Question 1

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 2

The demand curve for textbooks shifts

Accepted Answer

A)  when a determinant of the demand for textbooks other than income changes. 
B)  when a determinant of the demand for textbooks other than the price of textbooks changes. 
C)  when any determinant of the demand for textbooks changes. 
D)  only when the number of textbook-buyers changes. 
A)  when a determinant of the demand for textbooks other than income changes. 
B)  when a determinant of the demand for textbooks other than the price of textbooks changes. 
C)  when any determinant of the demand for textbooks changes. 
D)  only when the number of textbook-buyers changes.

Question 3

Figure 4-10  
-Refer to Figure 4-10.If price is $25,then quantity demanded and quantity supplied,respectively,are

Accepted Answer

A)  500 and 500. 
B)  500 and 800. 
C)  600 and 600. 
D)  800 and 500. 
A)  500 and 500. 
B)  500 and 800. 
C)  600 and 600. 
D)  800 and 500.

Question 4

If there is a shortage of farm laborers,we would expect

Accepted Answer

A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor. 
A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor.

Question 5

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good 
A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good

Question 6

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices. 
A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices.

Question 7

In a market economy,supply and demand determine both the quantity of each good produced and the price at which it is sold.

Accepted Answer

A) True 
 B)False

Question 8

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)  the idea that tobacco and marijuana are substitutes. 
B)  the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C)  the idea that lower cigarette prices are associated with less use of marijuana. 
D)  most of the available evidence. 
A)  the idea that tobacco and marijuana are substitutes. 
B)  the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C)  the idea that lower cigarette prices are associated with less use of marijuana. 
D)  most of the available evidence.

Question 9

Table 4-5
  
-Refer to Table 4-5.If the price were $4,a

Accepted Answer

A)  surplus of 15 units would exist and price would tend to fall. 
B)  shortage of 25 units would exist and price would tend to rise. 
C)  surplus of 25 units would exist and price would tend to fall. 
D)  shortage of 40 units would exist and price would tend to rise. 
A)  surplus of 15 units would exist and price would tend to fall. 
B)  shortage of 25 units would exist and price would tend to rise. 
C)  surplus of 25 units would exist and price would tend to fall. 
D)  shortage of 40 units would exist and price would tend to rise.

Question 10

Equilibrium quantity will unambiguously decrease when

Accepted Answer

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

Question 11

In a competitive market,there are so few buyers and so few sellers that each has a significant impact on the market price.

Accepted Answer

A) True 
 B)False

Question 12

Suppose you make jewelry.If the price of gold falls,then we would expect you to

Accepted Answer

A)  be willing and able to produce less jewelry than before at each possible price. 
B)  be willing and able to produce more jewelry than before at each possible price. 
C)  face a greater demand for your jewelry. 
D)  face a weaker demand for your jewelry. 
A)  be willing and able to produce less jewelry than before at each possible price. 
B)  be willing and able to produce more jewelry than before at each possible price. 
C)  face a greater demand for your jewelry. 
D)  face a weaker demand for your jewelry.

Question 13

Figure 4-13
The diagram below pertains to the supply of paper in university markets.  
-Refer to Figure 4-13.All else equal,a major paper company being shut down for tax evasion would cause a move

Accepted Answer

A)  from x to y. 
B)  from y to x. 
C)  from SA to SB. 
D)  from SB to SA. 
A)  from x to y. 
B)  from y to x. 
C)  from SA to SB. 
D)  from SB to SA.

Question 14

A shortage exists in a market if

Accepted Answer

A)  there is an excess supply of the good. 
B)  the situation is such that the law of supply and demand would predict a decrease in the price of the good from its current level. 
C)  the current price is below its equilibrium price. 
D)  quantity supplied exceeds quantity demanded. 
A)  there is an excess supply of the good. 
B)  the situation is such that the law of supply and demand would predict a decrease in the price of the good from its current level. 
C)  the current price is below its equilibrium price. 
D)  quantity supplied exceeds quantity demanded.

Question 15

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 16

Figure 4-14
Panel (a)Panel (b)     Panel (c)Panel (d)    
-Refer to Figure 4-14.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 17

The supply of a good or service is determined by

Accepted Answer

A)  those who buy the good or service. 
B)  the government. 
C)  those who sell the good or service. 
D)  both those who buy and those who sell the good or service. 
A)  those who buy the good or service. 
B)  the government. 
C)  those who sell the good or service. 
D)  both those who buy and those who sell the good or service.

Question 18

In a given market,how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)  There is no relationship. 
B)  They are the same price. 
C)  The market-clearing price exceeds the equilibrium price. 
D)  The equilibrium price exceeds the market-clearing price. 
A)  There is no relationship. 
B)  They are the same price. 
C)  The market-clearing price exceeds the equilibrium price. 
D)  The equilibrium price exceeds the market-clearing price.

Question 19

The supply curve for a good is

Accepted Answer

A)  a line that relates profit and quantity supplied. 
B)  a line that relates input prices and quantity supplied. 
C)  a line that relates price and quantity supplied. 
D)  a line that relates price and profit. 
A)  a line that relates profit and quantity supplied. 
B)  a line that relates input prices and quantity supplied. 
C)  a line that relates price and quantity supplied. 
D)  a line that relates price and profit.

Question 20

A surplus exists in a market if

Accepted Answer

A)  there is an excess demand for the good. 
B)  the situation is such that the law of supply and demand would predict an increase in the price of the good from its current level. 
C)  the current price is above its equilibrium price. 
D)  quantity demanded exceeds quantity supplied. 
A)  there is an excess demand for the good. 
B)  the situation is such that the law of supply and demand would predict an increase in the price of the good from its current level. 
C)  the current price is above its equilibrium price. 
D)  quantity demanded exceeds quantity supplied.

Exam 4: The Market Forces of Supply and Demand

When the price of a good or service changes,

The demand curve for textbooks shifts

Figure 4-10 -Refer to Figure 4-10.If price is $25,then quantity demanded and quantity supplied,respectively,are

If there is a shortage of farm laborers,we would expect

Which of the following is not a determinant of the demand for a particular good?

The signals that guide the allocation of resources in a market economy are

In a market economy,supply and demand determine both the quantity of each good produced and the price at which it is sold.

The belief that tobacco is a "gateway drug" is consistent with

Table 4-5 -Refer to Table 4-5.If the price were $4,a

Equilibrium quantity will unambiguously decrease when

In a competitive market,there are so few buyers and so few sellers that each has a significant impact on the market price.

Suppose you make jewelry.If the price of gold falls,then we would expect you to

Figure 4-13 The diagram below pertains to the supply of paper in university markets. -Refer to Figure 4-13.All else equal,a major paper company being shut down for tax evasion would cause a move

A shortage exists in a market if

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

Figure 4-14 Panel (a)Panel (b) Panel (c)Panel (d) -Refer to Figure 4-14.Panel (a)shows which of the following?

The supply of a good or service is determined by

In a given market,how are the equilibrium price and the market-clearing price related?

The supply curve for a good is

A surplus exists in a market if

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

Filters