Question 1

Table 4-11
 
-Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Accepted Answer

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

Question 2

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Accepted Answer

A) True 
 B)False

Question 3

Equilibrium quantity must decrease when demand

Accepted Answer

A)   increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
B)   increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
C)   decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
D)   decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) C) and D)
F) B) and C)

Question 4

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)   are in balance.
B)   are the same.
C)   clash.
D)   remain constant.E) C) and D)
F) B) and C)

Question 5

A supply curve slopes upward because

Accepted Answer

A)   as more is produced, total cost of production falls.
B)   an increase in input prices increases supply.
C)   the quantity supplied of most goods and services increases over time.
D)   an increase in price gives producers an incentive to supply a larger quantity.E) A) and B)
F) A) and C)

Question 6

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 7

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 8

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

A) True 
 B)False

Question 9

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Accepted Answer

A)   The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
B)   The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
C)   The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
D)   The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.E) None of the above
F) All of the above

Question 10

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Accepted Answer

A)   increase in price.
B)   decrease in price.
C)   decrease in the price of a substitute good.
D)   increase in income.E) A) and B)
F) All of the above

Question 11

Other things equal, when the price of a good falls, the

Accepted Answer

A)   quantity supplied of the good increases.
B)   supply decreases.
C)   quantity supplied of the good decreases.
D)   demand increases.E) A) and D)
F) A) and C)

Question 12

An improvement in production technology will

Accepted Answer

A)   increase a firm's costs and increase its supply.
B)   increase a firm's costs and decrease its supply.
C)   decrease a firm's costs and increase its supply.
D)   decrease a firm's costs and decrease its supply.E) A) and B)
F) None of the above

Question 13

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 supplyE) A) and D)
F) B) and D)

Question 14

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

Accepted Answer

A)   Price will fall, and the effect on quantity is ambiguous.
B)   Price will rise, and the effect on quantity is ambiguous.
C)   Quantity will fall, and the effect on price is ambiguous.
D)   Quantity will rise, and the effect on price is ambiguous.E) None of the above
F) A) and B)

Question 15

If the number of buyers in a market decreases, then

Accepted Answer

A)   demand will increase.
B)   demand will decrease.
C)   supply will increase.
D)   supply will decrease.E) A) and D)
F) None of the above

Question 16

Figure 4-22 
-Refer to Figure 4-22. What is the equilibrium price in this market?

Accepted Answer

A)   $8
B)   $12
C)   $16
D)   $20E) A) and D)
F) A) and B)

Question 17

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 peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) B) and C)
F) A) and D)

Question 18

Figure 4-2 
-Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Accepted Answer

A)   0 units.
B)   2 units.
C)   4 units.
D)   6 units.E) None of the above
F) C) and D)

Question 19

Figure 4-29 
-Refer to Figure 4-29. The movement from S1 to S2 is a

Accepted Answer

The answer of Figure 4-29 
-Refer to Figure 4-29. The...

Question 20

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

An improvement in production technology will

Correct Answer
verified

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Correct Answer
verified

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 peanut butter after a major hurricane hits the peanut-growing south?

Correct Answer
verified

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Correct Answer
verified

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

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

Correct Answer
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In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct Answer
verified

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Correct Answer
verified

Equilibrium quantity must decrease when demand

Correct Answer
verified

The dictionary defines equilibrium as a situation in which forces

Correct Answer
verified

Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Correct Answer
verified

A supply curve slopes upward because

Correct Answer
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Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Correct Answer
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Other things equal, when the price of a good falls, the

Correct Answer
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Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?

Correct Answer
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Figure 4-29 -Refer to Figure 4-29. The movement from S1 to S2 is a

Correct Answer
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An increase in the price of a substitute good will shift the demand curve for a good to the right.

Correct Answer
verified

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct Answer
verified

If the number of buyers in a market decreases, then

Correct Answer
verified

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

An improvement in production technology will

Correct AnswerverifiedShow Answer

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Correct AnswerverifiedShow Answer

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 peanut butter after a major hurricane hits the peanut-growing south?

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Correct AnswerverifiedShow Answer

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct AnswerverifiedShow Answer

When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good.

Correct AnswerverifiedShow Answer

Equilibrium quantity must decrease when demand

Correct AnswerverifiedShow Answer

The dictionary defines equilibrium as a situation in which forces

Correct AnswerverifiedShow Answer

Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Correct AnswerverifiedShow Answer

A supply curve slopes upward because

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Correct AnswerverifiedShow Answer

Other things equal, when the price of a good falls, the

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?

Correct AnswerverifiedShow Answer

Figure 4-29 -Refer to Figure 4-29. The movement from S1 to S2 is a

Correct AnswerverifiedShow Answer

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Correct AnswerverifiedShow Answer

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct AnswerverifiedShow Answer

If the number of buyers in a market decreases, then

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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