Question 1

Once the demand curve for a product or service is drawn, it

Accepted Answer

A)   remains stable over time.
B)   can shift either rightward or leftward.
C)   is possible to move along the curve, but the curve will not shift.
D)   tends to become steeper over time.E) None of the above
F) All of the above

Question 2

The two words most often used by economists are

Accepted Answer

A)   prices and quantities.
B)   resources and allocation.
C)   supply and demand.
D)   efficiency and equity.E) A) and B)
F) A) and D)

Question 3

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

Accepted Answer

A)   increase in the demand for Nooks.
B)   decrease in the demand for Nooks.
C)   increase in the demand for Kindles.
D)   decrease in the demand for Kindles.E) None of the above
F) B) and C)

Question 4

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 D)
F) None of the above

Question 5

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

A) True 
 B)False

Question 6

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 Db.
C)   x to y.
D)   y to x.E) B) and C)
F) All of the above

Question 7

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)   surpluses and shortages.
B)   quantities.
C)   government policies.
D)   prices.E) A) and C)
F) A) and B)

Question 8

Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are a(n)

Accepted Answer

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

Question 9

If the supply of 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 to both increase.
D)   and equilibrium quantity to both decrease.E) B) and C)
F) None of the above

Question 10

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Accepted Answer

A)   supply curve for Ashley's bread will increase.
B)   supply curve for Ashley's bread will decrease.
C)   demand curve for Ashley's bread will increase.
D)   demand curve for Ashley's bread will decrease.E) A) and D)
F) B) and D)

Question 11

Table 4-16
The following table shows the supply and demand schedules in a market.
 
-Refer to Table 4-16. What is the equilibrium price in this market?

Accepted Answer

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

Question 12

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)   today's price of gasoline.
B)   the expected future price of gasoline.
C)   the number of sellers of gasoline.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 13

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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 equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) None of the above
F) All of the above

Question 14

"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied

Accepted Answer

A)   is referred to as the law of supply.
B)   applies only to a few goods in the economy.
C)   is represented by a downward-sloping supply curve.
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 15

Table 4-11
 
-Refer to Table 4-11. If the price were $8, a

Accepted Answer

A)   shortage of 20 units would exist, and price would tend to rise.
B)   surplus of 25 units would exist, and price would tend to fall.
C)   shortage of 25 units would exist, and price would tend to rise.
D)   surplus of 45 units would exist, and price would tend to fall.E) All of the above
F) B) and C)

Question 16

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)   government to allocate scarce resources.
B)   supply and demand to allocate scarce resources.
C)   credit cards to allocate scarce resources.
D)   nature to allocate scarce resources.E) All of the above
F) A) and B)

Question 17

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

Accepted Answer

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

Question 18

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Accepted Answer

A)   DA to DB.
B)   DB to Db.
C)   x to y.
D)   y to x.E) All of the above
F) A) and B)

Question 19

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

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) A) and C)

Question 20

Figure 4-12
Firm A Firm B
  
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)   2 units.
B)   10 units.
C)   12 units.
D)   22 units.E) A) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Table 4-11 -Refer to Table 4-11. If the price were $8, a

Correct AnswerverifiedShow Answer

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

Correct AnswerverifiedShow Answer

"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

Correct AnswerverifiedShow Answer

The two words most often used by economists are

Correct AnswerverifiedShow Answer

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Correct AnswerverifiedShow Answer

If the supply of a product increases, then we would expect equilibrium price

Correct AnswerverifiedShow Answer

Today's demand curve for gasoline could shift in response to a change in

Correct AnswerverifiedShow Answer

If Kindle e-readers and Nook e-readers are substitutes, a higher price for Nooks would result in a(n)

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Currently you purchase ten frozen pizza per month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase frozen pizzas in January. For you, frozen pizzas are a(n)

Correct AnswerverifiedShow Answer

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Correct AnswerverifiedShow Answer

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Correct AnswerverifiedShow Answer

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

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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. What is the equilibrium price in this market?

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Once the demand curve for a product or service is drawn, it

Correct AnswerverifiedShow Answer

A decrease in income will shift the demand curve for an inferior good to the right.

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

The signals that guide the allocation of resources in a market economy are

Correct AnswerverifiedShow Answer

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