Question 1

According to the law of supply, other things equal, when the price of a good or service rises, the quantity supplied increases, but supply does not.

Accepted Answer

A) True 
 B)False

Question 2

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

Accepted Answer

A) ​demand has increased. 
B) ​demand has decreased. 
C) ​quantity demanded has increased. 
D) ​quantity demanded has decreased. 
A) ​demand has increased. 
B) ​demand has decreased. 
C) ​quantity demanded has increased. 
D) ​quantity demanded has decreased.

Question 3

A competitive market is one in which a number of buyers and sellers are offering similar products, and no single buyer or seller can influence the market price.

Accepted Answer

A) True 
 B)False

Question 4

A supply schedule shows:

Accepted Answer

A) ​projected sales as ad spending varies. 
B) ​how many units producers are willing and able to sell at various prices. 
C) ​possible combinations of output as input prices vary. 
D) ​how many units consumers would like to buy at various prices. 
A) ​projected sales as ad spending varies. 
B) ​how many units producers are willing and able to sell at various prices. 
C) ​possible combinations of output as input prices vary. 
D) ​how many units consumers would like to buy at various prices.

Question 5

​Exhibit 4-4  
-Refer to Exhibit 4-4. A change from Point A to Point E represents a(n):

Accepted Answer

A) ​increase in demand. 
B) ​decrease in demand. 
C) ​decrease in quantity demanded. 
D) ​increase in quantity demanded. 
A) ​increase in demand. 
B) ​decrease in demand. 
C) ​decrease in quantity demanded. 
D) ​increase in quantity demanded.

Question 6

The quantity supplied of a good is the amount that

Accepted Answer

A) ​buyers are willing and able to purchase. 
B) ​sellers are able to produce. 
C) ​buyers and sellers agree will be brought to market. 
D) ​sellers are willing and able to sell. 
A) ​buyers are willing and able to purchase. 
B) ​sellers are able to produce. 
C) ​buyers and sellers agree will be brought to market. 
D) ​sellers are willing and able to sell.

Question 7

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Accepted Answer

A) ​a decrease in the price of electricity 
B) ​an increase in the price of air conditioners 
C) ​an increase in the price of heating oil 
D) ​a decrease in the price of natural gas 
A) ​a decrease in the price of electricity 
B) ​an increase in the price of air conditioners 
C) ​an increase in the price of heating oil 
D) ​a decrease in the price of natural gas

Question 8

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

A) ​above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) ​above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) ​below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) ​below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A) ​above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B) ​above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C) ​below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D) ​below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 9

Exhibit 4-2  
-Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D0 would indicate a(n):

Accepted Answer

A) ​increase in demand. 
B) ​decrease in demand. 
C) ​increase in quantity demanded. 
D) ​decrease in quantity demanded. 
A) ​increase in demand. 
B) ​decrease in demand. 
C) ​increase in quantity demanded. 
D) ​decrease in quantity demanded.

Question 10

​Exhibit 4-6  
-Refer to Exhibit 4-6. A supply shift from S0 to S2 can be best explained by:

Accepted Answer

A) ​input price increases. 
B) ​rise in taxes. 
C) ​bad weather. 
D) ​a technological advance. 
A) ​input price increases. 
B) ​rise in taxes. 
C) ​bad weather. 
D) ​a technological advance.

Question 11

If Eric expects to earn more income next month, he may choose to

Accepted Answer

A) ​save more now and spend less of his current income on goods and services. 
B) ​save less now and spend more of his current income on goods and services. 
C) ​decrease his current demand for goods and services. 
D) ​decrease his late demand for goods and services. 
A) ​save more now and spend less of his current income on goods and services. 
B) ​save less now and spend more of his current income on goods and services. 
C) ​decrease his current demand for goods and services. 
D) ​decrease his late demand for goods and services.

Question 12

Which of the following is true?

Accepted Answer

A) ​A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
B) ​According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
C) ​A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
D) ​None of the above is true. 
A) ​A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. 
B) ​According to the law of demand, other things equal, when the price of a good or service falls, demand increases. 
C) ​A change in demand for chocolate bars is caused by a change in the price of chocolate bars. 
D) ​None of the above is true.

Question 13

If Diet Pepsi and Diet Coke are substitutes than an increase in the price of Diet Pepsi will cause a decrease in demand for Diet Coke.

Accepted Answer

A) True 
 B)False

Question 14

At the equilibrium price for gasoline:

Accepted Answer

A) ​everyone with the desire and the income to buy gasoline at that price can do so. 
B) ​surpluses are inevitable. 
C) ​quantity demanded exceeds the quantity supplied. 
D) ​none of the above 
A) ​everyone with the desire and the income to buy gasoline at that price can do so. 
B) ​surpluses are inevitable. 
C) ​quantity demanded exceeds the quantity supplied. 
D) ​none of the above

Question 15

Which of the following would shift a supply curve to the right?

Accepted Answer

A) ​Taxes 
B) ​Import restrictions 
C) ​Import duties 
D) ​Subsidies 
A) ​Taxes 
B) ​Import restrictions 
C) ​Import duties 
D) ​Subsidies

Question 16

According to the law of supply, when the price of a good increases we would predict that:

Accepted Answer

A) ​less will be produced. 
B) ​less will be consumed. 
C) ​more will be produced. 
D) ​more will be consumed. 
A) ​less will be produced. 
B) ​less will be consumed. 
C) ​more will be produced. 
D) ​more will be consumed.

Question 17

​Exhibit 4-5  
-Refer to Exhibit 4-5. A change from Point A to Point D represents a(n):

Accepted Answer

A) ​increase in supply. 
B) ​decrease in supply. 
C) ​increase in quantity supplied. 
D) ​decrease in quantity supplied. 
A) ​increase in supply. 
B) ​decrease in supply. 
C) ​increase in quantity supplied. 
D) ​decrease in quantity supplied.

Question 18

Which of the following is not a valid relationship?

Accepted Answer

A) ​For a normal good: demand for a good increases when income falls. 
B) ​For a normal good: demand for a good decreases when income falls. 
C) ​For an inferior good: demand for a good decreases when income rises. 
D) ​For an inferior good: demand for a good increases when income falls. 
A) ​For a normal good: demand for a good increases when income falls. 
B) ​For a normal good: demand for a good decreases when income falls. 
C) ​For an inferior good: demand for a good decreases when income rises. 
D) ​For an inferior good: demand for a good increases when income falls.

Question 19

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n):

Accepted Answer

A) ​increase in quantity supplied. 
B) ​increase in demand. 
C) ​increase in supply. 
D) ​decrease in demand. 
A) ​increase in quantity supplied. 
B) ​increase in demand. 
C) ​increase in supply. 
D) ​decrease in demand.

Question 20

The law of demand refers to the:

Accepted Answer

A) ​decrease in price that results as more units of a product are demanded. 
B) ​increase in price that results from an increase in demand for a good of limited supply. 
C) ​inverse relationship between the price of a good and the quantity demanded. 
D) ​increase in the quantity of a good made available when its price increases. 
A) ​decrease in price that results as more units of a product are demanded. 
B) ​increase in price that results from an increase in demand for a good of limited supply. 
C) ​inverse relationship between the price of a good and the quantity demanded. 
D) ​increase in the quantity of a good made available when its price increases.

Exam 4: Demand, Supply, and Market Equilibrium

According to the law of supply, other things equal, when the price of a good or service rises, the quantity supplied increases, but supply does not.

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

A competitive market is one in which a number of buyers and sellers are offering similar products, and no single buyer or seller can influence the market price.

A supply schedule shows:

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n):

The quantity supplied of a good is the amount that

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

If a shortage exists in a market, then we know that the actual price is

Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D0 would indicate a(n):

​Exhibit 4-6 -Refer to Exhibit 4-6. A supply shift from S0 to S2 can be best explained by:

If Eric expects to earn more income next month, he may choose to

Which of the following is true?

If Diet Pepsi and Diet Coke are substitutes than an increase in the price of Diet Pepsi will cause a decrease in demand for Diet Coke.

At the equilibrium price for gasoline:

Which of the following would shift a supply curve to the right?

According to the law of supply, when the price of a good increases we would predict that:

​Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point D represents a(n):

Which of the following is not a valid relationship?

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n):

The law of demand refers to the:

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n):

Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D₁, a shift to D₀ would indicate a(n):

Exhibit 4-6 -Refer to Exhibit 4-6. A supply shift from S₀ to S₂ can be best explained by:

Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point D represents a(n):