Question 1

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 2

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Accepted Answer

A)   decide which direction to shift the curve.
B)   decide whether the fires affected demand or supply.
C)   graph the shift to see the effect on equilibrium.
D)   None of the above is correct.E) B) and C)
F) A) and B)

Question 3

Equilibrium price must decrease when demand

Accepted Answer

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

Question 4

Figure 4-17 
-Refer to Figure 4-17.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A)   $15 and 400 units.
B)   $20 and 600 units.
C)   $25 and 500 units.
D)   $25 and 800 units.E) A) and B)
F) None of the above

Question 5

An increase in the price of ink will shift the supply curve for pens to the left.

Accepted Answer

A) True 
 B)False

Question 6

Assume the market for pork is perfectly competitive.When one pork buyer exits the market,

Accepted Answer

A)   the price of pork increases.
B)   the price of pork decreases.
C)   the price of pork does not change.
D)   there is no longer a market for pork.E) B) and C)
F) C) and D)

Question 7

If goods A and B are complements,then an increase in the price of good A will result in

Accepted Answer

A)   more of good A being sold.
B)   more of good B being sold.
C)   less of good B being sold.
D)   no difference in the quantity sold of either good.E) B) and C)
F) A) and D)

Question 8

Once the demand curve for a product or service is drawn,it

Accepted Answer

A)   remains stable over time.
B)   can shift either rightward or leftward.
C)   is possible to move along the curve,but the curve will not shift.
D)   tends to become steeper over time.E) None of the above
F) A) and B)

Question 9

A competitive market is one in which there

Accepted Answer

A)   is only one seller,but there are many buyers.
B)   are many sellers,and each seller has the ability to set the price of his product.
C)   are many sellers,and they compete with one another in such a way that some sellers are always being forced out of the market.
D)   are so many buyers and so many sellers that each has a negligible impact on the price of the product.E) C) and D)
F) A) and B)

Question 10

An increase in demand is represented by a

Accepted Answer

A)   movement downward and to the right along a demand curve.
B)   movement upward and to the left along a demand curve.
C)   rightward shift of a demand curve.
D)   leftward shift of a demand curve.E) None of the above
F) A) and D)

Question 11

Figure 4-22
 
-Refer to Figure 4-22.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) All of the above
F) A) and C)

Question 12

Figure 4-21 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

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) All of the above
F) C) and D)

Question 13

Figure 4-22
 
-Refer to Figure 4-22.Which of the four panels illustrates an increase in quantity supplied?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) None of the above
F) C) and D)

Question 14

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) None of the above
F) All of the above

Question 15

Table 4-4
 
-Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $4 to $2,the market quantity supplied

Accepted Answer

A)   increases by 10 units.
B)   decreases by 10 units.
C)   decreases by 20 units.
D)   decreases by 30 units.E) A) and B)
F) None of the above

Question 16

Figure 4-14 
-Refer to Figure 4-14.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) A) and C)
F) A) and D)

Question 17

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

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) B) and C)
F) None of the above

Question 18

Table 4-8
A country club usually only allows members to purchase tickets for its celebrity golf tournament,but the club is considering allowing non-members to purchase tickets this year.The demand and supply schedules are as follows:
 
-Refer to Table 4-8.If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament,then what will be the equilibrium price?

Accepted Answer

A)   $10
B)   $15
C)   $20
D)   $25E) C) and D)
F) A) and B)

Question 19

The unique point at which the supply and demand curves intersect is called

Accepted Answer

A)   market harmony.
B)   coincidence.
C)   equivalence.
D)   equilibrium.E) All of the above
F) None of the above

Question 20

The term price takers refers to buyers and sellers in

Accepted Answer

A)   perfectly competitive markets.
B)   monopolistic markets.
C)   markets that are regulated by the government.
D)   markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.E) A) and B)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

Assume the market for pork is perfectly competitive.When one pork buyer exits the market,

Correct Answer
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Figure 4-22 -Refer to Figure 4-22.Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Correct Answer
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Table 4-4 -Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $4 to $2,the market quantity supplied

Correct Answer
verified

All goods and services are sold in perfectly competitive markets.

Correct Answer
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Figure 4-22 -Refer to Figure 4-22.Which of the four panels illustrates an increase in quantity supplied?

Correct Answer
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The term price takers refers to buyers and sellers in

Correct Answer
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Equilibrium price must decrease when demand

Correct Answer
verified

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct Answer
verified

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct Answer
verified

A competitive market is one in which there

Correct Answer
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Once the demand curve for a product or service is drawn,it

Correct Answer
verified

Figure 4-14 -Refer to Figure 4-14.At a price of

Correct Answer
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The unique point at which the supply and demand curves intersect is called

Correct Answer
verified

If goods A and B are complements,then an increase in the price of good A will result in

Correct Answer
verified

Correct Answer
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An increase in demand is represented by a

Correct Answer
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Figure 4-17 -Refer to Figure 4-17.In this market,equilibrium price and quantity,respectively,are

Correct Answer
verified

Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Correct Answer
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A supply curve slopes upward because

Correct Answer
verified

An increase in the price of ink will shift the supply curve for pens to the left.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Assume the market for pork is perfectly competitive.When one pork buyer exits the market,

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22.Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $4 to $2,the market quantity supplied

Correct AnswerverifiedShow Answer

All goods and services are sold in perfectly competitive markets.

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22.Which of the four panels illustrates an increase in quantity supplied?

Correct AnswerverifiedShow Answer

The term price takers refers to buyers and sellers in

Correct AnswerverifiedShow Answer

Equilibrium price must decrease when demand

Correct AnswerverifiedShow Answer

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct AnswerverifiedShow Answer

A competitive market is one in which there

Correct AnswerverifiedShow Answer

Once the demand curve for a product or service is drawn,it

Correct AnswerverifiedShow Answer

Figure 4-14 -Refer to Figure 4-14.At a price of

Correct AnswerverifiedShow Answer

The unique point at which the supply and demand curves intersect is called

Correct AnswerverifiedShow Answer

If goods A and B are complements,then an increase in the price of good A will result in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in demand is represented by a

Correct AnswerverifiedShow Answer

Figure 4-17 -Refer to Figure 4-17.In this market,equilibrium price and quantity,respectively,are

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Correct AnswerverifiedShow Answer

A supply curve slopes upward because

Correct AnswerverifiedShow Answer

An increase in the price of ink will shift the supply curve for pens to the left.

Correct AnswerverifiedShow Answer

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