Question 1

A market's equilibrium is the point at which the supply and demand curves intersect.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-12
Firm A Firm B    
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)  2 units. 
B)  10 units. 
C)  12 units. 
D)  22 units. 
A)  2 units. 
B)  10 units. 
C)  12 units. 
D)  22 units.

Question 3

Figure 4-14  
-Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

Accepted Answer

A)  There is an improvement in the technology used to produce this good. 
B)  The cost of an input to the production of this good increases. 
C)  This good becomes very popular. 
D)  The price of a substitute good decreases. 
A)  There is an improvement in the technology used to produce this good. 
B)  The cost of an input to the production of this good increases. 
C)  This good becomes very popular. 
D)  The price of a substitute good decreases.

Question 4

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

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 5

Table 4-3  
-Refer to Table 4-3. Whose demand does not obey the law of demand?

Accepted Answer

A)  Bert's 
B)  Ernie's 
C)  Grover's 
D)  Oscar's 
A)  Bert's 
B)  Ernie's 
C)  Grover's 
D)  Oscar's

Question 6

Which of the following events must cause equilibrium quantity to fall?

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 7

Figure 4-22  
-Refer to Figure 4-22. At a price of $24, there is a

Accepted Answer

A)  surplus of 4 units. 
B)  surplus of 8 units. 
C)  shortage of 4 units. 
D)  shortage of 8 units. 
A)  surplus of 4 units. 
B)  surplus of 8 units. 
C)  shortage of 4 units. 
D)  shortage of 8 units.

Question 8

A decrease in the price of baseball bats will decrease the demand for baseballs.

Accepted Answer

A) True 
 B)False

Question 9

Table 4-1  
-Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units. 
A)  2 units. 
B)  3 units. 
C)  4 units. 
D)  5 units.

Question 10

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for wedding cakes resulting from a decrease in the number of pastry chefs?

Accepted Answer

A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D 
A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D

Question 11

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee prevents heart attacks?

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 effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous. 
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 effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.

Question 12

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 13

Figure 4-8  
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. Which of the following changes would occur?

Accepted Answer

A)  a movement along D2 from point A to point B 
B)  a movement along D2 from point B to point A 
C)  a shift from D1 to D2 
D)  a shift from D2 to D1 
A)  a movement along D2 from point A to point B 
B)  a movement along D2 from point B to point A 
C)  a shift from D1 to D2 
D)  a shift from D2 to D1

Question 14

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A)  decrease in equilibrium price and an increase in equilibrium quantity. 
B)  decrease in equilibrium price and a decrease in equilibrium quantity. 
C)  increase in equilibrium price and a decrease in equilibrium quantity. 
D)  increase in equilibrium price and an increase in equilibrium quantity. 
A)  decrease in equilibrium price and an increase in equilibrium quantity. 
B)  decrease in equilibrium price and a decrease in equilibrium quantity. 
C)  increase in equilibrium price and a decrease in equilibrium quantity. 
D)  increase in equilibrium price and an increase in equilibrium quantity.

Question 15

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 16

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

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 17

Other things equal, when the price of a good falls, the

Accepted Answer

A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases. 
A)  quantity supplied of the good increases. 
B)  supply decreases. 
C)  quantity supplied of the good decreases. 
D)  demand increases.

Question 18

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Accepted Answer

A) True 
 B)False

Question 19

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)

Accepted Answer

A)  decrease in the demand for sugar and a decrease in the quantity supplied of sugar. 
B)  decrease in the supply of sugar and a decrease in the quantity demanded of sugar. 
C)  decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar. 
D)  increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar. 
A)  decrease in the demand for sugar and a decrease in the quantity supplied of sugar. 
B)  decrease in the supply of sugar and a decrease in the quantity demanded of sugar. 
C)  decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar. 
D)  increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.

Question 20

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

Exam 4: The Market Forces of Supply and Demand

A market's equilibrium is the point at which the supply and demand curves intersect.

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Figure 4-14 -Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

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

Table 4-3 -Refer to Table 4-3. Whose demand does not obey the law of demand?

Which of the following events must cause equilibrium quantity to fall?

Figure 4-22 -Refer to Figure 4-22. At a price of $24, there is a

A decrease in the price of baseball bats will decrease the demand for baseballs.

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle, Laura, and Hillary and the price falls by $1, the quantity demanded in the market increases by

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for wedding cakes resulting from a decrease in the number of pastry chefs?

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee prevents heart attacks?

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

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless keyboards, a complementary good, increases. Which of the following changes would occur?

A decrease in input costs to firms in a market will result in a(n)

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

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Other things equal, when the price of a good falls, the

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)

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

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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