Question 1

When we move along a given supply curve,

Accepted Answer

A)   only price is held constant.
B)   technology and price are held constant.
C)   all nonprice determinants of supply are held constant.
D)   all determinants of quantity supplied are held constant.E) None of the above
F) B) and D)

Question 2

Figure 4-17
 
-Refer to Figure 4-17. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)   $15 and 400 units.
B)   $20 and 600 units.
C)   $25 and 500 units.
D)   $25 and 800 units.E) A) and C)
F) A) and B)

Question 3

Figure 4-15
 
-Refer to Figure 4-15. At the equilibrium price,

Accepted Answer

A)   200 units would be supplied and demanded.
B)   400 units would be supplied and demanded.
C)   600 units would be supplied and demanded.
D)   600 units would be supplied, but only 200 would be demanded.E) A) and D)
F) C) and D)

Question 4

A improvement in production technology will shift the

Accepted Answer

A)   supply curve to the right.
B)   supply curve to the left.
C)   demand curve to the right.
D)   demand curve to the left.E) All of the above
F) A) and D)

Question 5

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 6

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
D)   The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.E) All of the above
F) B) and C)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Accepted Answer

A) True 
 B)False

Question 9

Baseballs and baseball bats are substitute goods.

Accepted Answer

A) True 
 B)False

Question 10

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-6
 
-Refer to Figure 4-6. The movement from D' to D in the market for potato chips could be caused by a(n)

Accepted Answer

A)   decrease in the price of potato chips.
B)   decrease in income, assuming that potato chips are a normal good.
C)   announcement by the FDA that potato chips cause cancer.
D)   increase in the price of a pretzels.E) None of the above
F) B) and D)

Question 12

Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?

Accepted Answer

A)   (quantity demanded = 2, price = $1.50) 
B)   (quantity demanded = 4, price = $2.50) 
C)   (quantity demanded = 10, price = $1.00) 
D)   (quantity demanded = 16, price = $2.50) E) C) and D)
F) B) and D)

Question 13

A market includes

Accepted Answer

A)   buyers only.
B)   sellers only.
C)   both buyers and sellers.
D)   the place where transactions occur but not the people involved.E) A) and B)
F) A) and D)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

When supply and demand both increase, equilibrium

Accepted Answer

A)   price will increase.
B)   price will decrease.
C)   quantity may increase, decrease, or remain unchanged.
D)   price may increase, decrease, or remain unchanged.E) B) and C)
F) A) and D)

Question 16

Figure 4-4
 
-Refer to Figure 4-4. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Accepted Answer

A)   an increase in the price of DVDs
B)   a decrease in the price of DVD players
C)   a change in consumer preferences toward watching movies in movie theaters rather than at home
D)   an expectation by buyers that their incomes will increase in the very near futureE) None of the above
F) A) and B)

Question 17

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 18

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

Accepted Answer

A)   price-quantity schedule.
B)   buyer schedule.
C)   demand schedule.
D)   demand curve.E) A) and B)
F) None of the above

Question 19

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Accepted Answer

A)   shift rightward.
B)   shift leftward.
C)   become flatter.
D)   remain unchanged.E) All of the above
F) A) and B)

Question 20

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 C)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

Correct Answer
verified

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Correct Answer
verified

When supply and demand both increase, equilibrium

Correct Answer
verified

Baseballs and baseball bats are substitute goods.

Correct Answer
verified

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

Correct Answer
verified

A market includes

Correct Answer
verified

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

Correct Answer
verified

Figure 4-15 -Refer to Figure 4-15. At the equilibrium price,

Correct Answer
verified

A decrease in the price of a good will

Correct Answer
verified

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

Correct Answer
verified

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Correct Answer
verified

Figure 4-4 -Refer to Figure 4-4. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Correct Answer
verified

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

Correct Answer
verified

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

Correct Answer
verified

Figure 4-6 -Refer to Figure 4-6. The movement from D' to D in the market for potato chips could be caused by a(n)

Correct Answer
verified

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Correct Answer
verified

Figure 4-17 -Refer to Figure 4-17. In this market, equilibrium price and quantity, respectively, are

Correct Answer
verified

A improvement in production technology will shift the

Correct Answer
verified

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Correct Answer
verified

When we move along a given supply curve,

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold.

Correct AnswerverifiedShow Answer

When supply and demand both increase, equilibrium

Correct AnswerverifiedShow Answer

Baseballs and baseball bats are substitute goods.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A market includes

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-15 -Refer to Figure 4-15. At the equilibrium price,

Correct AnswerverifiedShow Answer

A decrease in the price of a good will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Correct AnswerverifiedShow Answer

Figure 4-4 -Refer to Figure 4-4. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Correct AnswerverifiedShow Answer

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

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 4-6 -Refer to Figure 4-6. The movement from D' to D in the market for potato chips could be caused by a(n)

Correct AnswerverifiedShow Answer

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Correct AnswerverifiedShow Answer

Figure 4-17 -Refer to Figure 4-17. In this market, equilibrium price and quantity, respectively, are

Correct AnswerverifiedShow Answer

A improvement in production technology will shift the

Correct AnswerverifiedShow Answer

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Correct AnswerverifiedShow Answer

When we move along a given supply curve,

Correct AnswerverifiedShow Answer

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