Question 1

If the number of buyers in a market decreases, then

Accepted Answer

A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease. 
A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease.

Question 2

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 3

If Miguel expects to earn a higher income next month, he may choose to

Accepted Answer

A)  save more now and spend less of his current income on goods and services. 
B)  save less now and spend more of his current income on goods and services. 
C)  decrease his current demand for goods and services. 
D)  move along his current demand curves for goods and services. 
A)  save more now and spend less of his current income on goods and services. 
B)  save less now and spend more of his current income on goods and services. 
C)  decrease his current demand for goods and services. 
D)  move along his current demand curves for goods and services.

Question 4

A likely example of complementary goods for most people would be

Accepted Answer

A)  butter and margarine. 
B)  lawnmowers and automobiles. 
C)  chips and salsa. 
D)  cola and lemonade. 
A)  butter and margarine. 
B)  lawnmowers and automobiles. 
C)  chips and salsa. 
D)  cola and lemonade.

Question 5

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 6

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

Accepted Answer

A)  complementary goods. 
B)  normal goods. 
C)  inferior goods. 
D)  substitute goods. 
A)  complementary goods. 
B)  normal goods. 
C)  inferior goods. 
D)  substitute goods.

Question 7

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 8

When quantity demanded decreases at every possible price, the demand curve has

Accepted Answer

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

Question 9

A supply curve slopes upward because

Accepted Answer

A)  as more is produced, total cost of production falls. 
B)  an increase in input prices increases supply. 
C)  the quantity supplied of most goods and services increases over time. 
D)  an increase in price gives producers an incentive to supply a larger quantity. 
A)  as more is produced, total cost of production falls. 
B)  an increase in input prices increases supply. 
C)  the quantity supplied of most goods and services increases over time. 
D)  an increase in price gives producers an incentive to supply a larger quantity.

Question 10

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 11

If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the

Accepted Answer

A)  law of supply. 
B)  law of demand. 
C)  difference between normal and inferior goods. 
D)  difference between substitute and complement goods. 
A)  law of supply. 
B)  law of demand. 
C)  difference between normal and inferior goods. 
D)  difference between substitute and complement goods.

Question 12

A market demand curve shows

Accepted Answer

A)  the relationship between price and the number of buyers in a market. 
B)  how quantity demanded changes when the number of sellers changes. 
C)  the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D)  how much of a good all buyers are willing and able to buy at each possible price. 
A)  the relationship between price and the number of buyers in a market. 
B)  how quantity demanded changes when the number of sellers changes. 
C)  the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good. 
D)  how much of a good all buyers are willing and able to buy at each possible price.

Question 13

Figure 4-27
Panel a) Panel b)
     Panel c) Panel d)
    
-Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

A)  Panel a) 
B)  Panel b) 
C)  Panel c) 
D)  Panel d) 
A)  Panel a) 
B)  Panel b) 
C)  Panel c) 
D)  Panel d)

Question 14

Table 4-16
The following table shows the supply and demand schedules in a market.
  
-Refer to Table 4-16. At a price of $2, will there be a surplus or shortage of units in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 15

In a market economy, prices are the signals that guide the allocation of scarce resources.

Accepted Answer

A) True 
 B)False

Question 16

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 17

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 18

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 19

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Accepted Answer

A)  Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B)  Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C)  Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce. 
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace. 
A)  Beef producers, concerned about the health of their customers, decided to produce relatively less beef. 
B)  Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef. 
C)  Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce. 
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.

Question 20

If the demand for 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.

Exam 4: The Market Forces of Supply and Demand

If the number of buyers in a market decreases, then

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

If Miguel expects to earn a higher income next month, he may choose to

A likely example of complementary goods for most people would be

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

It is not possible for demand and supply to shift at the same time.

When quantity demanded decreases at every possible price, the demand curve has

A supply curve slopes upward because

An increase in the price of pizza will shift the demand curve for pizza to the left.

A market demand curve shows

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $2, will there be a surplus or shortage of units in this market?

In a market economy, prices are the signals that guide the allocation of scarce resources.

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

The law of demand is true for most goods in the economy.

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

If the demand for a product decreases, then we would expect equilibrium price

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

Filters