Question 1

Which of the following would be most likely to increase 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)  lower wages for carpenters,lower wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher 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)  lower wages for carpenters,lower wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher 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 2

What is the relationship between price and quantity supplied?

Accepted Answer

A)  negative,or inverse 
B)  positive,or direct 
C)  nonexistent 
D)  the same as the relationship between price and quantity demanded 
A)  negative,or inverse 
B)  positive,or direct 
C)  nonexistent 
D)  the same as the relationship between price and quantity demanded

Question 3

Other things equal,what happens when the price of a good rises?

Accepted Answer

A)  The quantity demanded of the good increases. 
B)  The supply increases. 
C)  The quantity supplied of the good rises. 
D)  The demand curve shifts to the left. 
A)  The quantity demanded of the good increases. 
B)  The supply increases. 
C)  The quantity supplied of the good rises. 
D)  The demand curve shifts to the left.

Question 4

Market demand is Qd = 200 - 6P.Market supply is Qs = 4P.In a perfectly competitive equilibrium,what will be the price?

Accepted Answer

A)  $150 
B)  $120 
C)  $30 
D)  $20 
A)  $150 
B)  $120 
C)  $30 
D)  $20

Question 5

If cigarettes and marijuana had been found to be substitutes,what would a tax placed on cigarettes do?

Accepted Answer

A)  decrease the demand for marijuana 
B)  increase the demand for marijuana 
C)  decrease the quantity demanded of marijuana 
D)  increase the quantity demanded of marijuana 
A)  decrease the demand for marijuana 
B)  increase the demand for marijuana 
C)  decrease the quantity demanded of marijuana 
D)  increase the quantity demanded of marijuana

Question 6

Figure 4-4  
-Refer to the Figure 4-4.If the price is $25,what would happen?

Accepted Answer

A)  There would be a surplus of 300 and the price would fall. 
B)  There would be a surplus of 200 and the price would fall. 
C)  There would be a shortage of 200 and the price would rise. 
D)  There would be a shortage of 300 and the price would rise. 
A)  There would be a surplus of 300 and the price would fall. 
B)  There would be a surplus of 200 and the price would fall. 
C)  There would be a shortage of 200 and the price would rise. 
D)  There would be a shortage of 300 and the price would rise.

Question 7

On what basis is a good considered either a normal good or an inferior good?

Accepted Answer

A)  the quality of the good 
B)  the price of the good 
C)  personal preference toward the good 
D)  the amount of a person's income 
A)  the quality of the good 
B)  the price of the good 
C)  personal preference toward the good 
D)  the amount of a person's income

Question 8

What does a demand curve illustrate?

Accepted Answer

A)  the negative relationship between number of buyers and quantity demanded 
B)  the positive relationship between price and quantity demanded 
C)  the negative relationship between price and quantity demanded 
D)  the maximum quantity of two goods an economy is capable of producing with available resources and technology 
A)  the negative relationship between number of buyers and quantity demanded 
B)  the positive relationship between price and quantity demanded 
C)  the negative relationship between price and quantity demanded 
D)  the maximum quantity of two goods an economy is capable of producing with available resources and technology

Question 9

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

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 10

If the supply of a product increases,what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 11

Wheat is the main input in the production of flour.All else equal,if the price of wheat decreases,what would we expect?

Accepted Answer

A)  the supply of flour to decrease 
B)  the demand for flour to decrease 
C)  the supply of flour to increase 
D)  the demand for flour to increase 
A)  the supply of flour to decrease 
B)  the demand for flour to decrease 
C)  the supply of flour to increase 
D)  the demand for flour to increase

Question 12

Funsters Inc.sells its most popular doll for $35.It has just learned that its leading competitor is mass producing an excellent copy and plans to flood the market with their $10 doll in six weeks.What should Funsters do?

Accepted Answer

A)  increase the supply of their doll now before the other doll hits the market 
B)  fight fire with fire and decrease supply for six weeks,then increase the supply of its doll too 
C)  continue business as usual,since consumers will not buy the cheaper imitation 
D)  discontinue their doll 
A)  increase the supply of their doll now before the other doll hits the market 
B)  fight fire with fire and decrease supply for six weeks,then increase the supply of its doll too 
C)  continue business as usual,since consumers will not buy the cheaper imitation 
D)  discontinue their doll

Question 13

Market demand is given as Qd = 80 - 2P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $20 and quantity will be 10 
B)  price will be $20 and quantity will be 40 
C)  price will be $10 and quantity will be 20 
D)  price will be $40 and quantity will be 20 
A)  price will be $20 and quantity will be 10 
B)  price will be $20 and quantity will be 40 
C)  price will be $10 and quantity will be 20 
D)  price will be $40 and quantity will be 20

Question 14

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $25 to $30,what is the price elasticity of demand?

Accepted Answer

A)  0.7 
B)  0.8 
C)  1.0 
D)  1.2 
A)  0.7 
B)  0.8 
C)  1.0 
D)  1.2

Question 15

Figure 4-3
​  
-Refer to the Figure 4-3.In this market,what are the equilibrium price and quantity?

Accepted Answer

A)  $14 and 30 
B)  $12 and 60 
C)  $10 and 50 
D)  $8 and 50 
A)  $14 and 30 
B)  $12 and 60 
C)  $10 and 50 
D)  $8 and 50

Question 16

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Question 17

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 18

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products.What would the market for wheat be considered?

Accepted Answer

A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive 
A)  oligopolistic 
B)  monopolistic 
C)  perfectly competitive 
D)  monopolistically competitive

Question 19

What will a technological advancement do?

Accepted Answer

A)  shift the supply curve to the right 
B)  shift the demand curve to the left 
C)  shift the demand curve to the right 
D)  shift the supply curve to the left 
A)  shift the supply curve to the right 
B)  shift the demand curve to the left 
C)  shift the demand curve to the right 
D)  shift the supply curve to the left

Question 20

Which of the following will definitely cause equilibrium quantity to fall?

Accepted Answer

A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase 
A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase

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

What is the relationship between price and quantity supplied?

Other things equal,what happens when the price of a good rises?

Market demand is Qd = 200 - 6P.Market supply is Qs = 4P.In a perfectly competitive equilibrium,what will be the price?

If cigarettes and marijuana had been found to be substitutes,what would a tax placed on cigarettes do?

Figure 4-4 -Refer to the Figure 4-4.If the price is $25,what would happen?

On what basis is a good considered either a normal good or an inferior good?

What does a demand curve illustrate?

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

If the supply of a product increases,what would we expect?

Wheat is the main input in the production of flour.All else equal,if the price of wheat decreases,what would we expect?

Funsters Inc.sells its most popular doll for $35.It has just learned that its leading competitor is mass producing an excellent copy and plans to flood the market with their $10 doll in six weeks.What should Funsters do?

Market demand is given as Qd = 80 - 2P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $25 to $30,what is the price elasticity of demand?

Figure 4-3 -Refer to the Figure 4-3.In this market,what are the equilibrium price and quantity?

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products.What would the market for wheat be considered?

What will a technological advancement do?

Which of the following will definitely cause equilibrium quantity to fall?

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

Exam 4: The Market Forces of Supply and Demand

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

What is the relationship between price and quantity supplied?

Other things equal,what happens when the price of a good rises?

Market demand is Qd = 200 - 6P.Market supply is Qs = 4P.In a perfectly competitive equilibrium,what will be the price?

If cigarettes and marijuana had been found to be substitutes,what would a tax placed on cigarettes do?

Figure 4-4 -Refer to the Figure 4-4.If the price is $25,what would happen?

On what basis is a good considered either a normal good or an inferior good?

What does a demand curve illustrate?

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

If the supply of a product increases,what would we expect?

Wheat is the main input in the production of flour.All else equal,if the price of wheat decreases,what would we expect?

Funsters Inc.sells its most popular doll for $35.It has just learned that its leading competitor is mass producing an excellent copy and plans to flood the market with their $10 doll in six weeks.What should Funsters do?

Market demand is given as Qd = 80 - 2P.Market supply is given as Qs = 2P.In a perfectly competitive equilibrium,what will be price and quantity traded in the market?

Market demand is given as QD = 300 - 6P.Market supply is given as QS = 4P.If price increases from $25 to $30,what is the price elasticity of demand?

Figure 4-3 ​ -Refer to the Figure 4-3.In this market,what are the equilibrium price and quantity?

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

A movement along a supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.

There are thousands of wheat farmers who produce and sell wheat and there are millions of consumers who use wheat and wheat products.What would the market for wheat be considered?

What will a technological advancement do?

Which of the following will definitely cause equilibrium quantity to fall?

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

Figure 4-3 -Refer to the Figure 4-3.In this market,what are the equilibrium price and quantity?