Question 1

When the market price is above the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-4
Panel (a)Panel (b)    
-Refer to Figure 4-4.The graphs show the demand for cigarettes.In Panel (b),the arrows are consistent with which of the following events?

Accepted Answer

A)  The price of cigarettes increased. 
B)  A tax was placed on cigarettes. 
C)  The prohibition of cigarette advertisements on television. 
D)  Tobacco and marijuana are complements and the price of marijuana decreased. 
A)  The price of cigarettes increased. 
B)  A tax was placed on cigarettes. 
C)  The prohibition of cigarette advertisements on television. 
D)  Tobacco and marijuana are complements and the price of marijuana decreased.

Question 3

New oak tables are normal goods.What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

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 4

In any economic system,scarce resources have to be allocated among competing uses.Market economies harness the forces of

Accepted Answer

A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources. 
A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources.

Question 5

Figure 4-11  
-Refer to Figure 4-11.At a price of $12,which of the following is correct?

Accepted Answer

A)  there is a surplus of 1 unit 
B)  there is a surplus of 2 units 
C)  there is a shortage of 1 unit 
D)  there is a shortage of 2 units 
A)  there is a surplus of 1 unit 
B)  there is a surplus of 2 units 
C)  there is a shortage of 1 unit 
D)  there is a shortage of 2 units

Question 6

Figure 4-7  
-Refer to Figure 4-7.The movement from S to S' could be caused by

Accepted Answer

A)  an increase in the price of the good. 
B)  an improvement in technology. 
C)  an increase in income. 
D)  an increase in input prices. 
A)  an increase in the price of the good. 
B)  an improvement in technology. 
C)  an increase in income. 
D)  an increase in input prices.

Question 7

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next 6 months.As a result,we can expect the supply of lumber to

Accepted Answer

A)  fall in 6 months,but not now. 
B)  increase in 6 months when the price goes up. 
C)  fall now. 
D)  increase now to meet as much demand as possible. 
A)  fall in 6 months,but not now. 
B)  increase in 6 months when the price goes up. 
C)  fall now. 
D)  increase now to meet as much demand as possible.

Question 8

Figure 4-8  
-Refer to Figure 4-8.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 9

An increase in demand is represented by

Accepted Answer

A)  a movement downward and to the right along a demand curve. 
B)  a movement upward and to the left along a demand curve. 
C)  a rightward shift of a demand curve. 
D)  a leftward shift of a demand curve. 
A)  a movement downward and to the right along a demand curve. 
B)  a movement upward and to the left along a demand curve. 
C)  a rightward shift of a demand curve. 
D)  a leftward shift of a demand curve.

Question 10

A decrease in the number of sellers in the market causes

Accepted Answer

A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve. 
A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve.

Question 11

At the equilibrium price,buyers have bought all they want to buy,but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 12

Table 4-7
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-7.Suppose x = 1.Then the slope of the market demand curve is

Accepted Answer

A)  -3. 
B)  -1/3. 
C)  1/3. 
D)  3. 
A)  -3. 
B)  -1/3. 
C)  1/3. 
D)  3.

Question 13

If the price of a good is low,

Accepted Answer

A)  firms would increase profit by increasing output. 
B)  the quantity supplied of the good could be zero. 
C)  the supply curve for the good will shift to the left. 
D)  firms can and should raise the price of the product. 
A)  firms would increase profit by increasing output. 
B)  the quantity supplied of the good could be zero. 
C)  the supply curve for the good will shift to the left. 
D)  firms can and should raise the price of the product.

Question 14

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.

Question 15

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 16

A decrease in quantity demanded

Accepted Answer

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

Question 17

The term price takers refers to buyers and sellers in

Accepted Answer

A)  perfectly competitive markets. 
B)  monopolistic markets. 
C)  markets that are regulated by the government. 
D)  markets in which buyers cannot buy all they want and/or sellers cannot sell all they want. 
A)  perfectly competitive markets. 
B)  monopolistic markets. 
C)  markets that are regulated by the government. 
D)  markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.

Question 18

Whenever a determinant of demand other than price changes,the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 19

Figure 4-2  
-Refer to Figure 4-2.The movement from point A to point B on the graph shows

Accepted Answer

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

Question 20

Figure 4-5
Firm A Firm B    
-Refer to Figure 4-5.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

When the market price is above the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

Figure 4-4 Panel (a)Panel (b) -Refer to Figure 4-4.The graphs show the demand for cigarettes.In Panel (b),the arrows are consistent with which of the following events?

New oak tables are normal goods.What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

In any economic system,scarce resources have to be allocated among competing uses.Market economies harness the forces of

Figure 4-11 -Refer to Figure 4-11.At a price of $12,which of the following is correct?

Figure 4-7 -Refer to Figure 4-7.The movement from S to S' could be caused by

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next 6 months.As a result,we can expect the supply of lumber to

Figure 4-8 -Refer to Figure 4-8.At the equilibrium price,

An increase in demand is represented by

A decrease in the number of sellers in the market causes

At the equilibrium price,buyers have bought all they want to buy,but sellers have not sold all they want to sell.

Table 4-7 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-7.Suppose x = 1.Then the slope of the market demand curve is

If the price of a good is low,

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

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

A decrease in quantity demanded

The term price takers refers to buyers and sellers in

Whenever a determinant of demand other than price changes,the demand curve shifts.

Figure 4-2 -Refer to Figure 4-2.The movement from point A to point B on the graph shows

Figure 4-5 Firm A Firm B -Refer to Figure 4-5.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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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 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 Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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