Question 1

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Accepted Answer

A)   the dress manufacturer to supply more dresses now than it was supplying previously.
B)   the dress manufacturer to supply fewer dresses now than it was supplying previously.
C)   the demand for this manufacturer's dresses to fall.
D)   no change in the dress manufacturer's current supply;instead,future supply will be affected.E) B) and C)
F) None of the above

Question 2

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Question 3

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Accepted Answer

A)   Beef producers,concerned about the health of their customers,decided to produce relatively less beef.
B)   Government officials,concerned about consumer health,ordered beef producers to produce relatively less beef.
C)   Individual consumers,concerned about their own health,decreased their demand for beef,which lowered the equilibrium price of beef,making it less attractive to produce.
D)   Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.E) All of the above
F) None of the above

Question 4

Once the supply 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) A) and B)
F) All of the above

Question 5

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 6

When we move along a given demand curve,

Accepted Answer

A)   only price is held constant.
B)   income and price are held constant.
C)   all nonprice determinants of demand are held constant.
D)   all determinants of quantity demanded are held constant.E) A) and D)
F) A) and C)

Question 7

In a market economy,

Accepted Answer

A)   supply determines demand and demand,in turn,determines prices.
B)   demand determines supply and supply,in turn,determines prices.
C)   the allocation of scarce resources determines prices and prices,in turn,determine supply and demand.
D)   supply and demand determine prices and prices,in turn,allocate the economy's scarce resources.E) A) and C)
F) C) and D)

Question 8

Funsters,Inc. ,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor,Toysorama,is mass-producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

Accepted Answer

A)   "fight fire with fire" by decreasing supply of its doll for 6 weeks and then increasing the supply.
B)   increase the supply of their doll now before the other doll hits the market.
C)   increase the price of their doll now.
D)   discontinue their doll.E) B) and C)
F) All of the above

Question 9

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Accepted Answer

A)   an increase in the price of wool shirts and a decrease in the price of raw cotton
B)   a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)   an increase in the price of wool shirts and an increase in the price of raw cotton
D)   a decrease in the price of wool shirts and an increase in the price of raw cottonE) A) and B)
F) All of the above

Question 10

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 11

The market demand curve

Accepted Answer

A)   is found by vertically adding the individual demand curves.
B)   slopes upward.
C)   represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.
D)   represents the sum of the quantities demanded by all the buyers at each price of the good.E) A) and B)
F) C) and D)

Question 12

Figure 4-12
The diagram below pertains to the demand for turkey in the United States. A to DB. B)  from DB to DA. C)  from x to y. D)  from y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-12.All else equal,a decrease in the price of the grain fed to turkeys would cause a move

Accepted Answer

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

Question 13

Suppose that a decrease in the price of good X results in fewer units of good Y being sold.This implies that X and Y are

Accepted Answer

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

Question 14

A newspaper's classified ads are an example of a market.

Accepted Answer

A) True 
 B)False

Question 15

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December,and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Accepted Answer

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

Question 16

Which of the following is not a reason perfect competition is a useful simplification,despite the diversity of market types we find in the world?

Accepted Answer

A)   Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)   Some degree of competition is present in most markets.
C)   There are many buyers and many sellers in all types of markets.
D)   Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) B) and C)
F) A) and D)

Question 17

If a good is normal,then an increase in income will result in

Accepted Answer

A)   an increase in the demand for the good.
B)   a decrease in the demand for the good.
C)   a movement down and to the right along the demand curve for the good.
D)   a movement up and to the left along the demand curve for the good.E) B) and C)
F) None of the above

Question 18

A higher price for bagels would result in a(n)

Accepted Answer

A)   increase in the demand for bagels.
B)   decrease in the demand for bagels.
C)   increase in the demand for muffins.
D)   decrease in the demand for muffins.E) A) and B)
F) B) and C)

Question 19

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

Accepted Answer

A)   demand schedule,and it usually slopes upward.
B)   demand schedule,and it usually slopes downward.
C)   demand curve,and it usually slopes upward.
D)   demand curve,and it usually slopes downward.E) A) and B)
F) C) and D)

Question 20

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)   an increase in the price of mp3 players
B)   a decrease in the number of sellers of mp3 players
C)   an increase in the price of plastic,an input into the production of mp3 players
D)   an improvement in the technology used to produce mp3 playersE) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

The market demand curve

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A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

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Figure 4-12 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-12.All else equal,a decrease in the price of the grain fed to turkeys would cause a move

Correct AnswerverifiedShow Answer

A newspaper's classified ads are an example of a market.

Correct AnswerverifiedShow Answer

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Correct AnswerverifiedShow Answer

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A higher price for bagels would result in a(n)

Correct AnswerverifiedShow Answer

Funsters,Inc. ,the largest toy company in the country,sells its most popular doll for $15.It has just learned that its leading competitor,Toysorama,is mass-producing an excellent copy and plans to flood the market with their $5 doll in 6 weeks.Funsters should

Correct AnswerverifiedShow Answer

If a good is normal,then an increase in income will result in

Correct AnswerverifiedShow Answer

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December,and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Correct AnswerverifiedShow Answer

Which of the following is not a reason perfect competition is a useful simplification,despite the diversity of market types we find in the world?

Correct AnswerverifiedShow Answer

In a market economy,

Correct AnswerverifiedShow Answer

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of good X results in fewer units of good Y being sold.This implies that X and Y are

Correct AnswerverifiedShow Answer

A yard sale is an example of a market.

Correct AnswerverifiedShow Answer

A reduction in an input price will cause a change in quantity supplied,but not a change in supply.

Correct AnswerverifiedShow Answer

When we move along a given demand curve,

Correct AnswerverifiedShow Answer

Which of the following would not shift the supply curve for mp3 players?

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