Question 1

Figure 4-21  
-Refer to Figure 4-21.At a price of $16,there is a

Accepted Answer

A) surplus of 1 unit. 
B) surplus of 3 units. 
C) shortage of 1 unit. 
D) shortage of 3 units. 
A) surplus of 1 unit. 
B) surplus of 3 units. 
C) shortage of 1 unit. 
D) shortage of 3 units.

Question 2

In a given market,how are the equilibrium price and the market-clearing price related?

Accepted Answer

A) There is no relationship. 
B) They are the same price. 
C) The market-clearing price exceeds the equilibrium price. 
D) The equilibrium price exceeds the market-clearing price. 
A) There is no relationship. 
B) They are the same price. 
C) The market-clearing price exceeds the equilibrium price. 
D) The equilibrium price exceeds the market-clearing price.

Question 3

Suppose that demand for a good increases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Accepted Answer

A) Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase,but the impact on equilibrium quantity 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) Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase,but the impact on equilibrium quantity 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 4

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 5

Figure 4-20  
-Refer to Figure 4-20.If the price is $25,then there would be an excess

Accepted Answer

A) supply of 100 units,and price would fall. 
B) supply of 300 units,and price would fall. 
C) demand of 100 units,and price would fall. 
D) demand of 300 units,and price would fall. 
A) supply of 100 units,and price would fall. 
B) supply of 300 units,and price would fall. 
C) demand of 100 units,and price would fall. 
D) demand of 300 units,and price would fall.

Question 6

Which of the following events must cause equilibrium quantity to rise?

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

Question 7

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 8

Equilibrium quantity must decrease when demand

Accepted Answer

A) increases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease. 
B) increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease. 
C) decreases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease. 
D) decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease. 
A) increases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease. 
B) increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease. 
C) decreases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease. 
D) decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.

Question 9

Suppose the number of buyers in a market increases 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 price would increase,but the impact on equilibrium quantity 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) Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous. 
B) Equilibrium price would increase,but the impact on equilibrium quantity 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 10

The market for diamond rings is closely linked to the market for high-quality diamonds.If a large quantity of high-quality diamonds enters the market,then the

Accepted Answer

A) supply curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity. 
B) supply curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity. 
C) demand curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity. 
D) demand curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity. 
A) supply curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity. 
B) supply curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity. 
C) demand curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity. 
D) demand curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity.

Question 11

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive,digital cameras become cheaper,the cost of the resources needed to manufacture traditional film falls,and more firms decide to manufacture traditional film?

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 12

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 13

If macaroni and cheese is an inferior good,what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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 14

Figure 4-18  
-Refer to Figure 4-18.At a price of $35,there would be a

Accepted Answer

A) shortage of 400 units. 
B) surplus of 200 units. 
C) surplus of 400 units. 
D) surplus of 600 units. 
A) shortage of 400 units. 
B) surplus of 200 units. 
C) surplus of 400 units. 
D) surplus of 600 units.

Question 15

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

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 16

Which of the following events must cause equilibrium price to rise?

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

Question 17

Consider the market for portable air conditioners in equilibrium.When a heat wave strikes the equilibrium price

Accepted Answer

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

Question 18

Figure 4-18  
-Refer to Figure 4-18.At what price would there be an excess demand of 200 units of the good?

Accepted Answer

A) $15 
B) $20 
C) $30 
D) $35 
A) $15 
B) $20 
C) $30 
D) $35

Question 19

New oak tables are normal goods.What would 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 the glue used in the production of the new oak tables 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 20

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A) an increase in the price of wool shirts and a decrease in the price of raw cotton 
B) a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C) an increase in the price of wool shirts and an increase in the price of raw cotton 
D) a decrease in the price of wool shirts and an increase in the price of raw cotton 
A) an increase in the price of wool shirts and a decrease in the price of raw cotton 
B) a decrease in the price of wool shirts and a decrease in the price of raw cotton 
C) an increase in the price of wool shirts and an increase in the price of raw cotton 
D) a decrease in the price of wool shirts and an increase in the price of raw cotton

Exam 4: The Market Forces of Supply and Demand: Supply and Demand Together

Figure 4-21 -Refer to Figure 4-21.At a price of $16,there is a

In a given market,how are the equilibrium price and the market-clearing price related?

Suppose that demand for a good increases and,at the same time,supply of the good decreases.What would happen in the market for the good?

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

Figure 4-20 -Refer to Figure 4-20.If the price is $25,then there would be an excess

Which of the following events must cause equilibrium quantity to rise?

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

Equilibrium quantity must decrease when demand

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

The market for diamond rings is closely linked to the market for high-quality diamonds.If a large quantity of high-quality diamonds enters the market,then the

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive,digital cameras become cheaper,the cost of the resources needed to manufacture traditional film falls,and more firms decide to manufacture traditional film?

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

If macaroni and cheese is an inferior good,what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Figure 4-18 -Refer to Figure 4-18.At a price of $35,there would be a

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Which of the following events must cause equilibrium price to rise?

Consider the market for portable air conditioners in equilibrium.When a heat wave strikes the equilibrium price

Figure 4-18 -Refer to Figure 4-18.At what price would there be an excess demand of 200 units of the good?

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Application International Trade: Part B