Question 1

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources. 
A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources.

Question 2

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, the function for market supply can be written as QS=

Accepted Answer

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

Question 3

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)  a restaurant in a large city 
B)  a dry cleaners in a large city 
C)  a local gas station 
D)  a local electrical company 
A)  a restaurant in a large city 
B)  a dry cleaners in a large city 
C)  a local gas station 
D)  a local electrical company

Question 4

To obtain the market demand curve for a product, sum the individual demand curves

Accepted Answer

A)  vertically. 
B)  diagonally. 
C)  horizontally. 
D)  and then average them. 
A)  vertically. 
B)  diagonally. 
C)  horizontally. 
D)  and then average them.

Question 5

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices. 
A)  surpluses and shortages. 
B)  quantities. 
C)  government policies. 
D)  prices.

Question 6

Table 4-8
  
-Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)  6 units. 
B)  12 units. 
C)  18 units. 
D)  24 units. 
A)  6 units. 
B)  12 units. 
C)  18 units. 
D)  24 units.

Question 7

A decrease in quantity supplied

Accepted Answer

A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right. 
A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right.

Question 8

Which of these statements does not apply to market economies?

Accepted Answer

A)  Prices prevent decentralized decision making from degenerating into chaos. 
B)  Prices coordinate the actions of millions of people with varying abilities and desires. 
C)  Prices ensure that anyone who wants a product can get it. 
D)  Prices ensure that what needs to get done does in fact get done. 
A)  Prices prevent decentralized decision making from degenerating into chaos. 
B)  Prices coordinate the actions of millions of people with varying abilities and desires. 
C)  Prices ensure that anyone who wants a product can get it. 
D)  Prices ensure that what needs to get done does in fact get done.

Question 9

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 10

Suppose John and Wayne are the only two demanders of cowboy movies. Each month, John buys six cowboy movies when the price is $10 each, and he buys four cowboy movies when the price is $15 each. Each month, Wayne buys four cowboy movies when the price is $10 each, and he buys two cowboy movies when the price is $15 each. Which of the following points is on the market demand curve?

Accepted Answer

A)  quantity demanded = 2; price = $15 
B)  quantity demanded = 4; price = $25 
C)  quantity demanded = 10; price = $10 
D)  quantity demanded = 16; price = $25 
A)  quantity demanded = 2; price = $15 
B)  quantity demanded = 4; price = $25 
C)  quantity demanded = 10; price = $10 
D)  quantity demanded = 16; price = $25

Question 11

Figure 4-30  
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the changes) in the equilibrium price and quantity.

Accepted Answer

Equilibrium price de

Question 12

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.

Accepted Answer

A) True 
 B)False

Question 13

Buyers and sellers who have no influence on market price are referred to as

Accepted Answer

A)  market pawns. 
B)  monopolists. 
C)  price takers. 
D)  price setters. 
A)  market pawns. 
B)  monopolists. 
C)  price takers. 
D)  price setters.

Question 14

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Accepted Answer

A)  the government 
B)  prices 
C)  subsidies 
D)  the Federal Reserve 
A)  the government 
B)  prices 
C)  subsidies 
D)  the Federal Reserve

Question 15

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A)  The goods offered for sale are exactly the same. 
B)  There are so many buyers and sellers that no single buyer or seller has any influence over the market price. 
C)  It is difficult for new sellers to enter the market. 
D)  Both a and b are correct. 
A)  The goods offered for sale are exactly the same. 
B)  There are so many buyers and sellers that no single buyer or seller has any influence over the market price. 
C)  It is difficult for new sellers to enter the market. 
D)  Both a and b are correct.

Question 16

Table 4-6
  
-Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A)  4 units. 
B)  7.5 units. 
C)  10 units. 
D)  30 units. 
A)  4 units. 
B)  7.5 units. 
C)  10 units. 
D)  30 units.

Question 17

Figure 4-18  
-Refer to Figure 4-18. At a price of $35, there would be a

Accepted Answer

A)  shortage of 400 units. 
B)  surplus of 200 units. 
C)  surplus of 400 units. 
D)  surplus of 600 units. 
A)  shortage of 400 units. 
B)  surplus of 200 units. 
C)  surplus of 400 units. 
D)  surplus of 600 units.

Question 18

Equilibrium price must increase when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously. 
B)  increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously. 
C)  decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously. 
D)  decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously. 
A)  increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously. 
B)  increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously. 
C)  decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously. 
D)  decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.

Question 19

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 20

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Accepted Answer

A)  The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
B)  The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
C)  The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
D)  The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
A)  The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
B)  The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity. 
C)  The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity. 
D)  The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

Exam 4: The Market Forces of Supply and Demand

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

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, the function for market supply can be written as QS=

Which of the following would most likely serve as an example of a monopoly?

To obtain the market demand curve for a product, sum the individual demand curves

The signals that guide the allocation of resources in a market economy are

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

A decrease in quantity supplied

Which of these statements does not apply to market economies?

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the changes) in the equilibrium price and quantity.

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.

Buyers and sellers who have no influence on market price are referred to as

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Which of the following characteristics is required for a perfectly competitive market?

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be a

Equilibrium price must increase when demand

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

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

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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