Question 1

A movement along the demand curve might be caused by a change in

Accepted Answer

A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded. 
A)  income. 
B)  the prices of substitutes or complements. 
C)  expectations about future prices. 
D)  the price of the good or service that is being demanded.

Question 2

An increase in the price of a good will

Accepted Answer

A)  increase demand. 
B)  decrease demand. 
C)  increase quantity demanded. 
D)  decrease quantity demanded. 
A)  increase demand. 
B)  decrease demand. 
C)  increase quantity demanded. 
D)  decrease quantity demanded.

Question 3

In a market economy, who or what determines who produces each good and how much is produced?

Accepted Answer

A)  the government 
B)  lawyers 
C)  lotteries 
D)  prices 
A)  the government 
B)  lawyers 
C)  lotteries 
D)  prices

Question 4

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.  
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • x = 2.
-The current price of a sandwich is $5.00.
-The market quantity supplied of sandwiches is 10.
-The law of supply applies to the supply of sandwiches.
Then there is a

Accepted Answer

A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00. 
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00. 
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.

Question 5

The equilibrium price is the same as the market-clearing price.

Accepted Answer

A) True 
 B)False

Question 6

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

Accepted Answer

A)  Price will fall, and the effect on quantity is ambiguous. 
B)  Price will rise, and the effect on quantity is ambiguous. 
C)  Quantity will fall, and the effect on price is ambiguous. 
D)  Quantity will rise, and the effect on price is ambiguous. 
A)  Price will fall, and the effect on quantity is ambiguous. 
B)  Price will rise, and the effect on quantity is ambiguous. 
C)  Quantity will fall, and the effect on price is ambiguous. 
D)  Quantity will rise, and the effect on price is ambiguous.

Question 7

If Max experiences a decrease in his income, then we would expect Max's demand for

Accepted Answer

A)  each good he purchases to remain unchanged. 
B)  normal goods to decrease. 
C)  luxury goods to increase. 
D)  inferior goods to decrease. 
A)  each good he purchases to remain unchanged. 
B)  normal goods to decrease. 
C)  luxury goods to increase. 
D)  inferior goods to decrease.

Question 8

Holding the nonprice determinants of supply constant, a change in price would

Accepted Answer

A)  result in either a decrease in supply or an increase in supply. 
B)  result in a movement along a stationary supply curve. 
C)  result in a shift of demand. 
D)  have no effect on the quantity supplied. 
A)  result in either a decrease in supply or an increase in supply. 
B)  result in a movement along a stationary supply curve. 
C)  result in a shift of demand. 
D)  have no effect on the quantity supplied.

Question 9

Local cable television companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Question 10

If a firm is a price taker, it operates in a

Accepted Answer

A)  competitive market. 
B)  monopoly market. 
C)  oligopoly market. 
D)  monopolistically competitive market. 
A)  competitive market. 
B)  monopoly market. 
C)  oligopoly market. 
D)  monopolistically competitive market.

Question 11

A decrease in the price of sugar will shift the supply curve for cookies to the right.

Accepted Answer

A) True 
 B)False

Question 12

The market demand curve

Accepted Answer

A)  is found by vertically adding the individual demand curves. 
B)  slopes upward. 
C)  represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D)  represents the sum of the quantities demanded by all the buyers at each price of the good. 
A)  is found by vertically adding the individual demand curves. 
B)  slopes upward. 
C)  represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good. 
D)  represents the sum of the quantities demanded by all the buyers at each price of the good.

Question 13

The forces that make market economies work are

Accepted Answer

A)  work and leisure. 
B)  politics and religion. 
C)  supply and demand. 
D)  taxes and government spending. 
A)  work and leisure. 
B)  politics and religion. 
C)  supply and demand. 
D)  taxes and government spending.

Question 14

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 15

Once the demand curve for a product or service is drawn, it

Accepted Answer

A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve, but the curve will not shift. 
D)  tends to become steeper over time. 
A)  remains stable over time. 
B)  can shift either rightward or leftward. 
C)  is possible to move along the curve, but the curve will not shift. 
D)  tends to become steeper over time.

Question 16

When a shortage exists in a market, sellers

Accepted Answer

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

Question 17

In a market, to find the total amount supplied at a particular price, we must

Accepted Answer

A)  sum the quantities that individual firms are willing and able to supply at that price. 
B)  calculate the average of the quantities that individual firms are willing and able to supply at that price. 
C)  sum the costs that individual firms incur to supply the product at that price. 
D)  account for all determinants of demand. 
A)  sum the quantities that individual firms are willing and able to supply at that price. 
B)  calculate the average of the quantities that individual firms are willing and able to supply at that price. 
C)  sum the costs that individual firms incur to supply the product at that price. 
D)  account for all determinants of demand.

Question 18

Which of the following would shift the demand curve for gasoline to the right?

Accepted Answer

A)  a decrease in the price of gasoline 
B)  an increase in consumer income, assuming gasoline is a normal good 
C)  an increase in the price of cars, a complement for gasoline 
D)  a decrease in the expected future price of gasoline 
A)  a decrease in the price of gasoline 
B)  an increase in consumer income, assuming gasoline is a normal good 
C)  an increase in the price of cars, a complement for gasoline 
D)  a decrease in the expected future price of gasoline

Question 19

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)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes. 
A)  The price of marijuana, a complement to cigarettes, increased. 
B)  Mandatory health warnings were placed on cigarette packages. 
C)  Several foreign countries banned U.S. cigarettes in their countries. 
D)  A tax was placed on cigarettes.

Question 20

The law of supply states that, other things equal, when the price of a good rises, the quantity supplied of the good falls.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

A movement along the demand curve might be caused by a change in

An increase in the price of a good will

In a market economy, who or what determines who produces each good and how much is produced?

The equilibrium price is the same as the market-clearing price.

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?

If Max experiences a decrease in his income, then we would expect Max's demand for

Holding the nonprice determinants of supply constant, a change in price would

Local cable television companies frequently are monopolists.

If a firm is a price taker, it operates in a

A decrease in the price of sugar will shift the supply curve for cookies to the right.

The market demand curve

The forces that make market economies work are

All goods and services are sold in perfectly competitive markets.

Once the demand curve for a product or service is drawn, it

When a shortage exists in a market, sellers

In a market, to find the total amount supplied at a particular price, we must

Which of the following would shift the demand curve for gasoline to the right?

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?

The law of supply states that, other things equal, when the price of a good rises, the quantity supplied of the good falls.

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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