Question 1

Sugar and honey are viewed as substitutes for each other in many cooking applications.If the price of sugar rises,we would expect

Accepted Answer

A) the demand for honey to increase 
B) the demand for honey to decrease 
C) the quantity demanded of honey to decrease 
D) the price of honey to decrease 
E) the quantity demanded of honey to increase 
A) the demand for honey to increase 
B) the demand for honey to decrease 
C) the quantity demanded of honey to decrease 
D) the price of honey to decrease 
E) the quantity demanded of honey to increase

Question 2

Which of the following would shift the supply curve for CDs to the right?

Accepted Answer

A) a decrease in the price of materials used to make CDs 
B) a rise in the cost of labor used to make CDs 
C) an increase in the price of audio cassettes 
D) a decrease in the number of suppliers 
E) an increase in the price of CDs 
A) a decrease in the price of materials used to make CDs 
B) a rise in the cost of labor used to make CDs 
C) an increase in the price of audio cassettes 
D) a decrease in the number of suppliers 
E) an increase in the price of CDs

Question 3

Economists emphasize the importance of equilibrium in markets because

Accepted Answer

A) trading in markets can only occur at the equilibrium price and quantity 
B) the behavior of buyers and sellers will automatically guide the market toward the equilibrium price and quantity 
C) all buyers and sellers are better off at the equilibrium point than any other price and quantity combination 
D) it represents a compromise between sellers hoping for low prices and buyers searching for high prices 
E) it is the only price-quantity combination that guarantees that the poorest members of society can purchase the good or service 
A) trading in markets can only occur at the equilibrium price and quantity 
B) the behavior of buyers and sellers will automatically guide the market toward the equilibrium price and quantity 
C) all buyers and sellers are better off at the equilibrium point than any other price and quantity combination 
D) it represents a compromise between sellers hoping for low prices and buyers searching for high prices 
E) it is the only price-quantity combination that guarantees that the poorest members of society can purchase the good or service

Question 4

Exhibit 4-13  
-Refer to Exhibit 4-13.If the price increases from P to P',the result will be a(n)

Accepted Answer

A) shortage 
B) equilibrium 
C) clearing of the market 
D) surplus 
E) excess quantity demanded 
A) shortage 
B) equilibrium 
C) clearing of the market 
D) surplus 
E) excess quantity demanded

Question 5

An increase in supply will cause a(n)

Accepted Answer

A) increase in demand 
B) decrease in demand 
C) increase in quantity demanded 
D) decrease in equilibrium quantity demanded 
E) increase in equilibrium price 
A) increase in demand 
B) decrease in demand 
C) increase in quantity demanded 
D) decrease in equilibrium quantity demanded 
E) increase in equilibrium price

Question 6

Assume that corn and soybeans are alternatives that could be grown by most farmers.An increase in the price of corn will

Accepted Answer

A) increase the supply of corn 
B) increase the supply of soybeans 
C) decrease the supply of soybeans 
D) decrease the supply of corn 
E) have no effect on the supplies of corn and soybeans 
A) increase the supply of corn 
B) increase the supply of soybeans 
C) decrease the supply of soybeans 
D) decrease the supply of corn 
E) have no effect on the supplies of corn and soybeans

Question 7

Which of the following would not shift the demand curve for pork?

Accepted Answer

A) an increase in the price of beef 
B) an increase in the price of pork 
C) an increase in the incomes of pork consumers 
D) a widespread advertising campaign for pork 
E) a finding that consumption of beef increases the risk of heart attack 
A) an increase in the price of beef 
B) an increase in the price of pork 
C) an increase in the incomes of pork consumers 
D) a widespread advertising campaign for pork 
E) a finding that consumption of beef increases the risk of heart attack

Question 8

Exhibit 4-2  
-Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S1 to S0?

Accepted Answer

A) an increase in the price cattle feed 
B) the expectation of a higher price in the near future 
C) an increase in the price of milk 
D) a decrease in the price of beef 
E) a new and improved cattle food that increases the yield per dairy cow 
A) an increase in the price cattle feed 
B) the expectation of a higher price in the near future 
C) an increase in the price of milk 
D) a decrease in the price of beef 
E) a new and improved cattle food that increases the yield per dairy cow

Question 9

If the price of a haircut (a normal good)increases,other things constant,the

Accepted Answer

A) demand for haircuts increases 
B) demand for haircuts decreases 
C) quantity demanded of haircuts decreases 
D) quantity demanded of haircuts increases 
E) demand for haircuts,or quantity demanded of haircuts decreases; they are the same thing 
A) demand for haircuts increases 
B) demand for haircuts decreases 
C) quantity demanded of haircuts decreases 
D) quantity demanded of haircuts increases 
E) demand for haircuts,or quantity demanded of haircuts decreases; they are the same thing

Question 10

If a decrease in the price of good A causes an increase in the demand for good B,then A and B must be complements.

Accepted Answer

A) True 
 B)False

Question 11

Producers are willing and able to offer greater quantities for sale at higher prices because

Accepted Answer

A) they have the incentive to pay the increasing opportunity cost of resources to attract them from alternative uses 
B) they will decrease their profits by expanding production at higher prices 
C) the government orders them to do so 
D) lower prices attract new firms,which have higher costs of production 
E) they hire superior quality,higher-priced resources as production expands 
A) they have the incentive to pay the increasing opportunity cost of resources to attract them from alternative uses 
B) they will decrease their profits by expanding production at higher prices 
C) the government orders them to do so 
D) lower prices attract new firms,which have higher costs of production 
E) they hire superior quality,higher-priced resources as production expands

Question 12

As the baby boom ended,fewer families had young children and,as a consequence,the

Accepted Answer

A) demand curve for preschool services shifted outward 
B) demand curve for preschool services shifted inward 
C) supply curve for preschool services shifted outward 
D) supply curve for preschool services shifted inward 
E) supply and demand curves for preschool services remained constant 
A) demand curve for preschool services shifted outward 
B) demand curve for preschool services shifted inward 
C) supply curve for preschool services shifted outward 
D) supply curve for preschool services shifted inward 
E) supply and demand curves for preschool services remained constant

Question 13

Exhibit 4-14  
-Refer to exhibit 4-14.The discovery that breast milk provides more protection against disease than baby formula will cause which of the following to happen?

Accepted Answer

A) a movement from a to b on demand curve D1 
B) a demand shift from D1 to D2 
C) movement from c to d on demand curve D2 
D) demand shift from D2 to D1 
E) either a or b 
A) a movement from a to b on demand curve D1 
B) a demand shift from D1 to D2 
C) movement from c to d on demand curve D2 
D) demand shift from D2 to D1 
E) either a or b

Question 14

Exhibit 4-12  
-Refer to Exhibit 4-12.A shift from supply curve S to supply curve S' could be caused by a(n)

Accepted Answer

A) decrease in consumer income 
B) increase in the current price of the product 
C) patent application that restricts the use of a particular production technology 
D) several competing producers going out of business 
E) supplier expecting higher product prices in the future 
A) decrease in consumer income 
B) increase in the current price of the product 
C) patent application that restricts the use of a particular production technology 
D) several competing producers going out of business 
E) supplier expecting higher product prices in the future

Question 15

Exhibit 4-10  
-Refer to Exhibit 4-10.A shift from demand curve D to demand curve D' would be caused by a(n)

Accepted Answer

A) decrease in the price of the product under consideration 
B) significant decrease in population because of emigration 
C) increase in consumer income 
D) decrease in the number of producers of the product 
E) increase in the price of a relevant resource 
A) decrease in the price of the product under consideration 
B) significant decrease in population because of emigration 
C) increase in consumer income 
D) decrease in the number of producers of the product 
E) increase in the price of a relevant resource

Question 16

If there is a shortage in the market for automobiles,then

Accepted Answer

A) producers' inventories will rise 
B) the price should begin to rise 
C) the demand curve will shift to restore equilibrium in the market 
D) the supply curve will shift to restore equilibrium in the market 
E) the price is expected to fall 
A) producers' inventories will rise 
B) the price should begin to rise 
C) the demand curve will shift to restore equilibrium in the market 
D) the supply curve will shift to restore equilibrium in the market 
E) the price is expected to fall

Question 17

If suppliers expect an increase in price,they will reduce the current supply of a good.

Accepted Answer

A) True 
 B)False

Question 18

As the price of ballpoint pens increases,the demand for felt-tip pens can be expected to decrease.

Accepted Answer

A) True 
 B)False

Question 19

Many people argue against increasing the minimum wage because they believe the result would be increased unemployment.Which of the following best summarizes this argument? A higher minimum wage would

Accepted Answer

A) increase the supply of labor while decreasing the demand for labor 
B) decrease the supply of labor while increasing the demand for labor 
C) increase the quantity supplied of labor while decreasing the quantity demanded of labor 
D) decrease the quantity supplied of labor while increasing the quantity demanded of labor 
E) increase the supply of labor while decreasing the quantity demanded of labor 
A) increase the supply of labor while decreasing the demand for labor 
B) decrease the supply of labor while increasing the demand for labor 
C) increase the quantity supplied of labor while decreasing the quantity demanded of labor 
D) decrease the quantity supplied of labor while increasing the quantity demanded of labor 
E) increase the supply of labor while decreasing the quantity demanded of labor

Question 20

Supply and demand curves both

Accepted Answer

A) have negative slopes 
B) have positive slopes 
C) relate quantities to prices 
D) reflect the actions of producers 
E) reflect the actions of consumers 
A) have negative slopes 
B) have positive slopes 
C) relate quantities to prices 
D) reflect the actions of producers 
E) reflect the actions of consumers

Exam 4: Demand, supply, and Markets

Sugar and honey are viewed as substitutes for each other in many cooking applications.If the price of sugar rises,we would expect

Which of the following would shift the supply curve for CDs to the right?

Economists emphasize the importance of equilibrium in markets because

Exhibit 4-13 -Refer to Exhibit 4-13.If the price increases from P to P',the result will be a(n)

An increase in supply will cause a(n)

Assume that corn and soybeans are alternatives that could be grown by most farmers.An increase in the price of corn will

Which of the following would not shift the demand curve for pork?

Exhibit 4-2 -Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S1 to S0?

If the price of a haircut (a normal good)increases,other things constant,the

If a decrease in the price of good A causes an increase in the demand for good B,then A and B must be complements.

Producers are willing and able to offer greater quantities for sale at higher prices because

As the baby boom ended,fewer families had young children and,as a consequence,the

Exhibit 4-14 -Refer to exhibit 4-14.The discovery that breast milk provides more protection against disease than baby formula will cause which of the following to happen?

Exhibit 4-12 -Refer to Exhibit 4-12.A shift from supply curve S to supply curve S' could be caused by a(n)

Exhibit 4-10 -Refer to Exhibit 4-10.A shift from demand curve D to demand curve D' would be caused by a(n)

If there is a shortage in the market for automobiles,then

If suppliers expect an increase in price,they will reduce the current supply of a good.

As the price of ballpoint pens increases,the demand for felt-tip pens can be expected to decrease.

Many people argue against increasing the minimum wage because they believe the result would be increased unemployment.Which of the following best summarizes this argument? A higher minimum wage would

Supply and demand curves both

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters

Exhibit 4-2 -Consider Exhibit 4-2 which shows 3 supply curves for milk.Which of the following would shift the supply curve for milk from S₁ to S₀?