Question 1

An increase in quantity supplied

Accepted Answer

A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right. 
A)  results in a movement downward and to the left along a fixed supply curve. 
B)  results in a movement upward and to the right along a fixed supply curve. 
C)  shifts the supply curve to the left. 
D)  shifts the supply curve to the right.

Question 2

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4-20  
-Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

Accepted Answer

A)  500 units and 500 units. 
B)  500 units and 800 units. 
C)  600 units and 600 units. 
D)  800 units and 500 units. 
A)  500 units and 500 units. 
B)  500 units and 800 units. 
C)  600 units and 600 units. 
D)  800 units and 500 units.

Question 4

Figure 4-16  
-Refer to Figure 4-16. The shift from S to S' is called a(n)

Accepted Answer

A)  decrease in supply. 
B)  decrease in quantity supplied. 
C)  increase in supply. 
D)  increase in quantity supplied. 
A)  decrease in supply. 
B)  decrease in quantity supplied. 
C)  increase in supply. 
D)  increase in quantity supplied.

Question 5

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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 6

To obtain the market demand curve for a product, sum the individual demand curves

Accepted Answer

A)  vertically. 
B)  diagonally. 
C)  horizontally. 
D)  and then average them. 
A)  vertically. 
B)  diagonally. 
C)  horizontally. 
D)  and then average them.

Question 7

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

Accepted Answer

A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  remain unchanged. 
A)  shift rightward. 
B)  shift leftward. 
C)  become flatter. 
D)  remain unchanged.

Question 8

The supply curve for portable charcoal grills shifts

Accepted Answer

A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes. 
A)  only when production technology changes. 
B)  when a determinant of the supply of portable charcoal grills other than the price of portable charcoal grills changes. 
C)  when any determinant of the supply of portable charcoal grills changes. 
D)  only when the number of sellers of portable charcoal grills changes.

Question 9

Which of the following is not held constant in a demand schedule?

Accepted Answer

A)  income 
B)  tastes 
C)  price 
D)  expectations 
A)  income 
B)  tastes 
C)  price 
D)  expectations

Question 10

What is the difference between a "change in supply" and a "change in quantity supplied?" Graph your answer.
a. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.

Accepted Answer

a. A change in supply refers to a shift

Question 11

Figure 4-6  
-Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. If the warning labels are successful, we could illustrate the plan as producing a movement from

Accepted Answer

A)  Point A to Point B in Panel 1. 
B)  Point B to Point A in Panel 1. 
C)  Point A to Point C in Panel 2. 
D)  Point C to Point A in Panel 2. 
A)  Point A to Point B in Panel 1. 
B)  Point B to Point A in Panel 1. 
C)  Point A to Point C in Panel 2. 
D)  Point C to Point A in Panel 2.

Question 12

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous. 
A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. 
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. 
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. 
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

Question 13

The demand curve for a good is a line that relates

Accepted Answer

A)  price and quantity demanded. 
B)  income and quantity demanded. 
C)  quantity demanded and quantity supplied. 
D)  price and income. 
A)  price and quantity demanded. 
B)  income and quantity demanded. 
C)  quantity demanded and quantity supplied. 
D)  price and income.

Question 14

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

Accepted Answer

A)  a decrease in the price of mp3 players 
B)  a fad that makes mp3 players more popular among 12-25 year olds 
C)  an increase in the price of digital music downloads, a complement for mp3 players 
D)  a decrease in the price of satellite radio, a substitute for mp3 players 
A)  a decrease in the price of mp3 players 
B)  a fad that makes mp3 players more popular among 12-25 year olds 
C)  an increase in the price of digital music downloads, a complement for mp3 players 
D)  a decrease in the price of satellite radio, a substitute for mp3 players

Question 15

Table 4-7  
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

Accepted Answer

A)  decreases by 10 gallons. 
B)  decreases by 20 gallons. 
C)  increases by 10 gallons. 
D)  increases by 20 gallons. 
A)  decreases by 10 gallons. 
B)  decreases by 20 gallons. 
C)  increases by 10 gallons. 
D)  increases by 20 gallons.

Question 16

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources. 
A)  government to allocate scarce resources. 
B)  supply and demand to allocate scarce resources. 
C)  credit cards to allocate scarce resources. 
D)  nature to allocate scarce resources.

Question 17

In competitive markets,

Accepted Answer

A)  firms produce identical products. 
B)  buyers can influence the market price more easily than sellers. 
C)  markets are more likely to be in equilibrium. 
D)  sellers are price setters. 
A)  firms produce identical products. 
B)  buyers can influence the market price more easily than sellers. 
C)  markets are more likely to be in equilibrium. 
D)  sellers are price setters.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would cause a movement along the supply curve for cupcakes?

Accepted Answer

A)  an improvement in technology for commercial mixers 
B)  a decrease in the price of cupcakes 
C)  an increase in the price of cake flour 
D)  All of the above are correct. 
A)  an improvement in technology for commercial mixers 
B)  a decrease in the price of cupcakes 
C)  an increase in the price of cake flour 
D)  All of the above are correct.

Question 20

Individual demand curves are summed horizontally to obtain the market demand curve.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

An increase in quantity supplied

Figure 4-20 -Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are

Figure 4-16 -Refer to Figure 4-16. The shift from S to S' is called a(n)

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

To obtain the market demand curve for a product, sum the individual demand curves

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

The supply curve for portable charcoal grills shifts

Which of the following is not held constant in a demand schedule?

What is the difference between a "change in supply" and a "change in quantity supplied?" Graph your answer. a. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

The demand curve for a good is a line that relates

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

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

In competitive markets,

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

Which of the following would cause a movement along the supply curve for cupcakes?

Individual demand curves are summed horizontally to obtain the market demand curve.

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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