Question 1

The equilibrium price is the same as the market-clearing price.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)  Different sellers sell identical products. 
B)  There are many sellers. 
C)  Sellers must accept the price the market determines. 
D)  All of the above are characteristics of a perfectly competitive market. 
A)  Different sellers sell identical products. 
B)  There are many sellers. 
C)  Sellers must accept the price the market determines. 
D)  All of the above are characteristics of a perfectly competitive market.

Question 3

A market supply curve is determined by

Accepted Answer

A)  vertically summing individual supply curves. 
B)  horizontally summing individual supply curves. 
C)  finding the average quantity supplied by sellers at each possible price. 
D)  finding the average price at which sellers are willing and able to sell a particular quantity of the good. 
A)  vertically summing individual supply curves. 
B)  horizontally summing individual supply curves. 
C)  finding the average quantity supplied by sellers at each possible price. 
D)  finding the average price at which sellers are willing and able to sell a particular quantity of the good.

Question 4

Supply and demand together determine the price and quantity of a good sold in a market.

Accepted Answer

A) True 
 B)False

Question 5

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)  a shortage will exist. 
B)  buyers desire to purchase more than is produced. 
C)  sellers desire to produce and sell more than buyers wish to purchase. 
D)  quantity demanded exceeds quantity supplied. 
A)  a shortage will exist. 
B)  buyers desire to purchase more than is produced. 
C)  sellers desire to produce and sell more than buyers wish to purchase. 
D)  quantity demanded exceeds quantity supplied.

Question 6

All market participants are price takers that have no influence over prices in markets that feature

Accepted Answer

A)  only a few buyers and a few sellers. 
B)  numerous sellers but only a few buyers. 
C)  numerous buyers but only a few sellers. 
D)  numerous buyers and numerous sellers. 
A)  only a few buyers and a few sellers. 
B)  numerous sellers but only a few buyers. 
C)  numerous buyers but only a few sellers. 
D)  numerous buyers and numerous sellers.

Question 7

Figure 4-13
The diagram below pertains to the supply of paper in university markets.  
-Refer to Figure 4-13.All else equal,the return of college students to campus in the fall 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 8

Table 4-7
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-7.Regarding Charlie and Maxine,for whom are sandwiches a normal good?

Accepted Answer

A)  only for Charlie 
B)  only for Maxine 
C)  for Charlie and for Maxine 
D)  This cannot be determined from the given information. 
A)  only for Charlie 
B)  only for Maxine 
C)  for Charlie and for Maxine 
D)  This cannot be determined from the given information.

Question 9

A university's football stadium is never more than half-full during football games.This indicates

Accepted Answer

A)  the ticket price is above the equilibrium price. 
B)  the ticket price is below the equilibrium price. 
C)  the ticket price is at the equilibrium price. 
D)  nothing about the equilibrium price. 
A)  the ticket price is above the equilibrium price. 
B)  the ticket price is below the equilibrium price. 
C)  the ticket price is at the equilibrium price. 
D)  nothing about the equilibrium price.

Question 10

If something happens to alter the quantity demanded at any given price,then

Accepted Answer

A)  the demand curve becomes steeper. 
B)  the demand curve becomes flatter. 
C)  the demand curve shifts. 
D)  we move along the demand curve. 
A)  the demand curve becomes steeper. 
B)  the demand curve becomes flatter. 
C)  the demand curve shifts. 
D)  we move along the demand curve.

Question 11

What will happen in the rice market now if sellers expect higher rice prices in the near future?

Accepted Answer

A)  The supply of rice will increase. 
B)  The supply of rice will decrease. 
C)  The supply of rice will be unaffected. 
D)  The demand for rice will decrease. 
A)  The supply of rice will increase. 
B)  The supply of rice will decrease. 
C)  The supply of rice will be unaffected. 
D)  The demand for rice will decrease.

Question 12

Figure 4-3  
-Refer to Figure 4-3.If the demand curve shifts from D to D',then

Accepted Answer

A)  firms would be willing to supply less of the good than before at each possible price. 
B)  people are willing to buy less of the good than before at each possible price. 
C)  people's incomes evidently have decreased. 
D)  the price of the product has increased,causing consumers to buy less of the product. 
A)  firms would be willing to supply less of the good than before at each possible price. 
B)  people are willing to buy less of the good than before at each possible price. 
C)  people's incomes evidently have decreased. 
D)  the price of the product has increased,causing consumers to buy less of the product.

Question 13

Which of the following sets of events would most likely cause an increase in the price of a new house?

Accepted Answer

A)  higher wages for carpenters,higher wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher house prices in the future 
B)  lower wages for carpenters,lower wood prices,increases in consumer incomes,higher apartment rents,increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters,higher wood prices,decreases in consumer incomes,higher apartment rents,decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters,lower wood prices,decreases in consumer incomes,lower apartment rents,decreases in population and expectations of lower house prices in the future 
A)  higher wages for carpenters,higher wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher house prices in the future 
B)  lower wages for carpenters,lower wood prices,increases in consumer incomes,higher apartment rents,increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters,higher wood prices,decreases in consumer incomes,higher apartment rents,decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters,lower wood prices,decreases in consumer incomes,lower apartment rents,decreases in population and expectations of lower house prices in the future

Question 14

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 only 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 15

A likely example of substitute goods for most people would be

Accepted Answer

A)  peanut butter and jelly. 
B)  tennis balls and tennis rackets. 
C)  televisions and subscriptions to cable television services. 
D)  pencils and pens. 
A)  peanut butter and jelly. 
B)  tennis balls and tennis rackets. 
C)  televisions and subscriptions to cable television services. 
D)  pencils and pens.

Question 16

A movement along the demand curve might be caused by a change in

Accepted Answer

A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded. 
A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded.

Question 17

When quantity supplied increases at every possible price,we know that the supply curve has

Accepted Answer

A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted;rather,we have moved along the supply curve to a new point on the same curve. 
D)  not shifted;rather,the supply curve has become flatter. 
A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted;rather,we have moved along the supply curve to a new point on the same curve. 
D)  not shifted;rather,the supply curve has become flatter.

Question 18

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Accepted Answer

A)  Price will fall and the effect on quantity is ambiguous. 
B)  Price will rise and the effect on quantity is ambiguous. 
C)  Quantity will fall and the effect on price is ambiguous. 
D)  Quantity will rise and the effect on price is ambiguous. 
A)  Price will fall and the effect on quantity is ambiguous. 
B)  Price will rise and the effect on quantity is ambiguous. 
C)  Quantity will fall and the effect on price is ambiguous. 
D)  Quantity will rise and the effect on price is ambiguous.

Question 19

The law of supply states that,other things equal,

Accepted Answer

A)  when the price of a good falls,the supply of the good rises. 
B)  when the price of a good rises,the quantity supplied of the good rises. 
C)  when the price of a good rises,the supply of the good falls. 
D)  when the price of a good falls,the quantity supplied of the good rises. 
A)  when the price of a good falls,the supply of the good rises. 
B)  when the price of a good rises,the quantity supplied of the good rises. 
C)  when the price of a good rises,the supply of the good falls. 
D)  when the price of a good falls,the quantity supplied of the good rises.

Question 20

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good rises,and when the price falls,the quantity demanded falls.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

The equilibrium price is the same as the market-clearing price.

Which of the following is not a characteristic of a perfectly competitive market?

A market supply curve is determined by

Supply and demand together determine the price and quantity of a good sold in a market.

When the price of a good is higher than the equilibrium price,

All market participants are price takers that have no influence over prices in markets that feature

Figure 4-13 The diagram below pertains to the supply of paper in university markets. -Refer to Figure 4-13.All else equal,the return of college students to campus in the fall would cause a move

Table 4-7 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-7.Regarding Charlie and Maxine,for whom are sandwiches a normal good?

A university's football stadium is never more than half-full during football games.This indicates

If something happens to alter the quantity demanded at any given price,then

What will happen in the rice market now if sellers expect higher rice prices in the near future?

Figure 4-3 -Refer to Figure 4-3.If the demand curve shifts from D to D',then

Which of the following sets of events would most likely cause an increase in the price of a new house?

A likely example of substitute goods for most people would be

A movement along the demand curve might be caused by a change in

When quantity supplied increases at every possible price,we know that the supply curve has

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

The law of supply states that,other things equal,

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good rises,and when the price falls,the quantity demanded falls.

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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