Question 1

Exhibit 4-2  
-Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D2 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 2

The law of demand states that, ceteris paribus, an increase in

Accepted Answer

A) ​price causes quantity demanded to increase. 
B) ​price causes quantity demanded to decrease. 
C) ​quantity demanded causes price to increase. 
D) ​quantity demanded causes price to decrease. 
A) ​price causes quantity demanded to increase. 
B) ​price causes quantity demanded to decrease. 
C) ​quantity demanded causes price to increase. 
D) ​quantity demanded causes price to decrease.

Question 3

An increase in the price of a good will

Accepted Answer

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

Question 4

Which of the following will not cause a change in the demand for a product?

Accepted Answer

A) ​a change in consumer income 
B) ​a change in consumer preferences 
C) ​a change in the price of the product 
D) ​a change in the price of a substitute product 
A) ​a change in consumer income 
B) ​a change in consumer preferences 
C) ​a change in the price of the product 
D) ​a change in the price of a substitute product

Question 5

A downward-sloping demand curve shows:

Accepted Answer

A) ​the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B) ​the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C) ​the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D) ​the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases. 
A) ​the direct relationship between price and quantity supplied; as price increases, the quantity supplied increases. 
B) ​the inverse relationship between price and quantity supplied; as price increases, the quantity supplied decreases. 
C) ​the direct relationship between price and quantity demanded; as price increases, the quantity demanded increases. 
D) ​the inverse relationship between price and quantity demanded; as price increases, the quantity demanded decreases.

Question 6

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit. That change would be described as:

Accepted Answer

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

Question 7

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Accepted Answer

A) ​is greater than the quantity that sellers are willing and able to sell. 
B) ​exactly equals the quantity that sellers are willing and able to sell. 
C) ​is less than the quantity that sellers are willing and able to sell. 
D) ​there is no scarcity. 
A) ​is greater than the quantity that sellers are willing and able to sell. 
B) ​exactly equals the quantity that sellers are willing and able to sell. 
C) ​is less than the quantity that sellers are willing and able to sell. 
D) ​there is no scarcity.

Question 8

If the market for wheat is in equilibrium, the quantity of wheat demanded will equal the quantity of wheat supplied.

Accepted Answer

A) True 
 B)False

Question 9

As the price of DVD players has fallen over the last two years, more DVD players have been sold by consumer electronics firms. Is this a violation of the law of supply?

Accepted Answer

No. Very likely the reduction in price i

Question 10

Differentiate between a change in quantity demanded and a change in demand.

Accepted Answer

A change in a good's own, current price

Question 11

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

Accepted Answer

A) ​Skippy's demand for peanut butter will increase, but not until the end of the year. 
B) ​Skippy's demand for peanut butter increases today. 
C) ​Skippy's demand for peanut butter decreases as he considers buying almond butter. 
D) ​Skippy's demand for peanut butter shifts left today. 
A) ​Skippy's demand for peanut butter will increase, but not until the end of the year. 
B) ​Skippy's demand for peanut butter increases today. 
C) ​Skippy's demand for peanut butter decreases as he considers buying almond butter. 
D) ​Skippy's demand for peanut butter shifts left today.

Question 12

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt, a substitute.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the table below. If these three firms represented the entire market, how many mid-sized autos would be supplied at a price of $30,000? ​
Price for
Mid-Sized Auto
​
GM
​
Ford
​
Chrysler
​
Market
$22,000
10,000
8,000
4,000
​
$24,000
12,000
10,000
5,000
​
$26,000
15,000
12,000
7,000
​
$28,000
19,000
14,000
10,000
​
$30,000
24,000
16,000
14,000
​

Accepted Answer

A) ​43,000 
B) ​54,000 
C) ​126,000 
D) ​158,000 
A) ​43,000 
B) ​54,000 
C) ​126,000 
D) ​158,000

Question 14

An increase in demand could be caused by

Accepted Answer

A) ​a decrease in price. 
B) ​a decrease in income, assuming the good is inferior. 
C) ​buyers expecting the price of the good to fall in the near future. 
D) ​an increase in the price of a complement. 
A) ​a decrease in price. 
B) ​a decrease in income, assuming the good is inferior. 
C) ​buyers expecting the price of the good to fall in the near future. 
D) ​an increase in the price of a complement.

Question 15

Two goods are complements if a decrease in the price of one causes an increase in the demand for the other good.

Accepted Answer

A) True 
 B)False

Question 16

The demand schedule for a good:

Accepted Answer

A) ​indicates the quantity that people will buy at the prevailing price. 
B) ​indicates the quantities that suppliers will sell at various market prices. 
C) ​indicates the quantities that will be purchased at alternative market prices. 
D) ​is determined primarily by the cost of producing the good. 
A) ​indicates the quantity that people will buy at the prevailing price. 
B) ​indicates the quantities that suppliers will sell at various market prices. 
C) ​indicates the quantities that will be purchased at alternative market prices. 
D) ​is determined primarily by the cost of producing the good.

Question 17

Suppose the price of gasoline and other petroleum products decline sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

Accepted Answer

A) ​an increase in demand for solar heating systems 
B) ​an increase in demand for larger, more powerful automobiles 
C) ​an increase in demand for home insulation products 
D) ​an increase in demand for gasoline 
A) ​an increase in demand for solar heating systems 
B) ​an increase in demand for larger, more powerful automobiles 
C) ​an increase in demand for home insulation products 
D) ​an increase in demand for gasoline

Question 18

In the three months before a $1 per pack cigarette tax took effect in Alaska, smokers bought 175 million more cigarettes than during the same period a year earlier. What explains this behavior by consumers?

Accepted Answer

The increase of $1 per pack is pretty si

Question 19

How do orange growers react to the news of medical research findings that suggest that eating oranges leads to greater health benefits than were previously known?

Accepted Answer

A) ​They increase the supply of oranges. 
B) ​They increase the quantity of oranges supplied. 
C) ​They decrease the supply of oranges. 
D) ​They decrease the quantity of oranges supplied. 
A) ​They increase the supply of oranges. 
B) ​They increase the quantity of oranges supplied. 
C) ​They decrease the supply of oranges. 
D) ​They decrease the quantity of oranges supplied.

Question 20

Dean bakes his famous apple pies and sells them at the local farmer's market. If the price of apples increases, the

Accepted Answer

A) ​supply curve for Dean's pies will increase. 
B) ​supply curve for Dean's pies will decrease. 
C) ​demand curve for Dean's pies will increase. 
D) ​demand curve for Dean's pies will decrease. 
A) ​supply curve for Dean's pies will increase. 
B) ​supply curve for Dean's pies will decrease. 
C) ​demand curve for Dean's pies will increase. 
D) ​demand curve for Dean's pies will decrease.

Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D₁, a shift to D₂ would indicate a(n):

The law of demand states that, ceteris paribus, an increase in

An increase in the price of a good will

Which of the following will not cause a change in the demand for a product?

A downward-sloping demand curve shows:

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit. That change would be described as:

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

If the market for wheat is in equilibrium, the quantity of wheat demanded will equal the quantity of wheat supplied.

As the price of DVD players has fallen over the last two years, more DVD players have been sold by consumer electronics firms. Is this a violation of the law of supply?

Differentiate between a change in quantity demanded and a change in demand.

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt, a substitute.

An increase in demand could be caused by

Two goods are complements if a decrease in the price of one causes an increase in the demand for the other good.

The demand schedule for a good:

Suppose the price of gasoline and other petroleum products decline sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

In the three months before a $1 per pack cigarette tax took effect in Alaska, smokers bought 175 million more cigarettes than during the same period a year earlier. What explains this behavior by consumers?

How do orange growers react to the news of medical research findings that suggest that eating oranges leads to greater health benefits than were previously known?

Dean bakes his famous apple pies and sells them at the local farmer's market. If the price of apples increases, 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

Exam 4: Demand, Supply, and Market Equilibrium

Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D2 would indicate a(n):

The law of demand states that, ceteris paribus, an increase in

An increase in the price of a good will

Which of the following will not cause a change in the demand for a product?

A downward-sloping demand curve shows:

Sellers who were originally willing to supply 800 units of a good at $4 per unit are now willing to supply 600 units at $4 per unit. That change would be described as:

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

If the market for wheat is in equilibrium, the quantity of wheat demanded will equal the quantity of wheat supplied.

As the price of DVD players has fallen over the last two years, more DVD players have been sold by consumer electronics firms. Is this a violation of the law of supply?

Differentiate between a change in quantity demanded and a change in demand.

Skippy loves peanut butter. Skippy reads on the internet that 75 percent of the peanut crop in the South has been wiped out by drought, and that this will cause the price of peanuts to more than double by the end of the year. As a result,

An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt, a substitute.

An increase in demand could be caused by

Two goods are complements if a decrease in the price of one causes an increase in the demand for the other good.

The demand schedule for a good:

Suppose the price of gasoline and other petroleum products decline sharply. Which of the following will most likely occur as a result of the lower petroleum prices?

In the three months before a $1 per pack cigarette tax took effect in Alaska, smokers bought 175 million more cigarettes than during the same period a year earlier. What explains this behavior by consumers?

How do orange growers react to the news of medical research findings that suggest that eating oranges leads to greater health benefits than were previously known?

Dean bakes his famous apple pies and sells them at the local farmer's market. If the price of apples increases, 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 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D₁, a shift to D₂ would indicate a(n):