Question 1

Hops are used to produce beer.If the price of hops decreases,

Accepted Answer

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

Question 2

When a government pays a company for producing a product or good with the result that selling the product is more profitable regardless of the price so that the company will produce more of it,it is called a(n)________.

Accepted Answer

The answer of When a government pays a company for...

Question 3

If the number of beer producers decreases,

Accepted Answer

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

Question 4

If consumers have an expectation of a product's price increasing in the near future,they will usually

Accepted Answer

A)  wait to see if the price really increases. 
B)  purchase more at the current price. 
C)  wait for the new price and compare. 
D)  none of the above

Question 5

Define a "normal good" as it relates to markets.

Accepted Answer

The answer of Define a "normal good" as it relates...

Question 6

Suppose that the current price in a market for pizza is $9.At that price,the quantity demanded is 519 and the quantity supplied is 400.At the current price,the market is experiencing

Accepted Answer

A)  an excess demand of 119 pizzas. 
B)  an equilibrium. 
C)  an excess supply of $119. 
D)  an excess demand of 500 pizzas.

Question 7

If the price of hotdogs is expected to increase in the future,then

Accepted Answer

A)  the current demand for hotdogs will increase. 
B)  the current demand for hotdogs will decrease. 
C)  the current quantity demanded for hotdogs will decrease. 
D)  the current quantity demanded for hotdogs will increase.

Question 8

Suppose that ramen noodles are an inferior good.When income increases,the equilibrium quantity of ramen noodles will ________ and the equilibrium price of ramen noodles will ________.

Accepted Answer

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

Question 9

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s).
-According to the Application,we can infer that the wine lakes will grow faster if

Accepted Answer

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

Question 10

Bananas and apples are substitutes.When the price of bananas falls,the equilibrium quantity of apples will ________ and the equilibrium price of apples will ________.

Accepted Answer

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

Question 11

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 12

Which of the following can increase the number of pizzas a seller is willing to sell at a given price?

Accepted Answer

A)  The cost of inputs such as pepperoni and cheese goes up. 
B)  The number of workers working in the pizza factory decreases. 
C)  The amount of subsidies that pizza makers receive from the government decreases. 
D)  A new technology is developed that allows producers to make the same sized pizza using less cheese and dough.

Question 13

Recall the Application about the harmattan and how it affects the price of cocoa to answer the following question(s).
-Recall the Application.Using supply and demand analysis,the increase in the price of cocoa can be illustrated as

Accepted Answer

A)  a leftward shift in the supply curve for cocoa caused by the harmattan. 
B)  a rightward shift in the supply curve for cocoa caused by the harmattan. 
C)  a leftward shift in the demand curve for cocoa caused by the harmattan. 
D)  a rightward shift in the demand curve for cocoa caused by the harmattan.

Question 14

As consumers prefer smaller and more fuel-efficient cars,the

Accepted Answer

A)  demand for SUVs will decrease. 
B)  quantity demanded for SUVs will rise. 
C)  demand for SUVs will increase. 
D)  quantity demanded for SUVs will fall.

Question 15

Suppose that the price of apples decreases and the quantity of apples in the market decreases.Suggest two reasons why this might have happened.

Accepted Answer

The answer of Suppose that the price of apples decreases...

Question 16

If a government imposes a tax on the producers of a product,in addition to making the product more costly and less profitable,the tax will ________ supply.

Accepted Answer

The answer of If a government imposes a tax on...

Question 17

Figure 4.4
-Figure 4.4 illustrates the demand for guitars.Assume guitars are an inferior good.An increase in income 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 18

The model of supply and demand is the most important tool of economic analysis.

Accepted Answer

A) True 
 B)False

Question 19

Why is the market supply curve positively sloped?

Accepted Answer

A)  At a higher price, more firms enter the market willing to sell the product or service. 
B)  At a higher price, fewer firms enter the market willing to sell the product or service. 
C)  At a higher price, the firms already in the market and are willing to sell a larger quantity of the product or service. 
D)  Both A and C are correct.

Question 20

Suppose you have 2 goods,X and Y.If the price of X increases and you buy more Y,then X and Y are

Accepted Answer

A)  substitutes. 
B)  normal goods. 
C)  complements. 
D)  inferior goods.

Exam 4: Demand,supply,and Market Equilibrium