Question 1

If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip?

Accepted Answer

A)  a decrease in the price of Miracle Whip 
B)  an increase in the price of mayonnaise 
C)  a decrease in the price of mayonnaise 
D)  Both a and b are correct. 
A)  a decrease in the price of Miracle Whip 
B)  an increase in the price of mayonnaise 
C)  a decrease in the price of mayonnaise 
D)  Both a and b are correct.

Question 2

A surplus is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

Accepted Answer

A)  The number of sellers of mangos increases. 
B)  There is an advance in technology that reduces the cost of producing mangos. 
C)  The price of fertilizer decreases, and fertilizer is an input in the production of mangos. 
D)  The price of mangos rises. 
A)  The number of sellers of mangos increases. 
B)  There is an advance in technology that reduces the cost of producing mangos. 
C)  The price of fertilizer decreases, and fertilizer is an input in the production of mangos. 
D)  The price of mangos rises.

Question 4

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease. 
A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease.

Question 5

When the price of a good is high, selling the good is profitable, and so the quantity supplied is large.

Accepted Answer

A) True 
 B)False

Question 6

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Accepted Answer

A) True 
 B)False

Question 7

Which of these statements best represents the law of demand?

Accepted Answer

A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases. 
A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases.

Question 8

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite. 
A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite.

Question 9

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good 
A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good

Question 10

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Accepted Answer

The supply

Question 11

Most markets in the economy are

Accepted Answer

A)  markets in which sellers, rather than buyers, control the price of the product. 
B)  markets in which buyers, rather than sellers, control the price of the product. 
C)  perfectly competitive. 
D)  highly competitive. 
A)  markets in which sellers, rather than buyers, control the price of the product. 
B)  markets in which buyers, rather than sellers, control the price of the product. 
C)  perfectly competitive. 
D)  highly competitive.

Question 12

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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 13

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)

Accepted Answer

A)  decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B)  decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C)  decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D)  increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers. 
A)  decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B)  decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C)  decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D)  increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

Question 14

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-25. All else equal, a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

Accepted Answer

A)  x to y. 
B)  y to x. 
C)  SA to Sc. 
D)  SB to SA. 
A)  x to y. 
B)  y to x. 
C)  SA to Sc. 
D)  SB to SA.

Question 15

Which of the following is not an example of a market?

Accepted Answer

A)  A small town has only one seller of electricity. 
B)  In the United States, a sick person cannot legally purchase a kidney. 
C)  In Florida, there are many buyers and sellers of key lime pie. 
D)  The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities. 
A)  A small town has only one seller of electricity. 
B)  In the United States, a sick person cannot legally purchase a kidney. 
C)  In Florida, there are many buyers and sellers of key lime pie. 
D)  The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities.

Question 16

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 17

Sellers respond to a surplus by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 18

The sum of all the individual demand curves for a product is called

Accepted Answer

A)  income demand. 
B)  equilibrium demand. 
C)  complementary demand. 
D)  market demand. 
A)  income demand. 
B)  equilibrium demand. 
C)  complementary demand. 
D)  market demand.

Question 19

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Accepted Answer

A)  hair gel to increase. 
B)  razors to increase. 
C)  combs to increase. 
D)  shampoo to increase. 
A)  hair gel to increase. 
B)  razors to increase. 
C)  combs to increase. 
D)  shampoo to increase.

Question 20

Table 4-6
  
-Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

Accepted Answer

A)  increases by 10 units. 
B)  decreases by 10 units. 
C)  decreases by 20 units. 
D)  decreases by 30 units. 
A)  increases by 10 units. 
B)  decreases by 10 units. 
C)  decreases by 20 units. 
D)  decreases by 30 units.

Exam 4: The Market Forces of Supply and Demand

If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip?

A surplus is the same as an excess demand.

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

When the price of a good is high, selling the good is profitable, and so the quantity supplied is large.

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Which of these statements best represents the law of demand?

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Which of the following is not a determinant of the demand for a particular good?

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Most markets in the economy are

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

Which of the following is not an example of a market?

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Sellers respond to a surplus by cutting their prices.

The sum of all the individual demand curves for a product is called

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

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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