Question 1

The highest form of competition is called

Accepted Answer

A)  arbitrage.
B)  monopolistic competition.
C)  equilibrium.
D)  perfect competition.E) B) and C)
F) C) and D)

Question 2

Figure 4-20 
-Refer to Figure 4-20. If the price is $10, then there would be a

Accepted Answer

A)  shortage of 400 units, and price would rise.
B)  surplus of 400 units, and price would rise.
C)  shortage of 600 units, and price would rise.
D)  surplus of 600 units, and price would rise.E) None of the above
F) A) and B)

Question 3

The demand for a good or service is determined by

Accepted Answer

A)  those who buy the good or service.
B)  the government.
C)  those who sell the good or service.
D)  both those who buy and those who sell the good or service.E) A) and D)
F) A) and B)

Question 4

If buyers and sellers in a certain market are price takers, then individually

Accepted Answer

A)  they have no influence on market price.
B)  they have some influence on market price but that influence is limited.
C)  buyers will be able to find prices lower than those determined in the market.
D)  sellers will find it difficult to sell all they want to sell at the market price.E) None of the above
F) A) and B)

Question 5

Which of the following is the least likely to be a competitive market?

Accepted Answer

A)  ice cream
B)  soybeans
C)  cable television
D)  new housesE) A) and B)
F) None of the above

Question 6

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

Accepted Answer

A)  a shortage, and the price would tend to rise from $35 to a higher price.
B)  a surplus, and the price would tend to rise from $35 to a higher price.
C)  excess demand, and the price would tend to fall from $35 to a lower price.
D)  excess supply, and the price would tend to fall from $35 to a lower price.E) B) and D)
F) None of the above

Question 7

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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 increase, and the equilibrium quantity would decrease.
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and B)
F) A) and C)

Question 8

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 9

Figure 4-18 
-Refer to Figure 4-18. 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) All of the above
F) A) and C)

Question 10

Figure 4-15 
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for butter?

Accepted Answer

A)  a decrease in the price of butter
B)  an increase in the price of margarine
C)  an increase in the price of milk
D)  an improvement in technology that allows firms to use less labor in the production of butterE) All of the above
F) B) and C)

Question 11

Table 4-7 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

Accepted Answer

A)  decreases by 10 gallons.
B)  decreases by 20 gallons.
C)  increases by 10 gallons.
D)  increases by 20 gallons.E) B) and D)
F) None of the above

Question 12

Table 4-7 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $4 is

Accepted Answer

A)  4 gallons.
B)  5 gallons.
C)  20 gallons.
D)  80 gallons.E) A) and D)
F) B) and C)

Question 13

Table 4-16
The following table shows the supply and demand schedules in a market. 
-Refer to Table 4-16. What is the equilibrium price in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 14

In a competitive market, the price of a product

Accepted Answer

A)  is determined by buyers, and the quantity of the product produced is determined by sellers.
B)  is determined by sellers, and the quantity of the product produced is determined by buyers.
C)  and the quantity of the product produced are both determined by sellers.
D)  None of the above is correct.E) A) and C)
F) A) and B)

Question 15

Figure 4-30
​ 
-Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Accepted Answer

Demand shi...

Question 16

Figure 4-27
Panel (a) 
Panel (b)    Panel (c) 
Panel (d)   
-Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) E) All of the above
F) A) and D)

Question 17

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 18

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 19

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for fences of a decrease in the price of wood?

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) None of the above
F) All of the above

Question 20

If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

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If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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

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Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $4 is

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Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply B to Supply A in the market for butter?

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Figure 4-18 -Refer to Figure 4-18. At the equilibrium price,

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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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Figure 4-20 -Refer to Figure 4-20. If the price is $10, then there would be a

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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 fences of a decrease in the price of wood?

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Figure 4-30 ​ -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

Correct AnswerverifiedDemand shi...View AnswerShow Answer

The demand for a good or service is determined by

Correct AnswerverifiedShow Answer

If buyers and sellers in a certain market are price takers, then individually

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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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Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

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The highest form of competition is called

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In a competitive market, the price of a product

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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. What is the equilibrium price in this market?

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Which of the following is the least likely to be a competitive market?

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Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price increases from $4 to $6, the market quantity supplied

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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.

Correct AnswerverifiedShow Answer

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Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curve(s) shift(s) and in which direction?

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Demand shi...
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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.

Correct Answer
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