Question 1

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

Question 2

Table 4-6
 
-Refer to Table 4-6.Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) All of the above
F) C) and D)

Question 3

Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

Accepted Answer

A)   Sellers would not be able to produce and sell as much as before at each relevant price.
B)   The supply would decrease.
C)   Buyers would not be willing to buy as much as before at each relevant price.
D)   The equilibrium price would rise.E) All of the above
F) A) and D)

Question 4

Figure 4-11
 
-Refer to Figure 4-11.If these are the only two sellers in the market,then the market quantity supplied at a price of $8 is

Accepted Answer

A)   14 units.
B)   15 units.
C)   16 units.
D)   29 units.E) A) and C)
F) B) and D)

Question 5

Figure 4-7

-Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (a) ,the arrows are consistent with which of the following events?

Accepted Answer

A)   The price of marijuana, a complement to cigarettes, increased.
B)   Mandatory health warnings were placed on cigarette packages.
C)   Several foreign countries banned U.S. cigarettes in their countries.
D)   A tax was placed on cigarettes.E) A) and C)
F) B) and D)

Question 6

The sum of all the individual demand curves for a product is called

Accepted Answer

A)   income demand.
B)   equilibrium demand.
C)   complementary demand.
D)   market demand.E) All of the above
F) C) and D) D

Question 7

Which of these statements does not apply to market economies?

Accepted Answer

A)   Prices prevent decentralized decision making from degenerating into chaos.
B)   Prices coordinate the actions of millions of people with varying abilities and desires.
C)   Prices ensure that anyone who wants a product can get it.
D)   Prices ensure that what needs to get done does in fact get done.E) C) and D)
F) B) and C)

Question 8

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) B) and D)
F) B) and C)

Question 9

Pens are normal goods.What will happen to the equilibrium price of pens if the price of pencils rises,consumers experience an increase in income,writing in ink becomes fashionable,people expect the price of pens to rise in the near future,the population increases,fewer firms manufacture pens,and the wages of pen-makers increase?

Accepted Answer

A)   Price will rise.
B)   Price will fall.
C)   Price will stay exactly the same.
D)   The price change will be ambiguous.E) All of the above
F) None of the above

Question 10

Table 4-5
 
-Refer to Table 4-5.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied decreases by

Accepted Answer

A)   2.5 units.
B)   4 units.
C)   10 units.
D)   50 units.E) All of the above
F) C) and D)

Question 11

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 12

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-10
 
-Refer to Figure 4-10.Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?

Accepted Answer

A)   an increase in the price of winter coats
B)   a decrease in the number of firms selling winter coats
C)   a decrease in the price of zippers and snaps
D)   a decrease in the price of winter hats and glovesE) A) and D)
F) B) and D)

Question 14

The highest form of competition is called

Accepted Answer

A)   arbitrage.
B)   monopolistic competition.
C)   equilibrium.
D)   perfect competition.E) B) and C)
F) None of the above

Question 15

If buyers and sellers in a certain market are price takers,then individually

Accepted Answer

A)   they have no influence on market price.
B)   they have some influence on market price but that influence is limited.
C)   buyers will be able to find prices lower than those determined in the market.
D)   sellers will find it difficult to sell all they want to sell at the market price.E) C) and D)
F) A) and B)

Question 16

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

Accepted Answer

A)   decreases the demand for the other good.
B)   decreases the quantity demanded of the other good.
C)   increases the demand for the other good.
D)   increases the quantity demanded of the other good.E) B) and C)
F) A) and D)

Question 17

If a firm is a price taker,it operates in a

Accepted Answer

A)   competitive market.
B)   monopoly market.
C)   oligopoly market.
D)   monopolistically competitive market.E) None of the above
F) A) and D) A

Question 18

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Accepted Answer

A)   Price will rise.
B)   Price will fall.
C)   Price will stay exactly the same.
D)   The price change will be ambiguous.E) B) and D)
F) A) and D) D

Question 19

Figure 4-4
 
-Refer to Figure 4-4.Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Accepted Answer

A)   an increase in the price of DVDs
B)   a decrease in the price of DVD players
C)   a change in consumer preferences toward watching movies in movie theaters rather than at home
D)   an expectation by buyers that their incomes will increase in the very near futureE) A) and B)
F) B) and C)

Question 20

Figure 4-6
 
-Refer to Figure 4-6.The movement from D to D' could be caused by

Accepted Answer

A)   an increase in price.
B)   a decrease in the price of a complement.
C)   a technological advance.
D)   a decrease in the price of a substitute.E) None of the above
F) A) and B)

Exam 4: The Market Forces of Supply and Demand.

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

Correct Answer
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Table 4-6 -Refer to Table 4-6.Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Correct Answer
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Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

Correct Answer
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Figure 4-11 -Refer to Figure 4-11.If these are the only two sellers in the market,then the market quantity supplied at a price of $8 is

Correct Answer
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Figure 4-7 -Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (a) ,the arrows are consistent with which of the following events?

Correct Answer
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The sum of all the individual demand curves for a product is called

Correct Answer
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D

Which of these statements does not apply to market economies?

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

Correct Answer
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Table 4-5 -Refer to Table 4-5.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied decreases by

Correct Answer
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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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A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct Answer
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Figure 4-10 -Refer to Figure 4-10.Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?

Correct Answer
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The highest form of competition is called

Correct Answer
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If buyers and sellers in a certain market are price takers,then individually

Correct Answer
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Two goods are substitutes when a decrease in the price of one good

Correct Answer
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If a firm is a price taker,it operates in a

Correct Answer
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A

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Correct Answer
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D

Figure 4-4 -Refer to Figure 4-4.Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Correct Answer
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Figure 4-6 -Refer to Figure 4-6.The movement from D to D' could be caused by

Correct Answer
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Exam 4: The Market Forces of Supply and Demand.

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

Correct AnswerverifiedShow Answer

Table 4-6 -Refer to Table 4-6.Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Correct AnswerverifiedShow Answer

Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

Correct AnswerverifiedShow Answer

Figure 4-11 -Refer to Figure 4-11.If these are the only two sellers in the market,then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (a) ,the arrows are consistent with which of the following events?

Correct AnswerverifiedShow Answer

The sum of all the individual demand curves for a product is called

Correct AnswerverifiedD

Which of these statements does not apply to market economies?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 4-5 -Refer to Table 4-5.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied decreases by

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

A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to Figure 4-10.Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for winter coats?

Correct AnswerverifiedShow Answer

The highest form of competition is called

Correct AnswerverifiedShow Answer

If buyers and sellers in a certain market are price takers,then individually

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a firm is a price taker,it operates in a

Correct AnswerverifiedA

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Correct AnswerverifiedD

Figure 4-4 -Refer to Figure 4-4.Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Correct AnswerverifiedShow Answer

Figure 4-6 -Refer to Figure 4-6.The movement from D to D' could be caused by

Correct AnswerverifiedShow Answer

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D

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A

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D

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