Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-31
Consider the market for 2-packs of light bulbs below. 
-Refer to Figure 4-31. At a price of $3, is there a shortage or surplus, and how large is the shortage/surplus?

Accepted Answer

There is a...

Question 3

Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

Accepted Answer

The answer of Since individual buyers and individual sellers in...

Question 4

A surplus exists in a market if

Accepted Answer

A)   there is an excess demand for the good.
B)   quantity demanded exceeds quantity supplied.
C)   the current price is above its equilibrium price.
D)   All of the above are correct.E) B) and D)
F) A) and B)

Question 5

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Accepted Answer

The answer of Figure 4-28 
-Refer to Figure 4-28. Using...

Question 6

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.E) B) and D)
F) A) and D)

Question 7

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 $8 is

Accepted Answer

A)   14 units.
B)   15 units.
C)   16 units.
D)   29 units.E) A) and D)
F) B) and C)

Question 8

Figure 4-3
Consumer 1 Consumer 2
  
-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) None of the above
F) All of the above

Question 9

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)   a shortage will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity demanded exceeds quantity supplied.E) A) and B)
F) All of the above

Question 10

Table 4-2
 
-Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. If the price is $8, then the market quantity demanded is

Accepted Answer

A)   4 units.
B)   6 units.
C)   24 units.
D)   32 units.E) All of the above
F) A) and C)

Question 11

The law of supply states that, other things equal, when the price of a good

Accepted Answer

A)   falls, the supply of the good rises.
B)   rises, the quantity supplied of the good rises.
C)   rises, the supply of the good falls.
D)   falls, the quantity supplied of the good rises.E) B) and C)
F) A) and C)

Question 12

Table 4-6
 
-Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A)   4 units.
B)   7.5 units.
C)   10 units.
D)   30 units.E) A) and D)
F) None of the above

Question 13

An example of a perfectly competitive market would be the market for

Accepted Answer

A)   electricity.
B)   soybeans.
C)   coffee shops.
D)   restaurants.E) All of the above
F) C) and D)

Question 14

Which of the following might cause the supply curve for an inferior good to shift to the right?

Accepted Answer

A)   an increase in input prices
B)   a decrease in consumer income
C)   an improvement in production technology that makes production of the good more profitable
D)   a decrease in the number of sellers in the marketE) A) and C)
F) A) and D)

Question 15

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Accepted Answer

A)   Price would fall, and the effect on quantity would be ambiguous.
B)   Price would rise, and the effect on quantity would be ambiguous.
C)   Quantity would fall, and the effect on price would be ambiguous.
D)   Quantity would rise, and the effect on price would be ambiguous.E) A) and C)
F) None of the above

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Figure 4-11 
-Refer to Figure 4-11. The movement from point A to point B on the graph is caused by

Accepted Answer

A)   a decrease in the price of the good.
B)   an increase in the price of the good.
C)   an advance in production technology.
D)   a decrease in input prices.E) A) and D)
F) All of the above

Question 18

In a given market, how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)   There is no relationship.
B)   They are the same price.
C)   The market-clearing price exceeds the equilibrium price.
D)   The equilibrium price exceeds the market-clearing price.E) B) and C)
F) A) and B)

Question 19

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 20

A market's equilibrium is the point at which the supply and demand curves intersect.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

A market's equilibrium is the point at which the supply and demand curves intersect.

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In a given market, how are the equilibrium price and the market-clearing price related?

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Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. At a price of $3, is there a shortage or surplus, and how large is the shortage/surplus?

Correct AnswerverifiedThere is a...View AnswerShow Answer

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

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When the price of a good is higher than the equilibrium price,

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Figure 4-3 Consumer 1 Consumer 2 -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

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Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

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Table 4-2 -Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. If the price is $8, then the market quantity demanded is

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A surplus exists in a market if

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Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph is caused by

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

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The law of supply states that, other things equal, when the price of a good

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

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What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

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An example of a perfectly competitive market would be the market for

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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 $8 is

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Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

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Which of the following might cause the supply curve for an inferior good to shift to the right?

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When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

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Which of the following demonstrates the law of supply?

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There is a...
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