Question 1

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

Accepted Answer

A)  decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B)  decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C)  decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D)  increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers. 
A)  decrease in the demand for printers and a decrease in the quantity supplied of printers. 
B)  decrease in the supply of printers and a decrease in the quantity demanded of printers. 
C)  decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. 
D)  increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

Question 2

Supply and demand together determine the price and quantity of a good sold in a market.

Accepted Answer

A) True 
 B)False

Question 3

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 $6 is

Accepted Answer

A)  4 units. 
B)  6 units. 
C)  12 units. 
D)  18 units. 
A)  4 units. 
B)  6 units. 
C)  12 units. 
D)  18 units.

Question 4

When a shortage exists in a market, sellers

Accepted Answer

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

Question 5

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 approach of Thanksgiving 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 6

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Accepted Answer

A) True 
 B)False

Question 7

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A)  increase the supply of education. 
B)  decrease the supply of education. 
C)  increase the demand for education. 
D)  decrease the demand for education. 
A)  increase the supply of education. 
B)  decrease the supply of education. 
C)  increase the demand for education. 
D)  decrease the demand for education.

Question 8

Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity.
   
a. What is the equilibrium price and the equilibrium quantity?
b. Suppose the price is currently $5. What problem would exist in the market? What would you expect to happen to price? Show this on your graph.
c. Suppose the price is currently $2. What problem would exist in the market? What would you expect to happen to price? Show this on your graph.

Accepted Answer

a. @#IMG-DLM& b. The equilibrium price Pe) is $4 a

Question 9

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the least likely to be a competitive market?

Accepted Answer

A)  ice cream 
B)  soybeans 
C)  cable television 
D)  new houses 
A)  ice cream 
B)  soybeans 
C)  cable television 
D)  new houses

Question 11

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Accepted Answer

The supply

Question 12

Most studies have found that tobacco and marijuana are complements rather than substitutes.

Accepted Answer

A) True 
 B)False

Question 13

When quantity supplied decreases at every possible price, we know that the supply curve has

Accepted Answer

A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D)  not shifted; rather, the supply curve has become flatter. 
A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D)  not shifted; rather, the supply curve has become flatter.

Question 14

The highest form of competition is called

Accepted Answer

A)  absolute competition. 
B)  cutthroat competition. 
C)  perfect competition. 
D)  market competition. 
A)  absolute competition. 
B)  cutthroat competition. 
C)  perfect competition. 
D)  market competition.

Question 15

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Accepted Answer

A)  decreases, and the supply of tires increases. 
B)  is unaffected, and the supply of tires decreases. 
C)  is unaffected, and the supply of tires increases. 
D)  None of the above is necessarily correct. 
A)  decreases, and the supply of tires increases. 
B)  is unaffected, and the supply of tires decreases. 
C)  is unaffected, and the supply of tires increases. 
D)  None of the above is necessarily correct.

Question 16

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation
         , where   is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied.
-Refer to Scenario 4-1. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

Accepted Answer

There is a

Question 17

Baseballs and baseball bats are substitute goods.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-8  
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Accepted Answer

A)  a movement along D2 from point A to point B 
B)  a movement along D2 from point B to point A 
C)  a shift from D1 to D2 
D)  a shift from D2 to D1 
A)  a movement along D2 from point A to point B 
B)  a movement along D2 from point B to point A 
C)  a shift from D1 to D2 
D)  a shift from D2 to D1

Question 19

If a good is normal, then an increase in income will result in a(n)

Accepted Answer

A)  increase in the demand for the good. 
B)  decrease in the demand for the good. 
C)  movement down and to the right along the demand curve for the good. 
D)  movement up and to the left along the demand curve for the good. 
A)  increase in the demand for the good. 
B)  decrease in the demand for the good. 
C)  movement down and to the right along the demand curve for the good. 
D)  movement up and to the left along the demand curve for the good.

Question 20

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

Accepted Answer

A)  $15 
B)  $20 
C)  $30 
D)  $35 
A)  $15 
B)  $20 
C)  $30 
D)  $35

Exam 4: The Market Forces of Supply and Demand

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

Supply and demand together determine the price and quantity of a good sold in a market.

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 $6 is

When a shortage exists in a market, sellers

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 approach of Thanksgiving would cause a move from

An increase in the number of college scholarships issued by private foundations would

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Which of the following is the least likely to be a competitive market?

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Most studies have found that tobacco and marijuana are complements rather than substitutes.

When quantity supplied decreases at every possible price, we know that the supply curve has

The highest form of competition is called

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Baseballs and baseball bats are substitute goods.

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

If a good is normal, then an increase in income will result in a(n)

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

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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