Question 1

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

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

Question 3

Figure 4-19 
-Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Accepted Answer

A)   demand predicts that the price will rise by $2 to eliminate the shortage.
B)   supply predicts that the price will rise by $2 to eliminate the shortage.
C)   supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)   supply and demand predicts that the price will fall by $2 to eliminate the shortage.E) A) and B)
F) B) and D)

Question 4

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Accepted Answer

A) True 
 B)False

Question 5

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Accepted Answer

A)   The demand for shotgun-shell ammunition will increase.
B)   The demand for shotgun-shell ammunition will decrease.
C)   The demand for shotgun-shell ammunition will be unaffected.
D)   The supply of shotgun-shell ammunition will increase.E) A) and B)
F) C) and D)

Question 6

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)

Question 7

Figure 4-13 
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $2 is

Accepted Answer

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

Question 8

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Accepted Answer

A)   a freeze in Florida
B)   a technological advance that allows oranges to ripen faster
C)   a decrease in the price of apples
D)   an announcement by the FDA that oranges prevent heart diseaseE) A) and B)
F) A) and C)

Question 9

The quantity supplied of a good is the amount that

Accepted Answer

A)   buyers are willing and able to purchase.
B)   sellers are able to produce.
C)   buyers and sellers agree will be brought to market.
D)   sellers are willing and able to sell.E) None of the above
F) B) and D)

Question 10

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following does not affect an individual's demand curve?

Accepted Answer

A)   expectations
B)   income
C)   prices of related goods
D)   the number of buyersE) C) and D)
F) A) and B)

Question 12

A surplus is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 13

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)   the idea that tobacco and marijuana are substitutes.
B)   the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana.
C)   the idea that lower cigarette prices are associated with less use of marijuana.
D)   most of the available evidence.E) All of the above
F) A) and C)

Question 14

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

The line that relates the price of a good and the quantity demanded of that good is called the demand

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

Question 16

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to turkeys would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and B)
F) A) and C)

Question 17

According to the law of demand, when price increases the quantity demanded of a good

Accepted Answer

The answer of According to the law of demand, when...

Question 18

For a market for a good or service to exist, there must be a

Accepted Answer

A)   group of buyers and sellers.
B)   specific time and place at which the good or service is traded.
C)   high degree of organization present.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 19

If a surplus exists in a market, then we know that the actual price is

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) A) and D)
F) B) and C)

Question 20

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Most studies have found that tobacco and marijuana are substitutes rather than complements.

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, a decrease in the price of the grain fed to turkeys would cause a move from

Correct AnswerverifiedShow Answer

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Correct AnswerverifiedShow Answer

Figure 4-19 -Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Correct AnswerverifiedShow Answer

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Correct AnswerverifiedShow Answer

When supply and demand both increase, equilibrium

Correct AnswerverifiedShow Answer

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Correct AnswerverifiedShow Answer

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Correct AnswerverifiedShow Answer

The belief that tobacco is a "gateway drug" is consistent with

Correct AnswerverifiedShow Answer

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Correct AnswerverifiedShow Answer

Individual supply curves are summed vertically to obtain the market supply curve.

Correct AnswerverifiedShow Answer

The line that relates the price of a good and the quantity demanded of that good is called the demand

Correct AnswerverifiedShow Answer

For a market for a good or service to exist, there must be a

Correct AnswerverifiedShow Answer

A surplus is the same as an excess demand.

Correct AnswerverifiedShow Answer

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $2 is

Correct AnswerverifiedShow Answer

The quantity supplied of a good is the amount that

Correct AnswerverifiedShow Answer

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Correct AnswerverifiedShow Answer

Which of the following does not affect an individual's demand curve?

Correct AnswerverifiedShow Answer

According to the law of demand, when price increases the quantity demanded of a good

Correct AnswerverifiedShow Answer

If a surplus exists in a market, then we know that the actual price is

Correct AnswerverifiedShow Answer

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