Question 1

When it comes to people's tastes,economists generally believe that

Accepted Answer

A)  tastes are based on forces that are well within the realm of economics. 
B)  tastes are based on historical and psychological forces that are beyond the realm of economics. 
C)  tastes can only be studied through well-constructed,real-life models. 
D)  since tastes do not directly affect demand,there is little need to explain people's tastes. 
A)  tastes are based on forces that are well within the realm of economics. 
B)  tastes are based on historical and psychological forces that are beyond the realm of economics. 
C)  tastes can only be studied through well-constructed,real-life models. 
D)  since tastes do not directly affect demand,there is little need to explain people's tastes.

Question 2

Holding the nonprice determinants of supply constant,a change in price would

Accepted Answer

A)  result in either a decrease in supply or an increase in supply. 
B)  result in a movement along a stationary supply curve. 
C)  result in a shift of demand. 
D)  have no effect on the quantity supplied. 
A)  result in either a decrease in supply or an increase in supply. 
B)  result in a movement along a stationary supply curve. 
C)  result in a shift of demand. 
D)  have no effect on the quantity supplied.

Question 3

A competitive market is one in which

Accepted Answer

A)  there is only one seller,but there are many buyers. 
B)  there are many sellers and each seller has the ability to set the price of his product. 
C)  there are many sellers and they compete with one another in such a way that some sellers are always being forced out of the market. 
D)  there are so many buyers and so many sellers that each has a negligible impact on the price of the product. 
A)  there is only one seller,but there are many buyers. 
B)  there are many sellers and each seller has the ability to set the price of his product. 
C)  there are many sellers and they compete with one another in such a way that some sellers are always being forced out of the market. 
D)  there are so many buyers and so many sellers that each has a negligible impact on the price of the product.

Question 4

If suppliers expect the price of their product to fall in the future,then they will

Accepted Answer

A)  decrease supply now. 
B)  increase supply now. 
C)  decrease supply in the future but not now. 
D)  increase supply in the future but not now. 
A)  decrease supply now. 
B)  increase supply now. 
C)  decrease supply in the future but not now. 
D)  increase supply in the future but not now.

Question 5

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When leather became more expensive,belt producers decreased their supply of belts. 
B)  When car production technology improved,car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future,they decreased their current supply of sweaters. 
D)  When ketchup prices rose,ketchup sellers increased their quantity supplied of ketchup. 
A)  When leather became more expensive,belt producers decreased their supply of belts. 
B)  When car production technology improved,car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future,they decreased their current supply of sweaters. 
D)  When ketchup prices rose,ketchup sellers increased their quantity supplied of ketchup.

Question 6

In a perfectly competitive market,the goods offered for sale are all exactly the same.

Accepted Answer

A) True 
 B)False

Question 7

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

Accepted Answer

A)  price-quantity schedule. 
B)  buyer schedule. 
C)  demand schedule. 
D)  demand curve. 
A)  price-quantity schedule. 
B)  buyer schedule. 
C)  demand schedule. 
D)  demand curve.

Question 8

A decrease in supply shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 9

Local cable TV companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Question 10

If there is an improvement in the technology used to produce a good,then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 11

Suppose roses are currently selling for $40 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease. 
A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease.

Question 12

Soup is an inferior good if

Accepted Answer

A)  the demand for soup falls when the price of a substitute for soup rises. 
B)  the demand for soup rises when the price of soup falls. 
C)  the demand curve for soup slopes upward. 
D)  the demand for soup falls when income rises. 
A)  the demand for soup falls when the price of a substitute for soup rises. 
B)  the demand for soup rises when the price of soup falls. 
C)  the demand curve for soup slopes upward. 
D)  the demand for soup falls when income rises.

Question 13

For the general population,a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)  1 percent reduction in the quantity demanded of cigarettes. 
B)  4 percent reduction in the quantity demanded of cigarettes. 
C)  10 percent reduction in the quantity demanded of cigarettes. 
D)  12 percent reduction in the quantity demanded of cigarettes. 
A)  1 percent reduction in the quantity demanded of cigarettes. 
B)  4 percent reduction in the quantity demanded of cigarettes. 
C)  10 percent reduction in the quantity demanded of cigarettes. 
D)  12 percent reduction in the quantity demanded of cigarettes.

Question 14

A competitive market is a market in which

Accepted Answer

A)  an auctioneer helps set prices and arrange sales. 
B)  there are only a few sellers. 
C)  the forces of supply and demand do not apply. 
D)  no individual buyer or seller has any significant impact on the market price. 
A)  an auctioneer helps set prices and arrange sales. 
B)  there are only a few sellers. 
C)  the forces of supply and demand do not apply. 
D)  no individual buyer or seller has any significant impact on the market price.

Question 15

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Accepted Answer

A)  decide which direction to shift the curve. 
B)  decide whether the fires affected demand or supply. 
C)  graph the shift to see the effect on equilibrium. 
D)  None of the above are correct. 
A)  decide which direction to shift the curve. 
B)  decide whether the fires affected demand or supply. 
C)  graph the shift to see the effect on equilibrium. 
D)  None of the above are correct.

Question 16

Figure 4-3  
-Refer to Figure 4-3.The movement from D' to D could be caused by

Accepted Answer

A)  a decrease in price. 
B)  a decrease in income,assuming the good is inferior. 
C)  buyers expecting the price of the good to fall in the near future. 
D)  an increase in the price of a complement. 
A)  a decrease in price. 
B)  a decrease in income,assuming the good is inferior. 
C)  buyers expecting the price of the good to fall in the near future. 
D)  an increase in the price of a complement.

Question 17

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

Accepted Answer

A)  total supply. 
B)  market supply. 
C)  aggregate supply. 
D)  total output. 
A)  total supply. 
B)  market supply. 
C)  aggregate supply. 
D)  total output.

Question 18

Which of these statements does not apply to market economies?

Accepted Answer

A)  Prices prevent decentralized decision making from degenerating into chaos. 
B)  Prices coordinate the actions of millions of people with varying abilities and desires. 
C)  Prices ensure that anyone who wants a product can get it. 
D)  Prices ensure that what needs to get done does in fact get done. 
A)  Prices prevent decentralized decision making from degenerating into chaos. 
B)  Prices coordinate the actions of millions of people with varying abilities and desires. 
C)  Prices ensure that anyone who wants a product can get it. 
D)  Prices ensure that what needs to get done does in fact get done.

Question 19

Which of the following would cause price to decrease?

Accepted Answer

A)  a decrease in supply 
B)  an increase in demand 
C)  a surplus of the good 
D)  a shortage of the good 
A)  a decrease in supply 
B)  an increase in demand 
C)  a surplus of the good 
D)  a shortage of the good

Question 20

Figure 4-8  
-Refer to Figure 4-8.At what price would there be an excess supply of 200 units of the good?

Accepted Answer

A)  $15 
B)  $20 
C)  $30 
D)  $35 
A)  $15 
B)  $20 
C)  $30 
D)  $35

Exam 4: The Market Forces of Supply and Demand

When it comes to people's tastes,economists generally believe that

Holding the nonprice determinants of supply constant,a change in price would

A competitive market is one in which

If suppliers expect the price of their product to fall in the future,then they will

Which of the following demonstrates the law of supply?

In a perfectly competitive market,the goods offered for sale are all exactly the same.

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

A decrease in supply shifts the supply curve to the left.

Local cable TV companies frequently are monopolists.

If there is an improvement in the technology used to produce a good,then the supply curve for that good will shift to the left.

Suppose roses are currently selling for $40 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

Soup is an inferior good if

For the general population,a 10 percent increase in the price of cigarettes leads to a

A competitive market is a market in which

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Figure 4-3 -Refer to Figure 4-3.The movement from D' to D could be caused by

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

Which of these statements does not apply to market economies?

Which of the following would cause price to decrease?

Figure 4-8 -Refer to Figure 4-8.At what price would there be an excess supply of 200 units of the good?

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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