Question 1

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-12
The diagram below pertains to the demand for turkey in the United States. A to DB. B)  from DB to DA. C)  from x to y. D)  from y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-12.All else equal,the approach of Thanksgiving would cause a move

Accepted Answer

A)   from DA to DB.
B)   from DB to DA.
C)   from x to y.
D)   from y to x.E) A) and B)
F) None of the above

Question 3

Public service announcements,mandatory health warnings on cigarette packages,and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Accepted Answer

A) True 
 B)False

Question 4

Demand refers to the amount buyers wish to buy,whereas the quantity demanded refers to the position of the demand curve.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

Figure 4-14
Panel (a) Panel (b)    Panel (c) Panel (d)   
-Refer to Figure 4-14.Which of the four panels illustrates an increase in quantity demanded?

Accepted Answer

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

Question 7

Assume the market for pork is perfectly competitive.When one pork buyer exits the market,

Accepted Answer

A)   the price of pork increases.
B)   the price of pork decreases.
C)   the price of pork does not change.
D)   there is no longer a market for pork.E) A) and B)
F) A) and C)

Question 8

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 9

When quantity demanded exceeds quantity supplied at the current market price,the market has a shortage and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 10

When a shortage exists in a market,sellers

Accepted Answer

A)   raise price,which increases quantity demanded and decreases quantity supplied,until the shortage is eliminated.
B)   raise price,which decreases quantity demanded and increases quantity supplied,until the shortage is eliminated.
C)   lower price,which increases quantity demanded and decreases quantity supplied,until the shortage is eliminated.
D)   lower price,which decreases quantity demanded and increases quantity supplied,until the shortage is eliminated.E) C) and D)
F) B) and C)

Question 11

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Figure 4-8 
-Refer to Figure 4-8.At a price of $35,

Accepted Answer

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

Question 14

At the equilibrium price,quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-11 
-Refer to Figure 4-11.What is the equilibrium price in this market?

Accepted Answer

A)   $0
B)   $5
C)   $7.50
D)   $10E) B) and C)
F) B) and D)

Question 16

If the demand for a product increases,then we would expect

Accepted Answer

A)   equilibrium price to increase and equilibrium quantity to decrease.
B)   equilibrium price to decrease and equilibrium quantity to increase.
C)   equilibrium price and equilibrium quantity both to increase.
D)   equilibrium price and equilibrium quantity both to decrease.E) All of the above
F) C) and D)

Question 17

A rightward shift of a demand curve is called

Accepted Answer

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

Question 18

If a seller in a competitive market chooses to charge more than the going price,then

Accepted Answer

A)   the sellers' profits definitely would increase.
B)   the owners of the raw materials used in production would raise the prices for the raw materials.
C)   other sellers would also raise their prices.
D)   buyers will make purchases from other sellers.E) None of the above
F) B) and D)

Question 19

Monopolists are price takers.

Accepted Answer

A) True 
 B)False

Question 20

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Accepted Answer

A)   encourage marijuana use,and the evidence supports this argument.
B)   encourage marijuana use,but the evidence does not support this argument.
C)   discourage marijuana use,and the evidence supports this argument.
D)   discourage marijuana use,but the evidence does not support this argument.E) A) and B)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

Monopolists are price takers.

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At the equilibrium price,quantity demanded is equal to quantity supplied.

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Public service announcements,mandatory health warnings on cigarette packages,and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

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A rightward shift of a demand curve is called

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If the demand for a product increases,then we would expect

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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 4-11 -Refer to Figure 4-11.What is the equilibrium price in this market?

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All goods and services are sold in perfectly competitive markets.

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Figure 4-12 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-12.All else equal,the approach of Thanksgiving would cause a move

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Demand refers to the amount buyers wish to buy,whereas the quantity demanded refers to the position of the demand curve.

Correct AnswerverifiedShow Answer

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

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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.

Correct AnswerverifiedShow Answer

Assume the market for pork is perfectly competitive.When one pork buyer exits the market,

Correct AnswerverifiedShow Answer

Figure 4-8 -Refer to Figure 4-8.At a price of $35,

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When quantity demanded exceeds quantity supplied at the current market price,the market has a shortage and market price will likely rise in the future to eliminate the shortage.

Correct AnswerverifiedShow Answer

When an increase in the price of one good lowers the demand for another good,the two goods are called complements.

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In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct AnswerverifiedShow Answer

Figure 4-14 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-14.Which of the four panels illustrates an increase in quantity demanded?

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If a seller in a competitive market chooses to charge more than the going price,then

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When a shortage exists in a market,sellers

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