Question 1

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

Question 2

The two words most often used by economists are

Accepted Answer

A)   prices and quantities.
B)   resources and allocation.
C)   supply and demand.
D)   efficiency and equity.E) A) and B)
F) A) and C)

Question 3

When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

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 and that the market demand violates the law of demand. Then, in the table, the value of x must be

Accepted Answer

A)   less than or equal to 5.
B)   greater than or equal to 5.
C)   greater than or equal to 7.
D)   greater than or equal to 10.E) A) and D)
F) A) and C)

Question 5

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 6

Figure 4-15 
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

Accepted Answer

A)   a decrease in the price of beer
B)   an expectation by firms that the price of beer will increase in the very near future
C)   a decrease in the price of hops
D)   an improvement in technology that allows firms to use less labor in the production of beerE) All of the above
F) B) and C)

Question 7

When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 8

If something happens to alter the quantity supplied at any given price, then

Accepted Answer

A)   we move along the supply curve.
B)   the supply curve shifts.
C)   the supply curve becomes steeper.
D)   the supply curve becomes flatter.E) All of the above
F) A) and B)

Question 9

Table 4-5
The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. 
-Refer to Table 4-5. Suppose the four families listed in the table are the only demanders of Mt. Dew in the market. If the price of a case of Mt. Dew decreases by $1, the

Accepted Answer

A)   market quantity demanded decreases by 10.
B)   market quantity demanded increases by 10.
C)   Adams family increases its quantity demanded by more than the Smith family.
D)   Jones family increases its quantity demanded by more than the Williams family.E) A) and B)
F) B) and C)

Question 10

A newspaper's classified ads are an example of a market.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of this good increases.

Accepted Answer

The answer of Figure 4-28 
-Refer to Figure 4-28. Using...

Question 12

A higher price for batteries would result in a(n)

Accepted Answer

A)   increase in the demand for flashlights.
B)   decrease in the demand for flashlights.
C)   increase in the demand for batteries.
D)   decrease in the demand for batteries.E) B) and D)
F) None of the above

Question 13

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Accepted Answer

A) True 
 B)False

Question 14

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) C) and D)
F) A) and D)

Question 15

If income rises in the market for an inferior good, will the demand curve for the inferior good shift to the right or to the left?

Accepted Answer

The demand...

Question 16

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

Question 17

When all market participants are price takers who have no influence over prices, the markets have

Accepted Answer

A)   only a few buyers and sellers.
B)   numerous sellers but only a few buyers.
C)   numerous buyers but only a few sellers.
D)   numerous buyers and sellers.E) C) and D)
F) A) and C)

Question 18

Who gets scarce resources in a market economy?

Accepted Answer

A)   the government
B)   whoever the government decides gets them
C)   whoever wants them
D)   whoever is willing and able to pay the priceE) A) and C)
F) B) and D)

Question 19

Suppose the supply and demand of corn both increase. As a result, what will happen to the equilibrium price and equilibrium quantity in the market?

Accepted Answer

The equilibrium quan...

Question 20

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

If something happens to alter the quantity supplied at any given price, then

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A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

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When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a shortage exists in a market, then we know that the actual price is

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A newspaper's classified ads are an example of a market.

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An increase in supply will cause a decrease in price, which will cause an increase in demand.

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A likely example of complementary goods for most people would be

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Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of this good increases.

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Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

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A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

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If income rises in the market for an inferior good, will the demand curve for the inferior good shift to the right or to the left?

Correct AnswerverifiedThe demand...View AnswerShow Answer

When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

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When all market participants are price takers who have no influence over prices, the markets have

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The two words most often used by economists are

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Suppose the supply and demand of corn both increase. As a result, what will happen to the equilibrium price and equilibrium quantity in the market?

Correct AnswerverifiedThe equilibrium quan...View AnswerShow Answer

Table 4-5 The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. -Refer to Table 4-5. Suppose the four families listed in the table are the only demanders of Mt. Dew in the market. If the price of a case of Mt. Dew decreases by $1, the

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Who gets scarce resources in a market economy?

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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 and that the market demand violates the law of demand. Then, in the table, the value of x must be

Correct AnswerverifiedShow Answer

A higher price for batteries would result in a(n)

Correct AnswerverifiedShow Answer

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The demand...
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The equilibrium quan...
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