Question 1

Who gets scarce resources in a market economy?

Accepted Answer

A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price 
A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price

Question 2

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
  
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium quantity?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 3

Figure 4-7  
-Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then

Accepted Answer

A)  firms would be willing to supply less of Good X than before at each possible price. 
B)  people are willing to buy more of Good X than before at each possible price. 
C)  people's incomes must have decreased. 
D)  the price of Good X has decreased. 
A)  firms would be willing to supply less of Good X than before at each possible price. 
B)  people are willing to buy more of Good X than before at each possible price. 
C)  people's incomes must have decreased. 
D)  the price of Good X has decreased.

Question 4

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Accepted Answer

The demand

Question 5

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Accepted Answer

A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D 
A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D

Question 6

A decrease in quantity supplied

Accepted Answer

A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right. 
A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right.

Question 7

A competitive market is one in which there

Accepted Answer

A)  is only one seller, but there are many buyers. 
B)  are many sellers, and each seller has the ability to set the price of his product. 
C)  are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market. 
D)  are so many buyers and so many sellers that each has a negligible impact on the price of the product. 
A)  is only one seller, but there are many buyers. 
B)  are many sellers, and each seller has the ability to set the price of his product. 
C)  are many sellers, and they compete with one another in such a way that some sellers are always being forced out of the market. 
D)  are so many buyers and so many sellers that each has a negligible impact on the price of the product.

Question 8

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 9

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Accepted Answer

A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D 
A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D

Question 10

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Accepted Answer

The equilibrium quan

Question 11

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 12

Figure 4-29  
-Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Accepted Answer

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

Question 13

Figure 4-18  
-Refer to Figure 4-18. At a price of $35, there would be

Accepted Answer

A)  a shortage, and the price would tend to rise from $35 to a higher price. 
B)  a surplus, and the price would tend to rise from $35 to a higher price. 
C)  excess demand, and the price would tend to fall from $35 to a lower price. 
D)  excess supply, and the price would tend to fall from $35 to a lower price. 
A)  a shortage, and the price would tend to rise from $35 to a higher price. 
B)  a surplus, and the price would tend to rise from $35 to a higher price. 
C)  excess demand, and the price would tend to fall from $35 to a lower price. 
D)  excess supply, and the price would tend to fall from $35 to a lower price.

Question 14

Figure 4-27
Panel (a) Panel (b)
     Panel (c) Panel (d)
    
-Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

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 15

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Accepted Answer

The equilibrium pric

Question 16

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A)  decrease in equilibrium price and an increase in equilibrium quantity. 
B)  decrease in equilibrium price and a decrease in equilibrium quantity. 
C)  increase in equilibrium price and a decrease in equilibrium quantity. 
D)  increase in equilibrium price and an increase in equilibrium quantity. 
A)  decrease in equilibrium price and an increase in equilibrium quantity. 
B)  decrease in equilibrium price and a decrease in equilibrium quantity. 
C)  increase in equilibrium price and a decrease in equilibrium quantity. 
D)  increase in equilibrium price and an increase in equilibrium quantity.

Question 17

In a perfectly competitive market, at the market price, buyers

Accepted Answer

A)  cannot buy all they want, and sellers cannot sell all they want. 
B)  cannot buy all they want, but sellers can sell all they want. 
C)  can buy all they want, but sellers cannot sell all they want. 
D)  can buy all they want, and sellers can sell all they want. 
A)  cannot buy all they want, and sellers cannot sell all they want. 
B)  cannot buy all they want, but sellers can sell all they want. 
C)  can buy all they want, but sellers cannot sell all they want. 
D)  can buy all they want, and sellers can sell all they want.

Question 18

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

Accepted Answer

A)  the price of pork increases. 
B)  the price of pork decreases. 
C)  the price of pork does not change. 
D)  there is no longer a market for pork. 
A)  the price of pork increases. 
B)  the price of pork decreases. 
C)  the price of pork does not change. 
D)  there is no longer a market for pork.

Question 19

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • x = 2.
-The current price of a sandwich is $5.00.
-The market quantity supplied of sandwiches is 10.
-The law of supply applies to the supply of sandwiches.
Then there is a

Accepted Answer

A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.

Question 20

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Who gets scarce resources in a market economy?

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

A decrease in quantity supplied

A competitive market is one in which there

Economists normally

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

A decrease in input costs to firms in a market will result in a(n)

In a perfectly competitive market, at the market price, buyers

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

The demand curve is the upward-sloping line relating price and quantity demanded.

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

Filters

Exam 4: The Market Forces of Supply and Demand

Who gets scarce resources in a market economy?

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

A decrease in quantity supplied

A competitive market is one in which there

Economists normally

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

A decrease in input costs to firms in a market will result in a(n)

In a perfectly competitive market, at the market price, buyers

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

The demand curve is the upward-sloping line relating price and quantity demanded.

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

Filters