Question 1

An increase in the price of a good will

Accepted Answer

A)   increase demand.
B)   decrease demand.
C)   increase quantity demanded.
D)   decrease quantity demanded.E) None of the above
F) All of the above

Question 2

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Accepted Answer

A)   encourage marijuana use,and the evidence supports this argument.
B)   encourage marijuana use,but the evidence does not support this argument.
C)   discourage marijuana use,and the evidence supports this argument.
D)   discourage marijuana use,but the evidence does not support this argument.E) A) and D)
F) A) and C)

Question 3

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

Question 4

An increase in the price of a good would

Accepted Answer

A)   increase the supply of the good.
B)   increase the amount purchased by buyers.
C)   give producers an incentive to produce more.
D)   decrease both the quantity demanded of the good and the quantity supplied of the good.E) A) and D)
F) B) and C)

Question 5

Table 4-3
 
-Refer to Table 4-3.Whose demand does not obey the law of demand?

Accepted Answer

A)   Bert's
B)   Ernie's
C)   Grover's
D)   Oscar'sE) None of the above
F) B) and D)

Question 6

Figure 4-3

-Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $10 is

Accepted Answer

A)   0 units.
B)   5 units.
C)   8.33 units.
D)   25 units.E) A) and B)
F) A) and C)

Question 7

Figure 4-14 
-Refer to Figure 4-14.At a price of

Accepted Answer

A)   $2,there is a surplus of 6 units.
B)   $5,there is a surplus of 25 units.
C)   $5,there is a shortage of $25.
D)   $7,there is a surplus of 4 units.E) C) and D)
F) All of the above

Question 8

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-9.Suppose Harry,Darby,and Jake are the only demanders of sandwiches.Also suppose the following: • x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 5.
• The slope of the supply curve is 1.
Then there is currently a

Accepted Answer

A)   shortage of 5 sandwiches,and the equilibrium price of a sandwich is between $3.00 and $5.00.
B)   shortage of 5 sandwiches,and the equilibrium price of a sandwich is $5.00.
C)   surplus of 5 sandwiches,and the equilibrium price of a sandwich is between $3.00 and $5.00.
D)   surplus of 5 sandwiches,and the equilibrium price of a sandwich is $5.00.E) A) and B)
F) A) and C)

Question 9

Which of these statements best represents the law of demand?

Accepted Answer

A)   When buyers' tastes for a good increase,they purchase more of the good.
B)   When income levels increase,buyers purchase more of most goods.
C)   When the price of a good decreases,buyers purchase more of the good.
D)   When buyers' demands for a good increase,the price of the good increases.E) All of the above
F) B) and D)

Question 10

When a shortage exists in a market,sellers

Accepted Answer

A)   raise price,which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
B)   raise price,which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
C)   lower price,which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
D)   lower price,which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.E) C) and D)
F) B) and D)

Question 11

When quantity demanded decreases at every possible price,the demand curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted;rather,we have moved along the demand curve to a new point on the same curve.
D)   not shifted;rather,the demand curve has become flatter.E) C) and D)
F) B) and C)

Question 12

Each of the following is a determinant of demand except

Accepted Answer

A)   tastes.
B)   production technology.
C)   expectations.
D)   the prices of related goods.E) A) and D)
F) None of the above

Question 13

For the general population,a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)   1 percent reduction in the quantity demanded of cigarettes.
B)   4 percent reduction in the quantity demanded of cigarettes.
C)   10 percent reduction in the quantity demanded of cigarettes.
D)   12 percent reduction in the quantity demanded of cigarettes.E) C) and D)
F) None of the above

Question 14

A decrease in the price of a good would

Accepted Answer

A)   increase the supply of the good.
B)   increase the quantity demanded of the good.
C)   give producers an incentive to produce more to keep profits from falling.
D)   shift the supply curve for the good to the left.E) A) and B)
F) All of the above

Question 15

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 16

If a good or service has only one seller,then the seller is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 17

Music compact discs are normal goods.What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties,compact disc players become cheaper,more firms start producing music compact discs,and music lovers experience an increase in income?

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 ambiguous.E) C) and D)
F) B) and C)

Question 18

An increase in the price of cotton will increase the equilibrium price and decrease the equilibrium quantity in the market for cotton t-shirts.

Accepted Answer

A) True 
 B)False

Question 19

Sellers respond to a surplus by cutting their prices.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 4: The Market Forces of Supply and Demand

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct Answer
verified

Music compact discs are normal goods.What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties,compact disc players become cheaper,more firms start producing music compact discs,and music lovers experience an increase in income?

Correct Answer
verified

When a shortage exists in a market,sellers

Correct Answer
verified

If a good or service has only one seller,then the seller is called a monopoly.

Correct Answer
verified

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct Answer
verified

Sellers respond to a surplus by cutting their prices.

Correct Answer
verified

An increase in the price of a good will

Correct Answer
verified

Figure 4-3 -Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $10 is

Correct Answer
verified

An increase in the price of cotton will increase the equilibrium price and decrease the equilibrium quantity in the market for cotton t-shirts.

Correct Answer
verified

When quantity demanded decreases at every possible price,the demand curve has

Correct Answer
verified

For the general population,a 10 percent increase in the price of cigarettes leads to a

Correct Answer
verified

A decrease in the price of a good would

Correct Answer
verified

Correct Answer
verified

Figure 4-14 -Refer to Figure 4-14.At a price of

Correct Answer
verified

An increase in the price of a good would

Correct Answer
verified

Table 4-3 -Refer to Table 4-3.Whose demand does not obey the law of demand?

Correct Answer
verified

Each of the following is a determinant of demand except

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of these statements best represents the law of demand?

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct AnswerverifiedShow Answer

Music compact discs are normal goods.What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties,compact disc players become cheaper,more firms start producing music compact discs,and music lovers experience an increase in income?

Correct AnswerverifiedShow Answer

When a shortage exists in a market,sellers

Correct AnswerverifiedShow Answer

If a good or service has only one seller,then the seller is called a monopoly.

Correct AnswerverifiedShow Answer

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct AnswerverifiedShow Answer

Sellers respond to a surplus by cutting their prices.

Correct AnswerverifiedShow Answer

An increase in the price of a good will

Correct AnswerverifiedShow Answer

Figure 4-3 -Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $10 is

Correct AnswerverifiedShow Answer

An increase in the price of cotton will increase the equilibrium price and decrease the equilibrium quantity in the market for cotton t-shirts.

Correct AnswerverifiedShow Answer

When quantity demanded decreases at every possible price,the demand curve has

Correct AnswerverifiedShow Answer

For the general population,a 10 percent increase in the price of cigarettes leads to a

Correct AnswerverifiedShow Answer

A decrease in the price of a good would

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-14 -Refer to Figure 4-14.At a price of

Correct AnswerverifiedShow Answer

An increase in the price of a good would

Correct AnswerverifiedShow Answer

Table 4-3 -Refer to Table 4-3.Whose demand does not obey the law of demand?

Correct AnswerverifiedShow Answer

Each of the following is a determinant of demand except

Correct AnswerverifiedShow Answer

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

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

Which of these statements best represents the law of demand?

Correct AnswerverifiedShow Answer

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