Question 1

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

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

Question 2

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) C) and D)
F) B) and D)

Question 3

If the demand for a good falls when income falls, then the good is called an inferior good.

Accepted Answer

A) True 
 B)False

Question 4

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

Question 5

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

Question 6

If the number of buyers in a market decreases, then

Accepted Answer

A)   demand will increase.
B)   demand will decrease.
C)   supply will increase.
D)   supply will decrease.E) B) and D)
F) All of the above

Question 7

If a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 8

The law of supply states that, other things equal, an increase in

Accepted Answer

A)   price causes quantity supplied to increase.
B)   price causes quantity supplied to decrease.
C)   quantity supplied causes price to increase.
D)   quantity supplied causes price to decrease.E) B) and D)
F) B) and C)

Question 9

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

Question 10

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

Accepted Answer

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

Question 11

Figure 4-15 
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

Accepted Answer

A)   a decrease in the price of beer
B)   an expectation by firms that the price of beer will increase in the very near future
C)   a decrease in the price of hops
D)   an improvement in technology that allows firms to use less labor in the production of beerE) B) and C)
F) None of the above

Question 12

An decrease in the price of oranges would lead to an)

Accepted Answer

A)   increased supply of oranges.
B)   increase in the prices of inputs used in orange production.
C)   a movement down and to the left along the supply curve for oranges.
D)   a movement up and to the right along the supply curve for oranges.E) A) and C)
F) C) and D)

Question 13

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-13. Suppose x = 1. Then it must be true that

Accepted Answer

A)   Harry and Jake have the same income, which is lower than Darby's income.
B)   if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake.
C)   Harry's demand curve is identical to Jake's demand curve.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 14

Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause an)

Accepted Answer

A)   increase in the demand for wine, increasing price.
B)   increase in the supply of wine, decreasing price.
C)   decrease in the demand for wine, decreasing price.
D)   decrease in the supply of wine, increasing price.E) A) and B)
F) A) and C)

Question 15

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 16

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) All of the above
F) C) and D)

Question 17

Which of the following demonstrates the law of demand?

Accepted Answer

A)   After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise.
B)   Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal.
C)   Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal.
D)   Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way.E) A) and D)
F) C) and D)

Question 18

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Different sellers sell identical products.
B)   There are many sellers.
C)   Sellers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.E) A) and B)
F) A) and C)

Question 19

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

Accepted Answer

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

Question 20

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)   Consumers have experienced an increase in income, and beef-production technology has improved.
B)   The price of chicken has risen, and the price of steak sauce has fallen.
C)   New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)   The demand curve for beef must be positively sloped.E) None of the above
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

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

Correct AnswerverifiedShow Answer

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

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If the demand for a good falls when income falls, then the good is called an inferior good.

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The law of supply states that, other things equal, an increase in

Correct AnswerverifiedShow Answer

A decrease in the price of a good will

Correct AnswerverifiedShow Answer

An decrease in the price of oranges would lead to an)

Correct AnswerverifiedShow Answer

Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause an)

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

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct AnswerverifiedShow Answer

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the number of buyers in a market decreases, then

Correct AnswerverifiedShow Answer

If a determinant of demand other than price changes, the demand curve shifts.

Correct AnswerverifiedShow Answer

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded

Correct AnswerverifiedShow Answer

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then it must be true that

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Which of the following is not a characteristic of a perfectly competitive market?

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

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Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for beer?

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Which of the following demonstrates the law of demand?

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Which of the following would cause price to increase?

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