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

Figure 4-5  
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Accepted Answer

A)  an increase in the price of DVDs 
B)  a decrease in the price of DVD players 
C)  a change in consumer preferences toward watching movies in movie theaters rather than at home 
D)  an expectation by buyers that their incomes will increase in the very near future 
A)  an increase in the price of DVDs 
B)  a decrease in the price of DVD players 
C)  a change in consumer preferences toward watching movies in movie theaters rather than at home 
D)  an expectation by buyers that their incomes will increase in the very near future

Question 3

An example of a perfectly competitive market would be the

Accepted Answer

A)  cable TV market. 
B)  soybean market. 
C)  breakfast cereal market. 
D)  shampoo market. 
A)  cable TV market. 
B)  soybean market. 
C)  breakfast cereal market. 
D)  shampoo market.

Question 4

A movement downward and to the right along a demand curve is called an)

Accepted Answer

A)  increase in demand. 
B)  decrease in demand. 
C)  decrease in quantity demanded. 
D)  increase in quantity demanded. 
A)  increase in demand. 
B)  decrease in demand. 
C)  decrease in quantity demanded. 
D)  increase in quantity demanded.

Question 5

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

Accepted Answer

A) True 
 B)False

Question 6

Most studies indicate that tobacco and marijuana tend to be

Accepted Answer

A)  substitutes. 
B)  complements. 
C)  unrelated because one good is legal while the other one is illegal. 
D)  inferior goods. 
A)  substitutes. 
B)  complements. 
C)  unrelated because one good is legal while the other one is illegal. 
D)  inferior goods.

Question 7

Which of the following might cause the supply curve for an inferior good to shift to the right?

Accepted Answer

A)  an increase in input prices 
B)  a decrease in consumer income 
C)  an improvement in production technology that makes production of the good more profitable 
D)  a decrease in the number of sellers in the market 
A)  an increase in input prices 
B)  a decrease in consumer income 
C)  an improvement in production technology that makes production of the good more profitable 
D)  a decrease in the number of sellers in the market

Question 8

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 9

Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  None of the above is correct. 
A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  None of the above is correct.

Question 10

Table 4-5
The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices.
  
-Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Accepted Answer

A)  decreases, and the supply of tires increases. 
B)  is unaffected, and the supply of tires decreases. 
C)  is unaffected, and the supply of tires increases. 
D)  None of the above is necessarily correct. 
A)  decreases, and the supply of tires increases. 
B)  is unaffected, and the supply of tires decreases. 
C)  is unaffected, and the supply of tires increases. 
D)  None of the above is necessarily correct.

Question 12

Which of the following would cause price to decrease?

Accepted Answer

A)  a decrease in supply 
B)  an increase in demand 
C)  a surplus of the good 
D)  a shortage of the good 
A)  a decrease in supply 
B)  an increase in demand 
C)  a surplus of the good 
D)  a shortage of the good

Question 13

Individual demand curves are summed vertically to obtain the market demand curve.

Accepted Answer

A) True 
 B)False

Question 14

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation
         , where   is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied.
-Refer to Scenario 4-1. What is the equilibrium quantity in this market?

Accepted Answer

The answer of Scenario 4-1
Suppose the demand schedule in a...

Question 16

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

Accepted Answer

A)  -3. 
B)  -1/3. 
C)  1/3. 
D)  3. 
A)  -3. 
B)  -1/3. 
C)  1/3. 
D)  3.

Question 17

When the price of a good or service changes,

Accepted Answer

A)  the supply curve shifts in the opposite direction. 
B)  the demand curve shifts in the opposite direction. 
C)  the demand curve shifts in the same direction. 
D)  there is a movement along a given demand curve. 
A)  the supply curve shifts in the opposite direction. 
B)  the demand curve shifts in the opposite direction. 
C)  the demand curve shifts in the same direction. 
D)  there is a movement along a given demand curve.

Question 18

In a competitive market, the quantity of a product produced and the price of the product are determined by

Accepted Answer

A)  a single buyer. 
B)  a single seller. 
C)  one buyer and one seller working together. 
D)  all buyers and all sellers. 
A)  a single buyer. 
B)  a single seller. 
C)  one buyer and one seller working together. 
D)  all buyers and all sellers.

Question 19

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

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 20

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.

Exam 4: The Market Forces of Supply and Demand

The term price takers refers to buyers and sellers in

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

An example of a perfectly competitive market would be the

A movement downward and to the right along a demand curve is called an)

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

Most studies indicate that tobacco and marijuana tend to be

Which of the following might cause the supply curve for an inferior good to shift to the right?

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

Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market?

Table 4-5 The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. -Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Which of the following would cause price to decrease?

Individual demand curves are summed vertically to obtain the market demand curve.

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

When the price of a good or service changes,

In a competitive market, the quantity of a product produced and the price of the product are determined by

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

When we move along a given demand curve,

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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