Question 1

Exhibit 4-4   Refer to Exhibit 4-4.A change from Point A to Point C 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 2

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt,a substitute.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Accepted Answer

A)  a decrease in the price of electricity 
B)  an increase in the price of air conditioners 
C)  an increase in the price of heating oil 
D)  a decrease in the price of natural gas 
A)  a decrease in the price of electricity 
B)  an increase in the price of air conditioners 
C)  an increase in the price of heating oil 
D)  a decrease in the price of natural gas

Question 4

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 5

Exhibit 4-9 The diagram below represents the market for butter.   Refer to Exhibit 4-9.At a market price of $1,there exists a:

Accepted Answer

A)  shortage equal to 5,000 pounds of butter. 
B)  surplus equal to 5,000 pounds of butter. 
C)  shortage equal to 11,000 pounds of butter. 
D)  surplus equal to 11,000 pounds of butter. 
A)  shortage equal to 5,000 pounds of butter. 
B)  surplus equal to 5,000 pounds of butter. 
C)  shortage equal to 11,000 pounds of butter. 
D)  surplus equal to 11,000 pounds of butter.

Question 6

Along a supply curve:

Accepted Answer

A)  supply changes as price changes. 
B)  quantity supplied changes as price changes. 
C)  supply changes as technology changes. 
D)  quantity supplied changes as technology changes. 
A)  supply changes as price changes. 
B)  quantity supplied changes as price changes. 
C)  supply changes as technology changes. 
D)  quantity supplied changes as technology changes.

Question 7

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A)  a change in income 
B)  a change in the price of the good or service 
C)  a change in expectations about the future price of the good or service 
D)  a change in the price of a related good or service 
A)  a change in income 
B)  a change in the price of the good or service 
C)  a change in expectations about the future price of the good or service 
D)  a change in the price of a related good or service

Question 8

A decrease in quantity demanded

Accepted Answer

A)  illustrated by a movement downward and to the right along a demand curve. 
B)  illustrated by a movement upward and to the left along a demand curve. 
C)  shifts the demand curve to the left. 
D)  shifts the demand curve to the right. 
A)  illustrated by a movement downward and to the right along a demand curve. 
B)  illustrated by a movement upward and to the left along a demand curve. 
C)  shifts the demand curve to the left. 
D)  shifts the demand curve to the right.

Question 9

The law of demand refers to the:

Accepted Answer

A)  decrease in price that results as more units of a product are demanded. 
B)  increase in price that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity demanded. 
D)  increase in the quantity of a good made available when its price increases. 
A)  decrease in price that results as more units of a product are demanded. 
B)  increase in price that results from an increase in demand for a good of limited supply. 
C)  inverse relationship between the price of a good and the quantity demanded. 
D)  increase in the quantity of a good made available when its price increases.

Question 10

The supply curve shows:

Accepted Answer

A)  the same basic information as a demand curve. 
B)  how the average cost of production varies with price. 
C)  how the quantity supplied varies with price. 
D)  how the quantity demanded varies with price. 
A)  the same basic information as a demand curve. 
B)  how the average cost of production varies with price. 
C)  how the quantity supplied varies with price. 
D)  how the quantity demanded varies with price.

Question 11

Two donut chains in your town are battling for customers.The manager of the Real Yum Donut Shop lowered donut prices.As a result,customers:

Accepted Answer

A)  increase the quantity demanded of Real Yum donuts. 
B)  decrease the quantity demanded of Real Yum donuts. 
C)  buy the same quantity of Real Yum donuts as before the price change. 
D)  decrease their demand for Real Yum donuts. 
A)  increase the quantity demanded of Real Yum donuts. 
B)  decrease the quantity demanded of Real Yum donuts. 
C)  buy the same quantity of Real Yum donuts as before the price change. 
D)  decrease their demand for Real Yum donuts.

Question 12

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A)  luxury good. 
B)  inferior good. 
C)  normal good. 
D)  complementary good. 
A)  luxury good. 
B)  inferior good. 
C)  normal good. 
D)  complementary good.

Question 13

Which of the following would cause an increase in demand for golf balls?

Accepted Answer

A)  a decrease in the price of golf balls 
B)  an increase in the price of green fees 
C)  an expectation by buyers that their incomes will increase in the very near future 
D)  a change in consumer tastes away from golf and toward tennis 
A)  a decrease in the price of golf balls 
B)  an increase in the price of green fees 
C)  an expectation by buyers that their incomes will increase in the very near future 
D)  a change in consumer tastes away from golf and toward tennis

Question 14

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

Accepted Answer

A) True 
 B)False

Question 15

If a surplus 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 16

If bad weather destroyed half of the current coffee crop,ceteris paribus,it would:

Accepted Answer

A)  increase the demand for coffee. 
B)  decrease the demand for coffee. 
C)  increase the demand for tea. 
D)  decrease the demand for tea. 
A)  increase the demand for coffee. 
B)  decrease the demand for coffee. 
C)  increase the demand for tea. 
D)  decrease the demand for tea.

Question 17

Differentiate between a change in quantity demanded and a change in demand.

Accepted Answer

A change in a good's own,current price i

Question 18

If a product's price increases,quantity:

Accepted Answer

A)  supplied increases. 
B)  supplied decreases. 
C)  supplied does not change, but supply does increase. 
D)  demanded increases. 
A)  supplied increases. 
B)  supplied decreases. 
C)  supplied does not change, but supply does increase. 
D)  demanded increases.

Question 19

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new,environmentally friendly automobiles when trading in a less fuel efficient vehicle.Discuss the effect of this move on the industry's demand curve.

Accepted Answer

The "Cash For Clunkers" program made con

Question 20

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

Accepted Answer

A)  the demand curve, as consumers try to economize because of the shortage. 
B)  the demand curve and a rightward shift of the supply curve. 
C)  the supply curve. 
D)  the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price. 
A)  the demand curve, as consumers try to economize because of the shortage. 
B)  the demand curve and a rightward shift of the supply curve. 
C)  the supply curve. 
D)  the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

Exam 4: Demand, Supply, and Market Equilibrium

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

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt,a substitute.

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

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

Exhibit 4-9 The diagram below represents the market for butter. Refer to Exhibit 4-9.At a market price of $1,there exists a:

Along a supply curve:

Which of the following changes would not shift the demand curve for a good or service?

A decrease in quantity demanded

The law of demand refers to the:

The supply curve shows:

Two donut chains in your town are battling for customers.The manager of the Real Yum Donut Shop lowered donut prices.As a result,customers:

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Which of the following would cause an increase in demand for golf balls?

A technological advance that reduces the cost of producing computers will shift the supply curve of computers to the right.

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

If bad weather destroyed half of the current coffee crop,ceteris paribus,it would:

Differentiate between a change in quantity demanded and a change in demand.

If a product's price increases,quantity:

The federal government's "Cash For Clunkers" program provided consumers up to $4,500 towards new,environmentally friendly automobiles when trading in a less fuel efficient vehicle.Discuss the effect of this move on the industry's demand curve.

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift of:

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