Question 1

Figure 4-2  
-Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $6, then the market quantity demanded is

Accepted Answer

A)  4 units. 
B)  6 units. 
C)  8 units. 
D)  12 units. 
A)  4 units. 
B)  6 units. 
C)  8 units. 
D)  12 units.

Question 2

Which of the following events must cause equilibrium price to rise?

Accepted Answer

A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase 
A)  demand increases and supply decreases 
B)  demand and supply both decrease 
C)  demand decreases and supply increases 
D)  demand and supply both increase

Question 3

A likely example of substitute goods for most people would be

Accepted Answer

A)  tables and chairs. 
B)  bicycles and helmets. 
C)  apple juice and orange juice. 
D)  coffee and sugar. 
A)  tables and chairs. 
B)  bicycles and helmets. 
C)  apple juice and orange juice. 
D)  coffee and sugar.

Question 4

Table 4-3
  
-Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

Accepted Answer

A)  decreases by 1.75 units. 
B)  increases by 2 units. 
C)  decreases by 7 units. 
D)  decreases by 24 units. 
A)  decreases by 1.75 units. 
B)  increases by 2 units. 
C)  decreases by 7 units. 
D)  decreases by 24 units.

Question 5

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 6

Figure 4-16  
-Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by an)

Accepted Answer

A)  decrease in the number of commercial bakers. 
B)  improvement in oven technology. 
C)  decrease in the price of butter. 
D)  decrease in the price of chocolate cake. 
A)  decrease in the number of commercial bakers. 
B)  improvement in oven technology. 
C)  decrease in the price of butter. 
D)  decrease in the price of chocolate cake.

Question 7

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

Accepted Answer

A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded. 
A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded.

Question 8

A movement upward and to the right along a supply curve is called an)

Accepted Answer

A)  increase in supply. 
B)  decrease in supply. 
C)  decrease in quantity supplied. 
D)  increase in quantity supplied. 
A)  increase in supply. 
B)  decrease in supply. 
C)  decrease in quantity supplied. 
D)  increase in quantity supplied.

Question 9

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
  
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium price?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 10

If the demand for a product increases, 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 both to increase. 
D)  and equilibrium quantity both to decrease. 
A)  to increase and equilibrium quantity to decrease. 
B)  to decrease and equilibrium quantity to increase. 
C)  and equilibrium quantity both to increase. 
D)  and equilibrium quantity both to decrease.

Question 11

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current 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 12

A decrease in demand is represented by a

Accepted Answer

A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve. 
A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve.

Question 13

A demand schedule is a table that shows the relationship between

Accepted Answer

A)  quantity demanded and quantity supplied. 
B)  income and quantity demanded. 
C)  price and quantity demanded. 
D)  price and income. 
A)  quantity demanded and quantity supplied. 
B)  income and quantity demanded. 
C)  price and quantity demanded. 
D)  price and income.

Question 14

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

Accepted Answer

A) True 
 B)False

Question 15

The supply of 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 16

In a market economy, who or what determines who produces each good and how much is produced?

Accepted Answer

A)  the government 
B)  lawyers 
C)  lotteries 
D)  prices 
A)  the government 
B)  lawyers 
C)  lotteries 
D)  prices

Question 17

If the number of sellers in a market increases, then the

Accepted Answer

A)  demand in that market will increase. 
B)  supply in that market will increase. 
C)  supply in that market will decrease. 
D)  demand in that market will decrease. 
A)  demand in that market will increase. 
B)  supply in that market will increase. 
C)  supply in that market will decrease. 
D)  demand in that market will decrease.

Question 18

A decrease in the number of sellers in the market causes

Accepted Answer

A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve. 
A)  the supply curve to shift to the left. 
B)  the supply curve to shift to the right. 
C)  a movement up and to the right along a stationary supply curve. 
D)  a movement downward and to the left along a stationary supply curve.

Question 19

Monopolists are price takers.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-3
Consumer 1 Consumer 2
    
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $6 is

Accepted Answer

A)  12 units. 
B)  14 units. 
C)  19 units. 
D)  21 units. 
A)  12 units. 
B)  14 units. 
C)  19 units. 
D)  21 units.

Exam 4: The Market Forces of Supply and Demand

Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $6, then the market quantity demanded is

Which of the following events must cause equilibrium price to rise?

A likely example of substitute goods for most people would be

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Figure 4-16 -Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by an)

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

A movement upward and to the right along a supply curve is called an)

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

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

A decrease in demand is represented by a

A demand schedule is a table that shows the relationship between

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

The supply of a good or service is determined by

In a market economy, who or what determines who produces each good and how much is produced?

If the number of sellers in a market increases, then the

A decrease in the number of sellers in the market causes

Monopolists are price takers.

Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $6 is

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

Filters