Question 1

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Accepted Answer

A) True 
 B)False

Question 2

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 per hour,then it is likely that the

Accepted Answer

A)   demand for bicycle assembly workers will increase.
B)   supply of bicycles will shift to the right.
C)   supply of bicycles will shift to the left.
D)   firm must increase output to maintain profit levels.E) B) and D)
F) C) and D)

Question 3

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Accepted Answer

A)   Price will rise.
B)   Price will fall.
C)   Price will stay exactly the same.
D)   The price change will be ambiguous.E) A) and B)
F) None of the above

Question 4

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk,which is used to make lattés,and scientists discovered that coffee prevents heart attacks?

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 effect on equilibrium quantity would be ambiguous.
D)   The equilibrium quantity would increase,and the effect on equilibrium price would be ambiguous.E) All of the above
F) C) and D)

Question 5

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)   prices at and above the equilibrium price.
B)   prices at and below the equilibrium price.
C)   prices above and below the equilibrium price,but not at the equilibrium price.
D)   the equilibrium price but not above or below the equilibrium price.E) All of the above
F) C) and D)

Question 6

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 B)
F) A) and C)

Question 7

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A)   luxury good.
B)   inferior good.
C)   normal good.
D)   complementary good.E) A) and D)
F) All of the above

Question 8

Suppose there are five suppliers of ice cream in the town of Summerville.If we add the respective quantities that each firm would produce at each of the five ice cream parlors when the price of ice cream is $2 per scoop,$2.50 per scoop,and $3 per scoop,and so forth,we have found the

Accepted Answer

A)   market demand curve.
B)   market supply curve.
C)   equilibrium curve.
D)   surplus or shortage depending on market conditions.E) A) and B)
F) None of the above

Question 9

Figure 4-6 
-Refer to Figure 4-6.The movement from D' to D in the market for potato chips could be caused by a(n)

Accepted Answer

A)   decrease in the price of potato chips.
B)   decrease in income,assuming that potato chips are a normal good.
C)   announcement by the FDA that potato chips cause cancer.
D)   increase in the price of a pretzels.E) All of the above
F) C) and D)

Question 10

The sum of all the individual demand curves for a product is called

Accepted Answer

A)   income demand.
B)   equilibrium demand.
C)   complementary demand.
D)   market demand.E) A) and D)
F) A) and C)

Question 11

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

Question 12

The current price of neckties is $30,but the equilibrium price of neckties is $25.As a result,

Accepted Answer

A)   the quantity supplied of neckties exceeds the quantity demanded of neckties at the $30 price.
B)   the equilibrium quantity of neckties exceeds the quantity demanded at the $30 price.
C)   there is a surplus of neckties at the $30 price.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 13

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 14

If orange juice and apple juice are substitutes,an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

A) True 
 B)False

Question 15

A decrease in input costs to firms in a market will result in a(n)

Accepted Answer

A)   decrease in equilibrium price and an increase in equilibrium quantity.
B)   decrease in equilibrium price and a decrease in equilibrium quantity.
C)   increase in equilibrium price and a decrease in equilibrium quantity.
D)   increase in equilibrium price and an increase in equilibrium quantity.E) None of the above
F) C) and D)

Question 16

Figure 4-21 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

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 C)
F) B) and C)

Question 17

A market demand curve shows how the total quantity demanded of a good varies as

Accepted Answer

A)   income varies.
B)   price varies.
C)   price of the nearest substitute good varies.
D)   supply varies.E) None of the above
F) A) and D)

Question 18

The line that relates the price of a good and the quantity supplied of that good is called the supply

Accepted Answer

A)   schedule,and it usually slopes upward.
B)   schedule,and it usually slopes downward.
C)   curve,and it usually slopes upward.
D)   curve,and it usually slopes downward.E) B) and C)
F) A) and C)

Question 19

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded.This implies that X and Y are

Accepted Answer

A)   complementary goods.
B)   normal goods.
C)   inferior goods.
D)   substitute goods.E) C) and D)
F) B) and C)

Question 20

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-9.Suppose x = 1.Then the slope of the market demand curve is

Accepted Answer

A)   -3.
B)   -1/3.
C)   1/3.
D)   3.E) A) and D)
F) None of the above

Exam 4: The Market Forces of Supply and Demand

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk,which is used to make lattés,and scientists discovered that coffee prevents heart attacks?

Correct AnswerverifiedShow Answer

The line that relates the price of a good and the quantity supplied of that good is called the supply

Correct AnswerverifiedShow Answer

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Correct AnswerverifiedShow Answer

You lose your job and,as a result,you buy fewer iTunes music downloads.This shows that you consider iTunes music downloads to be a(n)

Correct AnswerverifiedShow Answer

The demand curve is the upward-sloping line relating price and quantity demanded.

Correct AnswerverifiedShow Answer

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 per hour,then it is likely that the

Correct AnswerverifiedShow Answer

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-9.Suppose x = 1.Then the slope of the market demand curve is

Correct AnswerverifiedShow Answer

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

Correct AnswerverifiedShow Answer

Figure 4-6 -Refer to Figure 4-6.The movement from D' to D in the market for potato chips could be caused by a(n)

Correct AnswerverifiedShow Answer

If orange juice and apple juice are substitutes,an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Correct AnswerverifiedShow Answer

A decrease in input costs to firms in a market will result in a(n)

Correct AnswerverifiedShow Answer

A market demand curve shows how the total quantity demanded of a good varies as

Correct AnswerverifiedShow Answer

Suppose there are five suppliers of ice cream in the town of Summerville.If we add the respective quantities that each firm would produce at each of the five ice cream parlors when the price of ice cream is $2 per scoop,$2.50 per scoop,and $3 per scoop,and so forth,we have found the

Correct AnswerverifiedShow Answer

The current price of neckties is $30,but the equilibrium price of neckties is $25.As a result,

Correct AnswerverifiedShow Answer

The sum of all the individual demand curves for a product is called

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded.This implies that X and Y are

Correct AnswerverifiedShow Answer

A decrease in the price of a good will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Correct AnswerverifiedShow Answer

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