Question 1

If Miguel expects to earn a higher income next month, he may choose to

Accepted Answer

A)  save more now and spend less of his current income on goods and services. 
B)  save less now and spend more of his current income on goods and services. 
C)  decrease his current demand for goods and services. 
D)  move along his current demand curves for goods and services. 
A)  save more now and spend less of his current income on goods and services. 
B)  save less now and spend more of his current income on goods and services. 
C)  decrease his current demand for goods and services. 
D)  move along his current demand curves for goods and services.

Question 2

Figure 4-27
Panel (a) Panel (b)
     Panel (c) Panel (d)
    
-Refer to Figure 4-27. Which of the four panels illustrates a decrease 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 3

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

Accepted Answer

A) True 
 B)False

Question 4

At the equilibrium price, quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 5

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Accepted Answer

A)  encourage marijuana use, and the evidence supports this argument. 
B)  encourage marijuana use, but the evidence does not support this argument. 
C)  discourage marijuana use, and the evidence supports this argument. 
D)  discourage marijuana use, but the evidence does not support this argument. 
A)  encourage marijuana use, and the evidence supports this argument. 
B)  encourage marijuana use, but the evidence does not support this argument. 
C)  discourage marijuana use, and the evidence supports this argument. 
D)  discourage marijuana use, but the evidence does not support this argument.

Question 6

A rightward shift of a supply curve is called a(n)

Accepted Answer

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

Question 7

A movement upward and to the left along a demand curve is called a(n)

Accepted Answer

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

Question 8

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then

Accepted Answer

A)  we will observe a movement downward and to the right along the demand curve for SUPs. 
B)  we will observe a movement upward and to the left along the demand curve for SUPs. 
C)  the demand curve for SUPs will shift to the right. 
D)  the demand curve for SUPs will shift to the left. 
A)  we will observe a movement downward and to the right along the demand curve for SUPs. 
B)  we will observe a movement upward and to the left along the demand curve for SUPs. 
C)  the demand curve for SUPs will shift to the right. 
D)  the demand curve for SUPs will shift to the left.

Question 9

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Accepted Answer

A)  Both the equilibrium price and quantity would increase. 
B)  Both the equilibrium price and quantity would decrease. 
C)  The equilibrium price would increase, and the equilibrium quantity would decrease. 
D)  The equilibrium price would decrease, and the equilibrium quantity would increase. 
A)  Both the equilibrium price and quantity would increase. 
B)  Both the equilibrium price and quantity would decrease. 
C)  The equilibrium price would increase, and the equilibrium quantity would decrease. 
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.

Question 10

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 11

Figure 4-7  
-Refer to Figure 4-7. The shift from Da to Db is called

Accepted Answer

A)  an increase in demand. 
B)  a decrease in demand. 
C)  a decrease in quantity demanded. 
D)  an increase in quantity demanded. 
A)  an increase in demand. 
B)  a decrease in demand. 
C)  a decrease in quantity demanded. 
D)  an increase in quantity demanded.

Question 12

Table 4-8
  
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price decreases from $12 to $9, quantity supplied will

Accepted Answer

A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units. 
A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units.

Question 13

Which of the following is an example of a market?

Accepted Answer

A)  a gas station 
B)  a garage sale 
C)  a barber shop 
D)  All of the above are examples of markets. 
A)  a gas station 
B)  a garage sale 
C)  a barber shop 
D)  All of the above are examples of markets.

Question 14

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

Accepted Answer

A)  Students would purchase fewer than 750 cups per day. 
B)  Student would continue to purchase 750 cups per day. 
C)  Students would purchase more than 750 cups per day. 
D)  We do not have enough information to answer this question. 
A)  Students would purchase fewer than 750 cups per day. 
B)  Student would continue to purchase 750 cups per day. 
C)  Students would purchase more than 750 cups per day. 
D)  We do not have enough information to answer this question.

Question 15

In a competitive market, the price of a product

Accepted Answer

A)  is determined by buyers, and the quantity of the product produced is determined by sellers. 
B)  is determined by sellers, and the quantity of the product produced is determined by buyers. 
C)  and the quantity of the product produced are both determined by sellers. 
D)  None of the above is correct. 
A)  is determined by buyers, and the quantity of the product produced is determined by sellers. 
B)  is determined by sellers, and the quantity of the product produced is determined by buyers. 
C)  and the quantity of the product produced are both determined by sellers. 
D)  None of the above is correct.

Question 16

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  None of the above is correct. 
A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  None of the above is correct.

Question 17

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

Accepted Answer

A)  supply curve for diamond rings 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)  supply curve for diamond rings 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)  demand curve for diamond rings 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)  demand curve for diamond rings 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)  supply curve for diamond rings 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)  supply curve for diamond rings 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)  demand curve for diamond rings 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)  demand curve for diamond rings 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 18

Today's supply curve for gasoline could shift in response to a change in

Accepted Answer

A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of buyers of gasoline. 
D)  All of the above are correct. 
A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of buyers of gasoline. 
D)  All of the above are correct.

Question 19

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices.
  
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk increases from $4.00 to $5.00, what is the change in the market quantity demanded?

Accepted Answer

decreases

Question 20

Figure 4-30  
-Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Accepted Answer

Demand shi

Exam 4: The Market Forces of Supply and Demand

If Miguel expects to earn a higher income next month, he may choose to

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

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

At the equilibrium price, quantity demanded is equal to quantity supplied.

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

A rightward shift of a supply curve is called a(n)

A movement upward and to the left along a demand curve is called a(n)

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Figure 4-7 -Refer to Figure 4-7. The shift from Da to Db is called

Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price decreases from $12 to $9, quantity supplied will

Which of the following is an example of a market?

Suppose that when the price of a 16 oz. to-go cup of gourmet coffee is $4.25, students purchase 750 cups per day. If the price decreases to $3.75 per cup, which of the following is the most likely outcome?

In a competitive market, the price of a product

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

Today's supply curve for gasoline could shift in response to a change in

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

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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