Question 1

If a shortage exists in a market,then we know that the actual price is

Accepted Answer

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

Question 2

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)  a bakery in a large city 
B)  a bank in a large city 
C)  a local cable television company 
D)  a small group of corn farmers 
A)  a bakery in a large city 
B)  a bank in a large city 
C)  a local cable television company 
D)  a small group of corn farmers

Question 3

The demand for 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 4

Figure 4-14
Panel (a)Panel (b)     Panel (c)Panel (d)    
-Refer to Figure 4-14.Which of the four panels represents the market for winter coats as we progress from winter to spring?

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 5

The supply curve for coffee

Accepted Answer

A)  shifts when the price of coffee changes because the price of coffee is measured on the vertical axis of the graph. 
B)  shifts when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph. 
C)  does not shift when the price of coffee changes because the price of coffee is measured on the vertical axis of the graph. 
D)  does not shift when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph. 
A)  shifts when the price of coffee changes because the price of coffee is measured on the vertical axis of the graph. 
B)  shifts when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph. 
C)  does not shift when the price of coffee changes because the price of coffee is measured on the vertical axis of the graph. 
D)  does not shift when the price of coffee changes because the quantity supplied of coffee is measured on the horizontal axis of the graph.

Question 6

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Accepted Answer

A)  It would decrease. 
B)  It would increase. 
C)  It would be unaffected. 
D)  There is insufficient information given to answer the question. 
A)  It would decrease. 
B)  It would increase. 
C)  It would be unaffected. 
D)  There is insufficient information given to answer the question.

Question 7

In a perfectly competitive market,at the market price,

Accepted Answer

A)  buyers cannot buy all they want and sellers cannot sell all they want. 
B)  buyers cannot buy all they want,but sellers can sell all they want. 
C)  buyers can buy all they want,but sellers cannot sell all they want. 
D)  buyers can buy all they want and sellers can sell all they want. 
A)  buyers cannot buy all they want and sellers cannot sell all they want. 
B)  buyers cannot buy all they want,but sellers can sell all they want. 
C)  buyers can buy all they want,but sellers cannot sell all they want. 
D)  buyers can buy all they want and sellers can sell all they want.

Question 8

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

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

Question 9

An advance in production technology will

Accepted Answer

A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply. 
A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply.

Question 10

Table 4-7
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-7.Suppose Charlie,Maxine,and Quinn are the only demanders of sandwiches.Also suppose the following:
• x = 2
• the current price of a sandwich is $5.00
• the market quantity supplied of sandwiches is 10
• the law of supply applies to the supply of sandwiches
Then

Accepted Answer

A)  there is a shortage of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
B)  there is a shortage of 5 sandwiches and the price would be expected to fall from its current level of $5.00. 
C)  there is a surplus of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
D)  there is a surplus of 5 sandwiches and the price would be expected to fall from its current level of $5.00. 
A)  there is a shortage of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
B)  there is a shortage of 5 sandwiches and the price would be expected to fall from its current level of $5.00. 
C)  there is a surplus of 5 sandwiches and the price would be expected to rise from its current level of $5.00. 
D)  there is a surplus of 5 sandwiches and the price would be expected to fall from its current level of $5.00.

Question 11

A shortage is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 12

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs.As a result of this information,today's demand curve for Mustangs

Accepted Answer

A)  shifts to the right. 
B)  shifts to the left. 
C)  shifts either to the right or to the left,but we cannot determine the direction of the shift from the given information. 
D)  will not shift;rather,the demand curve for Mustangs will shift to the right next month. 
A)  shifts to the right. 
B)  shifts to the left. 
C)  shifts either to the right or to the left,but we cannot determine the direction of the shift from the given information. 
D)  will not shift;rather,the demand curve for Mustangs will shift to the right next month.

Question 13

For a competitive market,which of the following statements is correct?

Accepted Answer

A)  A seller can always increase her profit by raising the price of her product. 
B)  If a seller charges more than the going price,buyers will go elsewhere to make their purchases. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A single buyer can influence the price of the product,but only when purchasing from several sellers in a short period of time. 
A)  A seller can always increase her profit by raising the price of her product. 
B)  If a seller charges more than the going price,buyers will go elsewhere to make their purchases. 
C)  A seller often charges less than the going price to increase sales and profit. 
D)  A single buyer can influence the price of the product,but only when purchasing from several sellers in a short period of time.

Question 14

If the number of sellers in a market increases,then the

Accepted Answer

A)  demand in that market will increase. 
B)  supply in that market will increase. 
C)  supply in that market will decrease. 
D)  demand in that market will decrease. 
A)  demand in that market will increase. 
B)  supply in that market will increase. 
C)  supply in that market will decrease. 
D)  demand in that market will decrease.

Question 15

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 16

In a competitive market,the price of a product

Accepted Answer

A)  is determined by buyers and the quantity of the product produced is determined by sellers. 
B)  is determined by sellers and the quantity of the product produced is determined by buyers. 
C)  and the quantity of the product produced are both determined by sellers. 
D)  None of the above is correct. 
A)  is determined by buyers and the quantity of the product produced is determined by sellers. 
B)  is determined by sellers and the quantity of the product produced is determined by buyers. 
C)  and the quantity of the product produced are both determined by sellers. 
D)  None of the above is correct.

Question 17

A market's equilibrium is the point at which the supply and demand curves intersect.

Accepted Answer

A) True 
 B)False

Question 18

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 19

Table 4-6
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:
  
-Refer to Table 4-6.If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament,then what will be the equilibrium price?

Accepted Answer

A)  $10 
B)  $15 
C)  $20 
D)  $25 
A)  $10 
B)  $15 
C)  $20 
D)  $25

Question 20

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

If a shortage exists in a market,then we know that the actual price is

Which of the following would most likely serve as an example of a monopoly?

The demand for a good or service is determined by

Figure 4-14 Panel (a)Panel (b) Panel (c)Panel (d) -Refer to Figure 4-14.Which of the four panels represents the market for winter coats as we progress from winter to spring?

The supply curve for coffee

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

In a perfectly competitive market,at the market price,

An increase in the number of college scholarships issued by private foundations would

An advance in production technology will

A shortage is the same as an excess demand.

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs.As a result of this information,today's demand curve for Mustangs

For a competitive market,which of the following statements is correct?

If the number of sellers in a market increases,then the

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

In a competitive market,the price of a product

A market's equilibrium is the point at which the supply and demand curves intersect.

A decrease in the price of a complement will shift the demand curve for a good to the left.

An increase in the price of a substitute good will shift the demand curve for a good to the right.

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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