Question 1

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) All of the above
F) None of the above

Question 2

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) A) and B)
F) C) and D)

Question 3

If something happens to alter the quantity supplied at any given price, then

Accepted Answer

A)   we move along the supply curve.
B)   the supply curve shifts.
C)   the supply curve becomes steeper.
D)   the supply curve becomes flatter.E) All of the above
F) A) and C)

Question 4

Equilibrium quantity must increase when demand

Accepted Answer

A)   increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.
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 decreases, and when both demand and supply increase.
D)   decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) A) and B)
F) A) and C)

Question 5

New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?

Accepted Answer

A)   Price will fall, and the effect on quantity is ambiguous.
B)   Price will rise, and the effect on quantity is ambiguous.
C)   Quantity will fall, and the effect on price is ambiguous.
D)   Quantity will rise, and the effect on price is ambiguous.E) A) and B)
F) A) and C)

Question 6

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

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) None of the above
F) A) and C)

Question 7

Local cable television companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-7 
-Refer to Figure 4-7. The movement from Da to Db in the market for potato chips could be caused by an)

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

Question 9

The highest form of competition is called

Accepted Answer

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

Question 10

Individual demand curves are summed horizontally to obtain the market demand curve.

Accepted Answer

A) True 
 B)False

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) A) and D)

Question 12

For a market for a good or service to exist, there must be a

Accepted Answer

A)   group of buyers and sellers.
B)   specific time and place at which the good or service is traded.
C)   high degree of organization present.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 13

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Accepted Answer

A) True 
 B)False

Question 14

Assume a market is perfectly competitive. When a new producer enters the market, the

Accepted Answer

A)   price in the market increases.
B)   price in the market decreases.
C)   price in the market does not change.
D)   market is no longer a competitive market.E) None of the above
F) B) and D)

Question 15

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-13. Regarding Harry and Darby, for whom are sandwiches a normal good?

Accepted Answer

A)   only for Harry
B)   only for Darby
C)   for both Harry and Darby
D)   This cannot be determined from the given information.E) B) and D)
F) A) and B)

Question 16

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)   production technology
B)   the price of the good
C)   the prices of inputs
D)   expectationsE) B) and C)
F) B) and D)

Question 17

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are an)

Accepted Answer

A)   luxury good.
B)   inferior good.
C)   normal good.
D)   complementary good.E) B) and C)
F) A) and C)

Question 18

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Accepted Answer

A)   and quantity both decrease.
B)   and quantity both increase.
C)   increases, and the equilibrium quantity decreases.
D)   decreases, and the equilibrium quantity increases.E) B) and C)
F) None of the above

Question 19

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Accepted Answer

A) True 
 B)False

Question 20

Today, producers changed their expectations about the future. This change

Accepted Answer

A)   can cause a movement along a supply curve.
B)   can affect future supply, but not today's supply.
C)   can affect today's supply.
D)   cannot affect either today's supply or future supply.E) C) and D)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

For a market for a good or service to exist, there must be a

Correct Answer
verified

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

Correct Answer
verified

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Correct Answer
verified

Which of the following is not held constant in a supply schedule?

Correct Answer
verified

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

Correct Answer
verified

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Regarding Harry and Darby, for whom are sandwiches a normal good?

Correct Answer
verified

If something happens to alter the quantity supplied at any given price, then

Correct Answer
verified

Today, producers changed their expectations about the future. This change

Correct Answer
verified

Individual demand curves are summed horizontally to obtain the market demand curve.

Correct Answer
verified

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are an)

Correct Answer
verified

Local cable television companies frequently are monopolists.

Correct Answer
verified

Equilibrium quantity must increase when demand

Correct Answer
verified

The highest form of competition is called

Correct Answer
verified

Correct Answer
verified

Assume a market is perfectly competitive. When a new producer enters the market, the

Correct Answer
verified

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Correct Answer
verified

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Correct Answer
verified

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

Correct Answer
verified

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. The movement from Da to Db in the market for potato chips could be caused by an)

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

For a market for a good or service to exist, there must be a

Correct AnswerverifiedShow Answer

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates an increase in quantity supplied?

Correct AnswerverifiedShow Answer

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Correct AnswerverifiedShow Answer

Which of the following is not held constant in a supply schedule?

Correct AnswerverifiedShow Answer

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

Correct AnswerverifiedShow Answer

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Regarding Harry and Darby, for whom are sandwiches a normal good?

Correct AnswerverifiedShow Answer

If something happens to alter the quantity supplied at any given price, then

Correct AnswerverifiedShow Answer

Today, producers changed their expectations about the future. This change

Correct AnswerverifiedShow Answer

Individual demand curves are summed horizontally to obtain the market demand curve.

Correct AnswerverifiedShow Answer

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are an)

Correct AnswerverifiedShow Answer

Local cable television companies frequently are monopolists.

Correct AnswerverifiedShow Answer

Equilibrium quantity must increase when demand

Correct AnswerverifiedShow Answer

The highest form of competition is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assume a market is perfectly competitive. When a new producer enters the market, the

Correct AnswerverifiedShow Answer

Most studies have found that tobacco and marijuana are substitutes rather than complements.

Correct AnswerverifiedShow Answer

If baked potatoes and sour cream are complements, then an increase in the price of sour cream decreases the demand for baked potatoes.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity demanded?

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. The movement from Da to Db in the market for potato chips could be caused by an)

Correct AnswerverifiedShow Answer

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