Question 1

In a competitive market, the quantity of a product produced and the price of the product are determined by

Accepted Answer

A)   buyers.
B)   sellers.
C)   both buyers and sellers.
D)   None of the above is correct.E) A) and B)
F) B) and C)

Question 2

A shortage exists in a market if

Accepted Answer

A)   there is an excess supply of the good.
B)   quantity supplied exceeds quantity demanded.
C)   the current price is below its equilibrium price.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 3

Figure 4-7 
-Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by an)

Accepted Answer

A)   decrease in the price of potato chips.
B)   decrease in income, assuming that potato chips are a normal good.
C)   announcement by the FDA that potato chips lower cholesterol.
D)   increase in the price of a pretzels.E) A) and C)
F) A) and B)

Question 4

When quantity supplied decreases 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 5

Figure 4-4
Yasmine Mercedes
  
-Refer to Figure 4-4. Which of the following statements is correct?

Accepted Answer

A)   If the price is $6, the market quantity demanded is 15 units.
B)   If the price is $9, the market quantity demanded is 24 units.
C)   If the price is $12, the market quantity demanded is 9 units.
D)   If the price is $15, the market quantity demanded is 39 units.E) A) and D)
F) All of the above

Question 6

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A)   a change in income
B)   a change in the price of the good or service
C)   a change in expectations about the future price of the good or service
D)   a change in the price of a related good or serviceE) None of the above
F) C) and D)

Question 7

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices.
 
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk increases from $4.00 to $5.00, what is the change in the market quantity demanded?

Accepted Answer

decreases ...

Question 8

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Accepted Answer

A)   the ticket price was above the equilibrium price.
B)   the ticket price was below the equilibrium price.
C)   the ticket price was at the equilibrium price.
D)   nothing about the equilibrium price.E) B) and C)
F) A) and B)

Question 9

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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

Question 10

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 11

A university's football stadium is never more than half-full during football games. This indicates

Accepted Answer

A)   the ticket price is above the equilibrium price.
B)   the ticket price is below the equilibrium price.
C)   the ticket price is at the equilibrium price.
D)   nothing about the equilibrium price.E) A) and B)
F) A) and D)

Question 12

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Accepted Answer

A)   decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
B)   decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
C)   decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
D)   increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.E) A) and B)
F) A) and C)

Question 13

Figure 4-17 
-Refer to Figure 4-17. At a price of

Accepted Answer

A)   $2, there is a shortage of 6 units.
B)   $5, there is a surplus of 25 units.
C)   $5, there is a shortage of $25.
D)   $7, there is a shortage of 4 units.E) B) and D)
F) A) and D)

Question 14

Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and equilibrium quantity would change.
a. Winter starts, and the weather turns sharply colder.
b. The price of tea, a substitute for hot chocolate, falls.
c. The price of cocoa beans decreases.
d. The price of whipped cream falls.
e. A better method of harvesting cocoa beans is introduced.
f. The Surgeon General of the U.S. announces that hot chocolate cures acne.
g. Protesting farmers dump millions of gallons of milk, causing the price of milk to rise.
h. Consumer income falls because of a recession, and hot chocolate is considered a normal good.
i. Producers expect the price of hot chocolate to increase next month.
j. Currently, the price of hot chocolate is $0.50 per cup above equilibrium.

Accepted Answer

In j), a price above equilib...

Question 15

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

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 D)
F) A) and B)

Question 16

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 17

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand...

Question 18

Figure 4-7 
-Refer to Figure 4-7. The shift from Db to Da is called

Accepted Answer

A)   an increase in demand.
B)   a decrease in demand.
C)   a decrease in quantity demanded.
D)   an increase in quantity demanded.E) All of the above
F) A) and D)

Question 19

The quantity supplied of a good is the amount that

Accepted Answer

A)   buyers are willing and able to purchase.
B)   sellers are able to produce.
C)   buyers and sellers agree will be brought to market.
D)   sellers are willing and able to sell.E) None of the above
F) All of the above

Question 20

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in an)

Accepted Answer

A)   increase in the demand for Nooks.
B)   decrease in the demand for Nooks.
C)   increase in the demand for Kindles.
D)   decrease in the demand for Kindles.E) B) and C)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. The shift from Db to Da is called

Correct Answer
verified

All goods and services are sold in perfectly competitive markets.

Correct Answer
verified

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. Which of the following statements is correct?

Correct Answer
verified

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Correct Answer
verified

A university's football stadium is never more than half-full during football games. This indicates

Correct Answer
verified

It is not possible for demand and supply to shift at the same time.

Correct Answer
verified

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in an)

Correct Answer
verified

In a competitive market, the quantity of a product produced and the price of the product are determined by

Correct Answer
verified

Which of the following changes would not shift the demand curve for a good or service?

Correct Answer
verified

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Correct Answer
verified
The demand...
View Answer

Correct Answer
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In j), a price above equilib...
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Figure 4-17 -Refer to Figure 4-17. At a price of

Correct Answer
verified

The quantity supplied of a good is the amount that

Correct Answer
verified

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by an)

Correct Answer
verified

A shortage exists in a market if

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
decreases ...
View Answer

Exam 4: The Market Forces of Supply and Demand

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. The shift from Db to Da is called

Correct AnswerverifiedShow Answer

All goods and services are sold in perfectly competitive markets.

Correct AnswerverifiedShow Answer

Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Correct AnswerverifiedShow Answer

A university's football stadium is never more than half-full during football games. This indicates

Correct AnswerverifiedShow Answer

It is not possible for demand and supply to shift at the same time.

Correct AnswerverifiedShow Answer

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in an)

Correct AnswerverifiedShow Answer

In a competitive market, the quantity of a product produced and the price of the product are determined by

Correct AnswerverifiedShow Answer

Which of the following changes would not shift the demand curve for a good or service?

Correct AnswerverifiedShow Answer

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Correct AnswerverifiedThe demand...View AnswerShow Answer

Correct Answerverified In j), a price above equilib...View AnswerShow Answer

Figure 4-17 -Refer to Figure 4-17. At a price of

Correct AnswerverifiedShow Answer

The quantity supplied of a good is the amount that

Correct AnswerverifiedShow Answer

Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by an)

Correct AnswerverifiedShow Answer

A shortage exists in a market if

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answerverifieddecreases ...View AnswerShow Answer

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The demand...
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In j), a price above equilib...
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decreases ...
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