Question 1

When a demand curve is drawn,which of the following is NOT held constant?

Accepted Answer

A) people's income 
B) people's preferences 
C) prices of related goods 
D) the price of the good

Question 2

Define an "inferior good" as it relates to markets.

Accepted Answer

The answer of Define an "inferior good" as it relates...

Question 3

Figure 4.4
-Figure 4.4 illustrates the demand for guitars.Assume that guitars and banjos are substitutes.A decrease in the price of banjos would bring about a movement from:

Accepted Answer

A) point B to point C. 
B) point B to point A. 
C) D1 to D0. 
D) D1 to D2.

Question 4

A demand curve is defined as the relationship between:

Accepted Answer

A) the price of a good and the quantity of that good that consumers are willing to buy. 
B) the price of a good and the quantity of that good that producers are willing to sell. 
C) the income of consumers and the quantity of a good that consumers are willing to buy. 
D) the income of consumers and the quantity of a good that producers are willing to sell.

Question 5

Figure 4.3
-Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $50,we would expect that:

Accepted Answer

A) demand will increase until quantity demanded equals quantity supplied. 
B) supply will decrease until quantity demanded equals quantity supplied. 
C) price will decrease until quantity demanded equals quantity supplied. 
D) no change will occur since the market is in equilibrium.

Question 6

Between an "individual demand curve" and a "market demand curve," which one has a steeper slope?

Accepted Answer

The answer of Between an "individual demand curve" and a...

Question 7

Suppose that the quantity demanded for cars exceeds the quantity supplied of cars.We would expect that:

Accepted Answer

A) the price of cars will increase. 
B) the price of cars will decrease. 
C) the supply will increase to meet the demand. 
D) the demand will decrease to meet the supply.

Question 8

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs.What is the relationship between gasoline and SUVs?

Accepted Answer

The answer of Draw a graph to illustrate the effect...

Question 9

From the Application,we can infer that the wine lakes will grow faster if:

Accepted Answer

A) the government set minimum prices further above the equilibrium. 
B) the government set maximum prices further below the equilibrium. 
C) the government set maximum prices further above the equilibrium. 
D) the government set minimum prices further below the equilibrium.

Question 10

The price of compact discs has fallen dramatically.Which of the following is likely to happen?

Accepted Answer

A) The quantity supplied of compact discs will decrease. 
B) The quantity supplied of compact discs will increase. 
C) The supply of compact discs will decrease. 
D) The supply of compact discs players will increase.

Question 11

On the "demand side" of a market,consumers indicate to producers what they are willing to buy,in what quantity,and at what price.

Accepted Answer

A) True 
 B)False

Question 12

A permanent excess supply of a product is possible when the government sets a minimum price that is ________ than the equilibrium price.

Accepted Answer

The answer of A permanent excess supply of a product...

Question 13

According to the Application,which determinant of demand is responsible for the increase in the demand for pecans?

Accepted Answer

A) preferences 
B) income 
C) price of substitutes 
D) price of complements

Question 14

If the number of banana producers increases:

Accepted Answer

A) the demand for bananas increases. 
B) the demand for bananas decreases. 
C) the supply of bananas increases. 
D) the supply of bananas decreases.

Question 15

An inferior good is defined as a good for which demand decreases when:

Accepted Answer

A) the price increases. 
B) income increases. 
C) the price decreases. 
D) income decreases.

Question 16

Complementary goods are goods that are normally consumed together.

Accepted Answer

A) True 
 B)False

Question 17

Decreases in the demand for products can be caused by which of the following?

Accepted Answer

A) decreases in income 
B) decreases in population 
C) decreases in the prices of substitute goods 
D) all of the above

Question 18

Suppose that a technological advancement substantially reduces the cost of producing cheese.We would predict that the equilibrium quantity of cheese will ________ and the equilibrium price of cheese will ________.

Accepted Answer

A) rise;rise 
B) rise;fall 
C) fall;rise 
D) fall;fall

Question 19

As a result of advances in technology,cellular telephones have become cheaper to produce.Illustrate the effect of this change on the market for cellular telephones.

Accepted Answer

The answer of As a result of advances in technology,cellular...

Question 20

Additional factors beyond supply and consumer purchasing desire can affect demand.

Accepted Answer

A) True 
 B)False

Exam 4: Demand, supply, and Market Equilibrium

When a demand curve is drawn,which of the following is NOT held constant?

Define an "inferior good" as it relates to markets.

Figure 4.4 -Figure 4.4 illustrates the demand for guitars.Assume that guitars and banjos are substitutes.A decrease in the price of banjos would bring about a movement from:

A demand curve is defined as the relationship between:

Figure 4.3 -Figure 4.3 illustrates the supply and demand for blue jeans.If the actual price of blue jeans is $50,we would expect that:

Between an "individual demand curve" and a "market demand curve," which one has a steeper slope?

Suppose that the quantity demanded for cars exceeds the quantity supplied of cars.We would expect that:

Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs.What is the relationship between gasoline and SUVs?

From the Application,we can infer that the wine lakes will grow faster if:

The price of compact discs has fallen dramatically.Which of the following is likely to happen?

On the "demand side" of a market,consumers indicate to producers what they are willing to buy,in what quantity,and at what price.

A permanent excess supply of a product is possible when the government sets a minimum price that is ________ than the equilibrium price.

According to the Application,which determinant of demand is responsible for the increase in the demand for pecans?

If the number of banana producers increases:

An inferior good is defined as a good for which demand decreases when:

Complementary goods are goods that are normally consumed together.

Decreases in the demand for products can be caused by which of the following?

Suppose that a technological advancement substantially reduces the cost of producing cheese.We would predict that the equilibrium quantity of cheese will and the equilibrium price of cheese will .

As a result of advances in technology,cellular telephones have become cheaper to produce.Illustrate the effect of this change on the market for cellular telephones.

Additional factors beyond supply and consumer purchasing desire can affect demand.