Question 1

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises. 
A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises.

Question 2

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

Accepted Answer

The demand

Question 3

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 4

Figure 4-7  
-Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then

Accepted Answer

A)  firms would be willing to supply less of Good X than before at each possible price. 
B)  people are willing to buy more of Good X than before at each possible price. 
C)  people's incomes must have decreased. 
D)  the price of Good X has decreased. 
A)  firms would be willing to supply less of Good X than before at each possible price. 
B)  people are willing to buy more of Good X than before at each possible price. 
C)  people's incomes must have decreased. 
D)  the price of Good X has decreased.

Question 5

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-25. All else equal, a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

Accepted Answer

A)  x to y. 
B)  y to x. 
C)  SA to SB. 
D)  SB to SA. 
A)  x to y. 
B)  y to x. 
C)  SA to SB. 
D)  SB to SA.

Question 6

The supply curve for a good is a line that relates

Accepted Answer

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

Question 7

If the demand for a good falls when income falls, then the good is called an)

Accepted Answer

A)  normal good. 
B)  regular good. 
C)  luxury good. 
D)  inferior good. 
A)  normal good. 
B)  regular good. 
C)  luxury good. 
D)  inferior good.

Question 8

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Accepted Answer

A) True 
 B)False

Question 9

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • x = 2.
• The current price of a sandwich is $5.00.
• The market quantity supplied of sandwiches is 10.
• The law of supply applies to the supply of sandwiches.
Then there is a

Accepted Answer

A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.

Question 10

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right.

Accepted Answer

A) True 
 B)False

Question 11

If a surplus exists in a market, then we know that the actual price is

Accepted Answer

A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded. 
A)  above the equilibrium price, and quantity supplied is greater than quantity demanded. 
B)  above the equilibrium price, and quantity demanded is greater than quantity supplied. 
C)  below the equilibrium price, and quantity demanded is greater than quantity supplied. 
D)  below the equilibrium price, and quantity supplied is greater than quantity demanded.

Question 12

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

Accepted Answer

A)  less than or equal to 5. 
B)  greater than or equal to 5. 
C)  greater than or equal to 7. 
D)  greater than or equal to 10. 
A)  less than or equal to 5. 
B)  greater than or equal to 5. 
C)  greater than or equal to 7. 
D)  greater than or equal to 10.

Question 13

The supply curve for portable charcoal grills shifts

Accepted Answer

A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes. 
A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes.

Question 14

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A)  increase the supply of education. 
B)  decrease the supply of education. 
C)  increase the demand for education. 
D)  decrease the demand for education. 
A)  increase the supply of education. 
B)  decrease the supply of education. 
C)  increase the demand for education. 
D)  decrease the demand for education.

Question 15

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When leather became more expensive, belt producers decreased their supply of belts. 
B)  When car production technology improved, car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D)  When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup. 
A)  When leather became more expensive, belt producers decreased their supply of belts. 
B)  When car production technology improved, car producers increased their supply of cars. 
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters. 
D)  When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.

Question 16

The difference between a supply schedule and a supply curve is that a supply schedule

Accepted Answer

A)  incorporates demand and a supply curve does not. 
B)  incorporates profit and a supply curve does not. 
C)  can shift, but a supply curve cannot shift. 
D)  is a table, and a supply curve is drawn on a graph. 
A)  incorporates demand and a supply curve does not. 
B)  incorporates profit and a supply curve does not. 
C)  can shift, but a supply curve cannot shift. 
D)  is a table, and a supply curve is drawn on a graph.

Question 17

A decrease in the price of a good will

Accepted Answer

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

Question 18

An improvement in production technology will

Accepted Answer

A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply. 
A)  increase a firm's costs and increase its supply. 
B)  increase a firm's costs and decrease its supply. 
C)  decrease a firm's costs and increase its supply. 
D)  decrease a firm's costs and decrease its supply.

Question 19

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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 20

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

Exam 4: The Market Forces of Supply and Demand

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

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

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Da to Db, then

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

The supply curve for a good is a line that relates

If the demand for a good falls when income falls, then the good is called an)

A decrease in the price of sugar will shift the supply curve for cookies to the right.

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the right.

If a surplus exists in a market, then we know that the actual price is

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

The supply curve for portable charcoal grills shifts

An increase in the number of college scholarships issued by private foundations would

Which of the following demonstrates the law of supply?

The difference between a supply schedule and a supply curve is that a supply schedule

A decrease in the price of a good will

An improvement in production technology will

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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

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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