Question 1

A demand schedule is a table that shows the relationship between

Accepted Answer

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

Question 2

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

Accepted Answer

A)  less than or equal to 5. 
B)  greater than or equal to 5. 
C)  greater than or equal to 7. 
D)  greater than or equal to 10. 
A)  less than or equal to 5. 
B)  greater than or equal to 5. 
C)  greater than or equal to 7. 
D)  greater than or equal to 10.

Question 3

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)  1 percent reduction in the quantity demanded of cigarettes. 
B)  4 percent reduction in the quantity demanded of cigarettes. 
C)  10 percent reduction in the quantity demanded of cigarettes. 
D)  12 percent reduction in the quantity demanded of cigarettes. 
A)  1 percent reduction in the quantity demanded of cigarettes. 
B)  4 percent reduction in the quantity demanded of cigarettes. 
C)  10 percent reduction in the quantity demanded of cigarettes. 
D)  12 percent reduction in the quantity demanded of cigarettes.

Question 4

Table 4-5
The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices.
  
-Refer to Table 4-5. Which of the following could cause all four families to demand more Mt. Dew at all prices?

Accepted Answer

A)  The price of sugar decreases. 
B)  All four family incomes increase, and Mt. Dew is a normal good. 
C)  A major university study reveals that drinking Mt. Dew can cause diabetes. 
D)  The technology for bottling carbonated beverages improves. 
A)  The price of sugar decreases. 
B)  All four family incomes increase, and Mt. Dew is a normal good. 
C)  A major university study reveals that drinking Mt. Dew can cause diabetes. 
D)  The technology for bottling carbonated beverages improves.

Question 5

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Question 6

Who gets scarce resources in a market economy?

Accepted Answer

A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price 
A)  the government 
B)  whoever the government decides gets them 
C)  whoever wants them 
D)  whoever is willing and able to pay the price

Question 7

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

Accepted Answer

A)  increase in the demand for Nooks. 
B)  decrease in the demand for Nooks. 
C)  increase in the demand for Kindles. 
D)  decrease in the demand for Kindles. 
A)  increase in the demand for Nooks. 
B)  decrease in the demand for Nooks. 
C)  increase in the demand for Kindles. 
D)  decrease in the demand for Kindles.

Question 8

Table 4-1
  
-Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary 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 9

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices.
  
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk increases from $4.00 to $5.00, what is the change in the market quantity demanded?

Accepted Answer

decreases

Question 10

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Accepted Answer

A)  demand for bicycle assembly workers will increase. 
B)  supply of bicycles will shift to the right. 
C)  supply of bicycles will shift to the left. 
D)  firm must increase output to maintain profit levels. 
A)  demand for bicycle assembly workers will increase. 
B)  supply of bicycles will shift to the right. 
C)  supply of bicycles will shift to the left. 
D)  firm must increase output to maintain profit levels.

Question 11

Surpluses drive price up, while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease. 
A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease.

Question 14

Table 4-7
  
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Accepted Answer

A)  2.5 gallons. 
B)  4 gallons. 
C)  10 gallons. 
D)  50 gallons. 
A)  2.5 gallons. 
B)  4 gallons. 
C)  10 gallons. 
D)  50 gallons.

Question 15

The supply curve for portable charcoal grills shifts

Accepted Answer

A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes. 
A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes.

Question 16

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 17

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Accepted Answer

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

Question 18

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Accepted Answer

A)  fall in six months but not now. 
B)  increase in six months when the price goes up. 
C)  fall now. 
D)  increase now to meet as much demand as possible. 
A)  fall in six months but not now. 
B)  increase in six months when the price goes up. 
C)  fall now. 
D)  increase now to meet as much demand as possible.

Question 19

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 20

Figure 4-22  
-Refer to Figure 4-22. What is the equilibrium quantity in this market?

Accepted Answer

A)  4 units 
B)  8 units 
C)  12 units 
D)  16 units 
A)  4 units 
B)  8 units 
C)  12 units 
D)  16 units

Exam 4: The Market Forces of Supply and Demand

A demand schedule is a table that shows the relationship between

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Table 4-5 The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. -Refer to Table 4-5. Which of the following could cause all four families to demand more Mt. Dew at all prices?

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Who gets scarce resources in a market economy?

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

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

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Surpluses drive price up, while shortages drive price down.

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

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

The supply curve for portable charcoal grills shifts

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

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

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

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

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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