Question 1

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers rose and the price of tea rose?

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 2

Which of the following would be most likely to decrease the price of a new house?

Accepted Answer

A)  higher wages for carpenters,higher wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher house prices in the future 
B)  higher wages for carpenters,lower wood prices,reductions in consumer incomes,lower apartment rents,decreases in population,and expectations of lower house prices in the future 
C)  lower wages for carpenters,higher wood prices,decreases in consumer incomes,higher apartment rents,decreases in population,and expectations of higher house prices in the future 
D)  lower wages for carpenters,lower wood prices,decreases in consumer incomes,lower apartment rents,decreases in population,and expectations of lower house prices in the future 
A)  higher wages for carpenters,higher wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher house prices in the future 
B)  higher wages for carpenters,lower wood prices,reductions in consumer incomes,lower apartment rents,decreases in population,and expectations of lower house prices in the future 
C)  lower wages for carpenters,higher wood prices,decreases in consumer incomes,higher apartment rents,decreases in population,and expectations of higher house prices in the future 
D)  lower wages for carpenters,lower wood prices,decreases in consumer incomes,lower apartment rents,decreases in population,and expectations of lower house prices in the future

Question 3

What is the amount of the good buyers are willing and able to purchase?

Accepted Answer

A)  demand 
B)  quantity supplied 
C)  quantity demanded 
D)  supply 
A)  demand 
B)  quantity supplied 
C)  quantity demanded 
D)  supply

Question 4

What is the term for the behaviour of people as they interact with one another in markets?

Accepted Answer

A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology 
A)  economics 
B)  interaction 
C)  demand and supply 
D)  social psychology

Question 5

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Accepted Answer

A)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market 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)  The equilibrium price would increase,but the impact on the amount sold in the market would be ambiguous. 
B)  The equilibrium price would decrease,but the impact on the amount sold in the market 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 6

Table 4-2  
-Refer to the Table 4-2.What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A)  space A 
B)  space B 
C)  space C 
D)  space D 
A)  space A 
B)  space B 
C)  space C 
D)  space D

Question 7

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year,what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

Accepted Answer

A)  It would rise. 
B)  It would fall. 
C)  It would stay the same. 
D)  It could either rise or fall. 
A)  It would rise. 
B)  It would fall. 
C)  It would stay the same. 
D)  It could either rise or fall.

Question 8

What will result from an increase in resource costs to firms in a market?

Accepted Answer

A)  a decrease in equilibrium price and an increase in equilibrium quantity 
B)  a decrease in equilibrium price and a decrease in equilibrium quantity 
C)  an increase in equilibrium price and no change in equilibrium quantity 
D)  an increase in equilibrium price and an decrease in equilibrium quantity 
A)  a decrease in equilibrium price and an increase in equilibrium quantity 
B)  a decrease in equilibrium price and a decrease in equilibrium quantity 
C)  an increase in equilibrium price and no change in equilibrium quantity 
D)  an increase in equilibrium price and an decrease in equilibrium quantity

Question 9

Figure 4-6  
-Refer to the Figure 4-6.What happens if the demand curve shifts from D to D1?

Accepted Answer

A)  Firms would be willing to supply less than before. 
B)  People are less willing to buy the product at any price than before. 
C)  People are now more willing to buy the product at any price than before. 
D)  The price of the product has decreased,causing consumers to buy more of the product. 
A)  Firms would be willing to supply less than before. 
B)  People are less willing to buy the product at any price than before. 
C)  People are now more willing to buy the product at any price than before. 
D)  The price of the product has decreased,causing consumers to buy more of the product.

Question 10

Table 4-1  
-Refer to the Table 4-1.If the price were $3,what would happen?

Accepted Answer

A)  A shortage of 100 units would exist and the price would tend to fall. 
B)  A surplus of 50 units would exist and the price would tend to rise. 
C)  A surplus of 25 units would exist and the price would tend to fall. 
D)  A shortage of 100 units would exist and the price would tend to rise. 
A)  A shortage of 100 units would exist and the price would tend to fall. 
B)  A surplus of 50 units would exist and the price would tend to rise. 
C)  A surplus of 25 units would exist and the price would tend to fall. 
D)  A shortage of 100 units would exist and the price would tend to rise.

Question 11

Why does market price prevail in a perfectly competitive market?

Accepted Answer

A)  because there are few sellers 
B)  because the market is unregulated 
C)  because there are distinctive products 
D)  because no one has market power 
A)  because there are few sellers 
B)  because the market is unregulated 
C)  because there are distinctive products 
D)  because no one has market power

Question 12

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

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 13

Market demand is given as Qd = 150 - P.Market supply is given as Qs = 4P.What would result if the market price were $15?

Accepted Answer

A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 75 
D)  a shortage of 75 
A)  a shortage of 60 
B)  a surplus of 60 
C)  a surplus of 75 
D)  a shortage of 75

Question 14

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $3 to $5,what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.8 
C)  1.0 
D)  4.2 
A)  0.2 
B)  0.8 
C)  1.0 
D)  4.2

Question 15

Market demand is given as Qd = 300 - 0.5P.Market supply is given as Qs = 50 + 2P.What would result if the market price were $140?

Accepted Answer

A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 280 
D)  a shortage of 280 
A)  a shortage of 100 
B)  a surplus of 100 
C)  a surplus of 280 
D)  a shortage of 280

Question 16

Figure 4-10  
-Refer to the Figure 4-10.What would cause the movement from point A to point B on the graph?

Accepted Answer

A)  a decrease in the price of the good 
B)  an increase in the price of the good 
C)  an increase in technology 
D)  a decrease in input prices 
A)  a decrease in the price of the good 
B)  an increase in the price of the good 
C)  an increase in technology 
D)  a decrease in input prices

Question 17

Table 4-3
The table shows individual demand schedules for a market.  
-Refer to the Table 4-3.What happens if the price decreases from $1.50 to $1.00?

Accepted Answer

A)  The market demand increases by 20 units. 
B)  The quantity demanded in the market decreases by 2 units. 
C)  Individual demands will increase. 
D)  The quantity demanded in the market increases by 7 units. 
A)  The market demand increases by 20 units. 
B)  The quantity demanded in the market decreases by 2 units. 
C)  Individual demands will increase. 
D)  The quantity demanded in the market increases by 7 units.

Question 18

Which of the following is NOT one of the steps in analyzing how an event affects a market?

Accepted Answer

A)  Determine the number of market participants. 
B)  Decide whether the curve shifts to the right or to the left. 
C)  Determine whether the event shifts the supply,the demand,or both curves. 
D)  Use a supply-demand diagram to examine how the shift(s)affect the equilibrium. 
A)  Determine the number of market participants. 
B)  Decide whether the curve shifts to the right or to the left. 
C)  Determine whether the event shifts the supply,the demand,or both curves. 
D)  Use a supply-demand diagram to examine how the shift(s)affect the equilibrium.

Question 19

What is a demand curve?

Accepted Answer

A)  the downward-sloping line relating the price of the good to the quantity demanded 
B)  the upward-sloping line relating price to quantity supplied 
C)  the curve that relates income to quantity demanded 
D)  the curve that shows the same relationship between two goods as a production possibilities frontier 
A)  the downward-sloping line relating the price of the good to the quantity demanded 
B)  the upward-sloping line relating price to quantity supplied 
C)  the curve that relates income to quantity demanded 
D)  the curve that shows the same relationship between two goods as a production possibilities frontier

Question 20

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $100 and quantity will be 240 
B)  price will be $30 and quantity will be 100 
C)  price will be $20 and quantity will be 80 
D)  price will be $130 and quantity will be 300 
A)  price will be $100 and quantity will be 240 
B)  price will be $30 and quantity will be 100 
C)  price will be $20 and quantity will be 80 
D)  price will be $130 and quantity will be 300

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers rose and the price of tea rose?

Which of the following would be most likely to decrease the price of a new house?

What is the amount of the good buyers are willing and able to purchase?

What is the term for the behaviour of people as they interact with one another in markets?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Table 4-2 -Refer to the Table 4-2.What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year,what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

What will result from an increase in resource costs to firms in a market?

Figure 4-6 -Refer to the Figure 4-6.What happens if the demand curve shifts from D to D1?

Table 4-1 -Refer to the Table 4-1.If the price were $3,what would happen?

Why does market price prevail in a perfectly competitive market?

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

Market demand is given as Qd = 150 - P.Market supply is given as Qs = 4P.What would result if the market price were $15?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $3 to $5,what is the price elasticity of demand?

Market demand is given as Qd = 300 - 0.5P.Market supply is given as Qs = 50 + 2P.What would result if the market price were $140?

Figure 4-10 -Refer to the Figure 4-10.What would cause the movement from point A to point B on the graph?

Table 4-3 The table shows individual demand schedules for a market. -Refer to the Table 4-3.What happens if the price decreases from $1.50 to $1.00?

Which of the following is NOT one of the steps in analyzing how an event affects a market?

What is a demand curve?

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

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 would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers rose and the price of tea rose?

Which of the following would be most likely to decrease the price of a new house?

What is the amount of the good buyers are willing and able to purchase?

What is the term for the behaviour of people as they interact with one another in markets?

Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Table 4-2 -Refer to the Table 4-2.What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year,what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

What will result from an increase in resource costs to firms in a market?

Figure 4-6 -Refer to the Figure 4-6.What happens if the demand curve shifts from D to D1?

Table 4-1 -Refer to the Table 4-1.If the price were $3,what would happen?

Why does market price prevail in a perfectly competitive market?

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

Market demand is given as Qd = 150 - P.Market supply is given as Qs = 4P.What would result if the market price were $15?

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $3 to $5,what is the price elasticity of demand?

Market demand is given as Qd = 300 - 0.5P.Market supply is given as Qs = 50 + 2P.What would result if the market price were $140?

Figure 4-10 -Refer to the Figure 4-10.What would cause the movement from point A to point B on the graph?

Table 4-3 The table shows individual demand schedules for a market. -Refer to the Table 4-3.What happens if the price decreases from $1.50 to $1.00?

Which of the following is NOT one of the steps in analyzing how an event affects a market?

What is a demand curve?

Market demand is given as Qd = 120 - 2P.Market supply is given as Qs = 2P + 40.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

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