Question 1

If consumers view cappuccinos and lattés as substitutes,what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase,and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease,and the equilibrium quantity would increase.E) B) and D)
F) B) and C)

Question 2

The quantity demanded of a good is the amount that buyers are

Accepted Answer

A)   willing to purchase.
B)   willing and able to purchase.
C)   willing,able,and need to purchase.
D)   able to purchase.E) A) and D)
F) B) and D)

Question 3

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 per hour,then it is likely that the

Accepted Answer

A)   demand for bicycle assembly workers will increase.
B)   supply of bicycles will shift to the right.
C)   supply of bicycles will shift to the left.
D)   firm must increase output to maintain profit levels.E) A) and D)
F) All of the above

Question 4

The law of supply states that,other things equal,when the price of a good

Accepted Answer

A)   falls,the supply of the good rises.
B)   rises,the quantity supplied of the good rises.
C)   rises,the supply of the good falls.
D)   falls,the quantity supplied of the good rises.E) All of the above
F) B) and D)

Question 5

A leftward shift of a supply curve is called a(n)

Accepted Answer

A)   increase in supply.
B)   decrease in supply.
C)   decrease in quantity supplied.
D)   increase in quantity supplied.E) B) and D)
F) None of the above

Question 6

The law of supply states that,other things equal,an increase in

Accepted Answer

A)   price causes quantity supplied to increase.
B)   price causes quantity supplied to decrease.
C)   quantity supplied causes price to increase.
D)   quantity supplied causes price to decrease.E) B) and C)
F) A) and D)

Question 7

Table 4-7
 
-Refer to Table 4-7.If the price were $4,a

Accepted Answer

A)   surplus of 15 units would exist,and price would tend to fall.
B)   shortage of 25 units would exist,and price would tend to rise.
C)   surplus of 25 units would exist,and price would tend to fall.
D)   shortage of 40 units would exist,and price would tend to rise.E) A) and D)
F) C) and D)

Question 8

Suppose that when income rises,the demand curve for doctor's visits shifts to the right.In this case,we know doctor's visits are

Accepted Answer

A)   inferior goods.
B)   normal goods.
C)   perfectly competitive goods.
D)   durable goods.E) A) and C)
F) None of the above

Question 9

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.E) A) and C)
F) A) and B)

Question 10

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A)   decrease in equilibrium price and an increase in equilibrium quantity.
B)   decrease in equilibrium price and a decrease in equilibrium quantity.
C)   increase in equilibrium price and a decrease in equilibrium quantity.
D)   increase in equilibrium price and an increase in equilibrium quantity.E) B) and D)
F) B) and C)

Question 11

Which of the following is an example of a market?

Accepted Answer

A)   a gas station
B)   a garage sale
C)   a barber shop
D)   All of the above are examples of markets.E) C) and D)
F) A) and B)

Question 12

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When leather became more expensive,belt producers decreased their supply of belts.
B)   When car production technology improved,car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future,they decreased their current supply of sweaters.
D)   When ketchup prices rose,ketchup sellers increased their quantity supplied of ketchup.E) A) and D)
F) A) and C)

Question 13

A movement upward and to the left along a given demand curve is called a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-21 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

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 DE) A) and B)
F) A) and C)

Question 15

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Accepted Answer

A)   the dress manufacturer to supply more dresses now than it was supplying previously.
B)   the dress manufacturer to supply fewer dresses now than it was supplying previously.
C)   the demand for this manufacturer's dresses to fall.
D)   no change in the dress manufacturer's current supply;instead,future supply will be affected.E) B) and D)
F) B) and C)

Question 16

Wheat is the main input in the production of flour.If the price of wheat decreases,then we would expect the

Accepted Answer

A)   demand for flour to increase.
B)   demand for flour to decrease.
C)   supply of flour to increase.
D)   supply of flour to decrease.E) C) and D)
F) A) and D)

Question 17

When quantity supplied increases at every possible price,we know that the supply curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted;rather,we have moved along the supply curve to a new point on the same curve.
D)   not shifted;rather,the supply curve has become flatter.E) A) and B)
F) A) and C)

Question 18

If the demand for a good falls when income falls,then the good is called a(n)

Accepted Answer

A)   normal good.
B)   regular good.
C)   luxury good.
D)   inferior good.E) All of the above
F) B) and C)

Question 19

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Accepted Answer

A)   crystal to be unaffected.
B)   crystal to decrease.
C)   crystal to increase.
D)   lead to increase.E) C) and D)
F) A) and B)

Question 20

A market supply curve shows

Accepted Answer

A)   the total quantity supplied at all possible prices.
B)   the average quantity supplied by producers at all possible prices.
C)   how quantity supplied changes when consumer income changes.
D)   suppliers' responses,in terms of the amounts they will supply,to the demands of buyers.E) A) and B)
F) None of the above

Exam 4: The Market Forces of Supply and Demand

If the demand for a good falls when income falls,then the good is called a(n)

Correct AnswerverifiedShow Answer

A movement upward and to the left along a given demand curve is called a decrease in demand.

Correct AnswerverifiedShow Answer

Wheat is the main input in the production of flour.If the price of wheat decreases,then we would expect the

Correct AnswerverifiedShow Answer

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Correct AnswerverifiedShow Answer

The quantity demanded of a good is the amount that buyers are

Correct AnswerverifiedShow Answer

If consumers view cappuccinos and lattés as substitutes,what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

Correct AnswerverifiedShow Answer

A leftward shift of a supply curve is called a(n)

Correct AnswerverifiedShow Answer

The law of supply states that,other things equal,an increase in

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

A market supply curve shows

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The law of supply states that,other things equal,when the price of a good

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A decrease in input costs to firms in a market will result in a(n)

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An increase in quantity supplied

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Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for chocolate chip cookies of an improved high-speed mixer that allows bakers to produce cookies in less time?

Correct AnswerverifiedShow Answer

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Correct AnswerverifiedShow Answer

When quantity supplied increases at every possible price,we know that the supply curve has

Correct AnswerverifiedShow Answer

Suppose that when income rises,the demand curve for doctor's visits shifts to the right.In this case,we know doctor's visits are

Correct AnswerverifiedShow Answer

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 per hour,then it is likely that the

Correct AnswerverifiedShow Answer

Which of the following is an example of a market?

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7.If the price were $4,a

Correct AnswerverifiedShow Answer

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