Question 1

Figure 4-1  
-Refer to Figure 4-1. It is apparent from the figure that the

Accepted Answer

A)  good is inferior. 
B)  demand for the good decreases as income increases. 
C)  demand for the good conforms to the law of demand. 
D)  All of the above are correct. 
A)  good is inferior. 
B)  demand for the good decreases as income increases. 
C)  demand for the good conforms to the law of demand. 
D)  All of the above are correct.

Question 2

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

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 3

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 4

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 5

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

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 6

Figure 4-26  
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

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 7

If a good is normal, then an increase in income will result in a(n)

Accepted Answer

A)  increase in the demand for the good. 
B)  decrease in the demand for the good. 
C)  movement down and to the right along the demand curve for the good. 
D)  movement up and to the left along the demand curve for the good. 
A)  increase in the demand for the good. 
B)  decrease in the demand for the good. 
C)  movement down and to the right along the demand curve for the good. 
D)  movement up and to the left along the demand curve for the good.

Question 8

If a increase in income decreases the demand for a good, then the good is a(n)

Accepted Answer

A)  substitute good. 
B)  complementary good. 
C)  normal good. 
D)  inferior good. 
A)  substitute good. 
B)  complementary good. 
C)  normal good. 
D)  inferior good.

Question 9

A decrease in supply is represented by a

Accepted Answer

A)  movement downward and to the left along a supply curve. 
B)  movement upward and to the right along a supply curve. 
C)  rightward shift of a supply curve. 
D)  leftward shift of a supply curve. 
A)  movement downward and to the left along a supply curve. 
B)  movement upward and to the right along a supply curve. 
C)  rightward shift of a supply curve. 
D)  leftward shift of a supply curve.

Question 10

Table 4-3  
-Refer to Table 4-3. For whom is the good a normal good?

Accepted Answer

A)  Bert only 
B)  Grover only 
C)  Bert, Ernie, Grover, and Oscar 
D)  This cannot be determined from the table. 
A)  Bert only 
B)  Grover only 
C)  Bert, Ernie, Grover, and Oscar 
D)  This cannot be determined from the table.

Question 11

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

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

Question 12

If there is a shortage of farm laborers, we would expect

Accepted Answer

A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor. 
A)  the wage of farm laborers to increase. 
B)  the wage of farm laborers to decrease. 
C)  the price of farm commodities to decrease. 
D)  a decrease in the demand for substitutes for farm labor.

Question 13

A decrease in the price of a good would

Accepted Answer

A)  increase the supply of the good. 
B)  increase the quantity demanded of the good. 
C)  give producers an incentive to produce more to keep profits from falling. 
D)  shift the supply curve for the good to the left. 
A)  increase the supply of the good. 
B)  increase the quantity demanded of the good. 
C)  give producers an incentive to produce more to keep profits from falling. 
D)  shift the supply curve for the good to the left.

Question 14

A decrease in supply shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 15

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease. 
A)  shortage to exist and the market price of roses to increase. 
B)  shortage to exist and the market price of roses to decrease. 
C)  surplus to exist and the market price of roses to increase. 
D)  surplus to exist and the market price of roses to decrease.

Question 16

Figure 4-24
The diagram below pertains to the demand for turkey in the United States.  
-Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers 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 17

A movement upward and to the left along a given demand curve is called a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 18

The sum of all the individual demand curves for a product is called

Accepted Answer

A)  income demand. 
B)  equilibrium demand. 
C)  complementary demand. 
D)  market demand. 
A)  income demand. 
B)  equilibrium demand. 
C)  complementary demand. 
D)  market demand.

Question 19

An increase in demand is represented by a

Accepted Answer

A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve. 
A)  movement downward and to the right along a demand curve. 
B)  movement upward and to the left along a demand curve. 
C)  rightward shift of a demand curve. 
D)  leftward shift of a demand curve.

Question 20

Figure 4-9
Panel (a) Panel (b)    
-Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

Accepted Answer

A)  Tobacco and marijuana are complements, and the price of marijuana decreased. 
B)  Tobacco is a "gateway drug," and the price of marijuana increased. 
C)  The price of cigarettes increased. 
D)  The arrows are consistent with all of these events. 
A)  Tobacco and marijuana are complements, and the price of marijuana decreased. 
B)  Tobacco is a "gateway drug," and the price of marijuana increased. 
C)  The price of cigarettes increased. 
D)  The arrows are consistent with all of these events.

Exam 4: The Market Forces of Supply and Demand

Figure 4-1 -Refer to Figure 4-1. It is apparent from the figure that the

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

A decrease in the price of a complement will shift the demand curve for a good to the left.

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

If a good is normal, then an increase in income will result in a(n)

If a increase in income decreases the demand for a good, then the good is a(n)

A decrease in supply is represented by a

Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

Today's demand curve for gasoline could shift in response to a change in

If there is a shortage of farm laborers, we would expect

A decrease in the price of a good would

A decrease in supply shifts the supply curve to the left.

Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

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

A movement upward and to the left along a given demand curve is called a decrease in demand.

The sum of all the individual demand curves for a product is called

An increase in demand is represented by a

Figure 4-9 Panel (a) Panel (b) -Refer to Figure 4-9. The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with which of the following events?

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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