Question 1

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 2

If sellers expect higher basket prices in the near future, the current

Accepted Answer

A)   supply of baskets will increase.
B)   supply of baskets will decrease.
C)   supply of baskets will be unaffected.
D)   demand for baskets will decrease.E) A) and D)
F) B) and C)

Question 3

If macaroni and cheese is an inferior good, then an increase in

Accepted Answer

A)   the price will cause the demand curve for macaroni and cheese to shift to the left.
B)   the price will cause the demand curve for macaroni and cheese to shift to the right.
C)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.
D)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.E) A) and C)
F) A) and D)

Question 4

Supply and demand together determine the price and quantity of a good sold in a market.

Accepted Answer

A) True 
 B)False

Question 5

Table 4-16
The following table shows the supply and demand schedules in a market.
 
-Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 6

Table 4-4
 
-Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Accepted Answer

A)   4 units.
B)   6 units.
C)   8 units.
D)   10 units.E) A) and B)
F) C) and D)

Question 7

Table 4-9
 
-Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

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

Question 8

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Accepted Answer

A)   The number of sellers of mangos decreases.
B)   There is an advance in technology that reduces the cost of producing mangos.
C)   The price of mangos falls.
D)   The price of fertilizer increases, and fertilizer is an input in the production of mangos.E) None of the above
F) B) and D)

Question 9

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Accepted Answer

A movement...

Question 10

A market demand curve shows

Accepted Answer

A)   the relationship between price and the number of buyers in a market.
B)   how quantity demanded changes when the number of sellers changes.
C)   the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good.
D)   how much of a good all buyers are willing and able to buy at each possible price.E) B) and D)
F) All of the above

Question 11

A rightward shift of a demand curve is called a(n)

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) B) and C)
F) A) and B)

Question 12

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) C) and D)
F) B) and C)

Question 13

If, at the current price, there is a surplus of a good, then

Accepted Answer

A)   sellers are producing more than buyers wish to buy.
B)   the market must be in equilibrium.
C)   the price is below the equilibrium price.
D)   quantity demanded equals quantity supplied.E) C) and D)
F) A) and D)

Question 14

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When leather became more expensive, belt producers decreased their supply of belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.E) B) and C)
F) None of the above

Question 15

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A)   Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)   Some degree of competition is present in most markets.
C)   There are many buyers and many sellers in all types of markets.
D)   Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) All of the above
F) B) and C)

Question 16

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Accepted Answer

A) True 
 B)False

Question 17

The supply curve for a good is a line that relates

Accepted Answer

A)   profit and quantity supplied.
B)   quantity supplied and quantity demanded.
C)   price and quantity supplied.
D)   price and profit.E) B) and D)
F) All of the above

Question 18

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Accepted Answer

A) True 
 B)False

Question 19

A movement upward and to the left along a given demand curve is called a decrease in demand.

Accepted Answer

A) True 
 B)False

Question 20

When supply and demand both increase, equilibrium

Accepted Answer

A)   price will increase.
B)   price will decrease.
C)   quantity may increase, decrease, or remain unchanged.
D)   price may increase, decrease, or remain unchanged.E) A) and D)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

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

If macaroni and cheese is an inferior good, then an increase in

Correct AnswerverifiedShow Answer

Supply and demand together determine the price and quantity of a good sold in a market.

Correct AnswerverifiedShow Answer

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Correct AnswerverifiedShow Answer

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Correct AnswerverifiedA movement...View AnswerShow Answer

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Correct AnswerverifiedShow Answer

If sellers expect higher basket prices in the near future, the current

Correct AnswerverifiedShow Answer

Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Correct AnswerverifiedShow Answer

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Correct AnswerverifiedShow Answer

The supply curve for a good is a line that relates

Correct AnswerverifiedShow Answer

Holding all other things constant, a higher price for ski lift tickets would

Correct AnswerverifiedShow Answer

A rightward shift of a demand curve is called a(n)

Correct AnswerverifiedShow Answer

If, at the current price, there is a surplus of a good, then

Correct AnswerverifiedShow Answer

A market demand curve shows

Correct AnswerverifiedShow Answer

A movement upward and to the left along a given demand curve is called a decrease in demand.

Correct AnswerverifiedShow Answer

When supply and demand both increase, equilibrium

Correct AnswerverifiedShow Answer

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Correct AnswerverifiedShow Answer

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A movement...
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