

Baseballs and baseball bats are substitute goods.

Accepted Answer

A) True 
 B)False

Question 18

Market demand is given as Qd = 250 - .5P. Market supply is given as Qs = 2P. What would result if the market price were $140?

Accepted Answer

A) a shortage of 100 
B) a surplus of 100 
C) a surplus of 280 
D) a shortage of 280 
A) a shortage of 100 
B) a surplus of 100 
C) a surplus of 280 
D) a shortage of 280

Question 19

Table 4-2
  
-Refer to Table 4-2. If the price were $8, what would happen?

Accepted Answer

A) A surplus of 50 units would exist and the price would tend to fall. 
B) A surplus of 10 units would exist and the price would tend to fall. 
C) A surplus of 25 units would exist and the price would tend to fall. 
D) A shortage of 25 units would exist and the price would tend to rise. 
A) A surplus of 50 units would exist and the price would tend to fall. 
B) A surplus of 10 units would exist and the price would tend to fall. 
C) A surplus of 25 units would exist and the price would tend to fall. 
D) A shortage of 25 units would exist and the price would tend to rise.

Question 20

If a surplus exists in a market, what do we know?

Accepted Answer

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

Which of the following is NOT one of the steps in analyzing how some event affects a market?

You love peanut butter. You hear on the news that 50% of the peanut crop in North America has been wiped out, which will cause the price to double by the end of the year. What happens as a result?

What does the number of buyers in a market affect?

What happens when there is a surplus in a market?

If a shortage exists in a market, what do we know?

Complete the following: Two goods are substitutes if a decrease in the price of one good

What are the forces that make market economies work?

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?

What is a table called that shows the relationship between the price of a good and the quantity demanded?

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

What relationship is shown by the supply schedule?

Table 4-3 -Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

What would result from an increase in the number of scholarships issued for university education?

When it comes to people's tastes, what do economists generally believe?

Surpluses drive price up while shortages drive price down.

If buyers now wanted to purchase larger quantities of Vanilla Coke, what do we know about its demand curve?

Baseballs and baseball bats are substitute goods.

Market demand is given as Qd = 250 - .5P. Market supply is given as Qs = 2P. What would result if the market price were $140?

Table 4-2 -Refer to Table 4-2. If the price were $8, what would happen?

If a surplus exists in a market, what do we know?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

Which of the following is NOT one of the steps in analyzing how some event affects a market?

You love peanut butter. You hear on the news that 50% of the peanut crop in North America has been wiped out, which will cause the price to double by the end of the year. What happens as a result?

What does the number of buyers in a market affect?

What happens when there is a surplus in a market?

If a shortage exists in a market, what do we know?

Complete the following: Two goods are substitutes if a decrease in the price of one good

What are the forces that make market economies work?

Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?

What is a table called that shows the relationship between the price of a good and the quantity demanded?

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

What relationship is shown by the supply schedule?

Table 4-3 -Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

What would result from an increase in the number of scholarships issued for university education?

When it comes to people's tastes, what do economists generally believe?

Surpluses drive price up while shortages drive price down.

If buyers now wanted to purchase larger quantities of Vanilla Coke, what do we know about its demand curve?

Baseballs and baseball bats are substitute goods.

Market demand is given as Qd = 250 - .5P. Market supply is given as Qs = 2P. What would result if the market price were $140?

Table 4-2 -Refer to Table 4-2. If the price were $8, what would happen?

If a surplus exists in a market, what do we know?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

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 Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters