Question 1

Table 4-8 
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

Accepted Answer

A)  decrease by 6 units.
B)  decrease by 12 units.
C)  increase by 6 units.
D)  increase by 12 units.E) All of the above
F) A) and B)

Question 2

A likely example of complementary goods for most people would be

Accepted Answer

A)  canoes and paddles.
B)  snow mobiles and sofas.
C)  coffee and tea.
D)  tennis balls and basketballs.E) C) and D)
F) None of the above

Question 3

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Accepted Answer

A) True 
 B)False

Question 4

Figure 4-3
Consumer 1
Consumer 2  
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $6 is

Accepted Answer

A)  12 units.
B)  14 units.
C)  19 units.
D)  21 units.E) B) and C)
F) B) and D)

Question 5

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously.

Accepted Answer

The answer of Fill in the table below, showing whether...

Question 6

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

Accepted Answer

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

Question 7

Table 4-13
The demand schedule below pertains to sandwiches demanded per week. 
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose x = 2. Then

Accepted Answer

A)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -5/2.
B)  the slope of Jake's demand curve is -1/2, and the slope of the market demand curve is -2/5.
C)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -5/2.
D)  the slope of Jake's demand curve is -2, and the slope of the market demand curve is -2/5.E) A) and D)
F) All of the above

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. A to SB. D) SB to SA." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-25. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

Accepted Answer

A)  x to y.
B)  y to x.
C)  SA to SB.
D)  SB to SA.E) B) and C)
F) None of the above

Question 10

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A)  increase the supply of education.
B)  decrease the supply of education.
C)  increase the demand for education.
D)  decrease the demand for education.E) A) and B)
F) A) and C)

Question 11

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) E) A) and C)
F) None of the above

Question 12

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-16 
-Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Accepted Answer

A)  increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live.
B)  newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months.
C)  decrease in the price of lumber.
D)  All of the above are correct.E) B) and C)
F) A) and C)

Question 14

In a market economy, who or what determines who produces each good and how much is produced?

Accepted Answer

A)  the government
B)  lawyers
C)  lotteries
D)  pricesE) A) and C)
F) C) and D)

Question 15

If there is a shortage of farm laborers, we would expect

Accepted Answer

A)  the wage of farm laborers to increase.
B)  the wage of farm laborers to decrease.
C)  the price of farm commodities to decrease.
D)  a decrease in the demand for substitutes for farm labor.E) B) and C)
F) C) and D)

Question 16

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather 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 decreased their quantity supplied of ketchup.E) B) and D)
F) A) and D)

Question 18

Table 4-11 
-Refer to Table 4-11. 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 C)
F) A) and D)

Question 19

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Accepted Answer

A)  and quantity both decrease.
B)  and quantity both increase.
C)  increases, and the equilibrium quantity decreases.
D)  decreases, and the equilibrium quantity increases.E) A) and C)
F) A) and D)

Question 20

If muffins and bagels are substitutes, a higher price for bagels would result in a(n)

Accepted Answer

A)  increase in the demand for bagels.
B)  decrease in the demand for bagels.
C)  increase in the demand for muffins.
D)  decrease in the demand for muffins.E) A) and C)
F) All of the above

Exam 4: The Market Forces of Supply and Demand

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Correct AnswerverifiedShow Answer

Table 4-11 -Refer to Table 4-11. If the price were $4, a

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Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose x = 2. Then

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Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price increases from $12 to $15, quantity supplied will

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If muffins and bagels are substitutes, a higher price for bagels would result in a(n)

Correct AnswerverifiedShow Answer

Fill in the table below, showing whether equilibrium price and equilibrium quantity go up, go down, stay the same, or change ambiguously.

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Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, an increase in the price of the pulp used in the paper production process would cause a move from

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Most markets in the economy are highly competitive.

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Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Correct AnswerverifiedShow Answer

An increase in the number of college scholarships issued by private foundations would

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A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

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Figure 4-3 Consumer 1 Consumer 2 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $6 is

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

Correct AnswerverifiedShow Answer

In a market economy, who or what determines who produces each good and how much is produced?

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Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

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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?

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

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

If there is a shortage of farm laborers, we would expect

Correct AnswerverifiedShow Answer

A likely example of complementary goods for most people would be

Correct AnswerverifiedShow Answer

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