Question 1

Exhibit 4-4   Refer to Exhibit 4-4.A change from Point A to Point E represents a(n):

Accepted Answer

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

Question 2

A shortage exists in a market if

Accepted Answer

A)  there is an excess supply of the good. 
B)  quantity supplied exceeds quantity demanded. 
C)  the current price is below its equilibrium price. 
D)  All of the above are correct. 
A)  there is an excess supply of the good. 
B)  quantity supplied exceeds quantity demanded. 
C)  the current price is below its equilibrium price. 
D)  All of the above are correct. C

Question 3

If new manufacturers enter the computer industry,then (ceteris paribus):

Accepted Answer

A)  some established manufacturers must exit the industry. 
B)  the equilibrium price of computers must rise. 
C)  the supply curve shifts to the right. 
D)  the supply curve shifts to the left. 
A)  some established manufacturers must exit the industry. 
B)  the equilibrium price of computers must rise. 
C)  the supply curve shifts to the right. 
D)  the supply curve shifts to the left. C

Question 4

Exhibit 4-6   Refer to Exhibit 4-6.A supply shift from S0 to S2 can be best explained by:

Accepted Answer

A)  input price increases. 
B)  rise in taxes. 
C)  bad weather 
D)  a technological advance. 
A)  input price increases. 
B)  rise in taxes. 
C)  bad weather 
D)  a technological advance.

Question 5

When the price of a good or service changes

Accepted Answer

A)  the supply curve shifts in the opposite direction. 
B)  the demand curve shifts in the opposite direction. 
C)  the demand curve shifts in the same direction. 
D)  there is a movement along a given demand curve. 
A)  the supply curve shifts in the opposite direction. 
B)  the demand curve shifts in the opposite direction. 
C)  the demand curve shifts in the same direction. 
D)  there is a movement along a given demand curve.

Question 6

In markets,prices move toward equilibrium because of

Accepted Answer

A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes. 
A)  the actions of buyers and sellers. 
B)  government regulations placed on market participants. 
C)  increased competition among sellers. 
D)  buyers' ability to affect market outcomes.

Question 7

Suppose that a more efficient way to produce a good is discovered,thus lowering production costs for the good.This will cause:

Accepted Answer

A)  an increase in supply, or a rightward shift of the supply curve. 
B)  a decrease in supply, or a leftward shift of the supply curve. 
C)  an increase in quantity supplied, or a movement down the supply curve. 
D)  a decrease in quantity supplied, or a movement up the supply curve. 
A)  an increase in supply, or a rightward shift of the supply curve. 
B)  a decrease in supply, or a leftward shift of the supply curve. 
C)  an increase in quantity supplied, or a movement down the supply curve. 
D)  a decrease in quantity supplied, or a movement up the supply curve.

Question 8

When quantity demanded decreases at every possible price,the demand curve

Accepted Answer

A)  shifts to the left. 
B)  shifts to the right. 
C)  there is a movement along the given demand curve. 
D)  none of the above. 
A)  shifts to the left. 
B)  shifts to the right. 
C)  there is a movement along the given demand curve. 
D)  none of the above.

Question 9

Which of the following would cause the demand curve for DVDs to shift to the right?

Accepted Answer

A)  a decrease in the price of DVDs 
B)  a decrease in the price of DVD players 
C)  a change in the tastes towards watching movies in movie theaters 
D)  a decrease in the number of people in the market for DVDs 
A)  a decrease in the price of DVDs 
B)  a decrease in the price of DVD players 
C)  a change in the tastes towards watching movies in movie theaters 
D)  a decrease in the number of people in the market for DVDs

Question 10

Exhibit 4-4   Refer to Exhibit 4-4.A change from Point A to Point B represents a(n):

Accepted Answer

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

Question 11

The quantity of newspapers sold will decline if:

Accepted Answer

A)  newsprint becomes more expensive. 
B)  the printers' union makes wage concessions. 
C)  newspaper prices are reduced. 
D)  magazine prices rise. 
A)  newsprint becomes more expensive. 
B)  the printers' union makes wage concessions. 
C)  newspaper prices are reduced. 
D)  magazine prices rise.

Question 12

How will a decrease in price tend to affect supply?

Accepted Answer

A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  It is uncertain. 
A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  It is uncertain.

Question 13

According to the income effect,an increase in the price of oranges will:

Accepted Answer

A)  cause consumers to consume more apples because of greater savings on that good. 
B)  cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. 
C)  cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. 
D)  leave consumers with less real income to spend on all goods. 
A)  cause consumers to consume more apples because of greater savings on that good. 
B)  cause consumers to spend more on oranges because a higher price signals that oranges are better than apples. 
C)  cause consumers to replace some oranges with other fruit that is now relatively cheaper than oranges. 
D)  leave consumers with less real income to spend on all goods.

Question 14

As the price of DVD players has fallen over the last two years,more DVD players have been sold by consumer electronics firms.Is this a violation of the law of supply?

Accepted Answer

No.Very likely the reduction in price is

Question 15

Which of the following scenarios would prompt producers to supply less now than they otherwise would have?

Accepted Answer

A)  Producers expecting a higher price in the future 
B)  Producers expecting prices to remain unchanged 
C)  Producers expecting a lower price in the future 
D)  Producers expecting prices to be volatile 
A)  Producers expecting a higher price in the future 
B)  Producers expecting prices to remain unchanged 
C)  Producers expecting a lower price in the future 
D)  Producers expecting prices to be volatile

Question 16

Today,people changed their expectations about the future.This change

Accepted Answer

A)  can cause a movement along a demand curve. 
B)  can affect future demand but not today's demand. 
C)  can affect today's demand. 
D)  cannot affect either today's demand or future demand. 
A)  can cause a movement along a demand curve. 
B)  can affect future demand but not today's demand. 
C)  can affect today's demand. 
D)  cannot affect either today's demand or future demand.

Question 17

The difference between a change in quantity demanded and a change in demand is that a change in:

Accepted Answer

A)  quantity demanded is caused by a change in a good's own current price, while a change in demand is caused by a change in some other variable, such as income, tastes, or expectations. 
B)  demand is caused by a change in a good's own current price, while a change in quantity demanded is caused by a change in some other variable, such as income, tastes, or expectations. 
C)  quantity demanded is a change in the amount people actually buy, while a change in demand is a change in the amount they want to buy. 
D)  A change in demand and a change in quantity demanded are the same thing. 
A)  quantity demanded is caused by a change in a good's own current price, while a change in demand is caused by a change in some other variable, such as income, tastes, or expectations. 
B)  demand is caused by a change in a good's own current price, while a change in quantity demanded is caused by a change in some other variable, such as income, tastes, or expectations. 
C)  quantity demanded is a change in the amount people actually buy, while a change in demand is a change in the amount they want to buy. 
D)  A change in demand and a change in quantity demanded are the same thing.

Question 18

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

Accepted Answer

A) True 
 B)False

Question 19

The difference between a change in quantity supplied and a change in supply is that a change in:

Accepted Answer

A)  quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
B)  supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
C)  quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
D)  supply and a change in the quantity supplied are the same thing. 
A)  quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
B)  supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. 
C)  quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. 
D)  supply and a change in the quantity supplied are the same thing.

Question 20

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)  prices at and above the equilibrium price. 
B)  prices at and below the equilibrium price. 
C)  prices above and below the equilibrium price, but not at the equilibrium price. 
D)  the equilibrium price but not above or below the equilibrium price. 
A)  prices at and above the equilibrium price. 
B)  prices at and below the equilibrium price. 
C)  prices above and below the equilibrium price, but not at the equilibrium price. 
D)  the equilibrium price but not above or below the equilibrium price.

Exam 4: Demand, Supply, and Market Equilibrium

Exhibit 4-4 Refer to Exhibit 4-4.A change from Point A to Point E represents a(n):

A shortage exists in a market if

If new manufacturers enter the computer industry,then (ceteris paribus):

Exhibit 4-6 Refer to Exhibit 4-6.A supply shift from S0 to S2 can be best explained by:

When the price of a good or service changes

In markets,prices move toward equilibrium because of

Suppose that a more efficient way to produce a good is discovered,thus lowering production costs for the good.This will cause:

When quantity demanded decreases at every possible price,the demand curve

Which of the following would cause the demand curve for DVDs to shift to the right?

Exhibit 4-4 Refer to Exhibit 4-4.A change from Point A to Point B represents a(n):

The quantity of newspapers sold will decline if:

How will a decrease in price tend to affect supply?

According to the income effect,an increase in the price of oranges will:

As the price of DVD players has fallen over the last two years,more DVD players have been sold by consumer electronics firms.Is this a violation of the law of supply?

Which of the following scenarios would prompt producers to supply less now than they otherwise would have?

Today,people changed their expectations about the future.This change

The difference between a change in quantity demanded and a change in demand is that a change in:

A market is not really a place but rather the process of buyers and sellers exchanging goods and services.

The difference between a change in quantity supplied and a change in supply is that a change in:

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Markets in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

Exhibit 4-6 Refer to Exhibit 4-6.A supply shift from S₀to S₂ can be best explained by: