Question 1

When quantity supplied decreases at every possible price, we know that the supply curve has

Accepted Answer

A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D)  not shifted; rather, the supply curve has become flatter. 
A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted; rather, we have moved along the supply curve to a new point on the same curve. 
D)  not shifted; rather, the supply curve has become flatter.

Question 2

Sellers respond to a surplus by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

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

Question 4

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)  an increase in the price of mp3 players 
B)  a decrease in the number of sellers of mp3 players 
C)  an increase in the price of plastic, an input into the production of mp3 players 
D)  an improvement in the technology used to produce mp3 players 
A)  an increase in the price of mp3 players 
B)  a decrease in the number of sellers of mp3 players 
C)  an increase in the price of plastic, an input into the production of mp3 players 
D)  an improvement in the technology used to produce mp3 players

Question 5

A shortage is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 6

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.  
-Refer to Table 4-13. Suppose x = 1. Then it must be true that

Accepted Answer

A)  Harry and Jake have the same income, which is lower than Darby's income. 
B)  if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake. 
C)  Harry's demand curve is identical to Jake's demand curve. 
D)  All of the above are correct. 
A)  Harry and Jake have the same income, which is lower than Darby's income. 
B)  if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake. 
C)  Harry's demand curve is identical to Jake's demand curve. 
D)  All of the above are correct.

Question 7

When a surplus exists in a market, sellers

Accepted Answer

A)  raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
A)  raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
B)  raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated. 
C)  lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated. 
D)  lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.

Question 8

Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:  
-Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be

Accepted Answer

A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  300 tickets sold. 
D)  600 tickets unsold. 
A)  a shortage of 300 tickets. 
B)  a surplus of 300 tickets. 
C)  300 tickets sold. 
D)  600 tickets unsold.

Question 9

When the price of peaches changes, the demand curve for peaches

Accepted Answer

A)  shifts because the price of peaches is measured on the vertical axis of the graph. 
B)  shifts because the quantity demanded of peaches is measured on the horizontal axis of the graph. 
C)  does not shift because the price of peaches is measured on the vertical axis of the graph. 
D)  does not shift because the price of peaches is measured on the horizontal axis of the graph. 
A)  shifts because the price of peaches is measured on the vertical axis of the graph. 
B)  shifts because the quantity demanded of peaches is measured on the horizontal axis of the graph. 
C)  does not shift because the price of peaches is measured on the vertical axis of the graph. 
D)  does not shift because the price of peaches is measured on the horizontal axis of the graph.

Question 10

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Accepted Answer

The equilibrium pric

Question 11

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from

Accepted Answer

A)  DA to DB. 
B)  DB to DA. 
C)  x to y. 
D)  y to x. 
A)  DA to DB. 
B)  DB to DA. 
C)  x to y. 
D)  y to x.

Question 12

Surpluses drive price up, while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 13

If suppliers expect the price of their product to fall in the future, then they will

Accepted Answer

A)  decrease supply now. 
B)  increase supply now. 
C)  decrease supply in the future but not now. 
D)  increase supply in the future but not now. 
A)  decrease supply now. 
B)  increase supply now. 
C)  decrease supply in the future but not now. 
D)  increase supply in the future but not now.

Question 14

A university's football stadium is never more than half-full during football games. This indicates

Accepted Answer

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

Question 15

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Accepted Answer

A)  "fight fire with fire" by decreasing supply of its doll for six weeks and then increasing the supply. 
B)  increase the supply of its doll now before the other doll hits the market. 
C)  increase the price of its doll now. 
D)  discontinue its doll. 
A)  "fight fire with fire" by decreasing supply of its doll for six weeks and then increasing the supply. 
B)  increase the supply of its doll now before the other doll hits the market. 
C)  increase the price of its doll now. 
D)  discontinue its doll.

Question 16

If the number of buyers in a market decreases, then

Accepted Answer

A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease. 
A)  demand will increase. 
B)  demand will decrease. 
C)  supply will increase. 
D)  supply will decrease.

Question 17

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.  
-Refer to Figure 4-25. All else equal, the return of college students to campus in the fall 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 18

If the supply of a product decreases, then we would expect equilibrium price

Accepted Answer

A)  to increase and equilibrium quantity to decrease. 
B)  to decrease and equilibrium quantity to increase. 
C)  and equilibrium quantity to both increase. 
D)  and equilibrium quantity to both decrease. 
A)  to increase and equilibrium quantity to decrease. 
B)  to decrease and equilibrium quantity to increase. 
C)  and equilibrium quantity to both increase. 
D)  and equilibrium quantity to both decrease.

Question 19

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. Which of the following could cause all four families to demand more Mt. Dew at all prices?

Accepted Answer

A)  The price of sugar decreases. 
B)  All four family incomes increase, and Mt. Dew is a normal good. 
C)  A major university study reveals that drinking Mt. Dew can cause diabetes. 
D)  The technology for bottling carbonated beverages improves. 
A)  The price of sugar decreases. 
B)  All four family incomes increase, and Mt. Dew is a normal good. 
C)  A major university study reveals that drinking Mt. Dew can cause diabetes. 
D)  The technology for bottling carbonated beverages improves.

Question 20

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Accepted Answer

The answer of Studies show that lower cigarette prices are...

Exam 4: The Market Forces of Supply and Demand

When quantity supplied decreases at every possible price, we know that the supply curve has

Sellers respond to a surplus by cutting their prices.

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

Which of the following would not shift the supply curve for mp3 players?

A shortage is the same as an excess demand.

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then it must be true that

When a surplus exists in a market, sellers

When the price of peaches changes, the demand curve for peaches

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from

Surpluses drive price up, while shortages drive price down.

If suppliers expect the price of their product to fall in the future, then they will

A university's football stadium is never more than half-full during football games. This indicates

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

If the number of buyers in a market decreases, 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, the return of college students to campus in the fall would cause a move from

If the supply of a product decreases, then we would expect equilibrium price

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. Which of the following could cause all four families to demand more Mt. Dew at all prices?

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

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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