Question 1

A dress manufacturer is expecting higher prices for dresses in the near future. What would we expect?

Accepted Answer

A)   the dress manufacturer to supply more dresses now
B)   the dress manufacturer to supply fewer dresses now
C)   the demand for this manufacturer's dresses to fall
D)   no change in the dress manufacturer's current supplyE) B) and C)
F) A) and D)

Question 2

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Accepted Answer

A)   complementary goods
B)   normal goods
C)   inferior goods
D)   substitute goodsE) A) and B)
F) None of the above

Question 3

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

In a competitive market, why does each seller have limited control over the price of his product?

Accepted Answer

A)   Other sellers are offering similar products.
B)   In competitive markets, buyers have more influence over price than sellers.
C)   The products sold in competitive markets are generally in abundant supply.
D)   Sellers in competitive markets prefer to meet and set a price where profits will be realized.E) A) and B)
F) All of the above

Question 5

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Accepted Answer

A)   a shortage of 30
B)   a surplus of 30
C)   a surplus of 20
D)   a shortage of 20E) B) and D)
F) B) and C)

Question 6

Figure 4-4 
-Refer to the Figure 4-4. If the price is $25, what would happen?

Accepted Answer

A)   There would be a surplus of 300 and the price would fall.
B)   There would be a surplus of 200 and the price would fall.
C)   There would be a shortage of 200 and the price would rise.
D)   There would be a shortage of 300 and the price would rise.E) A) and D)
F) B) and D)

Question 7

Why do markets move toward equilibrium of supply and demand?

Accepted Answer

A)   because of the actions of buyers and sellers
B)   because of government regulations placed on market participants
C)   because of increased competition among sellers
D)   because of buyers' ability to affect market decisionsE) A) and C)
F) A) and B)

Question 8

Figure 4-10 
-Refer to the Figure 4-10. What is the movement from point A to point B on the graph called?

Accepted Answer

A)   a decrease in supply
B)   an increase in supply
C)   an increase in the quantity supplied
D)   a decrease in the quantity suppliedE) C) and D)
F) A) and D)

Question 9

Figure 4-2 
-Refer to the Figure 4-2. What would happen at a price of $35?

Accepted Answer

A)   There would be a shortage of 200 units.
B)   There would be a shortage of 400 units.
C)   There would be a surplus of 200 units.
D)   There would be a surplus of 400 units.E) A) and B)
F) B) and D)

Question 10

Market demand is given as Qd = 400 - 2P. Market supply is given as Qs = 3P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

Accepted Answer

A)   Price will be $1 and quantity will be 500.
B)   Price will be $30 and quantity will be 140.
C)   Price will be $60 and quantity will be 280.
D)   Price will be $100 and quantity will be 200.E) None of the above
F) B) and C)

Question 11

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 12

If a decrease in income increases the demand for a good, what is the good called?

Accepted Answer

A)   a substitute good
B)   a complementary good
C)   a normal good
D)   an inferior goodE) A) and D)
F) A) and C)

Question 13

What could be one result of a cold snap in Florida?

Accepted Answer

A)   an increase in farm machinery prices
B)   an increase in the price of diesel fuel used in farming
C)   an increase in migrant farm workers' wages
D)   an increase in the price of orangesE) A) and B)
F) B) and D)

Question 14

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year, what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

Accepted Answer

A)   It would rise.
B)   It would fall.
C)   It would stay the same.
D)   It could either rise or fall.E) B) and C)
F) A) and C)

Question 15

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

Accepted Answer

A)   a shortage of 100
B)   a surplus of 100
C)   a surplus of 125
D)   a shortage of 125E) A) and D)
F) A) and C)

Question 16

Refer to the following:
A. What is the difference between a "change in supply" and a "change in quantity supplied"? (Graph your answer).
B. For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply.
a. a change in the resource cost
b. a change in producer expectations
c. a change in price
d. a change in technology
e. a change in the number of sellers

Accepted Answer

A. A change in supply refers to a shift ...

Question 17

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

Accepted Answer

A)   price will fall and the effect on quantity is ambiguous
B)   price will rise and the effect on quantity is ambiguous
C)   quantity will fall and the effect on price is ambiguous
D)   quantity will rise and the effect on price is ambiguousE) A) and B)
F) B) and D)

Question 18

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?

Accepted Answer

A)   The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)   The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.E) B) and C)
F) A) and D)

Question 19

What will happen if the price of a good is low?

Accepted Answer

A)   Firms would increase profit by increasing output.
B)   Quantity supplied could be zero.
C)   The supply curve for the good will shift to the left.
D)   Firms should raise the price of the product.E) None of the above
F) A) and B)

Question 20

How is a market supply curve constructed?

Accepted Answer

A)   by vertically summing individual supply curves
B)   by horizontally summing individual supply curves
C)   by finding the average quantity supplied of the market's individual supply curves
D)   by summing a consumer's demands for all goodsE) A) and B)
F) All of the above

Exam 4: The Market Forces of Supply and Demand

What will happen if the price of a good is low?

Correct Answer
verified

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Correct Answer
verified

Figure 4-4 -Refer to the Figure 4-4. If the price is $25, what would happen?

Correct Answer
verified

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Correct Answer
verified

How is a market supply curve constructed?

Correct Answer
verified

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?

Correct Answer
verified

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

Correct Answer
verified

Figure 4-10 -Refer to the Figure 4-10. What is the movement from point A to point B on the graph called?

Correct Answer
verified

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

Correct Answer
verified

In a competitive market, why does each seller have limited control over the price of his product?

Correct Answer
verified

A dress manufacturer is expecting higher prices for dresses in the near future. What would we expect?

Correct Answer
verified

What could be one result of a cold snap in Florida?

Correct Answer
verified

Correct Answer
verified
A. A change in supply refers to a shift ...
View Answer

Why do markets move toward equilibrium of supply and demand?

Correct Answer
verified

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

Correct Answer
verified

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct Answer
verified

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year, what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

Correct Answer
verified

Market demand is given as Qd = 400 - 2P. Market supply is given as Qs = 3P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

Correct Answer
verified

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

Correct Answer
verified

If a decrease in income increases the demand for a good, what is the good called?

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

What will happen if the price of a good is low?

Correct AnswerverifiedShow Answer

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Correct AnswerverifiedShow Answer

Figure 4-4 -Refer to the Figure 4-4. If the price is $25, what would happen?

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Correct AnswerverifiedShow Answer

How is a market supply curve constructed?

Correct AnswerverifiedShow Answer

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?

Correct AnswerverifiedShow Answer

Smart phones are normal goods. What will happen to the equilibrium price and quantity of smart phones if phone plans become more expensive, fewer firms produce smart phones, and smart phone users experience a decrease in income?

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to the Figure 4-10. What is the movement from point A to point B on the graph called?

Correct AnswerverifiedShow Answer

A supply curve slopes upward because, all else equal, a higher price means a greater quantity supplied.

Correct AnswerverifiedShow Answer

In a competitive market, why does each seller have limited control over the price of his product?

Correct AnswerverifiedShow Answer

A dress manufacturer is expecting higher prices for dresses in the near future. What would we expect?

Correct AnswerverifiedShow Answer

What could be one result of a cold snap in Florida?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA. A change in supply refers to a shift ...View AnswerShow Answer

Why do markets move toward equilibrium of supply and demand?

Correct AnswerverifiedShow Answer

Market demand is given as Qd = 300 - 0.5P. Market supply is given as Qs = 50 + 2P. What would result if the market price were $50?

Correct AnswerverifiedShow Answer

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct AnswerverifiedShow Answer

If 50-inch flat screen TVs became cheaper and buyers expected Netflix subscription prices to fall next year, what could we safely conclude would happen to the equilibrium price of a new Netflix subscription?

Correct AnswerverifiedShow Answer

Market demand is given as Qd = 400 - 2P. Market supply is given as Qs = 3P + 100. In a perfectly competitive equilibrium, what will be price and quantity?

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $35?

Correct AnswerverifiedShow Answer

If a decrease in income increases the demand for a good, what is the good called?

Correct AnswerverifiedShow Answer

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Correct Answer
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A. A change in supply refers to a shift ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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