Question 1

If buyers today become more willing and able than before to purchase larger quantities of Vanilla Coke at each price of Vanilla Coke,then

Accepted Answer

A)   we will observe a movement downward and to the right along the demand curve for Vanilla Coke.
B)   we will observe a movement upward and to the left along the demand curve for Vanilla Coke.
C)   the demand curve for Vanilla Coke will shift to the right.
D)   the demand curve for Vanilla Coke will shift to the left.E) A) and B)
F) A) and C)

Question 2

Figure 4-3
 
-Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $15 is

Accepted Answer

A)   0 units.
B)   10 units.
C)   15 units.
D)   25 units.E) B) and D)
F) B) and C)

Question 3

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

Question 4

Figure 4-20
The graph below pertains to the supply of paper to colleges and universities. A to SB. D)  SB to SA." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-20.All else equal,a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) A) and B)
F) All of the above

Question 5

The law of supply states that,other things equal,when the price of a good falls,the quantity supplied falls as well.

Accepted Answer

A) True 
 B)False

Question 6

A leftward 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) A) and C)
F) All of the above

Question 7

In a given market,how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)   There is no relationship.
B)   They are the same price.
C)   The market-clearing price exceeds the equilibrium price.
D)   The equilibrium price exceeds the market-clearing price.E) B) and C)
F) All of the above

Question 8

An increase in demand will cause an increase in price,which will cause an increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 9

If baked potatoes and sour cream are complements,then an increase in the price of sour cream decreases the demand for baked potatoes.

Accepted Answer

A) True 
 B)False

Question 10

An increase in demand shifts the demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of a market?

Accepted Answer

A)   a gas station
B)   a garage sale
C)   a barber shop
D)   All of the above are examples of markets.E) All of the above
F) A) and D)

Question 12

The market for diamond rings is closely linked to the market for high-quality diamonds.If a large quantity of high-quality diamonds enters the market,then the

Accepted Answer

A)   supply curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity.
B)   supply curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity.
C)   demand curve for diamond rings will shift right,which will create a shortage at the current price.Price will increase,which will decrease quantity demanded and increase quantity supplied.The new market equilibrium will be at a higher price and higher quantity.
D)   demand curve for diamond rings will shift right,which will create a surplus at the current price.Price will decrease,which will increase quantity demanded and decrease quantity supplied.The new market equilibrium will be at a lower price and higher quantity.E) None of the above
F) B) and C)

Question 13

Figure 4-22
 
-Refer to Figure 4-22.Panel (a) shows which of the following?

Accepted Answer

A)   an increase in demand and an increase in quantity supplied
B)   an increase in demand and an increase in supply
C)   an increase in quantity demanded and an increase in quantity supplied
D)   an increase in quantity demanded and an increase in supplyE) None of the above
F) A) and D)

Question 14

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   an increase in the price of tennis balls
B)   a decrease in the price of tennis racquets
C)   an expectation by buyers that their incomes will increase in the very near future
D)   a decrease in the number of people in the United States under age 70E) A) and B)
F) C) and D)

Question 16

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 17

If the demand for a product increases,then we would expect equilibrium price

Accepted Answer

A)   to increase and equilibrium quantity to decrease.
B)   to decrease and equilibrium quantity to increase.
C)   and equilibrium quantity both to increase.
D)   and equilibrium quantity both to decrease.E) A) and B)
F) A) and C)

Question 18

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Accepted Answer

A)   an increase in consumer income
B)   a decrease in consumer income
C)   greater government restrictions on agricultural chemicals
D)   fewer government restrictions on agricultural chemicalsE) B) and C)
F) A) and D)

Question 19

Which of the following would cause price to increase?

Accepted Answer

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

Question 20

Figure 4-7
 
-Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (b) ,the arrows are consistent with which of the following events?

Accepted Answer

A)   an increase in the price of cigarettes
B)   placing a tax on cigarettes
C)   the prohibition of cigarette advertisements on television
D)   decreasing the price of marijuana,given that tobacco and marijuana are complementsE) B) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

If buyers today become more willing and able than before to purchase larger quantities of Vanilla Coke at each price of Vanilla Coke,then

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If baked potatoes and sour cream are complements,then an increase in the price of sour cream decreases the demand for baked potatoes.

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If the demand for a product increases,then we would expect equilibrium price

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Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

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An increase in demand shifts the demand curve to the left.

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The market for diamond rings is closely linked to the market for high-quality diamonds.If a large quantity of high-quality diamonds enters the market,then the

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A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

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Pizza is a normal good if the demand

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

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The law of supply states that,other things equal,when the price of a good falls,the quantity supplied falls as well.

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Figure 4-3 -Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $15 is

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In a given market,how are the equilibrium price and the market-clearing price related?

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Figure 4-22 -Refer to Figure 4-22.Panel (a) shows which of the following?

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

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Figure 4-20 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-20.All else equal,a major paper manufacturer filing for bankruptcy and shutting down as a result of an IRS tax evasion investigation would cause a move from

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Which of the following would cause price to increase?

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Figure 4-7 -Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (b) ,the arrows are consistent with which of the following events?

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Which of the following is an example of a market?

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A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

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An increase in demand will cause an increase in price,which will cause an increase in quantity supplied.

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