Question 1

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Accepted Answer

A) True 
 B)False

Question 2

Each of the following is a determinant of demand except

Accepted Answer

A)  tastes. 
B)  production technology. 
C)  expectations. 
D)  the prices of related goods. 
A)  tastes. 
B)  production technology. 
C)  expectations. 
D)  the prices of related goods.

Question 3

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Accepted Answer

The equilibrium pric

Question 4

At the equilibrium price, quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following events could shift the demand curve for gasoline to the left?

Accepted Answer

A)  The income of gasoline buyers rises, and gasoline is a normal good. 
B)  The income of gasoline buyers falls, and gasoline is an inferior good. 
C)  Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars. 
D)  The price of gasoline rises. 
A)  The income of gasoline buyers rises, and gasoline is a normal good. 
B)  The income of gasoline buyers falls, and gasoline is an inferior good. 
C)  Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars. 
D)  The price of gasoline rises.

Question 6

Table 4-3
  
-Refer to Table 4-3. For whom is the good a normal good?

Accepted Answer

A)  Bert only 
B)  Grover only 
C)  Bert, Ernie, Grover, and Oscar 
D)  This cannot be determined from the table. 
A)  Bert only 
B)  Grover only 
C)  Bert, Ernie, Grover, and Oscar 
D)  This cannot be determined from the table.

Question 7

Figure 4-4
Yasmine Mercedes
    
-Refer to Figure 4-4. Suppose Yasmine and Mercedes are the only two consumers in the market. When the market price falls from $12 to $6, the quantity demanded increases by

Accepted Answer

A)  6 units. 
B)  9 units. 
C)  12 units. 
D)  15 units. 
A)  6 units. 
B)  9 units. 
C)  12 units. 
D)  15 units.

Question 8

Figure 4-18  
-Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Accepted Answer

A)  $15 and 200 units. 
B)  $25 and 600 units. 
C)  $25 and 400 units. 
D)  $35 and 200 units. 
A)  $15 and 200 units. 
B)  $25 and 600 units. 
C)  $25 and 400 units. 
D)  $35 and 200 units.

Question 9

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

Accepted Answer

A)  DA to DB. 
B)  DB to DA. 
C)  x to y. 
D)  y to x. 
A)  DA to DB. 
B)  DB to DA. 
C)  x to y. 
D)  y to x.

Question 10

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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

Question 11

If, at the current price, there is a shortage of a good, then

Accepted Answer

A)  sellers are producing more than buyers wish to buy. 
B)  the market must be in equilibrium. 
C)  the price is below the equilibrium price. 
D)  quantity demanded equals quantity supplied. 
A)  sellers are producing more than buyers wish to buy. 
B)  the market must be in equilibrium. 
C)  the price is below the equilibrium price. 
D)  quantity demanded equals quantity supplied.

Question 12

Table 4-1
  
-Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units.

Question 13

If a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Table 4-9
  
-Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 16

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 17

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 18

A shortage exists in a market if

Accepted Answer

A)  there is an excess supply of the good. 
B)  quantity supplied exceeds quantity demanded. 
C)  the current price is below its equilibrium price. 
D)  All of the above are correct. 
A)  there is an excess supply of the good. 
B)  quantity supplied exceeds quantity demanded. 
C)  the current price is below its equilibrium price. 
D)  All of the above are correct.

Question 19

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

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 20

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Each of the following is a determinant of demand except

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

At the equilibrium price, quantity demanded is equal to quantity supplied.

Which of the following events could shift the demand curve for gasoline to the left?

Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. Suppose Yasmine and Mercedes are the only two consumers in the market. When the market price falls from $12 to $6, the quantity demanded increases by

Figure 4-18 -Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

If, at the current price, there is a shortage of a good, then

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

If a determinant of demand other than price changes, the demand curve shifts.

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

Table 4-9 -Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Individual supply curves are summed vertically to obtain the market supply curve.

Most markets in the economy are highly competitive.

A shortage exists in a market if

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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