Question 1

The term price takers refers to buyers and sellers in

Accepted Answer

A)  perfectly competitive markets. 
B)  monopolistic markets. 
C)  markets that are regulated by the government. 
D)  markets in which buyers cannot buy all they want and/or sellers cannot sell all they want. 
A)  perfectly competitive markets. 
B)  monopolistic markets. 
C)  markets that are regulated by the government. 
D)  markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.

Question 2

Monopolists are price takers.

Accepted Answer

A) True 
 B)False

Question 3

Table 4-2
  
-Refer to Table 4-2. Whose demand does not obey the law of demand?

Accepted Answer

A)  Abby's 
B)  Brandi's 
C)  Carrie's 
D)  DeeDee's 
A)  Abby's 
B)  Brandi's 
C)  Carrie's 
D)  DeeDee's

Question 4

An increase in the price of cotton will increase the equilibrium price and decrease the equilibrium quantity in the market for cotton t-shirts.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

A downward-sloping demand curve illustrates

Accepted Answer

A)  that demand decreases over time. 
B)  that prices fall over time. 
C)  the relationship between income and quantity demanded. 
D)  the law of demand. 
A)  that demand decreases over time. 
B)  that prices fall over time. 
C)  the relationship between income and quantity demanded. 
D)  the law of demand.

Question 7

Which of the following events must result in a higher price in the market for cigars?

Accepted Answer

A)  Demand for cigars increases, and supply of cigars decreases. 
B)  Demand for cigars and supply of cigars both decrease. 
C)  Demand for cigars decreases, and supply of cigars increases. 
D)  Demand for cigars and supply of cigars both increase 
A)  Demand for cigars increases, and supply of cigars decreases. 
B)  Demand for cigars and supply of cigars both decrease. 
C)  Demand for cigars decreases, and supply of cigars increases. 
D)  Demand for cigars and supply of cigars both increase

Question 8

Figure 4-10  
-Refer to Figure 4-10. The movement from Point A to Point B represents an)

Accepted Answer

A)  shift in the supply curve. 
B)  decrease in the quantity supplied. 
C)  increase in the quantity supplied. 
D)  Both a and b are correct. 
A)  shift in the supply curve. 
B)  decrease in the quantity supplied. 
C)  increase in the quantity supplied. 
D)  Both a and b are correct.

Question 9

Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Accepted Answer

The answer of Refer to Figure 4-28. Using the points...

Question 10

Figure 4-4
Yasmine Mercedes
    
-Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

Accepted Answer

A)  3 units. 
B)  6 units. 
C)  9 units. 
D)  12 units. 
A)  3 units. 
B)  6 units. 
C)  9 units. 
D)  12 units.

Question 11

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

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 12

The demand for a good or service is determined by

Accepted Answer

A)  those who buy the good or service. 
B)  the government. 
C)  those who sell the good or service. 
D)  both those who buy and those who sell the good or service. 
A)  those who buy the good or service. 
B)  the government. 
C)  those who sell the good or service. 
D)  both those who buy and those who sell the good or service.

Question 13

The following table contains a supply schedule for a good.   If the law of supply applies to this good, then Q1 could be

Accepted Answer

A)  0. 
B)  50. 
C)  100. 
D)  150. 
A)  0. 
B)  50. 
C)  100. 
D)  150.

Question 14

Today, producers changed their expectations about the future. This change

Accepted Answer

A)  can cause a movement along a supply curve. 
B)  can affect future supply, but not today's supply. 
C)  can affect today's supply. 
D)  cannot affect either today's supply or future supply. 
A)  can cause a movement along a supply curve. 
B)  can affect future supply, but not today's supply. 
C)  can affect today's supply. 
D)  cannot affect either today's supply or future supply.

Question 15

A group of buyers and sellers of a particular good or service is called a

Accepted Answer

The answer of A group of buyers and sellers of...

Question 16

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,

Accepted Answer

A)  the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price. 
B)  the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price. 
C)  there is a surplus of blue jeans at the $30 price. 
D)  All of the above are correct. 
A)  the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price. 
B)  the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price. 
C)  there is a surplus of blue jeans at the $30 price. 
D)  All of the above are correct.

Question 17

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

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 18

Figure 4-20  
-Refer to Figure 4-20. At a price of $15,

Accepted Answer

A)  quantity demanded exceeds quantity supplied. 
B)  there is a shortage. 
C)  there is an excess demand. 
D)  All of the above are correct. 
A)  quantity demanded exceeds quantity supplied. 
B)  there is a shortage. 
C)  there is an excess demand. 
D)  All of the above are correct.

Question 19

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

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 20

The law of supply states that, other things equal, when the price of a good

Accepted Answer

A)  falls, the supply of the good rises. 
B)  rises, the quantity supplied of the good rises. 
C)  rises, the supply of the good falls. 
D)  falls, the quantity supplied of the good rises. 
A)  falls, the supply of the good rises. 
B)  rises, the quantity supplied of the good rises. 
C)  rises, the supply of the good falls. 
D)  falls, the quantity supplied of the good rises.

Exam 4: The Market Forces of Supply and Demand

The term price takers refers to buyers and sellers in

Monopolists are price takers.

Table 4-2 -Refer to Table 4-2. Whose demand does not obey the law of demand?

An increase in the price of cotton will increase the equilibrium price and decrease the equilibrium quantity in the market for cotton t-shirts.

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

A downward-sloping demand curve illustrates

Which of the following events must result in a higher price in the market for cigars?

Figure 4-10 -Refer to Figure 4-10. The movement from Point A to Point B represents an)

Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

The demand for a good or service is determined by

The following table contains a supply schedule for a good. If the law of supply applies to this good, then Q1 could be

Today, producers changed their expectations about the future. This change

A group of buyers and sellers of a particular good or service is called a

The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

Figure 4-20 -Refer to Figure 4-20. At a price of $15,

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

The law of supply states that, other things equal, when the price of a 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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