Question 1

Pens are normal goods.What will happen to the equilibrium price of pens if the prices of pencils rises,consumers experience an increase in income,writing in ink becomes fashionable,people expect the price of pens to rise in the near future,the population increases,fewer firms manufacture pens,and the wages of pen-makers increase

Accepted Answer

A)  price will rise
B)  price will fall
C)  price will stay exactly the same
D)  price change will be ambiguousE) B) and D)
F) All of the above

Question 2

How is a market supply curve constructed

Accepted Answer

A)  by vertically summing individual supply curves
B)  by horizontally summing individual supply curves
C)  by finding the average quantity supplied of the market's individual supply curves
D)  by summing a consumer's demands for all goodsE) A) and B)
F) A) and C)

Question 3

Market demand is given as QD = 80 - 2P.Market supply is given as QS = 2P.What would result if the market price were $10

Accepted Answer

A)  a shortage of 40
B)  a surplus of 40
C)  a surplus of 20
D)  a shortage of 20E) A) and D)
F) B) and D)

Question 4

Suppose that demand increases and supply decreases.What would we expect to happen in the market

Accepted Answer

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

Question 5

Figure 4-7
 
-Refer to the Figure 4-7.What does the movement from point A to point B on the graph show

Accepted Answer

A)  a decrease in demand
B)  an increase in demand
C)  a decrease in quantity demanded
D)  an increase in quantity demandedE) A) and B)
F) All of the above

Question 6

Which of the following would cause both the equilibrium price and equilibrium quantity of day-old bread (an inferior good)  to increase

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

Question 7

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.If price increases from $40 to $44,what is the price elasticity of demand

Accepted Answer

A)  0.2
B)  0.7
C)  1.7
D)  2.0E) A) and B)
F) B) and D)

Question 8

Which of the following reflects the downward-sloping demand curve

Accepted Answer

A)  Price is positively related to quantity supplied.
B)  There is an inverse relationship between price and quantity demanded.
C)  There is a direct relationship between price and quantity demanded.
D)  When the price falls, buyers willingly buy less.E) A) and D)
F) All of the above

Question 9

What can be said about economists in general

Accepted Answer

A)  They do not try to explain people's tastes, but do try to explain what happens when tastes change.
B)  They must be able to explain people's tastes to explain what happens when tastes change.
C)  They do not believe that people's tastes determine demand and therefore ignore the subject of tastes.
D)  They believe that tastes and demand move in opposite directions.E) A) and D)
F) B) and D)

Question 10

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous
B)  price will rise and the effect on quantity is ambiguous
C)  quantity will fall and the effect on price is ambiguous
D)  quantity will rise and the effect on price is ambiguousE) A) and B)
F) A) and C)

Question 11

Figure 4-6
 
-Refer to the Figure 4-6.What could cause the shift from D to D₁

Accepted Answer

A)  an increase in price
B)  a decrease in the price of a complement
C)  an increase in technology
D)  a decrease in the price of a substituteE) All of the above
F) A) and D)

Question 12

What do demand and supply determine in a perfectly competitive market

Accepted Answer

A)  income
B)  expectations
C)  price
D)  costs of productionE) C) and D)
F) A) and B)

Question 13

Figure 4-5
 
-Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied

Accepted Answer

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

Question 14

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Question 15

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $21 to $23,what is the price elasticity of demand

Accepted Answer

A)  0.3
B)  1.0
C)  3.7
D)  9.4E) A) and B)
F) C) and D)

Question 16

If the supply of a product increases,what would we expect

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease
B)  equilibrium price to decrease and equilibrium quantity to increase
C)  equilibrium price and equilibrium quantity to both increase
D)  equilibrium price and equilibrium quantity to both decreaseE) A) and B)
F) A) and C)

Question 17

Market demand is given as Qd =150 - 3P.Market supply is given as QS = 2P.What would result if the market price were $25

Accepted Answer

A)  a shortage of 25
B)  a surplus of 25
C)  a surplus of 70
D)  a shortage of 70E) All of the above
F) C) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Market demand is given as QD = 80 - P.Market supply is given as QS = 3P.What would result if the market price were $10

Accepted Answer

A)  a shortage of 20
B)  a surplus of 20
C)  a surplus of 40
D)  a shortage of 40E) None of the above
F) All of the above

Question 20

Figure 4-6
 
-Refer to the Figure 4-6.What is the shift from D to D₁ called

Accepted Answer

A)  an increase in demand
B)  a decrease in demand
C)  a decrease in quantity demanded
D)  an increase in quantity demandedE) All of the above
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

Correct Answer
verified

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

Correct Answer
verified

Which of the following would cause both the equilibrium price and equilibrium quantity of day-old bread (an inferior good) to increase

Correct Answer
verified

What do demand and supply determine in a perfectly competitive market

Correct Answer
verified

What can be said about economists in general

Correct Answer
verified

Market demand is given as Q_D= 100 - P.Market supply is given as Q_S= 4P.If price increases from $40 to $44,what is the price elasticity of demand

Correct Answer
verified

Suppose that demand increases and supply decreases.What would we expect to happen in the market

Correct Answer
verified

Figure 4-7 -Refer to the Figure 4-7.What does the movement from point A to point B on the graph show

Correct Answer
verified

Figure 4-5 -Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied

Correct Answer
verified

Figure 4-6 -Refer to the Figure 4-6.What is the shift from D to D₁ called

Correct Answer
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If the supply of a product increases,what would we expect

Correct Answer
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Correct Answer
verified

Market demand is given as Q_D= 80 - P.Market supply is given as Q_S= 3P.What would result if the market price were $10

Correct Answer
verified

Market demand is given as Qd =150 - 3P.Market supply is given as Q_S= 2P.What would result if the market price were $25

Correct Answer
verified

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased

Correct Answer
verified

Market demand is given as Q_D= 140 - 5P.Market supply is given as Q_S= 2P.If price increases from $21 to $23,what is the price elasticity of demand

Correct Answer
verified

Which of the following reflects the downward-sloping demand curve

Correct Answer
verified

Figure 4-6 -Refer to the Figure 4-6.What could cause the shift from D to D₁

Correct Answer
verified

How is a market supply curve constructed

Correct Answer
verified

Market demand is given as Q_D= 80 - 2P.Market supply is given as Q_S= 2P.What would result if the market price were $10

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

If a company making frozen orange juice expects the price of their product to be higher next month,they will supply more to the market this month.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following would cause both the equilibrium price and equilibrium quantity of day-old bread (an inferior good) to increase

Correct AnswerverifiedShow Answer

What do demand and supply determine in a perfectly competitive market

Correct AnswerverifiedShow Answer

What can be said about economists in general

Correct AnswerverifiedShow Answer

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.If price increases from $40 to $44,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

Suppose that demand increases and supply decreases.What would we expect to happen in the market

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to the Figure 4-7.What does the movement from point A to point B on the graph show

Correct AnswerverifiedShow Answer

Figure 4-5 -Refer to the Figure 4-5.Which of the four graphs shown illustrates a decrease in quantity supplied

Correct AnswerverifiedShow Answer

Figure 4-6 -Refer to the Figure 4-6.What is the shift from D to D₁ called

Correct AnswerverifiedShow Answer

If the supply of a product increases,what would we expect

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Market demand is given as QD = 80 - P.Market supply is given as QS = 3P.What would result if the market price were $10

Correct AnswerverifiedShow Answer

Market demand is given as Qd =150 - 3P.Market supply is given as QS = 2P.What would result if the market price were $25

Correct AnswerverifiedShow Answer

New oak tables are normal goods.What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased

Correct AnswerverifiedShow Answer

Market demand is given as QD = 140 - 5P.Market supply is given as QS = 2P.If price increases from $21 to $23,what is the price elasticity of demand

Correct AnswerverifiedShow Answer

Which of the following reflects the downward-sloping demand curve

Correct AnswerverifiedShow Answer

Figure 4-6 -Refer to the Figure 4-6.What could cause the shift from D to D₁

Correct AnswerverifiedShow Answer

How is a market supply curve constructed

Correct AnswerverifiedShow Answer

Market demand is given as QD = 80 - 2P.Market supply is given as QS = 2P.What would result if the market price were $10

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Market demand is given as Q_D= 100 - P.Market supply is given as Q_S= 4P.If price increases from $40 to $44,what is the price elasticity of demand

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Market demand is given as Q_D= 80 - P.Market supply is given as Q_S= 3P.What would result if the market price were $10

Correct Answer
verified

Market demand is given as Qd =150 - 3P.Market supply is given as Q_S= 2P.What would result if the market price were $25

Correct Answer
verified

Correct Answer
verified

Market demand is given as Q_D= 140 - 5P.Market supply is given as Q_S= 2P.If price increases from $21 to $23,what is the price elasticity of demand

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Market demand is given as Q_D= 80 - 2P.Market supply is given as Q_S= 2P.What would result if the market price were $10

Correct Answer
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