Question 1

An example of a perfectly competitive market would be the

Accepted Answer

A)  cable TV market. 
B)  soybean market. 
C)  breakfast cereal market. 
D)  shampoo market. 
A)  cable TV market. 
B)  soybean market. 
C)  breakfast cereal market. 
D)  shampoo market.

Question 2

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

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

Question 3

Figure 4-13
The diagram below pertains to the supply of paper in university markets.  
-Refer to Figure 4-13.All else equal,an increase in the use of laptop computers for note-taking 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 4

Who gets scarce resources in a market economy?

Accepted Answer

A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price 
A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price

Question 5

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

A)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 6

Warrensburg is a small college town in Missouri.At the end of August each year,the market demand for fast food in Warrensburg

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant,but we observe a movement downward and to the right along the demand curve. 
D)  remains constant,but we observe a movement upward and to the left along the demand curve. 
A)  increases. 
B)  decreases. 
C)  remains constant,but we observe a movement downward and to the right along the demand curve. 
D)  remains constant,but we observe a movement upward and to the left along the demand curve.

Question 7

A movement upward and to the left along a demand curve is called

Accepted Answer

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

Question 8

The sum of all the individual demand curves for a product is called

Accepted Answer

A)  total demand. 
B)  consumer demand. 
C)  aggregate demand. 
D)  market demand. 
A)  total demand. 
B)  consumer demand. 
C)  aggregate demand. 
D)  market demand.

Question 9

Figure 4-6  
-Refer to Figure 4-6.The movement from point A to point B on the graph represents

Accepted Answer

A)  an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B)  an increase in the number of suppliers. 
C)  a decrease in the price of a relevant input. 
D)  an increase in the price of the good that is being supplied and suppliers' response to that price change. 
A)  an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B)  an increase in the number of suppliers. 
C)  a decrease in the price of a relevant input. 
D)  an increase in the price of the good that is being supplied and suppliers' response to that price change.

Question 10

Suppose that when income rises,the demand curve for computers shifts to the right.In this case,we know computers are

Accepted Answer

A)  inferior goods. 
B)  normal goods. 
C)  perfectly competitive goods. 
D)  durable goods. 
A)  inferior goods. 
B)  normal goods. 
C)  perfectly competitive goods. 
D)  durable goods.

Question 11

Which of the following events could shift the demand curve for gasoline to the left?

Accepted Answer

A)  The income of gasoline buyers rises,and gasoline is a normal good. 
B)  The income of gasoline buyers falls,and gasoline is an inferior good. 
C)  Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars. 
D)  The price of gasoline rises. 
A)  The income of gasoline buyers rises,and gasoline is a normal good. 
B)  The income of gasoline buyers falls,and gasoline is an inferior good. 
C)  Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars. 
D)  The price of gasoline rises.

Question 12

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 13

If the demand for a good falls when income falls,then the good is called an inferior good.

Accepted Answer

A) True 
 B)False

Question 14

If goods A and B are complements,then an increase in the price of good A will result in

Accepted Answer

A)  more of good A being sold. 
B)  more of good B being sold. 
C)  less of good B being sold. 
D)  no difference in the quantity sold of either good. 
A)  more of good A being sold. 
B)  more of good B being sold. 
C)  less of good B being sold. 
D)  no difference in the quantity sold of either good.

Question 15

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

Accepted Answer

A)  a decrease in demand and a decrease in quantity supplied 
B)  a decrease in demand and a decrease in supply 
C)  a decrease in quantity demanded and a decrease in quantity supplied 
D)  a decrease in quantity demanded and a decrease in supply 
A)  a decrease in demand and a decrease in quantity supplied 
B)  a decrease in demand and a decrease in supply 
C)  a decrease in quantity demanded and a decrease in quantity supplied 
D)  a decrease in quantity demanded and a decrease in supply

Question 16

Which of the following events would definitely result in a higher price in the market for Snickers?

Accepted Answer

A)  Demand for Snickers increases and supply of Snickers decreases. 
B)  Demand for Snickers and supply of Snickers both decrease. 
C)  Demand for Snickers decreases and supply of Snickers increases. 
D)  Demand for Snickers and supply of Snickers both increase 
A)  Demand for Snickers increases and supply of Snickers decreases. 
B)  Demand for Snickers and supply of Snickers both decrease. 
C)  Demand for Snickers decreases and supply of Snickers increases. 
D)  Demand for Snickers and supply of Snickers both increase

Question 17

Suppose Spencer and Kate are the only two demanders of lemonade.Each month,Spencer buys six glasses of lemonade when the price is $1.00 per glass,and he buys four glasses when the price is $1.50 per glass.Each month,Kate buys four glasses of lemonade when the price is $1.00 per glass,and she buys two glasses when the price is $1.50 per glass.Which of the following points is on the market demand curve?

Accepted Answer

A)  (quantity demanded = 2,price = $1.50) 
B)  (quantity demanded = 4,price = $2.50) 
C)  (quantity demanded = 10,price = $1.00) 
D)  (quantity demanded = 16,price = $2.50) 
A)  (quantity demanded = 2,price = $1.50) 
B)  (quantity demanded = 4,price = $2.50) 
C)  (quantity demanded = 10,price = $1.00) 
D)  (quantity demanded = 16,price = $2.50)

Question 18

Figure 4-14
Panel (a)Panel (b)     Panel (c)Panel (d)    
-Refer to Figure 4-14.Which of the four panels illustrates a decrease in quantity supplied?

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 19

Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Accepted Answer

A)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 20

You wear either shorts or sweatpants every day.You notice that sweatpants have gone on sale,so your demand for

Accepted Answer

A)  sweatpants will increase. 
B)  sweatpants will decrease. 
C)  shorts will increase. 
D)  shorts will decrease. 
A)  sweatpants will increase. 
B)  sweatpants will decrease. 
C)  shorts will increase. 
D)  shorts will decrease.

Exam 4: The Market Forces of Supply and Demand

An example of a perfectly competitive market would be the

Two goods are substitutes when a decrease in the price of one good

Figure 4-13 The diagram below pertains to the supply of paper in university markets. -Refer to Figure 4-13.All else equal,an increase in the use of laptop computers for note-taking would cause a move

Who gets scarce resources in a market economy?

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Warrensburg is a small college town in Missouri.At the end of August each year,the market demand for fast food in Warrensburg

A movement upward and to the left along a demand curve is called

The sum of all the individual demand curves for a product is called

Figure 4-6 -Refer to Figure 4-6.The movement from point A to point B on the graph represents

Suppose that when income rises,the demand curve for computers shifts to the right.In this case,we know computers are

Which of the following events could shift the demand curve for gasoline to the left?

The dictionary defines equilibrium as a situation in which forces

If the demand for a good falls when income falls,then the good is called an inferior good.

If goods A and B are complements,then an increase in the price of good A will result in

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

Which of the following events would definitely result in a higher price in the market for Snickers?

Figure 4-14 Panel (a)Panel (b) Panel (c)Panel (d) -Refer to Figure 4-14.Which of the four panels illustrates a decrease in quantity supplied?

Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

You wear either shorts or sweatpants every day.You notice that sweatpants have gone on sale,so your demand for

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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