Question 1

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) B) and C)
F) All of the above

Question 2

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

Question 3

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur?

Accepted Answer

A)   a movement along D2 from point A to point B
B)   a movement along D2 from point B to point A
C)   a shift from D1 to D2
D)   a shift from D2 to D1E) A) and B)
F) A) and C)

Question 4

Table 4-7
 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

Accepted Answer

A)   decreases by 10 gallons.
B)   decreases by 20 gallons.
C)   increases by 10 gallons.
D)   increases by 20 gallons.E) B) and D)
F) B) and C)

Question 5

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins?

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) A) and B)
F) All of the above

Question 6

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Accepted Answer

A)   Beef producers, concerned about the health of their customers, decided to produce relatively less beef.
B)   Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef.
C)   Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce.
D)   Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.E) A) and B)
F) A) and C)

Question 7

The supply of a good or service is determined by

Accepted Answer

A)   those who buy the good or service.
B)   the government.
C)   those who sell the good or service.
D)   both those who buy and those who sell the good or service.E) B) and C)
F) A) and D)

Question 8

A decrease in the price of a good will

Accepted Answer

A)   increase supply.
B)   decrease supply.
C)   increase quantity supplied.
D)   decrease quantity supplied.E) A) and C)
F) None of the above

Question 9

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) C) and D)
F) A) and B)

Question 10

Figure 4-31
Consider the market for 2-packs of light bulbs below. 
-Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Accepted Answer

Equilibrium price de...

Question 11

Pizza is a normal good if the demand

Accepted Answer

A)   for pizza rises when income rises.
B)   for pizza rises when the price of pizza falls.
C)   curve for pizza slopes upward.
D)   curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.E) A) and B)
F) A) and C)

Question 12

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

Question 13

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Accepted Answer

A) True 
 B)False

Question 14

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand...

Question 15

If Max experiences a decrease in his income, then we would expect Max's demand for

Accepted Answer

A)   each good he purchases to remain unchanged.
B)   normal goods to decrease.
C)   luxury goods to increase.
D)   inferior goods to decrease.E) A) and B)
F) A) and C)

Question 16

a. What is the difference between a "change in demand" and a "change in quantity demanded?" Graph your answer.
 b. For each of the following changes, determine whether there will be a change in quantity demanded or a change in demand.
i. a change in the price of a related good
ii. a change in tastes
iii. a change in the number of buyers
iv. a change in price
v. a change in consumer expectations
vi. a change in income

Accepted Answer

a. A change in demand refers to a shift ...

Question 17

The two words economists use most often are

Accepted Answer

A)   inflation and trade.
B)   supply and demand.
C)   competition and prices.
D)   markets and equilibrium.E) A) and B)
F) B) and C)

Question 18

Figure 4-27
Panel (a)  Panel (b) 
   Panel (c)  Panel (d) 
  
-Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity demanded?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) B) and D)
F) A) and D)

Question 19

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Accepted Answer

A)   DA to DB.
B)   DB to Db.
C)   x to y.
D)   y to x.E) B) and C)
F) None of the above

Exam 4: The Market Forces of Supply and Demand

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Correct Answer
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Equilibrium price de...
View Answer

Correct Answer
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a. A change in demand refers to a shift ...
View Answer

A decrease in the price of a good will

Correct Answer
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Pizza is a normal good if the demand

Correct Answer
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The two words economists use most often are

Correct Answer
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Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur?

Correct Answer
verified

If Max experiences a decrease in his income, then we would expect Max's demand for

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins?

Correct Answer
verified

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct Answer
verified

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Correct Answer
verified
The demand...
View Answer

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?

Correct Answer
verified

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

Correct Answer
verified

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct Answer
verified

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Correct Answer
verified

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct Answer
verified

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

Correct Answer
verified

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity demanded?

Correct Answer
verified

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Correct Answer
verified

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

Correct Answer
verified

The supply of a good or service is determined by

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and quantity?

Correct AnswerverifiedEquilibrium price de...View AnswerShow Answer

Correct Answerverifieda. A change in demand refers to a shift ...View AnswerShow Answer

A decrease in the price of a good will

Correct AnswerverifiedShow Answer

Pizza is a normal good if the demand

Correct AnswerverifiedShow Answer

The two words economists use most often are

Correct AnswerverifiedShow Answer

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur?

Correct AnswerverifiedShow Answer

If Max experiences a decrease in his income, then we would expect Max's demand for

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for paper napkins as a result of a "Go Green" advertising campaign encouraging people to use cloth napkins?

Correct AnswerverifiedShow Answer

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Correct AnswerverifiedShow Answer

Suppose goods A and B are complements. If the price of good A increases, will the demand for good B increase or decrease?

Correct AnswerverifiedThe demand...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?

Correct AnswerverifiedShow Answer

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct AnswerverifiedShow Answer

During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity demanded?

Correct AnswerverifiedShow Answer

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

Correct AnswerverifiedShow Answer

The supply of a good or service is determined by

Correct AnswerverifiedShow Answer

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Equilibrium price de...
View Answer

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a. A change in demand refers to a shift ...
View Answer

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The demand...
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