Question 1

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A)   coalition.
B)   economy.
C)   market.
D)   competition.E) A) and C)
F) B) and C)

Question 2

Table 4-4
 
-Refer to Table 4-4.Which supply schedules obey the law of supply?

Accepted Answer

A)   Firm A's only
B)   Firm B's,Firm C's,and Firm D's only
C)   Firm A's and Firm C's only
D)   Firm B's and Firm D's onlyE) C) and D)
F) None of the above

Question 3

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

Question 4

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

Accepted Answer

A)   falls,the demand for the good rises.
B)   rises,the quantity demanded of the good rises.
C)   rises,the demand for the good falls.
D)   falls,the quantity demanded of the good rises.E) B) and C)
F) None of the above

Question 5

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 6

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 $5.00.
• The market quantity supplied of sandwiches is 10.
• The law of supply applies to the supply of sandwiches.
Then there is a

Accepted Answer

A)   shortage of 5 sandwiches,and the price would be expected to rise from its current level of $5.00.
B)   shortage of 5 sandwiches,and the price would be expected to fall from its current level of $5.00.
C)   surplus of 5 sandwiches,and the price would be expected to rise from its current level of $5.00.
D)   surplus of 5 sandwiches,and the price would be expected to fall from its current level of $5.00.E) A) and D)
F) All of the above

Question 7

If American cheese and cheddar cheese are substitutes,then which of the following would increase the demand for cheddar cheese?

Accepted Answer

A)   a decrease in the price of cheddar cheese
B)   an increase in the price of American cheese
C)   a decrease in the price of American cheese
D)   Both a) and b) are correct.E) A) and B)
F) None of the above

Question 8

A decrease in supply will cause an increase in price,which will cause a decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 9

In competitive markets,

Accepted Answer

A)   firms produce identical products.
B)   buyers can influence the market price more easily than sellers.
C)   markets are more likely to be in equilibrium.
D)   sellers are price setters.E) B) and D)
F) All of the above

Question 10

Equilibrium quantity must decrease when demand

Accepted Answer

A)   increases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.
B)   increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
C)   decreases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
D)   decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.E) None of the above
F) B) and D)

Question 11

When a surplus exists in a market,sellers

Accepted Answer

A)   raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
B)   raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.
C)   lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
D)   lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.E) None of the above
F) A) and B)

Question 12

In a market economy,prices are the signals that guide the allocation of scarce resources.

Accepted Answer

a.b. The equilibrium price (Pe)is $4 and...

Question 13

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-22
 
-Refer to Figure 4-22.Panel (d) shows which of the following?

Accepted Answer

A)   a decrease in demand and a decrease in quantity supplied
B)   a decrease in demand and a decrease in supply
C)   a decrease in quantity demanded and a decrease in quantity supplied
D)   a decrease in quantity demanded and a decrease in supplyE) All of the above
F) B) and D)

Question 15

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 16

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

Accepted Answer

A)   electricity.
B)   soybeans.
C)   coffee shops.
D)   restaurants.E) A) and C)
F) None of the above

Question 17

A demand schedule is a table that shows the relationship between

Accepted Answer

A)   quantity demanded and quantity supplied.
B)   income and quantity demanded.
C)   price and quantity demanded.
D)   price and income.E) None of the above
F) All of the above

Question 18

Surpluses drive price up,while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 19

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies,the equilibrium price for movies will increase,but the effect on the equilibrium quantity of movies is ambiguous.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 4: The Market Forces of Supply and Demand

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

Correct Answer
verified

In a market economy,prices are the signals that guide the allocation of scarce resources.

Correct Answer
verified
a.b. The equilibrium price (Pe)is $4 and...
View Answer

Figure 4-22 -Refer to Figure 4-22.Panel (d) shows which of the following?

Correct Answer
verified

When a surplus exists in a market,sellers

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Surpluses drive price up,while shortages drive price down.

Correct Answer
verified

In competitive markets,

Correct Answer
verified

Correct Answer
verified

A decrease in supply will cause an increase in price,which will cause a decrease in quantity demanded.

Correct Answer
verified

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies,the equilibrium price for movies will increase,but the effect on the equilibrium quantity of movies is ambiguous.

Correct Answer
verified

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.

Correct Answer
verified

A group of buyers and sellers of a particular good or service is called a(n)

Correct Answer
verified

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

Correct Answer
verified

If American cheese and cheddar cheese are substitutes,then which of the following would increase the demand for cheddar cheese?

Correct Answer
verified

Equilibrium quantity must decrease when demand

Correct Answer
verified

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Correct Answer
verified

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Correct Answer
verified

Table 4-4 -Refer to Table 4-4.Which supply schedules obey the law of supply?

Correct Answer
verified

A demand schedule is a table that shows the relationship between

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

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

Correct AnswerverifiedShow Answer

In a market economy,prices are the signals that guide the allocation of scarce resources.

Correct Answerverifieda.b. The equilibrium price (Pe)is $4 and...View AnswerShow Answer

Figure 4-22 -Refer to Figure 4-22.Panel (d) shows which of the following?

Correct AnswerverifiedShow Answer

When a surplus exists in a market,sellers

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Surpluses drive price up,while shortages drive price down.

Correct AnswerverifiedShow Answer

In competitive markets,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A decrease in supply will cause an increase in price,which will cause a decrease in quantity demanded.

Correct AnswerverifiedShow Answer

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies,the equilibrium price for movies will increase,but the effect on the equilibrium quantity of movies is ambiguous.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A group of buyers and sellers of a particular good or service is called a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If American cheese and cheddar cheese are substitutes,then which of the following would increase the demand for cheddar cheese?

Correct AnswerverifiedShow Answer

Equilibrium quantity must decrease when demand

Correct AnswerverifiedShow Answer

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

Correct AnswerverifiedShow Answer

When Mario's income decreases,he buys more pasta.For Mario,pasta is a normal good.

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4.Which supply schedules obey the law of supply?

Correct AnswerverifiedShow Answer

A demand schedule is a table that shows the relationship between

Correct AnswerverifiedShow Answer

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Correct Answer
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a.b. The equilibrium price (Pe)is $4 and...
View Answer

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