Question 1

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

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 2

Figure 4-20  
-Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

Accepted Answer

A)  The market is in equilibrium. 
B)  Equilibrium price is equal to equilibrium quantity. 
C)  There is no pressure for price to change. 
D)  The quantity of the good that is bought and sold is 600 units. 
A)  The market is in equilibrium. 
B)  Equilibrium price is equal to equilibrium quantity. 
C)  There is no pressure for price to change. 
D)  The quantity of the good that is bought and sold is 600 units.

Question 3

An increase in the price of ink will shift the supply curve for pens to the left.

Accepted Answer

A) True 
 B)False

Question 4

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Accepted Answer

A) True 
 B)False

Question 5

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed.  
-Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 500 cases when the price is $5.00, which of the following statements is correct?

Accepted Answer

A)  The market is in equilibrium at a price of $5.00. 
B)  There is a surplus of 100 cases at a price of $5.00. 
C)  There is a shortage of 100 cases at a price of $5.00. 
D)  There is a shortage of 50 cases at a price of $5.00. 
A)  The market is in equilibrium at a price of $5.00. 
B)  There is a surplus of 100 cases at a price of $5.00. 
C)  There is a shortage of 100 cases at a price of $5.00. 
D)  There is a shortage of 50 cases at a price of $5.00.

Question 6

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

A)  the ticket price was above the equilibrium price. 
B)  the ticket price was below the equilibrium price. 
C)  the ticket price was at the equilibrium price. 
D)  nothing about the equilibrium price. 
A)  the ticket price was above the equilibrium price. 
B)  the ticket price was below the equilibrium price. 
C)  the ticket price was at the equilibrium price. 
D)  nothing about the equilibrium price.

Question 7

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 8

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause 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 decrease, and the effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would decrease, 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 decrease, and the effect on equilibrium quantity would be ambiguous. 
D)  The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.

Question 9

Table 4-8  
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Accepted Answer

A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units. 
A)  decrease by 6 units. 
B)  decrease by 12 units. 
C)  increase by 6 units. 
D)  increase by 12 units.

Question 10

Figure 4-8  
-Refer to Figure 4-8. Suppose the figure shows the market demand for Big Box e-readers. Suppose the price of the leading competitor's e­readers, a substitute good, decreases. 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 11

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 12

Figure 4-16  
-Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by a(n)

Accepted Answer

A)  decrease in the number of commercial bakers. 
B)  improvement in oven technology. 
C)  decrease in the price of butter. 
D)  decrease in the price of chocolate cake. 
A)  decrease in the number of commercial bakers. 
B)  improvement in oven technology. 
C)  decrease in the price of butter. 
D)  decrease in the price of chocolate cake.

Question 13

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

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 14

Table 4-9  
-Refer to Table 4-9. Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

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

Question 15

Today's supply curve for iPods could shift in response to a change in

Accepted Answer

A)  today's price of iPods. 
B)  the expected future price of iPods. 
C)  the number of buyers of iPods. 
D)  All of the above are correct. 
A)  today's price of iPods. 
B)  the expected future price of iPods. 
C)  the number of buyers of iPods. 
D)  All of the above are correct.

Question 16

Figure 4-21  
-Refer to Figure 4-21. At a price of $16, there is a

Accepted Answer

A)  surplus of 1 unit. 
B)  surplus of 3 units. 
C)  shortage of 1 unit. 
D)  shortage of 3 units. 
A)  surplus of 1 unit. 
B)  surplus of 3 units. 
C)  shortage of 1 unit. 
D)  shortage of 3 units.

Question 17

Figure 4-18  
-Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Accepted Answer

A)  $15 and 200 units. 
B)  $25 and 600 units. 
C)  $25 and 400 units. 
D)  $35 and 200 units. 
A)  $15 and 200 units. 
B)  $25 and 600 units. 
C)  $25 and 400 units. 
D)  $35 and 200 units.

Question 18

Figure 4-20  
-Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)  $15 and 400 units. 
B)  $20 and 600 units. 
C)  $25 and 500 units. 
D)  $25 and 800 units. 
A)  $15 and 400 units. 
B)  $20 and 600 units. 
C)  $25 and 500 units. 
D)  $25 and 800 units.

Question 19

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 20

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...

Exam 4: The Market Forces of Supply and Demand

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

Figure 4-20 -Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?

An increase in the price of ink will shift the supply curve for pens to the left.

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

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

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?

Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for Big Box e-readers. Suppose the price of the leading competitor's e­readers, a substitute good, decreases. Which of the following changes would occur?

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?

Figure 4-16 -Refer to Figure 4-16. The shift from S' to S in the market for chocolate cake could be caused by a(n)

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

Table 4-9 -Refer to Table 4-9. Which combination would produce an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Today's supply curve for iPods could shift in response to a change in

Figure 4-21 -Refer to Figure 4-21. At a price of $16, there is a

Figure 4-18 -Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Figure 4-20 -Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

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

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

Filters

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for Big Box e-readers. Suppose the price of the leading competitor's ereaders, a substitute good, decreases. Which of the following changes would occur?