Question 1

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 the following: • x = 2.
-The current price of a sandwich is $3.00.
-The market quantity supplied of sandwiches is 4.
-The slope of the supply curve is 2.
Then there is currently a

Accepted Answer

A)   shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
B)   shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
C)   surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
D)   surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.E) A) and B)
F) B) and D)

Question 2

The line that relates the price of a good and the quantity demanded of that good is called the demand

Accepted Answer

A)   schedule, and it usually slopes upward.
B)   schedule, and it usually slopes downward.
C)   curve, and it usually slopes upward.
D)   curve, and it usually slopes downward.E) A) and D)
F) None of the above

Question 3

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

A)   increases.
B)   decreases.
C)   remains constant, but we observe a movement downward and to the right along the demand curve.
D)   remains constant, but we observe a movement upward and to the left along the demand curve.E) All of the above
F) B) and D)

Question 4

Which of the following is not an example of a market?

Accepted Answer

A)   A small town has only one seller of electricity.
B)   In the United States, a sick person cannot legally purchase a kidney.
C)   In Florida, there are many buyers and sellers of key lime pie.
D)   The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities.E) B) and C)
F) C) and D)

Question 5

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

Accepted Answer

A)   supply curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
B)   supply curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
C)   demand curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
D)   demand curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.E) C) and D)
F) A) and B)

Question 6

There is no shortage of scarce resources in a market economy because

Accepted Answer

A)   the government makes shortages illegal.
B)   resources are abundant in market economies.
C)   prices adjust to eliminate shortages.
D)   quantity supplied is always greater than quantity demanded in market economies.E) A) and B)
F) A) and C)

Question 7

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

Accepted Answer

A)   increase in price.
B)   decrease in price.
C)   decrease in the price of a substitute good.
D)   increase in income.E) B) and D)
F) C) and D)

Question 8

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 9

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-18 
-Refer to Figure 4-18. At a price of $15, there would be a

Accepted Answer

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

Question 11

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Accepted Answer

A)   decrease.
B)   increase.
C)   be unaffected.
D)   There is insufficient information given to answer the question.E) A) and B)
F) None of the above

Question 13

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

Question 14

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Sellers set the price of the product.
B)   There are many sellers.
C)   Buyers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.E) C) and D)
F) None of the above

Question 15

An increase in supply is represented by a

Accepted Answer

A)   movement downward and to the left along a supply curve.
B)   movement upward and to the right along a supply curve.
C)   rightward shift of a supply curve.
D)   leftward shift of a supply curve.E) C) and D)
F) A) and C)

Question 16

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Accepted Answer

A movement...

Question 17

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

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) All of the above
F) A) and B)

Question 18

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

Question 19

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When leather became more expensive, belt producers decreased their supply of belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.E) B) and C)
F) None of the above

Question 20

The unique point at which the supply and demand curves intersect is called

Accepted Answer

A)   market harmony.
B)   coincidence.
C)   equivalence.
D)   equilibrium.E) B) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Correct Answer
verified
A movement...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

Correct Answer
verified

The line that relates the price of a good and the quantity demanded of that good is called the demand

Correct Answer
verified

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Correct Answer
verified

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Correct Answer
verified

Figure 4-18 -Refer to Figure 4-18. At a price of $15, there would be a

Correct Answer
verified

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Correct Answer
verified

Correct Answer
verified

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Correct Answer
verified

Which of the following is not an example of a market?

Correct Answer
verified

The unique point at which the supply and demand curves intersect is called

Correct Answer
verified

Which of the following is not a characteristic of a perfectly competitive market?

Correct Answer
verified

Which of the following demonstrates the law of supply?

Correct Answer
verified

There is no shortage of scarce resources in a market economy because

Correct Answer
verified

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

Correct Answer
verified

An increase in supply is represented by a

Correct Answer
verified

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Correct AnswerverifiedA movement...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An increase in demand will cause an increase in price, which will cause an increase in quantity supplied.

Correct AnswerverifiedShow Answer

The line that relates the price of a good and the quantity demanded of that good is called the demand

Correct AnswerverifiedShow Answer

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Correct AnswerverifiedShow Answer

A decrease in the price of blueberries will decrease both the equilibrium price and quantity in the market for blueberry muffins.

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $15, there would be a

Correct AnswerverifiedShow Answer

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a market?

Correct AnswerverifiedShow Answer

The unique point at which the supply and demand curves intersect is called

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a perfectly competitive market?

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

There is no shortage of scarce resources in a market economy because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An increase in supply is represented by a

Correct AnswerverifiedShow Answer

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Correct AnswerverifiedShow Answer

Correct Answer
verified
A movement...
View Answer

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