Question 1

A downward-sloping demand curve illustrates

Accepted Answer

A)  that demand decreases over time. 
B)  that prices fall over time. 
C)  the relationship between income and quantity demanded. 
D)  the law of demand. 
A)  that demand decreases over time. 
B)  that prices fall over time. 
C)  the relationship between income and quantity demanded. 
D)  the law of demand.

Question 2

The following table contains a supply schedule for a good.   If the law of supply applies to this good, then Q1 could be

Accepted Answer

A)  0. 
B)  50. 
C)  100. 
D)  150. 
A)  0. 
B)  50. 
C)  100. 
D)  150.

Question 3

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 $6 is

Accepted Answer

A)  12 units. 
B)  14 units. 
C)  19 units. 
D)  21 units. 
A)  12 units. 
B)  14 units. 
C)  19 units. 
D)  21 units.

Question 4

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 5

Suppose the number of buyers in a market 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 6

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 7

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

A)  the ticket price was above the equilibrium price. 
B)  the ticket price was below the equilibrium price. 
C)  the ticket price was at the equilibrium price. 
D)  nothing about the equilibrium price. 
A)  the ticket price was above the equilibrium price. 
B)  the ticket price was below the equilibrium price. 
C)  the ticket price was at the equilibrium price. 
D)  nothing about the equilibrium price.

Question 8

Figure 4-23  
-Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

Accepted Answer

A)  increases and the equilibrium quantity decreases. 
B)  decreases and the equilibrium quantity is ambiguous. 
C)  and quantity both increase. 
D)  and quantity both decrease. 
A)  increases and the equilibrium quantity decreases. 
B)  decreases and the equilibrium quantity is ambiguous. 
C)  and quantity both increase. 
D)  and quantity both decrease.

Question 9

Table 4-2
  
-Refer to Table 4-2. Whose demand does not obey the law of demand?

Accepted Answer

A)  Abby's 
B)  Brandi's 
C)  Carrie's 
D)  DeeDee's 
A)  Abby's 
B)  Brandi's 
C)  Carrie's 
D)  DeeDee's

Question 10

A movement along the supply curve might be caused by a change in

Accepted Answer

A)  production technology. 
B)  input prices. 
C)  expectations about future prices. 
D)  the price of the good or service that is being supplied. 
A)  production technology. 
B)  input prices. 
C)  expectations about future prices. 
D)  the price of the good or service that is being supplied.

Question 11

A decrease 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 12

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Accepted Answer

A) True 
 B)False

Question 13

The market for ice cream is a

Accepted Answer

A)  monopolistic market. 
B)  highly competitive market. 
C)  highly organized market. 
D)  Both b and c are correct. 
A)  monopolistic market. 
B)  highly competitive market. 
C)  highly organized market. 
D)  Both b and c are correct.

Question 14

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Accepted Answer

A)  Sellers would not be able to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise. 
A)  Sellers would not be able to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise.

Question 15

Figure 4-9
Panel (a) Panel (b)
    
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

Accepted Answer

A)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 16

A shortage is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 17

If a surplus exists in a market, then we know that the actual price is

Accepted Answer

A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 18

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand

Question 19

Which of the following is not a determinant of demand?

Accepted Answer

A)  the price of a resource that is used to produce the good 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good 
A)  the price of a resource that is used to produce the good 
B)  the price of a complementary good 
C)  the price of the good next month 
D)  the price of a substitute good

Question 20

Figure 4-19  
-Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)

Accepted Answer

A)  surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B)  excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C)  surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D)  excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
A)  surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
B)  excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price. 
C)  surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price. 
D)  excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.

Exam 4: The Market Forces of Supply and Demand

A downward-sloping demand curve illustrates

The following table contains a supply schedule for a good. If the law of supply applies to this good, then Q1 could be

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 $6 is

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

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

Most markets in the economy are highly competitive.

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Figure 4-23 -Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

Table 4-2 -Refer to Table 4-2. Whose demand does not obey the law of demand?

A movement along the supply curve might be caused by a change in

A decrease in quantity demanded

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

The market for ice cream is a

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Figure 4-9 Panel (a) Panel (b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

A shortage is the same as an excess demand.

If a surplus exists in a market, then we know that the actual price is

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Which of the following is not a determinant of demand?

Figure 4-19 -Refer to Figure 4-19. If price in this market is currently $14, then there would be 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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