Question 1

Prices allocate a market economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Accepted Answer

A)  production technology 
B)  expectations 
C)  input prices 
D)  the number of sellers 
A)  production technology 
B)  expectations 
C)  input prices 
D)  the number of sellers

Question 3

Figure 4-7  
-Refer to Figure 4-7. The shift from Db to Da is called

Accepted Answer

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

Question 4

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

Accepted Answer

A)  Price will rise. 
B)  Price will fall. 
C)  Price will stay exactly the same. 
D)  The price change will be ambiguous. 
A)  Price will rise. 
B)  Price will fall. 
C)  Price will stay exactly the same. 
D)  The price change will be ambiguous.

Question 5

If the supply of a product decreases, then we would expect equilibrium price

Accepted Answer

A)  to increase and equilibrium quantity to decrease. 
B)  to decrease and equilibrium quantity to increase. 
C)  and equilibrium quantity to both increase. 
D)  and equilibrium quantity to both decrease. 
A)  to increase and equilibrium quantity to decrease. 
B)  to decrease and equilibrium quantity to increase. 
C)  and equilibrium quantity to both increase. 
D)  and equilibrium quantity to both decrease.

Question 6

Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

Accepted Answer

A)  Price will rise. 
B)  Price will fall. 
C)  Price will stay exactly the same. 
D)  The price change will be ambiguous. 
A)  Price will rise. 
B)  Price will fall. 
C)  Price will stay exactly the same. 
D)  The price change will be ambiguous.

Question 7

Once the supply curve for a product or service is drawn, it

Accepted Answer

A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve, but the curve will not shift. 
D)  tends to become steeper over time. 
A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve, but the curve will not shift. 
D)  tends to become steeper over time.

Question 8

Table 4-8
  
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Accepted Answer

A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units. 
A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units.

Question 9

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

Accepted Answer

A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  remain unchanged. 
A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  remain unchanged.

Question 10

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of sellers of gasoline. 
D)  All of the above are correct. 
A)  today's price of gasoline. 
B)  the expected future price of gasoline. 
C)  the number of sellers of gasoline. 
D)  All of the above are correct.

Question 11

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 12

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Accepted Answer

The equilibrium quan

Question 13

A decrease in demand is represented by a

Accepted Answer

A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve. 
A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve.

Question 14

Which of the following sets of events must cause an increase in the price of a new house?

Accepted Answer

A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future 
A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future 
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future 
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future 
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future

Question 15

Table 4-3
  
-Refer to Table 4-3. Whose demand does not obey the law of demand?

Accepted Answer

A)  Bert's 
B)  Ernie's 
C)  Grover's 
D)  Oscar's 
A)  Bert's 
B)  Ernie's 
C)  Grover's 
D)  Oscar's

Question 16

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains constant, but we observe a movement downward and to the right along the demand curve. 
D)  remains constant, but we observe a movement upward and to the left along the demand curve. 
A)  increases. 
B)  decreases. 
C)  remains constant, but we observe a movement downward and to the right along the demand curve. 
D)  remains constant, but we observe a movement upward and to the left along the demand curve.

Question 17

Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
  
-Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be

Accepted Answer

A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  300 tickets sold. 
D)  600 tickets unsold. 
A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  300 tickets sold. 
D)  600 tickets unsold.

Question 18

An improvement in production technology will

Accepted Answer

A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply. 
A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply.

Question 19

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Accepted Answer

A)  The demand for gasoline will increase. 
B)  The demand for gasoline will decrease. 
C)  The demand for gasoline will be unaffected. 
D)  The supply of gasoline will increase. 
A)  The demand for gasoline will increase. 
B)  The demand for gasoline will decrease. 
C)  The demand for gasoline will be unaffected. 
D)  The supply of gasoline will increase.

Question 20

Figure 4-29  
-Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Accepted Answer

The answer of Figure 4-29  
-Refer to Figure 4-29....

Prices allocate a market economy's scarce resources.

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Figure 4-7 -Refer to Figure 4-7. The shift from Db to Da is called

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

If the supply of a product decreases, then we would expect equilibrium price

Once the supply curve for a product or service is drawn, it

Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

Today's demand curve for gasoline could shift in response to a change in

Equilibrium quantity must decrease when demand

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

A decrease in demand is represented by a

Which of the following sets of events must cause an increase in the price of a new house?

Table 4-3 -Refer to Table 4-3. Whose demand does not obey the law of demand?

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

An improvement in production technology will

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

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

Prices allocate a market economy's scarce resources.

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Figure 4-7 -Refer to Figure 4-7. The shift from Db to Da is called

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

If the supply of a product decreases, then we would expect equilibrium price

Once the supply curve for a product or service is drawn, it

Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

Today's demand curve for gasoline could shift in response to a change in

Equilibrium quantity must decrease when demand

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

A decrease in demand is represented by a

Which of the following sets of events must cause an increase in the price of a new house?

Table 4-3 -Refer to Table 4-3. Whose demand does not obey the law of demand?

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

An improvement in production technology will

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

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

Filters