Question 1

Figure 4-14  
-Refer to Figure 4-14. Which of the following best describes the movement from E1 to E2?

Accepted Answer

A)  a decrease in supply 
B)  an increase in supply 
C)  a movement along the supply curve 
D)  a decrease in demand 
A)  a decrease in supply 
B)  an increase in supply 
C)  a movement along the supply curve 
D)  a decrease in demand

Question 2

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Accepted Answer

A)  the ticket price is above the equilibrium price. 
B)  the ticket price is below the equilibrium price. 
C)  the ticket price is at the equilibrium price. 
D)  nothing about the equilibrium price. 
A)  the ticket price is above the equilibrium price. 
B)  the ticket price is below the equilibrium price. 
C)  the ticket price is at the equilibrium price. 
D)  nothing about the equilibrium price.

Question 3

Figure 4-9
Panel a) Panel b)
    
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel a), the arrows are consistent with which of the following events?

Accepted Answer

A)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 4

If Max experiences a decrease in his income, then we would expect Max's demand for

Accepted Answer

A)  each good he purchases to remain unchanged. 
B)  normal goods to decrease. 
C)  luxury goods to increase. 
D)  inferior goods to decrease. 
A)  each good he purchases to remain unchanged. 
B)  normal goods to decrease. 
C)  luxury goods to increase. 
D)  inferior goods to decrease.

Question 5

Figure 4-6  
-Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. We could illustrate the tax as producing a movement from

Accepted Answer

A)  Point A to Point B in Panel 1. 
B)  Point B to Point A in Panel 1. 
C)  Point A to Point C in Panel 2. 
D)  Point C to Point A in Panel 2. 
A)  Point A to Point B in Panel 1. 
B)  Point B to Point A in Panel 1. 
C)  Point A to Point C in Panel 2. 
D)  Point C to Point A in Panel 2.

Question 6

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 7

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas.   If the law of demand applies to these pizzas, then A could be

Accepted Answer

A)  40. 
B)  35. 
C)  30. 
D)  All of the above could be correct. 
A)  40. 
B)  35. 
C)  30. 
D)  All of the above could be correct.

Question 8

Table 4-9
  
-Refer to Table 4-9. Which combination would produce a decrease 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 9

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand

Question 10

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Accepted Answer

A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite. 
A)  granite countertops to shift to the left. 
B)  granite countertops to shift to the right. 
C)  substitute products such as marble countertops to shift to the right. 
D)  substitute products such as marble countertops to be unaffected by buyers' preferences for granite.

Question 11

Table 4-16
The following table shows the supply and demand schedules in a market.
  
-Refer to Table 4-16. What is the equilibrium price in this market?

Accepted Answer

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

Question 12

An increase in which of the following would shift the supply curve for gasoline to the right?

Accepted Answer

A)  demand for gasoline 
B)  price of gasoline 
C)  number of producers of gasoline 
D)  price of oil, an input into the production of gasoline 
A)  demand for gasoline 
B)  price of gasoline 
C)  number of producers of gasoline 
D)  price of oil, an input into the production of gasoline

Question 13

When we move along a given demand curve,

Accepted Answer

A)  only price is held constant. 
B)  income and price are held constant. 
C)  all nonprice determinants of demand are held constant. 
D)  all determinants of quantity demanded are held constant. 
A)  only price is held constant. 
B)  income and price are held constant. 
C)  all nonprice determinants of demand are held constant. 
D)  all determinants of quantity demanded are held constant.

Question 14

According to the law of demand, when price increases the quantity demanded of a good

Accepted Answer

The answer of According to the law of demand, when...

Question 15

If there is a shortage of farm laborers, we would expect

Accepted Answer

A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor. 
A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor.

Question 16

Figure 4-15  
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for butter?

Accepted Answer

A)  a decrease in the price of butter 
B)  an increase in the price of margarine 
C)  an increase in the price of milk 
D)  an improvement in technology that allows firms to use less labor in the production of butter 
A)  a decrease in the price of butter 
B)  an increase in the price of margarine 
C)  an increase in the price of milk 
D)  an improvement in technology that allows firms to use less labor in the production of butter

Question 17

Two goods are complements when a decrease in the price of one good

Accepted Answer

A)  decreases the quantity demanded of the other good. 
B)  decreases the demand for the other good. 
C)  increases the quantity demanded of the other good. 
D)  increases the demand for the other good. 
A)  decreases the quantity demanded of the other good. 
B)  decreases the demand for the other good. 
C)  increases the quantity demanded of the other good. 
D)  increases the demand for the other good.

Question 18

Which of these statements best represents the law of demand?

Accepted Answer

A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases. 
A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases.

Question 19

The two words economists use most often are

Accepted Answer

A)  inflation and trade. 
B)  supply and demand. 
C)  competition and prices. 
D)  markets and equilibrium. 
A)  inflation and trade. 
B)  supply and demand. 
C)  competition and prices. 
D)  markets and equilibrium.

Question 20

Assume a market is perfectly competitive. When a new producer enters the market, the

Accepted Answer

A)  price in the market increases. 
B)  price in the market decreases. 
C)  price in the market does not change. 
D)  market is no longer a competitive market. 
A)  price in the market increases. 
B)  price in the market decreases. 
C)  price in the market does not change. 
D)  market is no longer a competitive market.

Exam 4: The Market Forces of Supply and Demand

Figure 4-14 -Refer to Figure 4-14. Which of the following best describes the movement from E1 to E2?

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Figure 4-9 Panel a) Panel b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel a), the arrows are consistent with which of the following events?

If Max experiences a decrease in his income, then we would expect Max's demand for

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

The following table contains a monthly demand schedule for large, single-topping, carry-out pizzas. If the law of demand applies to these pizzas, then A could be

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

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

You watch a lot of HGTV during your summer vacation, and you notice that most housing buyers list granite countertops in their "must have" lists when buying a new or existing house. You expect the demand for

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. What is the equilibrium price in this market?

An increase in which of the following would shift the supply curve for gasoline to the right?

When we move along a given demand curve,

According to the law of demand, when price increases the quantity demanded of a good

If there is a shortage of farm laborers, we would expect

Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for butter?

Two goods are complements when a decrease in the price of one good

Which of these statements best represents the law of demand?

The two words economists use most often are

Assume a market is perfectly competitive. When a new producer enters the market, the

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