Question 1

Which of the following is true?

Accepted Answer

A)  A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
B)  According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
C)  A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
D)  None of the above is true. 
A)  A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
B)  According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
C)  A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
D)  None of the above is true.

Question 2

A university's basketball gymnasium is never more than half-full during basketball games.This implies

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 3

Economists normally

Accepted Answer

A)  do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B)  believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C)  do not believe that people's tastes determine demand, so they ignore the subject of tastes. 
D)  incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements. 
A)  do not try to explain people's tastes, but they do try to explain what happens when tastes change. 
B)  believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C)  do not believe that people's tastes determine demand, so they ignore the subject of tastes. 
D)  incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.

Question 4

If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10,that change would be described as a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 5

What is the most likely effect of deregulation on the supply curve?

Accepted Answer

A)  The supply curve will shift to the left 
B)  The quantity supplied will reduce 
C)  The supply curve will shift to the right 
D)  The supply curve will not be effected 
A)  The supply curve will shift to the left 
B)  The quantity supplied will reduce 
C)  The supply curve will shift to the right 
D)  The supply curve will not be effected

Question 6

If hot dogs are inferior goods,the demand for hot dogs will rise as consumer income falls.

Accepted Answer

A) True 
 B)False

Question 7

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $2.50 to $2.25 per dozen:

Accepted Answer

A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded. 
A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded.

Question 8

An upward-sloping supply curve shows that:

Accepted Answer

A)  buyers are willing to pay more for particularly scarce products. 
B)  suppliers expand production as the product price falls. 
C)  suppliers are willing to increase production of their goods if they receive higher prices for them. 
D)  buyers are willing to buy more as the product price falls. 
E)  buyers are not affected either directly or indirectly by the sellers' costs of production. 
A)  buyers are willing to pay more for particularly scarce products. 
B)  suppliers expand production as the product price falls. 
C)  suppliers are willing to increase production of their goods if they receive higher prices for them. 
D)  buyers are willing to buy more as the product price falls. 
E)  buyers are not affected either directly or indirectly by the sellers' costs of production.

Question 9

Suppose roses are currently selling for $20 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 10

A decrease in the number of sellers in the market causes

Accepted Answer

A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve. 
A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve.

Question 11

Exhibit 4-3   Refer to Exhibit 4-3.The University Theater faces market demand curve D0 and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.As a result,students have:

Accepted Answer

A)  increased their demand for tickets to Q4. 
B)  increased their quantity of tickets demanded to Q4. 
C)  decreased their demand for tickets to Q1. 
D)  decreased their quantity of tickets demanded to Q1. 
A)  increased their demand for tickets to Q4. 
B)  increased their quantity of tickets demanded to Q4. 
C)  decreased their demand for tickets to Q1. 
D)  decreased their quantity of tickets demanded to Q1.

Question 12

The supply curve of books (which are produced using paper made from trees)will shift to the left in response to:

Accepted Answer

A)  a decline in college tuition. 
B)  a sharp increase in the demand for and construction of wood-frame homes. 
C)  an increase in the supply of lumberjacks. 
D)  an end to government regulations that limit timber harvesting in national forests. 
A)  a decline in college tuition. 
B)  a sharp increase in the demand for and construction of wood-frame homes. 
C)  an increase in the supply of lumberjacks. 
D)  an end to government regulations that limit timber harvesting in national forests.

Question 13

Based on widespread reaction to the threat of the H1N1 virus,the likely effect on the demand curve for hand sanitizers would be

Accepted Answer

A)  a shift of the demand curve to the right. 
B)  a movement downward along the demand curve to the right. 
C)  a shift of the demand curve to the left. 
D)  a movement upward along the demand curve to the left. 
A)  a shift of the demand curve to the right. 
B)  a movement downward along the demand curve to the right. 
C)  a shift of the demand curve to the left. 
D)  a movement upward along the demand curve to the left.

Question 14

If an increase in the price of Product X causes an increase in the demand for Product Y,we can conclude that:

Accepted Answer

A)  Products X and Y are complements. 
B)  Products X and Y are substitutes. 
C)  Products X and Y are normal goods. 
D)  The price of Product Y will decrease. 
A)  Products X and Y are complements. 
B)  Products X and Y are substitutes. 
C)  Products X and Y are normal goods. 
D)  The price of Product Y will decrease.

Question 15

Exhibit 4-7   Refer to Exhibit 4-7.At a price of $10,there is a ____ of ____ pizzas.

Accepted Answer

A)  shortage; 4,500 
B)  surplus; 4,500 
C)  shortage; 6,500 
D)  surplus; 6,500 
A)  shortage; 4,500 
B)  surplus; 4,500 
C)  shortage; 6,500 
D)  surplus; 6,500

Question 16

Exhibit 4-1   Refer to Exhibit 4-1.Shown are the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,the quantity demanded in the market would be:

Accepted Answer

A)  12. 
B)  22. 
C)  31. 
D)  39. 
A)  12. 
B)  22. 
C)  31. 
D)  39.

Question 17

An economist would likely consider the sale of soft drinks at a major league baseball stadium to represent the same market as the sale of soft drinks at a gas station.

Accepted Answer

A) True 
 B)False

Question 18

A decrease in the price of a good will

Accepted Answer

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

Question 19

AWhen quantity demanded decreases in response to a change in price:

Accepted Answer

A)  the demand curve shifts to the right. 
B)  the demand curve shifts to the left. 
C)  there is a movement down along the demand curve. 
D)  there is a movement up along the demand curve. 
A)  the demand curve shifts to the right. 
B)  the demand curve shifts to the left. 
C)  there is a movement down along the demand curve. 
D)  there is a movement up along the demand curve.

Question 20

The price of peanut butter falls and as a result the demand for jelly increases.We can conclude that:

Accepted Answer

A)  peanut butter and jelly are substitutes. 
B)  peanut butter and jelly are complements. 
C)  peanut butter and jelly are inferior goods. 
D)  the marginal value of jelly is greater than the marginal value of peanut butter. 
A)  peanut butter and jelly are substitutes. 
B)  peanut butter and jelly are complements. 
C)  peanut butter and jelly are inferior goods. 
D)  the marginal value of jelly is greater than the marginal value of peanut butter.

Exam 4: Demand, Supply, and Market Equilibrium

Which of the following is true?

A university's basketball gymnasium is never more than half-full during basketball games.This implies

Economists normally

If consumers were originally willing to buy 500 units of a good at a price of $20 are now willing to buy 500 units of the same good at a price of $10,that change would be described as a decrease in demand.

What is the most likely effect of deregulation on the supply curve?

If hot dogs are inferior goods,the demand for hot dogs will rise as consumer income falls.

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $2.50 to $2.25 per dozen:

An upward-sloping supply curve shows that:

Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

A decrease in the number of sellers in the market causes

Exhibit 4-3 Refer to Exhibit 4-3.The University Theater faces market demand curve D0 and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.As a result,students have:

The supply curve of books (which are produced using paper made from trees)will shift to the left in response to:

Based on widespread reaction to the threat of the H1N1 virus,the likely effect on the demand curve for hand sanitizers would be

If an increase in the price of Product X causes an increase in the demand for Product Y,we can conclude that:

Exhibit 4-7 Refer to Exhibit 4-7.At a price of $10,there is a ____ of ____ pizzas.

Exhibit 4-1 Refer to Exhibit 4-1.Shown are the demand schedules for gourmet ice cream of two individuals and the rest of the market.At a price of $8,the quantity demanded in the market would be:

An economist would likely consider the sale of soft drinks at a major league baseball stadium to represent the same market as the sale of soft drinks at a gas station.

A decrease in the price of a good will

AWhen quantity demanded decreases in response to a change in price:

The price of peanut butter falls and as a result the demand for jelly increases.We can conclude that:

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 4-3 Refer to Exhibit 4-3.The University Theater faces market demand curve D₀ and has begun charging $10,up from $5,for tickets for Friday and Saturday night shows.As a result,students have:

Exhibit 4-7 Refer to Exhibit 4-7.At a price of $10,there is a of pizzas.