Question 1

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A)  an increase in the price of wool shirts and a decrease in the price of raw cotton 
B)  a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C)  an increase in the price of wool shirts and an increase in the price of raw cotton 
D)  a decrease in the price of wool shirts and an increase in the price of raw cotton 
A)  an increase in the price of wool shirts and a decrease in the price of raw cotton 
B)  a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C)  an increase in the price of wool shirts and an increase in the price of raw cotton 
D)  a decrease in the price of wool shirts and an increase in the price of raw cotton

Question 2

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)  an increase in the price of mp3 players 
B)  a decrease in the number of sellers of mp3 players 
C)  an increase in the price of plastic,an input into the production of mp3 players 
D)  an improvement in the technology used to produce mp3 players 
A)  an increase in the price of mp3 players 
B)  a decrease in the number of sellers of mp3 players 
C)  an increase in the price of plastic,an input into the production of mp3 players 
D)  an improvement in the technology used to produce mp3 players

Question 3

When we move along a given demand curve,

Accepted Answer

A)  only price is held constant. 
B)  income and price are held constant. 
C)  all nonprice determinants of demand are held constant. 
D)  all determinants of quantity demanded are held constant. 
A)  only price is held constant. 
B)  income and price are held constant. 
C)  all nonprice determinants of demand are held constant. 
D)  all determinants of quantity demanded are held constant.

Question 4

Figure 4-12
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-12.All else equal,a decrease in the price of the grain fed to turkeys would cause a move

Accepted Answer

A)  from DA to DB. 
B)  from DB to DA. 
C)  from x to y. 
D)  from y to x. 
A)  from DA to DB. 
B)  from DB to DA. 
C)  from x to y. 
D)  from y to x.

Question 5

The line that relates the price of a good and the quantity demanded of that good is called the

Accepted Answer

A)  demand schedule,and it usually slopes upward. 
B)  demand schedule,and it usually slopes downward. 
C)  demand curve,and it usually slopes upward. 
D)  demand curve,and it usually slopes downward. 
A)  demand schedule,and it usually slopes upward. 
B)  demand schedule,and it usually slopes downward. 
C)  demand curve,and it usually slopes upward. 
D)  demand curve,and it usually slopes downward.

Question 6

If a good is normal,then an increase in income will result in

Accepted Answer

A)  an increase in the demand for the good. 
B)  a decrease in the demand for the good. 
C)  a movement down and to the right along the demand curve for the good. 
D)  a movement up and to the left along the demand curve for the good. 
A)  an increase in the demand for the good. 
B)  a decrease in the demand for the good. 
C)  a movement down and to the right along the demand curve for the good. 
D)  a movement up and to the left along the demand curve for the good.

Question 7

A newspaper's classified ads are an example of a market.

Accepted Answer

A) True 
 B)False

Question 8

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 9

The market demand curve

Accepted Answer

A)  is found by vertically adding the individual demand curves. 
B)  slopes upward. 
C)  represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D)  represents the sum of the quantities demanded by all the buyers at each price of the good. 
A)  is found by vertically adding the individual demand curves. 
B)  slopes upward. 
C)  represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D)  represents the sum of the quantities demanded by all the buyers at each price of the good.

Question 10

In a market economy,

Accepted Answer

A)  supply determines demand and demand,in turn,determines prices. 
B)  demand determines supply and supply,in turn,determines prices. 
C)  the allocation of scarce resources determines prices and prices,in turn,determine supply and demand. 
D)  supply and demand determine prices and prices,in turn,allocate the economy's scarce resources. 
A)  supply determines demand and demand,in turn,determines prices. 
B)  demand determines supply and supply,in turn,determines prices. 
C)  the allocation of scarce resources determines prices and prices,in turn,determine supply and demand. 
D)  supply and demand determine prices and prices,in turn,allocate the economy's scarce resources.

Question 11

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December,and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Accepted Answer

A)  a substitute good. 
B)  a normal good. 
C)  an inferior good. 
D)  a complementary good. 
A)  a substitute good. 
B)  a normal good. 
C)  an inferior good. 
D)  a complementary good.

Question 12

Which of the following is not a reason perfect competition is a useful simplification,despite the diversity of market types we find in the world?

Accepted Answer

A)  Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions. 
B)  Some degree of competition is present in most markets. 
C)  There are many buyers and many sellers in all types of markets. 
D)  Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well. 
A)  Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions. 
B)  Some degree of competition is present in most markets. 
C)  There are many buyers and many sellers in all types of markets. 
D)  Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.

Question 13

Funsters,Inc. ,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor,Toysorama,is mass-producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

Accepted Answer

A)  "fight fire with fire" by decreasing supply of its doll for 6 weeks and then increasing the supply. 
B)  increase the supply of their doll now before the other doll hits the market. 
C)  increase the price of their doll now. 
D)  discontinue their doll. 
A)  "fight fire with fire" by decreasing supply of its doll for 6 weeks and then increasing the supply. 
B)  increase the supply of their doll now before the other doll hits the market. 
C)  increase the price of their doll now. 
D)  discontinue their doll.

Question 14

Suppose that a decrease in the price of good X results in fewer units of good Y being sold.This implies that X and Y are

Accepted Answer

A)  complementary goods. 
B)  normal goods. 
C)  inferior goods. 
D)  substitute goods. 
A)  complementary goods. 
B)  normal goods. 
C)  inferior goods. 
D)  substitute goods.

Question 15

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Accepted Answer

A)  the dress manufacturer to supply more dresses now than it was supplying previously. 
B)  the dress manufacturer to supply fewer dresses now than it was supplying previously. 
C)  the demand for this manufacturer's dresses to fall. 
D)  no change in the dress manufacturer's current supply;instead,future supply will be affected. 
A)  the dress manufacturer to supply more dresses now than it was supplying previously. 
B)  the dress manufacturer to supply fewer dresses now than it was supplying previously. 
C)  the demand for this manufacturer's dresses to fall. 
D)  no change in the dress manufacturer's current supply;instead,future supply will be affected.

Question 16

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Accepted Answer

A)  Beef producers,concerned about the health of their customers,decided to produce relatively less beef. 
B)  Government officials,concerned about consumer health,ordered beef producers to produce relatively less beef. 
C)  Individual consumers,concerned about their own health,decreased their demand for beef,which lowered the equilibrium price of beef,making it less attractive to produce. 
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace. 
A)  Beef producers,concerned about the health of their customers,decided to produce relatively less beef. 
B)  Government officials,concerned about consumer health,ordered beef producers to produce relatively less beef. 
C)  Individual consumers,concerned about their own health,decreased their demand for beef,which lowered the equilibrium price of beef,making it less attractive to produce. 
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.

Question 17

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Question 18

Once the supply curve for a product or service is drawn,it

Accepted Answer

A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve,but the curve will not shift. 
D)  tends to become steeper over time. 
A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve,but the curve will not shift. 
D)  tends to become steeper over time.

Question 19

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 20

A higher price for bagels would result in a(n)

Accepted Answer

A)  increase in the demand for bagels. 
B)  decrease in the demand for bagels. 
C)  increase in the demand for muffins. 
D)  decrease in the demand for muffins. 
A)  increase in the demand for bagels. 
B)  decrease in the demand for bagels. 
C)  increase in the demand for muffins. 
D)  decrease in the demand for muffins.

Exam 4: The Market Forces of Supply and Demand

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Which of the following would not shift the supply curve for mp3 players?

When we move along a given demand curve,

Figure 4-12 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-12.All else equal,a decrease in the price of the grain fed to turkeys would cause a move

The line that relates the price of a good and the quantity demanded of that good is called the

If a good is normal,then an increase in income will result in

A newspaper's classified ads are an example of a market.

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

The market demand curve

In a market economy,

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December,and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Which of the following is not a reason perfect competition is a useful simplification,despite the diversity of market types we find in the world?

Funsters,Inc. ,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor,Toysorama,is mass-producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

Suppose that a decrease in the price of good X results in fewer units of good Y being sold.This implies that X and Y are

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

A yard sale is an example of a market.

Once the supply curve for a product or service is drawn,it

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

A higher price for bagels would result in a(n)

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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