Question 1

What is the market demand?

Accepted Answer

A)  the sum of all individual demands 
B)  the demand for every product in an industry 
C)  the average quantity demanded at each price 
D)  the quantity demanded that exceeds supply 
A)  the sum of all individual demands 
B)  the demand for every product in an industry 
C)  the average quantity demanded at each price 
D)  the quantity demanded that exceeds supply

Question 2

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.8 
C)  1.0 
D)  2.0 
A)  0.2 
B)  0.8 
C)  1.0 
D)  2.0

Question 3

Figure 4-5  
-Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied?

Accepted Answer

A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D 
A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D

Question 4

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss,what would we see?

Accepted Answer

A)  an increase in demand for brown sugar and a decrease in demand for white sugar 
B)  no change in either demand because weight loss is not a nonprice determinant of demand 
C)  an increase in demand for white sugar,and a decrease in the demand for brown sugar 
D)  a decrease in the demand for white sugar,but no change in the demand for brown sugar 
A)  an increase in demand for brown sugar and a decrease in demand for white sugar 
B)  no change in either demand because weight loss is not a nonprice determinant of demand 
C)  an increase in demand for white sugar,and a decrease in the demand for brown sugar 
D)  a decrease in the demand for white sugar,but no change in the demand for brown sugar

Question 5

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar has fallen over time.Which of the following would be most consistent with this observation?

Accepted Answer

A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped. 
A)  Consumers have experienced an increase in income and sugar-production technology has improved. 
B)  The price of artificial sweetener has risen and the price of coffee has fallen. 
C)  Consumer tastes have changed so as to prefer sugar less than before. 
D)  The demand curve for sugar must be positively sloped.

Question 6

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $4 to $8,what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.8 
C)  1.9 
D)  2.3 
A)  0.1 
B)  0.8 
C)  1.9 
D)  2.3

Question 7

Figure 4-7  
-Refer to the Figure 4-7.What does the movement from point A to point B on the graph show?

Accepted Answer

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

Question 8

Whenever a determinant of demand other than price changes,the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 9

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $35 to $38,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  0.4 
C)  1.7 
D)  2.7 
A)  0.3 
B)  0.4 
C)  1.7 
D)  2.7

Question 10

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline falls,the price of steel increases,public transportation becomes more expensive and less comfortable,auto workers receive higher wages,and automobile insurance becomes less expensive?

Accepted Answer

A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous 
A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous

Question 11

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $12 to $14,what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  0.7 
C)  1.0 
D)  3.0 
A)  0.3 
B)  0.7 
C)  1.0 
D)  3.0

Question 12

Market demand is given as Qd = 80 - P.Market supply is given as Qs = 3P.What would result if the market price were $10?

Accepted Answer

A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40 
A)  a shortage of 20 
B)  a surplus of 20 
C)  a surplus of 40 
D)  a shortage of 40

Question 13

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and,at the same time,firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous 
A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous

Question 14

Assume the following demand and supply equations: Qd=900-20P,and Qs=150+10P.
a)Graph the two curves.
b)Calculate the slopes of the two curves.
c)Calculate the equilibrium price and quantity.
d)If the price was $30,how much would the quantity demanded be? (Show it on the graph)
e)If the price was $30,how much would the quantity supplied be? (Show it on the graph)

Accepted Answer

a)An easy way to draw the curves is to i

Question 15

What would result from an increase in the number of scholarships issued for university education?

Accepted Answer

A)  an increase in the supply of education 
B)  a decrease in the supply of education 
C)  an increase in the demand for education 
D)  a decrease in the demand for education 
A)  an increase in the supply of education 
B)  a decrease in the supply of education 
C)  an increase in the demand for education 
D)  a decrease in the demand for education

Question 16

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Accepted Answer

A)  an increase in supply and demand 
B)  an increase in supply and a decrease in demand 
C)  a decrease in supply and an increase in demand 
D)  a decrease in supply and demand 
A)  an increase in supply and demand 
B)  an increase in supply and a decrease in demand 
C)  a decrease in supply and an increase in demand 
D)  a decrease in supply and demand

Question 17

What impact would a higher price for batteries tend to have?

Accepted Answer

A)  increase the demand for flashlights 
B)  increase the demand for electricity 
C)  decrease the demand for electricity 
D)  increase the demand for batteries 
A)  increase the demand for flashlights 
B)  increase the demand for electricity 
C)  decrease the demand for electricity 
D)  increase the demand for batteries

Question 18

Which of the following determines a market supply curve but not an individual supply curve?

Accepted Answer

A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology 
A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology

Question 19

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.What would result if the market price were $10?

Accepted Answer

A)  a shortage of 40 
B)  a surplus of 40 
C)  a surplus of 80 
D)  a shortage of 80 
A)  a shortage of 40 
B)  a surplus of 40 
C)  a surplus of 80 
D)  a shortage of 80

Question 20

What is step one in the three-step program for analyzing changes in equilibrium?

Accepted Answer

A)  Decide in which direction the curve shifts. 
B)  Decide whether the event shifts the supply or demand curve. 
C)  Use the supply-and-demand diagram to see how the shift changes the original equilibrium. 
D)  Analyze how equilibrium price and quantity have changed. 
A)  Decide in which direction the curve shifts. 
B)  Decide whether the event shifts the supply or demand curve. 
C)  Use the supply-and-demand diagram to see how the shift changes the original equilibrium. 
D)  Analyze how equilibrium price and quantity have changed.

What is the market demand?

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand?

Figure 4-5 -Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied?

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss,what would we see?

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar has fallen over time.Which of the following would be most consistent with this observation?

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $4 to $8,what is the price elasticity of demand?

Figure 4-7 -Refer to the Figure 4-7.What does the movement from point A to point B on the graph show?

Whenever a determinant of demand other than price changes,the demand curve shifts.

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $35 to $38,what is the price elasticity of demand?

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline falls,the price of steel increases,public transportation becomes more expensive and less comfortable,auto workers receive higher wages,and automobile insurance becomes less expensive?

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $12 to $14,what is the price elasticity of demand?

Market demand is given as Qd = 80 - P.Market supply is given as Qs = 3P.What would result if the market price were $10?

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and,at the same time,firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

What would result from an increase in the number of scholarships issued for university education?

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

What impact would a higher price for batteries tend to have?

Which of the following determines a market supply curve but not an individual supply curve?

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.What would result if the market price were $10?

What is step one in the three-step program for analyzing changes in equilibrium?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

What is the market demand?

Market demand is given as QD = 75 - P.Market supply is given as QS = 3P + 15.If price increases from $11 to $14,what is the price elasticity of demand?

Figure 4-5 -Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied?

If a study by the CMA found that brown sugar caused weight gain while white sugar caused weight loss,what would we see?

Sugar is a normal good.You observe that both the equilibrium price and quantity of sugar has fallen over time.Which of the following would be most consistent with this observation?

Market demand is given as QD = 60 - P.Market supply is given as QS = 3P.If price increases from $4 to $8,what is the price elasticity of demand?

Figure 4-7 -Refer to the Figure 4-7.What does the movement from point A to point B on the graph show?

Whenever a determinant of demand other than price changes,the demand curve shifts.

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $35 to $38,what is the price elasticity of demand?

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline falls,the price of steel increases,public transportation becomes more expensive and less comfortable,auto workers receive higher wages,and automobile insurance becomes less expensive?

Market demand is given as QD = 220 - 4P.Market supply is given as QS = 2P + 40.If price increases from $12 to $14,what is the price elasticity of demand?

Market demand is given as Qd = 80 - P.Market supply is given as Qs = 3P.What would result if the market price were $10?

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and,at the same time,firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

What would result from an increase in the number of scholarships issued for university education?

Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

What impact would a higher price for batteries tend to have?

Which of the following determines a market supply curve but not an individual supply curve?

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.What would result if the market price were $10?

What is step one in the three-step program for analyzing changes in equilibrium?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters