Question 1

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not held constant in a demand schedule?

Accepted Answer

A)  income 
B)  tastes 
C)  price 
D)  expectations 
A)  income 
B)  tastes 
C)  price 
D)  expectations

Question 3

In a market economy, supply and demand determine

Accepted Answer

A)  both the quantity of each good produced and the price at which it is sold. 
B)  the quantity of each good produced but not the price at which it is sold. 
C)  the price at which each good is sold but not the quantity of each good produced. 
D)  neither the quantity of each good produced nor the price at which it is sold. 
A)  both the quantity of each good produced and the price at which it is sold. 
B)  the quantity of each good produced but not the price at which it is sold. 
C)  the price at which each good is sold but not the quantity of each good produced. 
D)  neither the quantity of each good produced nor the price at which it is sold.

Question 4

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Accepted Answer

A)  The government would provide tax incentives to encourage people to become farmers. 
B)  The government would subsidize the production of food. 
C)  The prices of food and the wages of farmers would adjust. 
D)  There are no mechanisms to remove the shortage. 
A)  The government would provide tax incentives to encourage people to become farmers. 
B)  The government would subsidize the production of food. 
C)  The prices of food and the wages of farmers would adjust. 
D)  There are no mechanisms to remove the shortage.

Question 5

Suppose that Amanda receives a pay increase. We would expect

Accepted Answer

A)  to observe Amanda moving down and to the right along her given demand curve. 
B)  Amanda's demand for inferior goods to decrease. 
C)  Amanda's demand for each of two goods that are complements to increase. 
D)  Amanda's demand for normal goods to decrease. 
A)  to observe Amanda moving down and to the right along her given demand curve. 
B)  Amanda's demand for inferior goods to decrease. 
C)  Amanda's demand for each of two goods that are complements to increase. 
D)  Amanda's demand for normal goods to decrease.

Question 6

An increase in quantity demanded

Accepted Answer

A)  results in a movement downward and to the right along a demand curve. 
B)  results in 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)  results in a movement downward and to the right along a demand curve. 
B)  results in 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 7

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Accepted Answer

A) True 
 B)False

Question 8

Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
  
-Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $30, then there will be

Accepted Answer

A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  600 tickets sold. 
D)  600 tickets unsold. 
A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  600 tickets sold. 
D)  600 tickets unsold.

Question 9

Table 4-3
  
-Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

Accepted Answer

A)  decreases by 1.75 units. 
B)  increases by 2 units. 
C)  decreases by 7 units. 
D)  decreases by 24 units. 
A)  decreases by 1.75 units. 
B)  increases by 2 units. 
C)  decreases by 7 units. 
D)  decreases by 24 units.

Question 10

Today, producers changed their expectations about the future. This change

Accepted Answer

A)  can cause a movement along a supply curve. 
B)  can affect future supply, but not today's supply. 
C)  can affect today's supply. 
D)  cannot affect either today's supply or future supply. 
A)  can cause a movement along a supply curve. 
B)  can affect future supply, but not today's supply. 
C)  can affect today's supply. 
D)  cannot affect either today's supply or future supply.

Question 11

Table 4-1
  
-Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units.

Question 12

Figure 4-10  
-Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Accepted Answer

A)  increase in the price. 
B)  decrease in the quantity supplied. 
C)  shift in the supply curve. 
D)  Both a and b are correct. 
A)  increase in the price. 
B)  decrease in the quantity supplied. 
C)  shift in the supply curve. 
D)  Both a and b are correct.

Question 13

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)  a restaurant in a large city 
B)  a dry cleaners in a large city 
C)  a local gas station 
D)  a local electrical company 
A)  a restaurant in a large city 
B)  a dry cleaners in a large city 
C)  a local gas station 
D)  a local electrical company

Question 14

Table 4-6
  
-Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Accepted Answer

A)  3 units. 
B)  11 units. 
C)  25 units. 
D)  44 units. 
A)  3 units. 
B)  11 units. 
C)  25 units. 
D)  44 units.

Question 15

Equilibrium price must increase when demand

Accepted Answer

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

Question 16

Table 4-3
  
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is

Accepted Answer

A)  4 units. 
B)  7.75 units. 
C)  14 units. 
D)  31 units. 
A)  4 units. 
B)  7.75 units. 
C)  14 units. 
D)  31 units.

Question 17

In a market economy,

Accepted Answer

A)  supply determines demand and demand, in turn, determines prices. 
B)  demand determines supply and supply, in turn, determines prices. 
C)  the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. 
D)  supply and demand determine prices and prices, in turn, allocate the economy's scarce resources. 
A)  supply determines demand and demand, in turn, determines prices. 
B)  demand determines supply and supply, in turn, determines prices. 
C)  the allocation of scarce resources determines prices and prices, in turn, determine supply and demand. 
D)  supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.

Question 18

Figure 4-3
Consumer 1 Consumer 2
    
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

Accepted Answer

A)  0 units. 
B)  10 units. 
C)  15 units. 
D)  25 units. 
A)  0 units. 
B)  10 units. 
C)  15 units. 
D)  25 units.

Question 19

The line that relates the price of a good and the quantity supplied of that good is called the supply

Accepted Answer

A)  schedule, and it usually slopes upward. 
B)  schedule, and it usually slopes downward. 
C)  curve, and it usually slopes upward. 
D)  curve, and it usually slopes downward. 
A)  schedule, and it usually slopes upward. 
B)  schedule, and it usually slopes downward. 
C)  curve, and it usually slopes upward. 
D)  curve, and it usually slopes downward.

Question 20

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A)  coalition. 
B)  economy. 
C)  market. 
D)  competition. 
A)  coalition. 
B)  economy. 
C)  market. 
D)  competition.

Exam 4: The Market Forces of Supply and Demand

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Which of the following is not held constant in a demand schedule?

In a market economy, supply and demand determine

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Suppose that Amanda receives a pay increase. We would expect

An increase in quantity demanded

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

Today, producers changed their expectations about the future. This change

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Figure 4-10 -Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Which of the following would most likely serve as an example of a monopoly?

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Equilibrium price must increase when demand

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is

In a market economy,

Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

The line that relates the price of a good and the quantity supplied of that good is called the supply

A group of buyers and sellers of a particular good or service is called a(n)

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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