Question 1

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Accepted Answer

A)   crystal to be unaffected.
B)   crystal to decrease.
C)   crystal to increase.
D)   lead to increase.E) A) and B)
F) C) and D)

Question 2

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)   are in balance.
B)   are the same.
C)   clash.
D)   remain constant.E) A) and B)
F) B) and C)

Question 3

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

Question 4

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Accepted Answer

The demand...

Question 5

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Accepted Answer

A)   The government would provide tax incentives to encourage people to become farmers.
B)   The government would subsidize the production of food.
C)   The prices of food and the wages of farmers would adjust.
D)   There are no mechanisms to remove the shortage.E) B) and D)
F) A) and B)

Question 6

In a competitive market, each seller has limited control over the price of his product because

Accepted Answer

A)   other sellers are offering similar products.
B)   buyers exert more control over the price than do sellers.
C)   these markets are highly regulated by the government.
D)   sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.E) C) and D)
F) A) and C)

Question 7

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium quantity?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 8

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 9

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)   the idea that tobacco and marijuana are substitutes.
B)   the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana.
C)   the idea that lower cigarette prices are associated with less use of marijuana.
D)   most of the available evidence.E) All of the above
F) C) and D)

Question 10

A yard sale is an example of a market.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Accepted Answer

A)   a freeze in Florida
B)   a technological advance that allows oranges to ripen faster
C)   a decrease in the price of apples
D)   an announcement by the FDA that oranges prevent heart diseaseE) A) and B)
F) A) and C)

Question 12

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 13

Figure 4-16 
-Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Accepted Answer

A)   increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live.
B)   newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months.
C)   decrease in the price of lumber.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 14

The market for ice cream is a

Accepted Answer

A)   monopolistic market.
B)   highly competitive market.
C)   highly organized market.
D)   Both b and c are correct.E) A) and C)
F) B) and D)

Question 15

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

A) True 
 B)False

Question 16

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. Assume these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price. If the price is $6 per case, is there a shortage or surplus, and how large is the shortage or surplus?

Accepted Answer

There is a...

Question 17

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

Question 18

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Accepted Answer

A)   Sellers would not be able to produce and sell as much as before at each relevant price.
B)   The supply would decrease.
C)   Buyers would not be willing to buy as much as before at each relevant price.
D)   The equilibrium price would rise.E) B) and D)
F) B) and C)

Question 19

Which of these statements best represents the law of demand?

Accepted Answer

A)   When buyers' tastes for a good increase, they purchase more of the good.
B)   When income levels increase, buyers purchase more of most goods.
C)   When the price of a good decreases, buyers purchase more of the good.
D)   When buyers' demands for a good increase, the price of the good increases.E) A) and B)
F) A) and C)

Question 20

Figure 4-20 
-Refer to Figure 4-20. If the price is $25, then there would be an excess

Accepted Answer

A)   supply of 100 units, and price would fall.
B)   supply of 300 units, and price would fall.
C)   demand of 100 units, and price would fall.
D)   demand of 300 units, and price would fall.E) None of the above
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

A yard sale is an example of a market.

Correct Answer
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Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Correct Answer
verified

The belief that tobacco is a "gateway drug" is consistent with

Correct Answer
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Correct Answer
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There is a...
View Answer

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct Answer
verified

The dictionary defines equilibrium as a situation in which forces

Correct Answer
verified

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

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 4-30 -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 Answer
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Demand shi...
View Answer

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Correct Answer
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Correct Answer
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Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Correct Answer
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The demand...
View Answer

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Correct Answer
verified

The market for ice cream is a

Correct Answer
verified

Which of these statements best represents the law of demand?

Correct Answer
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Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Correct Answer
verified

Figure 4-20 -Refer to Figure 4-20. If the price is $25, then there would be an excess

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

A decrease in income will shift the demand curve for an inferior good to the right.

Correct Answer
verified

In a competitive market, each seller has limited control over the price of his product because

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A yard sale is an example of a market.

Correct AnswerverifiedShow Answer

Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by a(n)

Correct AnswerverifiedShow Answer

The belief that tobacco is a "gateway drug" is consistent with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThere is a...View AnswerShow Answer

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct AnswerverifiedShow Answer

The dictionary defines equilibrium as a situation in which forces

Correct AnswerverifiedShow Answer

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

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 4-30 -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

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B increase or decrease?

Correct AnswerverifiedThe demand...View AnswerShow Answer

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Correct AnswerverifiedShow Answer

The market for ice cream is a

Correct AnswerverifiedShow Answer

Which of these statements best represents the law of demand?

Correct AnswerverifiedShow Answer

Suppose the United States had a short-term shortage of farmers. Which mechanisms would adjust to remove the shortage?

Correct AnswerverifiedShow Answer

Figure 4-20 -Refer to Figure 4-20. If the price is $25, then there would be an excess

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

A decrease in income will shift the demand curve for an inferior good to the right.

Correct AnswerverifiedShow Answer

In a competitive market, each seller has limited control over the price of his product because

Correct AnswerverifiedShow Answer

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There is a...
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Demand shi...
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The demand...
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