Question 1

In competitive markets,

Accepted Answer

A)  firms produce identical products. 
B)  no individual buyer can influence the market price. 
C)  no individual seller can influence the market price. 
D)  All of the above are correct. 
A)  firms produce identical products. 
B)  no individual buyer can influence the market price. 
C)  no individual seller can influence the market price. 
D)  All of the above are correct.

Question 2

Figure 4-28  
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of a substitute for this good becomes more expensive.

Accepted Answer

The answer of Figure 4-28  
-Refer to Figure 4-28....

Question 3

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 4

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 7

Figure 4-12
Firm A Firm B
    
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Accepted Answer

A)  14 units. 
B)  15 units. 
C)  16 units. 
D)  29 units. 
A)  14 units. 
B)  15 units. 
C)  16 units. 
D)  29 units.

Question 8

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Accepted Answer

A movement

Question 9

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-11  
-Refer to Figure 4-11. The movement from point A to point B on the graph represents

Accepted Answer

A)  an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B)  an increase in the number of suppliers. 
C)  a decrease in the price of a relevant input. 
D)  an increase in the price of the good that is being supplied and the suppliers' responses to that price change. 
A)  an increased willingness and ability on the part of suppliers to supply the good at each possible price. 
B)  an increase in the number of suppliers. 
C)  a decrease in the price of a relevant input. 
D)  an increase in the price of the good that is being supplied and the suppliers' responses to that price change.

Question 11

Figure 4-20  
-Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)  $15 and 400 units. 
B)  $20 and 600 units. 
C)  $25 and 500 units. 
D)  $25 and 800 units. 
A)  $15 and 400 units. 
B)  $20 and 600 units. 
C)  $25 and 500 units. 
D)  $25 and 800 units.

Question 12

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 13

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Accepted Answer

A)  be willing and able to produce less jewelry than before at each possible price. 
B)  be willing and able to produce more jewelry than before at each possible price. 
C)  face a greater demand for your jewelry. 
D)  face a weaker demand for your jewelry. 
A)  be willing and able to produce less jewelry than before at each possible price. 
B)  be willing and able to produce more jewelry than before at each possible price. 
C)  face a greater demand for your jewelry. 
D)  face a weaker demand for your jewelry.

Question 14

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Accepted Answer

The supply

Question 15

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 16

Figure 4-30  
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curves) shifts) and in which direction?

Accepted Answer

Supply shi

Question 17

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

Accepted Answer

A)  0. 
B)  100. 
C)  200. 
D)  400. 
A)  0. 
B)  100. 
C)  200. 
D)  400.

Question 18

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Accepted Answer

A)  Price will fall, and the effect on quantity is ambiguous. 
B)  Price will rise, and the effect on quantity is ambiguous. 
C)  Quantity will fall, and the effect on price is ambiguous. 
D)  Quantity will rise, and the effect on price is ambiguous. 
A)  Price will fall, and the effect on quantity is ambiguous. 
B)  Price will rise, and the effect on quantity is ambiguous. 
C)  Quantity will fall, and the effect on price is ambiguous. 
D)  Quantity will rise, and the effect on price is ambiguous.

Question 19

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 20

Figure 4-27
Panel a) Panel b)
     Panel c) Panel d)
    
-Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity supplied?

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)

Exam 4: The Market Forces of Supply and Demand

In competitive markets,

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of a substitute for this good becomes more expensive.

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Price will rise to eliminate a shortage.

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

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph represents

Figure 4-20 -Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

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

Suppose you make jewelry. If the price of gold falls, then we would expect you to

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curves) shifts) and in which direction?

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

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

A downward-sloping demand curve illustrates

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity supplied?

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

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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