Question 1

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) A) and B)
F) A) and C)

Question 2

Figure 4-19 
-Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Accepted Answer

A)  demand predicts that the price will rise by $2 to eliminate the shortage.
B)  supply predicts that the price will rise by $2 to eliminate the shortage.
C)  supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)  supply and demand predicts that the price will fall by $2 to eliminate the shortage.E) None of the above
F) All of the above

Question 3

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 4

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Accepted Answer

A) True 
 B)False

Question 5

A leftward shift of a supply curve is called a(n)

Accepted Answer

A)  increase in supply.
B)  decrease in supply.
C)  decrease in quantity supplied.
D)  increase in quantity supplied.E) C) and D)
F) A) and D)

Question 6

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 7

Which of the following is an example of a market?

Accepted Answer

A)  a gas station
B)  a garage sale
C)  a barber shop
D)  All of the above are examples of markets.E) A) and B)
F) A) and C)

Question 8

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' could be caused by an

Accepted Answer

A)  increase in the price of the good.
B)  improvement in production technology.
C)  increase in income.
D)  increase in input prices.E) B) and C)
F) All of the above

Question 9

You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Accepted Answer

A)  will increase but not until the end of the year.
B)  increases today.
C)  decreases as you look for a substitute good.
D)  shifts left today.E) A) and B)
F) A) and C)

Question 10

In a market economy, supply and demand are important because they

Accepted Answer

A)  play a critical role in the allocation of the economy's scarce resources.
B)  determine how much of each good gets produced.
C)  can be used to predict the impact on the economy of various events and policies.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 11

Figure 4-4
Yasmine
Mercedes  
-Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

Accepted Answer

A)  3 units.
B)  6 units.
C)  9 units.
D)  12 units.E) B) and C)
F) B) and D)

Question 12

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

Question 13

Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)  None of the above is correct.E) B) and C)
F) B) and D)

Question 14

A university's football stadium is never more than half-full during football games. This indicates

Accepted Answer

A)  the ticket price is above the equilibrium price.
B)  the ticket price is below the equilibrium price.
C)  the ticket price is at the equilibrium price.
D)  nothing about the equilibrium price.E) All of the above
F) C) and D)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs)  at each price of SUPs, then

Accepted Answer

A)  we will observe a movement downward and to the right along the demand curve for SUPs.
B)  we will observe a movement upward and to the left along the demand curve for SUPs.
C)  the demand curve for SUPs will shift to the right.
D)  the demand curve for SUPs will shift to the left.E) B) and C)
F) A) and D)

Question 17

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) None of the above

Question 18

Table 4-13
The demand schedule below pertains to sandwiches demanded per week. 
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

Accepted Answer

A)  less than or equal to 5.
B)  greater than or equal to 5.
C)  greater than or equal to 7.
D)  greater than or equal to 10.E) None of the above
F) A) and D)

Question 19

Figure 4-18 
-Refer to Figure 4-18. At a price of $35, there would be a

Accepted Answer

A)  shortage of 400 units.
B)  surplus of 200 units.
C)  surplus of 400 units.
D)  surplus of 600 units.E) A) and C)
F) B) and D)

Question 20

Table 4-9 
-Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) A) and D)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, the value of x must be

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If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

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A leftward shift of a supply curve is called a(n)

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If buyers today become more willing and able than before to purchase larger quantities of stand up paddle boards (SUPs) at each price of SUPs, then

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

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Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be a

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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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Figure 4-16 -Refer to Figure 4-16. The shift from S to S' could be caused by an

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In a market economy,

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Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for swimming lessons of an increase in the incomes of parents with school-aged children?

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A university's football stadium is never more than half-full during football games. This indicates

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You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter

Correct AnswerverifiedShow Answer

Figure 4-19 -Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Correct AnswerverifiedShow Answer

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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A decrease in the price of a good will

Correct AnswerverifiedShow Answer

In a market economy, supply and demand are important because they

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Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

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Which of the following is an example of a market?

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Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?

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Figure 4-4 Yasmine Mercedes -Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

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