Question 1

Table 4-8
 
-Refer to Table 4-8.Which space represents a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D

Question 2

Table 4-5
 
-Refer to Table 4-5.The equilibrium price and quantity,respectively,are

Accepted Answer

A)  $2 and 50. 
B)  $6 and 30. 
C)  $6 and 60. 
D)  $12 and 30.

Question 3

Figure 4-8 
-Refer to Figure 4-8.At what price would there be an excess demand of 200 units of the good?

Accepted Answer

A)  $15 
B)  $20 
C)  $30 
D)  $35

Question 4

The demand curve for a good is

Accepted Answer

A)  a line that relates price and quantity demanded. 
B)  a line that relates income and quantity demanded. 
C)  a line that relates quantity demanded and quantity supplied. 
D)  a line that relates price and income.

Question 5

Which of these statements best represents the law of supply?

Accepted Answer

A)  When input prices increase,sellers produce less of the good. 
B)  When production technology improves,sellers produce less of the good. 
C)  When the price of a good decreases,sellers produce less of the good. 
D)  When sellers' supplies of a good increase,the price of the good increases.

Question 6

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 7

Table 4-7
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-7.Suppose Charlie,Maxine,and Quinn are the only demanders of sandwiches.Also suppose the following:
• x = 2
• the current price of a sandwich is $3.00
• the market quantity supplied of sandwiches is 5
• the slope of the supply curve is 1
Then

Accepted Answer

A)  there is currently a shortage of 5 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
B)  there is currently a shortage of 5 sandwiches and the equilibrium price of a sandwich is $5.00. 
C)  there is currently a surplus of 5 sandwiches and the equilibrium price of a sandwich is between $3.00 and $5.00. 
D)  there is currently a surplus of 5 sandwiches and the equilibrium price of a sandwich is $5.00.

Question 8

You love peanut butter.You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought,and that this will cause the price of peanuts to double by the end of the year.As a result,

Accepted Answer

A)  your demand for peanut butter will increase,but not until the end of the year. 
B)  your demand for peanut butter increases today. 
C)  your demand for peanut butter decreases as you look for a substitute good. 
D)  your demand for peanut butter shifts left today.

Question 9

Each of the following is a determinant of demand except

Accepted Answer

A)  tastes. 
B)  technology. 
C)  expectations. 
D)  the prices of related goods.

Question 10

Good X and good Y are substitutes.If the price of good Y increases,then the

Accepted Answer

A)  demand for good X will decrease. 
B)  quantity demanded of good X will decrease. 
C)  demand for good X will increase. 
D)  quantity demanded of good X will increase.

Question 11

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.

Question 12

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.

Question 13

Figure 4-12
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-12.All else equal,a sale on chicken would cause a move

Accepted Answer

A)  from DA to DB. 
B)  from DB to DA. 
C)  from x to y. 
D)  from y to x.

Question 14

Which of the following might cause the supply curve for an inferior good to shift to the right?

Accepted Answer

A)  An increase in input prices. 
B)  A decrease in consumer income. 
C)  An improvement in production technology that makes production of the good more profitable. 
D)  A decrease in the number of sellers in the market.

Question 15

Economists normally

Accepted Answer

A)  do not try to explain people's tastes,but they do try to explain what happens when tastes change. 
B)  believe that they must be able to explain people's tastes in order to explain what happens when tastes change. 
C)  do not believe that people's tastes determine demand and therefore they ignore the subject of tastes. 
D)  incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.

Question 16

Two goods are complements when a decrease in the price of one good

Accepted Answer

A)  decreases the quantity demanded of the other good. 
B)  decreases the demand for the other good. 
C)  increases the quantity demanded of the other good. 
D)  increases the demand for the other good.

Question 17

An increase in supply will cause a decrease in price,which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 18

Table 4-3
 
-Refer to Table 4-3.If these are the only four sellers in the market,then when the price increases from $6 to $8,the market quantity supplied

Accepted Answer

A)  increases by 0.5 unit. 
B)  increases by 2 units. 
C)  decreases by 4 units. 
D)  increases by 42 units.

Question 19

A decrease in supply will cause an increase in price,which will cause a decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 20

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it.We would expect to see

Accepted Answer

A)  no change in the demand for chocolate pudding. 
B)  a decrease in the demand for chocolate pudding. 
C)  an increase in the demand for chocolate pudding. 
D)  a decrease in the supply of chocolate pudding.

Exam 4: The Market Forces of Supply and Demand

Table 4-8 -Refer to Table 4-8.Which space represents a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Table 4-5 -Refer to Table 4-5.The equilibrium price and quantity,respectively,are

Figure 4-8 -Refer to Figure 4-8.At what price would there be an excess demand of 200 units of the good?

The demand curve for a good is

Which of these statements best represents the law of supply?

The demand curve is the upward-sloping line relating price and quantity demanded.

You love peanut butter.You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought,and that this will cause the price of peanuts to double by the end of the year.As a result,

Each of the following is a determinant of demand except

Good X and good Y are substitutes.If the price of good Y increases,then the

A decrease in the price of a good would

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

Figure 4-12 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-12.All else equal,a sale on chicken would cause a move

Which of the following might cause the supply curve for an inferior good to shift to the right?

Economists normally

Two goods are complements when a decrease in the price of one good

An increase in supply will cause a decrease in price,which will cause an increase in demand.

Table 4-3 -Refer to Table 4-3.If these are the only four sellers in the market,then when the price increases from $6 to $8,the market quantity supplied

A decrease in supply will cause an increase in price,which will cause a decrease in quantity demanded.

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it.We would expect to see