Question 1

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

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) A) and D)
F) C) and D)

Question 2

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

Question 3

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

Accepted Answer

A)   a change in production technology
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 input pricesE) All of the above
F) A) and D)

Question 4

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 5

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Accepted Answer

A)   encourage marijuana use, and the evidence supports this argument.
B)   encourage marijuana use, but the evidence does not support this argument.
C)   discourage marijuana use, and the evidence supports this argument.
D)   discourage marijuana use, but the evidence does not support this argument.E) None of the above
F) B) and D)

Question 6

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

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) C) and D)
F) B) and D)

Question 7

Which of the following is the least likely to be a competitive market?

Accepted Answer

A)   ice cream
B)   soybeans
C)   cable television
D)   new housesE) A) and B)
F) A) and C)

Question 8

Which of the following would cause price to decrease?

Accepted Answer

A)   a decrease in supply
B)   an increase in demand
C)   a surplus of the good
D)   a shortage of the goodE) B) and C)
F) All of the above

Question 9

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Accepted Answer

A) True 
 B)False

Question 10

Table 4-4
 
-Refer to Table 4-4.Which supply schedules obey the law of supply?

Accepted Answer

A)   Firm A's only
B)   Firm B's, Firm C's, and Firm D's only
C)   Firm A's and Firm C's only
D)   Firm B's and Firm D's onlyE) B) and C)
F) A) and B)

Question 11

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 D)
F) B) and D)

Question 12

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-5

-Refer to Figure 4-5.Suppose that the federal government is concerned about obesity in the United States.Congress is considering two plans.One would require "junk food" producers to include warning labels on all junk food.The other would impose a tax on all products considered to be junk food.We could illustrate the tax as producing a movement from

Accepted Answer

A)   Point A to Point B in Panel 1.
B)   Point B to Point A in Panel 1.
C)   Point A to Point C in Panel 2.
D)   Point C to Point A in Panel 2.E) A) and B)
F) A) and C)

Question 14

Equilibrium price must increase 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) All of the above
F) None of the above

Question 15

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

Question 16

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)   Consumers have experienced an increase in income, and beef-production technology has improved.
B)   The price of chicken has risen, and the price of steak sauce has fallen.
C)   New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)   The demand curve for beef must be positively sloped.E) C) and D)
F) A) and B)

Question 17

The following table contains a supply schedule for a good. 
If the law of supply applies to this good,then Q1 could be

Accepted Answer

A)   0.
B)   50.
C)   100.
D)   150.E) A) and D)
F) All of the above

Question 18

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises.

Accepted Answer

A) True 
 B)False

Question 19

A likely example of complementary goods for most people would be

Accepted Answer

A)   butter and margarine.
B)   lawnmowers and automobiles.
C)   chips and salsa.
D)   cola and lemonade.E) None of the above
F) B) and C)

Question 20

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

Accepted Answer

A)   a decrease 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)   a decrease in the number of people in the United StatesE) B) and C)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand.

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

Correct Answer
verified

The following table contains a supply schedule for a good. If the law of supply applies to this good,then Q1 could be

Correct Answer
verified

The term price takers refers to buyers and sellers in

Correct Answer
verified

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct Answer
verified

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Correct Answer
verified

Equilibrium price must increase when demand

Correct Answer
verified

Table 4-4 -Refer to Table 4-4.Which supply schedules obey the law of supply?

Correct Answer
verified

Which of the following would cause price to decrease?

Correct Answer
verified

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

Correct Answer
verified

A likely example of complementary goods for most people would be

Correct Answer
verified

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
verified

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Correct Answer
verified

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Correct Answer
verified

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct Answer
verified

Price will rise to eliminate a shortage.

Correct Answer
verified

Correct Answer
verified

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises.

Correct Answer
verified

Which of the following is the least likely to be a competitive market?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand.

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

Correct AnswerverifiedShow Answer

The following table contains a supply schedule for a good. If the law of supply applies to this good,then Q1 could be

Correct AnswerverifiedShow Answer

The term price takers refers to buyers and sellers in

Correct AnswerverifiedShow Answer

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct AnswerverifiedShow Answer

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Correct AnswerverifiedShow Answer

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4.Which supply schedules obey the law of supply?

Correct AnswerverifiedShow Answer

Which of the following would cause price to decrease?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A likely example of complementary goods for most people would be

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

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

Correct AnswerverifiedShow Answer

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Correct AnswerverifiedShow Answer

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct AnswerverifiedShow Answer

Price will rise to eliminate a shortage.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises.

Correct AnswerverifiedShow Answer

Which of the following is the least likely to be a competitive market?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified