Question 1

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar?

Accepted Answer

A)  Point A to Point B 
B)  Point C to Point B 
C)  Point C to Point D 
D)  Point A to Point D

Question 2

Figure 4-27
Panel (a) Panel (b)   Panel (c) Panel (d)  
-Refer to Figure 4-27. Panel (a) shows which of the following?

Accepted Answer

A)  an increase in demand and an increase in quantity supplied 
B)  an increase in demand and an increase in supply 
C)  an increase in quantity demanded and an increase in quantity supplied 
D)  an increase in quantity demanded and an increase in supply

Question 3

Figure 4-27
Panel (a) Panel (b)   Panel (c) Panel (d)  
-Refer to Figure 4-27. Panel (c) shows which of the following?

Accepted Answer

A)  an increase in demand and an increase in quantity supplied 
B)  an increase in demand and an increase in supply 
C)  an increase in quantity demanded and an increase in quantity supplied 
D)  an increase in quantity demanded and an increase in supply

Question 4

When quantity demanded increases at every possible price, the demand curve has

Accepted Answer

A)  shifted to the left. 
B)  shifted to the right. 
C)  not shifted; rather, we have moved along the demand curve to a new point on the same curve. 
D)  not shifted; rather, the demand curve has become steeper.

Question 5

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)  a restaurant in a large city 
B)  a dry cleaners in a large city 
C)  a local gas station 
D)  a local electrical company

Question 6

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Accepted Answer

A) True 
 B)False

Question 7

Table 4-6 
-Refer to Table 4-6. 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 units. 
B)  increases by 2 units. 
C)  decreases by 4 units. 
D)  increases by 42 units.

Question 8

The actions of buyers and sellers naturally move markets toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 9

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, your demand for peanut butter

Accepted Answer

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

Question 10

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

Accepted Answer

A)  the price of pork increases. 
B)  the price of pork decreases. 
C)  the price of pork does not change. 
D)  there is no longer a market for pork.

Question 11

Figure 4-7 
-Refer to Figure 4-7. The movement from Da to Db could be caused by

Accepted Answer

A)  a decrease in price. 
B)  a decrease in income, assuming the good is inferior. 
C)  buyers expecting the price of the good to fall in the near future. 
D)  an increase in the price of a complement.

Question 12

Price will rise to eliminate a surplus.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-27
Panel (a) Panel (b)   Panel (c) Panel (d)  
-Refer to Figure 4-27. Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d)

Question 14

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)  The number of people who purchase olives decreases. 
B)  Consumer income decreases, and olives are a normal good. 
C)  The price of pickles decreases, and pickles are a substitute for olives. 
D)  The price of olives rises.

Question 15

Sellers respond to a shortage by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 16

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

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.

Question 17

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 18

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

Accepted Answer

A) True 
 B)False

Question 19

Suppose John and Wayne are the only two demanders of cowboy movies. Each month, John buys six cowboy movies when the price is $10 each, and he buys four cowboy movies when the price is $15 each. Each month, Wayne buys four cowboy movies when the price is $10 each, and he buys two cowboy movies when the price is $15 each. Which of the following points is on the market demand curve?

Accepted Answer

A)  quantity demanded = 2; price = $15 
B)  quantity demanded = 4; price = $25 
C)  quantity demanded = 10; price = $10 
D)  quantity demanded = 16; price = $25

Question 20

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then

Accepted Answer

A)  we will observe a movement downward and to the right along the demand curve for SUPs. 
B)  we will observe a movement upward and to the left along the demand curve for SUPs. 
C)  the demand curve for SUPs will shift to the right. 
D)  the demand curve for SUPs will shift to the left.

Exam 4: The Market Forces of Supply and Demand

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar?

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (a) shows which of the following?

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (c) shows which of the following?

When quantity demanded increases at every possible price, the demand curve has

Which of the following would most likely serve as an example of a monopoly?

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

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

The actions of buyers and sellers naturally move markets toward equilibrium.

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, your demand for peanut butter

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

Figure 4-7 -Refer to Figure 4-7. The movement from Da to Db could be caused by

Price will rise to eliminate a surplus.

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Sellers respond to a shortage by cutting their prices.

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

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

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then