Question 1

A newspaper's classified ads are an example of a market.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Accepted Answer

A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D 
A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D

Question 3

An increase in the price of blueberries would lead to an)

Accepted Answer

A)  increased supply of blueberries. 
B)  a movement up and to the right along the supply curve for blueberries. 
C)  a movement down and to the left along the supply curve for blueberries. 
D)  Both a and b are correct. 
A)  increased supply of blueberries. 
B)  a movement up and to the right along the supply curve for blueberries. 
C)  a movement down and to the left along the supply curve for blueberries. 
D)  Both a and b are correct.

Question 4

A market demand curve shows how the total quantity demanded of a good varies as

Accepted Answer

A)  income varies. 
B)  price varies. 
C)  price of the nearest substitute good varies. 
D)  supply varies. 
A)  income varies. 
B)  price varies. 
C)  price of the nearest substitute good varies. 
D)  supply varies.

Question 5

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-25. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

Accepted Answer

A)  x to y. 
B)  y to x. 
C)  SA to SB. 
D)  SB to SA. 
A)  x to y. 
B)  y to x. 
C)  SA to SB. 
D)  SB to SA.

Question 6

Figure 4-27

-Refer to Figure 4-27. Panel b) shows which of the following?

Accepted Answer

A)  a decrease in demand and a decrease in quantity supplied 
B)  a decrease in demand and a decrease in supply 
C)  a decrease in quantity demanded and a decrease in quantity supplied 
D)  a decrease in quantity demanded and a decrease in supply 
A)  a decrease in demand and a decrease in quantity supplied 
B)  a decrease in demand and a decrease in supply 
C)  a decrease in quantity demanded and a decrease in quantity supplied 
D)  a decrease in quantity demanded and a decrease in supply

Question 7

A movement along the supply curve might be caused by a change in

Accepted Answer

A)  production technology. 
B)  input prices. 
C)  expectations about future prices. 
D)  the price of the good or service that is being supplied. 
A)  production technology. 
B)  input prices. 
C)  expectations about future prices. 
D)  the price of the good or service that is being supplied.

Question 8

Figure 4-16  
-Refer to Figure 4-16. The shift from S to S' is called an

Accepted Answer

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

Question 9

Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of chocolate-dipped strawberries to increase. 
B)  shortage to exist and the market price of chocolate-dipped strawberries to decrease. 
C)  surplus to exist and the market price of chocolate-dipped strawberries to increase. 
D)  surplus to exist and the market price of chocolate-dipped strawberries to decrease. 
A)  shortage to exist and the market price of chocolate-dipped strawberries to increase. 
B)  shortage to exist and the market price of chocolate-dipped strawberries to decrease. 
C)  surplus to exist and the market price of chocolate-dipped strawberries to increase. 
D)  surplus to exist and the market price of chocolate-dipped strawberries to decrease.

Question 10

Table 4-11
  
-Refer to Table 4-11. If the price were $8, a

Accepted Answer

A)  shortage of 20 units would exist, and price would tend to rise. 
B)  surplus of 25 units would exist, and price would tend to fall. 
C)  shortage of 25 units would exist, and price would tend to rise. 
D)  surplus of 45 units would exist, and price would tend to fall. 
A)  shortage of 20 units would exist, and price would tend to rise. 
B)  surplus of 25 units would exist, and price would tend to fall. 
C)  shortage of 25 units would exist, and price would tend to rise. 
D)  surplus of 45 units would exist, and price would tend to fall.

Question 11

Figure 4-3 
Consumer 1
   
Consumer 2  
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

Accepted Answer

A)  0 units. 
B)  5 units. 
C)  8.33 units. 
D)  25 units. 
A)  0 units. 
B)  5 units. 
C)  8.33 units. 
D)  25 units.

Question 12

Figure 4-13  
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Accepted Answer

A)  8 units. 
B)  16 units. 
C)  24 units. 
D)  32 units. 
A)  8 units. 
B)  16 units. 
C)  24 units. 
D)  32 units.

Question 13

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Accepted Answer

A)  Both the equilibrium price and quantity would increase. 
B)  Both the equilibrium price and quantity would decrease. 
C)  The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous. 
A)  Both the equilibrium price and quantity would increase. 
B)  Both the equilibrium price and quantity would decrease. 
C)  The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.

Question 14

Figure 4-1  
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an:

Accepted Answer

A)  increase in price. 
B)  decrease in price. 
C)  decrease in the price of a substitute good. 
D)  increase in income. 
A)  increase in price. 
B)  decrease in price. 
C)  decrease in the price of a substitute good. 
D)  increase in income.

Question 15

When a surplus exists in a market, sellers

Accepted Answer

A)  raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
A)  raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.

Question 16

Figure 4-18  
-Refer to Figure 4-18. At a price of $20, there would be an)

Accepted Answer

A)  shortage. The law of supply and demand predicts that the price will fall from $20 to a lower price. 
B)  surplus. The law of supply and demand predicts that the price will rise from $20 to a higher price. 
C)  excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price. 
D)  excess supply. The law of supply and demand predicts that the price will fall from $20 to a lower price. 
A)  shortage. The law of supply and demand predicts that the price will fall from $20 to a lower price. 
B)  surplus. The law of supply and demand predicts that the price will rise from $20 to a higher price. 
C)  excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price. 
D)  excess supply. The law of supply and demand predicts that the price will fall from $20 to a lower price.

Question 17

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)  production technology 
B)  the price of the good 
C)  the prices of inputs 
D)  expectations 
A)  production technology 
B)  the price of the good 
C)  the prices of inputs 
D)  expectations

Question 18

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

Accepted Answer

A)  4 units. 
B)  7.5 units. 
C)  10 units. 
D)  30 units. 
A)  4 units. 
B)  7.5 units. 
C)  10 units. 
D)  30 units.

Question 19

Assume Leo buys coffee beans in a competitive market. It follows that

Accepted Answer

A)  Leo has a limited number of sellers from which to buy coffee beans. 
B)  Leo will negotiate with sellers whenever he buys coffee beans. 
C)  Leo can influence the price of coffee beans if he buys a large quantity of them. 
D)  None of the above is correct. 
A)  Leo has a limited number of sellers from which to buy coffee beans. 
B)  Leo will negotiate with sellers whenever he buys coffee beans. 
C)  Leo can influence the price of coffee beans if he buys a large quantity of them. 
D)  None of the above is correct.

Question 20

Other things equal, when the price of a good falls, the

Accepted Answer

A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases. 
A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases.

A newspaper's classified ads are an example of a market.

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

An increase in the price of blueberries would lead to an)

A market demand curve shows how the total quantity demanded of a good varies as

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

Figure 4-27 -Refer to Figure 4-27. Panel b) shows which of the following?

A movement along the supply curve might be caused by a change in

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' is called an

Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a

Table 4-11 -Refer to Table 4-11. If the price were $8, a

Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an:

When a surplus exists in a market, sellers

Figure 4-18 -Refer to Figure 4-18. At a price of $20, there would be an)

Which of the following is not held constant in a supply schedule?

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

Assume Leo buys coffee beans in a competitive market. It follows that

Other things equal, when the price of a good falls, the

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

A newspaper's classified ads are an example of a market.

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

An increase in the price of blueberries would lead to an)

A market demand curve shows how the total quantity demanded of a good varies as

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

Figure 4-27 -Refer to Figure 4-27. Panel b) shows which of the following?

A movement along the supply curve might be caused by a change in

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' is called an

Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a

Table 4-11 -Refer to Table 4-11. If the price were $8, a

Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $10 is

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by an:

When a surplus exists in a market, sellers

Figure 4-18 -Refer to Figure 4-18. At a price of $20, there would be an)

Which of the following is not held constant in a supply schedule?

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

Assume Leo buys coffee beans in a competitive market. It follows that

Other things equal, when the price of a good falls, the

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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