Question 1

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant. 
A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant.

Question 2

Table 4-11
  
-Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Accepted Answer

A)  $2 and 50 units. 
B)  $6 and 30 units. 
C)  $6 and 60 units. 
D)  $12 and 30 units. 
A)  $2 and 50 units. 
B)  $6 and 30 units. 
C)  $6 and 60 units. 
D)  $12 and 30 units.

Question 3

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Accepted Answer

A) True 
 B)False

Question 4

Other things equal, when the price of a good falls, the

Accepted Answer

A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases. 
A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases.

Question 5

Figure 4-27
Panel (a) Panel (b)
     Panel (c) Panel (d)
    
-Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) 
A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 6

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

A) True 
 B)False

Question 7

If the number of buyers in a market decreases, then

Accepted Answer

A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease. 
A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease.

Question 8

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

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 9

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 10

An improvement in production technology will

Accepted Answer

A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply. 
A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply.

Question 11

Figure 4-1  
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Accepted Answer

A)  increase in price. 
B)  decrease in price. 
C)  decrease in the price of a substitute good. 
D)  increase in income. 
A)  increase in price. 
B)  decrease in price. 
C)  decrease in the price of a substitute good. 
D)  increase in income.

Question 12

Equilibrium quantity must decrease when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. 
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
C)  decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. 
A)  increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. 
B)  increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
C)  decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. 
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.

Question 13

Figure 4-2  
-Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Accepted Answer

A)  0 units. 
B)  2 units. 
C)  4 units. 
D)  6 units. 
A)  0 units. 
B)  2 units. 
C)  4 units. 
D)  6 units.

Question 14

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-27
Panel (a) Panel (b)
     Panel (c) Panel (d)
    
-Refer to Figure 4-27. Panel (a) shows which of the following?

Accepted Answer

A)  an increase in demand and an increase in quantity supplied 
B)  an increase in demand and an increase in supply 
C)  an increase in quantity demanded and an increase in quantity supplied 
D)  an increase in quantity demanded and an increase in supply 
A)  an increase in demand and an increase in quantity supplied 
B)  an increase in demand and an increase in supply 
C)  an increase in quantity demanded and an increase in quantity supplied 
D)  an increase in quantity demanded and an increase in supply

Question 16

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Accepted Answer

A)  The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
B)  The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
C)  The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
D)  The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
A)  The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
B)  The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
C)  The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
D)  The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

Question 17

Figure 4-29  
-Refer to Figure 4-29. The movement from S1 to S2 is a

Accepted Answer

The answer of Figure 4-29  
-Refer to Figure 4-29....

Question 18

Figure 4-22  
-Refer to Figure 4-22. What is the equilibrium price in this market?

Accepted Answer

A)  $8 
B)  $12 
C)  $16 
D)  $20 
A)  $8 
B)  $12 
C)  $16 
D)  $20

Question 19

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Accepted Answer

A) True 
 B)False

Question 20

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.

Exam 4: The Market Forces of Supply and Demand

The dictionary defines equilibrium as a situation in which forces

Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Other things equal, when the price of a good falls, the

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

An increase in the price of a substitute good will shift the demand curve for a good to the right.

If the number of buyers in a market decreases, then

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

An improvement in production technology will

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Equilibrium quantity must decrease when demand

Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (a) shows which of the following?

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Figure 4-29 -Refer to Figure 4-29. The movement from S1 to S2 is a

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

A supply curve slopes upward because

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

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