Question 1

Figure 4-21  
-Refer to Figure 4-21. What is the equilibrium price in this market?

Accepted Answer

A)  $0 
B)  $5 
C)  $10 
D)  $20 
A)  $0 
B)  $5 
C)  $10 
D)  $20

Question 2

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts. 
B)  When car production technology improved, car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D)  When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup. 
A)  When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts. 
B)  When car production technology improved, car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D)  When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.

Question 4

Figure 4-23  
-Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

Accepted Answer

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

Question 5

If Miguel expects to earn a higher 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)  move along his current demand curves 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)  move along his current demand curves for goods and services.

Question 6

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 7

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 8

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 9

If a firm is a price taker, it operates in a

Accepted Answer

A)  competitive market. 
B)  monopoly market. 
C)  oligopoly market. 
D)  monopolistically competitive market. 
A)  competitive market. 
B)  monopoly market. 
C)  oligopoly market. 
D)  monopolistically competitive market.

Question 10

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good 
A)  the prices of related goods 
B)  income 
C)  tastes 
D)  the prices of the inputs used to produce the good

Question 11

Figure 4-31
Consider the market for 2-packs of light bulbs below.  
-Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Accepted Answer

Equilibrium price de

Question 12

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Accepted Answer

A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  greater government restrictions on agricultural chemicals 
D)  fewer government restrictions on agricultural chemicals 
A)  an increase in consumer income 
B)  a decrease in consumer income 
C)  greater government restrictions on agricultural chemicals 
D)  fewer government restrictions on agricultural chemicals

Question 13

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 14

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite. 
A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite.

Question 15

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises. 
A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises.

Question 16

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Accepted Answer

A) True 
 B)False

Question 17

The demand curve for a good is a line that relates

Accepted Answer

A)  price and quantity demanded. 
B)  income and quantity demanded. 
C)  quantity demanded and quantity supplied. 
D)  price and income. 
A)  price and quantity demanded. 
B)  income and quantity demanded. 
C)  quantity demanded and quantity supplied. 
D)  price and income.

Question 18

Table 4-8
  
-Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)  6 units. 
B)  12 units. 
C)  18 units. 
D)  24 units. 
A)  6 units. 
B)  12 units. 
C)  18 units. 
D)  24 units.

Question 19

In a market economy, supply and demand determine

Accepted Answer

A)  both the quantity of each good produced and the price at which it is sold. 
B)  the quantity of each good produced but not the price at which it is sold. 
C)  the price at which each good is sold but not the quantity of each good produced. 
D)  neither the quantity of each good produced nor the price at which it is sold. 
A)  both the quantity of each good produced and the price at which it is sold. 
B)  the quantity of each good produced but not the price at which it is sold. 
C)  the price at which each good is sold but not the quantity of each good produced. 
D)  neither the quantity of each good produced nor the price at which it is sold.

Question 20

If muffins and bagels are substitutes, a higher price for bagels would result in an)

Accepted Answer

A)  increase in the demand for bagels. 
B)  decrease in the demand for bagels. 
C)  increase in the demand for muffins. 
D)  decrease in the demand for muffins. 
A)  increase in the demand for bagels. 
B)  decrease in the demand for bagels. 
C)  increase in the demand for muffins. 
D)  decrease in the demand for muffins.

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium price in this market?

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Which of the following demonstrates the law of supply?

Figure 4-23 -Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

If Miguel expects to earn a higher income next month, he may choose to

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

The demand curve is the upward-sloping line relating price and quantity demanded.

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

If a firm is a price taker, it operates in a

Which of the following is not a determinant of the demand for a particular good?

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

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

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

The demand curve for a good is a line that relates

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

In a market economy, supply and demand determine

If muffins and bagels are substitutes, a higher price for bagels would result in an)

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

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the 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

Six Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium price in this market?

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Which of the following demonstrates the law of supply?

Figure 4-23 -Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects the watermelon crop. The equilibrium price

If Miguel expects to earn a higher income next month, he may choose to

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

The demand curve is the upward-sloping line relating price and quantity demanded.

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

If a firm is a price taker, it operates in a

Which of the following is not a determinant of the demand for a particular good?

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

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

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

The demand curve for a good is a line that relates

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

In a market economy, supply and demand determine

If muffins and bagels are substitutes, a higher price for bagels would result in an)

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

The Basic Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the 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

Six Debates Over Macroeconomic Policy

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