Question 1

The demand for a good or service is determined by

Accepted Answer

A)   those who buy the good or service.
B)   the government.
C)   those who sell the good or service.
D)   both those who buy and those who sell the good or service.E) All of the above
F) B) and D)

Question 2

Table 4-16
The following table shows the supply and demand schedules in a market. 
-Refer to Table 4-16. What is the equilibrium price in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 3

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

Accepted Answer

A)   a decrease in the price of golf balls
B)   an increase in the price of green fees
C)   an expectation by buyers that their incomes will increase in the very near future
D)   a change in consumer tastes away from golf and toward tennisE) All of the above
F) C) and D)

Question 4

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Accepted Answer

A)   hair gel to increase.
B)   razors to increase.
C)   combs to increase.
D)   shampoo to increase.E) A) and C)
F) A) and D)

Question 5

Figure 4-27
Panel (a)  Panel (b)    Panel (c)  Panel (d)   
-Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) All of the above
F) A) and B)

Question 6

In a perfectly competitive market, at the market price, buyers

Accepted Answer

A)   cannot buy all they want, and sellers cannot sell all they want.
B)   cannot buy all they want, but sellers can sell all they want.
C)   can buy all they want, but sellers cannot sell all they want.
D)   can buy all they want, and sellers can sell all they want.E) A) and D)
F) None of the above

Question 7

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 8

If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Accepted Answer

The equilibrium pric...

Question 9

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

Accepted Answer

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

Question 10

Figure 4-21 
-Refer to Figure 4-21. At a price of $4, there is a

Accepted Answer

A)   surplus of 1 unit.
B)   surplus of 3 units.
C)   shortage of 1 unit.
D)   shortage of 3 units.E) A) and C)
F) All of the above

Question 11

Table 4-6 
-Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Accepted Answer

A)   3 units.
B)   11 units.
C)   25 units.
D)   44 units.E) B) and D)
F) A) and D)

Question 12

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

Accepted Answer

A)   equilibrium.
B)   the law of demand.
C)   the relationship between supply and demand.
D)   the definition of an inferior good.E) C) and D)
F) B) and C)

Question 13

Kara receives a promotion at work, which increases her income. We would expect Kara's demand for

Accepted Answer

A)   each good she purchases to remain unchanged.
B)   normal goods to decrease.
C)   substitute goods to increase.
D)   inferior goods to decrease.E) A) and B)
F) A) and C)

Question 14

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to 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 C)
F) B) and C)

Question 15

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

Question 16

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Accepted Answer

A)   production technology
B)   expectations
C)   input prices
D)   the number of sellersE) A) and B)
F) A) and C)

Question 17

Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool weather would cause

Accepted Answer

A)   both the equilibrium price and quantity to decrease.
B)   both the equilibrium price and quantity to increase.
C)   the equilibrium price to increase and the equilibrium quantity to decrease.
D)   the equilibrium price to decrease and the equilibrium quantity to increase.E) B) and D)
F) None of the above

Question 18

If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip?

Accepted Answer

A)   a decrease in the price of Miracle Whip
B)   an increase in the price of mayonnaise
C)   a decrease in the price of mayonnaise
D)   Both a and b are correct.E) B) and D)
F) B) and C)

Question 19

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Accepted Answer

A)   a movement along D2 from point A to point B
B)   a movement along D2 from point B to point A
C)   a shift from D1 to D2
D)   a shift from D2 to D1E) B) and D)
F) A) and D)

Question 20

Which of these statements does not apply to market economies?

Accepted Answer

A)   Prices prevent decentralized decision making from degenerating into chaos.
B)   Prices coordinate the actions of millions of people with varying abilities and desires.
C)   Prices ensure that anyone who wants a product can get it.
D)   Prices ensure that what needs to get done does in fact get done.E) A) and D)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

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Figure 4-21 -Refer to Figure 4-21. At a price of $4, there is a

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

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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. What is the equilibrium price in this market?

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If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip?

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Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool weather would cause

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The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

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

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In a perfectly competitive market, at the market price, buyers

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Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

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Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

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Kara receives a promotion at work, which increases her income. We would expect Kara's demand for

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Which of these statements does not apply to market economies?

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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, a decrease in the price of the grain fed to turkeys would cause a move from

Correct AnswerverifiedShow Answer

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

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

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Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

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Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

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If the supply of pencils, a substitute for pens, increases, what will happen to the equilibrium price of pencils and to the equilibrium price of pens?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

The demand for a good or service is determined by

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The equilibrium pric...
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