Question 1

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant. 
A)  are in balance. 
B)  are the same. 
C)  clash. 
D)  remain constant.

Question 2

Figure 4-30  
-Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Accepted Answer

Demand shi

Question 3

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)  the idea that tobacco and marijuana are substitutes. 
B)  the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C)  the idea that lower cigarette prices are associated with less use of marijuana. 
D)  most of the available evidence. 
A)  the idea that tobacco and marijuana are substitutes. 
B)  the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana. 
C)  the idea that lower cigarette prices are associated with less use of marijuana. 
D)  most of the available evidence.

Question 4

Figure 4-20  
-Refer to Figure 4-20. If the price is $25, then there would be an excess

Accepted Answer

A)  supply of 100 units, and price would fall. 
B)  supply of 300 units, and price would fall. 
C)  demand of 100 units, and price would fall. 
D)  demand of 300 units, and price would fall. 
A)  supply of 100 units, and price would fall. 
B)  supply of 300 units, and price would fall. 
C)  demand of 100 units, and price would fall. 
D)  demand of 300 units, and price would fall.

Question 5

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Accepted Answer

A)  crystal to be unaffected. 
B)  crystal to decrease. 
C)  crystal to increase. 
D)  lead to increase. 
A)  crystal to be unaffected. 
B)  crystal to decrease. 
C)  crystal to increase. 
D)  lead to increase.

Question 6

Figure 4-16  
-Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Accepted Answer

A)  increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live. 
B)  newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months. 
C)  decrease in the price of lumber. 
D)  All of the above are correct. 
A)  increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live. 
B)  newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months. 
C)  decrease in the price of lumber. 
D)  All of the above are correct.

Question 7

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Accepted Answer

A)  and quantity both decrease. 
B)  and quantity both increase. 
C)  increases, and the equilibrium quantity decreases. 
D)  decreases, and the equilibrium quantity increases. 
A)  and quantity both decrease. 
B)  and quantity both increase. 
C)  increases, and the equilibrium quantity decreases. 
D)  decreases, and the equilibrium quantity increases.

Question 8

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

A) True 
 B)False

Question 9

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Accepted Answer

A)  Sellers would not be able to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise. 
A)  Sellers would not be able to produce and sell as much as before at each relevant price. 
B)  The supply would decrease. 
C)  Buyers would not be willing to buy as much as before at each relevant price. 
D)  The equilibrium price would rise.

Question 10

Figure 4-4
Yasmine Mercedes    
-Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

Accepted Answer

A)  3 units. 
B)  6 units. 
C)  9 units. 
D)  12 units. 
A)  3 units. 
B)  6 units. 
C)  9 units. 
D)  12 units.

Question 11

The market for ice cream is a

Accepted Answer

A)  monopolistic market. 
B)  highly competitive market. 
C)  highly organized market. 
D)  Both b and c are correct. 
A)  monopolistic market. 
B)  highly competitive market. 
C)  highly organized market. 
D)  Both b and c are correct.

Question 12

Which of these statements best represents the law of demand?

Accepted Answer

A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases. 
A)  When buyers' tastes for a good increase, they purchase more of the good. 
B)  When income levels increase, buyers purchase more of most goods. 
C)  When the price of a good decreases, buyers purchase more of the good. 
D)  When buyers' demands for a good increase, the price of the good increases.

Question 13

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 14

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 quantity?

Accepted Answer

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

Question 15

In a competitive market, each seller has limited control over the price of his product because

Accepted Answer

A)  other sellers are offering similar products. 
B)  buyers exert more control over the price than do sellers. 
C)  these markets are highly regulated by the government. 
D)  sellers usually agree to set a common price that will allow each seller to earn a comfortable profit. 
A)  other sellers are offering similar products. 
B)  buyers exert more control over the price than do sellers. 
C)  these markets are highly regulated by the government. 
D)  sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.

Question 16

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 17

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. Assume 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. If the price is $6 per case, is there a shortage or surplus, and how large is the shortage or surplus?

Accepted Answer

There is a

Question 18

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Question 19

Figure 4-5  
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Accepted Answer

A)  a freeze in Florida 
B)  a technological advance that allows oranges to ripen faster 
C)  a decrease in the price of apples 
D)  an announcement by the FDA that oranges prevent heart disease 
A)  a freeze in Florida 
B)  a technological advance that allows oranges to ripen faster 
C)  a decrease in the price of apples 
D)  an announcement by the FDA that oranges prevent heart disease

Question 20

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Accepted Answer

A)  The government would provide tax incentives to encourage people to become farmers. 
B)  The government would subsidize the production of food. 
C)  The prices of food and the wages of farmers would adjust. 
D)  There are no mechanisms to remove the shortage. 
A)  The government would provide tax incentives to encourage people to become farmers. 
B)  The government would subsidize the production of food. 
C)  The prices of food and the wages of farmers would adjust. 
D)  There are no mechanisms to remove the shortage.

Exam 4: The Market Forces of Supply and Demand

The dictionary defines equilibrium as a situation in which forces

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

The belief that tobacco is a "gateway drug" is consistent with

Figure 4-20 -Refer to Figure 4-20. If the price is $25, then there would be an excess

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

A decrease in income will shift the demand curve for an inferior good to the right.

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

The market for ice cream is a

Which of these statements best represents the law of demand?

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

In a competitive market, each seller has limited control over the price of his product because

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

A yard sale is an example of a market.

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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