Question 1

A decrease in demand could be caused by

Accepted Answer

A)  an increase in price. 
B)  a decrease in the price of a complement. 
C)  a technological advance. 
D)  a decrease in the price of a substitute. 
A)  an increase in price. 
B)  a decrease in the price of a complement. 
C)  a technological advance. 
D)  a decrease in the price of a substitute.

Question 2

Exhibit 4-8   Refer to Exhibit 4-8.At $0.40 there is a ____ of ____ downloads.

Accepted Answer

A)  surplus; 10,500,000 
B)  surplus; 7,500,000 
C)  shortage; 7,500,000 
D)  shortage; 10,500,000 
A)  surplus; 10,500,000 
B)  surplus; 7,500,000 
C)  shortage; 7,500,000 
D)  shortage; 10,500,000

Question 3

Upward shifts are

Accepted Answer

A)  increases in both demand and supply. 
B)  decreases in both demand and supply. 
C)  increases in demand and decreases in supply. 
D)  increases in supply and decreases in demand. 
A)  increases in both demand and supply. 
B)  decreases in both demand and supply. 
C)  increases in demand and decreases in supply. 
D)  increases in supply and decreases in demand.

Question 4

Because personal tastes differ,what are substitutes for one person need not be substitutes for another person.

Accepted Answer

A) True 
 B)False

Question 5

When there is an excess quantity supplied of a product at the current price,then:

Accepted Answer

A)  the market price must be below equilibrium price. 
B)  the quantity demanded is greater than the equilibrium quantity. 
C)  the market price will tend to rise. 
D)  the market price will tend to fall. 
A)  the market price must be below equilibrium price. 
B)  the quantity demanded is greater than the equilibrium quantity. 
C)  the market price will tend to rise. 
D)  the market price will tend to fall.

Question 6

The law of demand asserts that:

Accepted Answer

A)  output prices are more important than input prices. 
B)  when people want a good badly enough they will find a way to pay for it. 
C)  people want to buy more of goods that are priced very high because of their prestige. 
D)  the quantity of a good that people will buy is inversely related to the product's price. 
A)  output prices are more important than input prices. 
B)  when people want a good badly enough they will find a way to pay for it. 
C)  people want to buy more of goods that are priced very high because of their prestige. 
D)  the quantity of a good that people will buy is inversely related to the product's price.

Question 7

Which of the following will not cause a change in the demand for a product?

Accepted Answer

A)  a change in consumer income 
B)  a change in consumer preferences 
C)  a change in the price of the product 
D)  a change in the price of a substitute product 
A)  a change in consumer income 
B)  a change in consumer preferences 
C)  a change in the price of the product 
D)  a change in the price of a substitute product

Question 8

Refer to the table below.If these three firms represented the entire market,how many mid-sized autos would be supplied at a price of $30,000?

Accepted Answer

A)  43,000 
B)  54,000 
C)  126,000 
D)  158,000 
A)  43,000 
B)  54,000 
C)  126,000 
D)  158,000

Question 9

Identify the scenario that will cause the supply curve to shift to the left.

Accepted Answer

A)  Producer expects now that the price will be lower later 
B)  Price decreases for a substitute in production 
C)  Input price increases 
D)  Increase in number of suppliers 
A)  Producer expects now that the price will be lower later 
B)  Price decreases for a substitute in production 
C)  Input price increases 
D)  Increase in number of suppliers

Question 10

Each point on the supply curve shows the:

Accepted Answer

A)  amount that people want to buy at that price. 
B)  quantity supplied at that price. 
C)  productive capacity of an individual producer. 
D)  the amount producers want to sell to buyers of different income levels. 
A)  amount that people want to buy at that price. 
B)  quantity supplied at that price. 
C)  productive capacity of an individual producer. 
D)  the amount producers want to sell to buyers of different income levels.

Question 11

A supply curve slopes upward because

Accepted Answer

A)  as more is produced, total cost of production falls. 
B)  an increase in input prices increases supply. 
C)  the quantity supplied of most goods and services increases over time. 
D)  an increase in price gives producers an incentive to supply a larger quantity. 
A)  as more is produced, total cost of production falls. 
B)  an increase in input prices increases supply. 
C)  the quantity supplied of most goods and services increases over time. 
D)  an increase in price gives producers an incentive to supply a larger quantity.

Question 12

Ceteris paribus,if the price of lumber increases,we would expect an increase in the supply of lumber.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would not cause an increase in the demand for cheese?

Accepted Answer

A)  a decrease in the price of crackers, which are consumed with cheese 
B)  an increase in the income of cheese consumers, assuming that cheese is a normal good 
C)  an increase in the population 
D)  a technological advance that makes it cheaper to produce cheese 
A)  a decrease in the price of crackers, which are consumed with cheese 
B)  an increase in the income of cheese consumers, assuming that cheese is a normal good 
C)  an increase in the population 
D)  a technological advance that makes it cheaper to produce cheese

Question 14

To an economist,a decrease in supply means a:

Accepted Answer

A)  rightward shift of the supply curve. 
B)  movement up along a supply curve. 
C)  leftward shift of the supply curve. 
D)  movement down along the supply curve. 
A)  rightward shift of the supply curve. 
B)  movement up along a supply curve. 
C)  leftward shift of the supply curve. 
D)  movement down along the supply curve.

Question 15

Which of the following events would cause an upward movement along the demand curve for olives?

Accepted Answer

A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises. 
A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises.

Question 16

Exhibit 4-5   Refer to Exhibit 4-5.A change from Point A to Point C represents a(n):

Accepted Answer

A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in quantity supplied. 
A)  increase in supply. 
B)  decrease in supply. 
C)  increase in quantity supplied. 
D)  decrease in quantity supplied.

Question 17

A downward-sloping demand curve shows:

Accepted Answer

A)  the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B)  the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C)  the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D)  the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
A)  the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B)  the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C)  the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D)  the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases.

Question 18

A surplus exists in a market if

Accepted Answer

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

Question 19

If the electronics market is experiencing a shortage in the supply of mobile phones being sold at a cost that buyers are more than willing to pay for,then:

Accepted Answer

A)  the selling price is higher than the equilibrium price 
B)  the equilibrium price is higher than the selling price. 
C)  the quantity demanded is less than the quantity supplied. 
D)  the shortage could be eliminated by lowering the price. 
A)  the selling price is higher than the equilibrium price 
B)  the equilibrium price is higher than the selling price. 
C)  the quantity demanded is less than the quantity supplied. 
D)  the shortage could be eliminated by lowering the price.

Question 20

Markets tend toward equilibrium and,as a result,will tend to eliminate shortages and surpluses.Why?

Accepted Answer

Markets tend toward equilibrium because

Exam 4: Demand, Supply, and Market Equilibrium

A decrease in demand could be caused by

Exhibit 4-8 Refer to Exhibit 4-8.At $0.40 there is a ____ of ____ downloads.

Upward shifts are

Because personal tastes differ,what are substitutes for one person need not be substitutes for another person.

When there is an excess quantity supplied of a product at the current price,then:

The law of demand asserts that:

Which of the following will not cause a change in the demand for a product?

Refer to the table below.If these three firms represented the entire market,how many mid-sized autos would be supplied at a price of $30,000?

Identify the scenario that will cause the supply curve to shift to the left.

Each point on the supply curve shows the:

A supply curve slopes upward because

Ceteris paribus,if the price of lumber increases,we would expect an increase in the supply of lumber.

Which of the following would not cause an increase in the demand for cheese?

To an economist,a decrease in supply means a:

Which of the following events would cause an upward movement along the demand curve for olives?

Exhibit 4-5 Refer to Exhibit 4-5.A change from Point A to Point C represents a(n):

A downward-sloping demand curve shows:

A surplus exists in a market if

If the electronics market is experiencing a shortage in the supply of mobile phones being sold at a cost that buyers are more than willing to pay for,then:

Markets tend toward equilibrium and,as a result,will tend to eliminate shortages and surpluses.Why?

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 4-8 Refer to Exhibit 4-8.At $0.40 there is a of downloads.