Question 1

If sellers expect higher basket prices in the near future, the current

Accepted Answer

A)   supply of baskets will increase.
B)   supply of baskets will decrease.
C)   supply of baskets will be unaffected.
D)   demand for baskets will decrease.E) A) and C)
F) B) and D)

Question 2

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

Accepted Answer

A)   an increase in consumer income
B)   a decrease in consumer income
C)   greater government restrictions on agricultural chemicals
D)   fewer government restrictions on agricultural chemicalsE) A) and C)
F) None of the above

Question 3

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and B)
F) A) and C)

Question 4

Table 4-2 
-Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. If the price is $8, then the market quantity demanded is

Accepted Answer

A)   4 units.
B)   6 units.
C)   24 units.
D)   32 units.E) A) and B)
F) A) and C)

Question 5

The highest form of competition is called

Accepted Answer

A)   absolute competition.
B)   cutthroat competition.
C)   perfect competition.
D)   market competition.E) A) and B)
F) A) and C)

Question 6

Which of the following events would cause the price of oranges to fall?

Accepted Answer

A)   There is a shortage of oranges.
B)   The FDA announces that bananas cause strokes, and oranges and bananas are substitutes.
C)   The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 7

Equilibrium price must decrease when demand

Accepted Answer

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

Question 8

Two goods are substitutes when a decrease in the price of one good

Accepted Answer

A)   decreases the demand for the other good.
B)   decreases the quantity demanded of the other good.
C)   increases the demand for the other good.
D)   increases the quantity demanded of the other good.E) C) and D)
F) A) and B)

Question 9

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n)

Accepted Answer

A)   decrease in demand.
B)   increase in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) C) and D)
F) B) and C)

Question 10

The market supply curve

Accepted Answer

A)   is found by vertically adding the individual supply curves.
B)   slopes downward.
C)   represents the sum of the prices that all the sellers are willing to accept for a given quantity of the good.
D)   represents the sum of the quantities supplied by all the sellers at each price of the good.E) None of the above
F) C) and D)

Question 11

Each of the following is a determinant of demand except

Accepted Answer

A)   tastes.
B)   production technology.
C)   expectations.
D)   the prices of related goods.E) A) and B)
F) A) and C)

Question 12

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

Question 13

Table 4-8 
-Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price decreases from $12 to $9, quantity supplied will

Accepted Answer

A)   decrease by 6 units.
B)   decrease by 12 units.
C)   increase by 6 units.
D)   increase by 12 units.E) A) and B)
F) B) and C)

Question 14

Figure 4-27
Panel (a)  Panel (b)    Panel (c)  Panel (d)   
-Refer to Figure 4-27. Panel (b)  shows which of the following?

Accepted Answer

A)   a decrease in demand and a decrease in quantity supplied
B)   a decrease in demand and a decrease in supply
C)   a decrease in quantity demanded and a decrease in quantity supplied
D)   a decrease in quantity demanded and a decrease in supplyE) None of the above
F) All of the above

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

Figure 4-30 
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Accepted Answer

Equilibrium price de...

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. Also suppose x = 2. Then

Accepted Answer

A)   the slope of Jake's demand curve is ­1/2, and the slope of the market demand curve is ­5/2.
B)   the slope of Jake's demand curve is ­1/2, and the slope of the market demand curve is ­2/5.
C)   the slope of Jake's demand curve is ­2, and the slope of the market demand curve is ­5/2.
D)   the slope of Jake's demand curve is ­2, and the slope of the market demand curve is ­2/5.E) A) and D)
F) A) and C)

Question 19

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

Question 20

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) A) and B)

Exam 4: The Market Forces of Supply and Demand

The highest form of competition is called

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Two goods are substitutes when a decrease in the price of one good

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Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?

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In a market economy,

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

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When we move along a given supply curve,

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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would cause a move from

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The market supply curve

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Equilibrium price must decrease when demand

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Table 4-2 -Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. If the price is $8, then the market quantity demanded is

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Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (b) shows which of the following?

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Each of the following is a determinant of demand except

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Which of the following is an example of a market?

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Table 4-8 -Refer to Table 4-8. Suppose Firm X and Firm Y are the only two sellers in the market. If the market price decreases from $12 to $9, quantity supplied will

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Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n)

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Which of the following events would cause the price of oranges to fall?

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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. Also suppose x = 2. Then

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Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct AnswerverifiedEquilibrium price de...View AnswerShow 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?

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If sellers expect higher basket prices in the near future, the current

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