Question 1

Figure 4-2 
-Refer to Figure 4-2.The movement from point A to point B on the graph shows

Accepted Answer

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

Question 2

At the equilibrium price,buyers have bought all they want to buy,but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 3

New oak tables are normal goods.What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

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 ambiguous.E) A) and B)
F) B) and C)

Question 4

An increase in demand is represented by

Accepted Answer

A)   a movement downward and to the right along a demand curve.
B)   a movement upward and to the left along a demand curve.
C)   a rightward shift of a demand curve.
D)   a leftward shift of a demand curve.E) A) and B)
F) None of the above

Question 5

A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 6

Figure 4-11 
-Refer to Figure 4-11.At a price of $12,which of the following is correct?

Accepted Answer

A)   there is a surplus of 1 unit
B)   there is a surplus of 2 units
C)   there is a shortage of 1 unit
D)   there is a shortage of 2 unitsE) A) and B)
F) A) and C)

Question 7

Holding all other things constant,a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) C) and D)
F) A) and B)

Question 8

In any economic system,scarce resources have to be allocated among competing uses.Market economies harness the forces of

Accepted Answer

A)   government to allocate scarce resources.
B)   supply and demand to allocate scarce resources.
C)   credit cards to allocate scarce resources.
D)   nature to allocate scarce resources.E) A) and B)
F) A) and C)

Question 9

Whenever a determinant of demand other than price changes,the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 10

A decrease in the number of sellers in the market causes

Accepted Answer

A)   the supply curve to shift to the left.
B)   the supply curve to shift to the right.
C)   a movement up and to the right along a stationary supply curve.
D)   a movement downward and to the left along a stationary supply curve.E) B) and C)
F) C) and D)

Question 11

When the market price is above the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 12

Figure 4-8 
-Refer to Figure 4-8.At the equilibrium price,

Accepted Answer

A)   200 units would be supplied and demanded.
B)   400 units would be supplied and demanded.
C)   600 units would be supplied and demanded.
D)   600 units would be supplied,but only 200 would be demanded.E) B) and C)
F) A) and D)

Question 13

If the price of a good is low,

Accepted Answer

A)   firms would increase profit by increasing output.
B)   the quantity supplied of the good could be zero.
C)   the supply curve for the good will shift to the left.
D)   firms can and should raise the price of the product.E) A) and C)
F) A) and B)

Question 14

A decrease in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a fixed demand curve.
B)   results in a movement upward and to the left along a fixed demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) B) and C)
F) A) and D)

Question 15

Figure 4-5
Firm A Firm B  
-Refer to Figure 4-5.If these are the only two sellers in the market,then the market quantity supplied at a price of $6 is

Accepted Answer

A)   2 units.
B)   10 units.
C)   12 units.
D)   22 units.E) A) and D)
F) A) and B)

Question 16

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next 6 months.As a result,we can expect the supply of lumber to

Accepted Answer

A)   fall in 6 months,but not now.
B)   increase in 6 months when the price goes up.
C)   fall now.
D)   increase now to meet as much demand as possible.E) B) and C)
F) A) and D)

Question 17

The term price takers refers to buyers and sellers in

Accepted Answer

A)   perfectly competitive markets.
B)   monopolistic markets.
C)   markets that are regulated by the government.
D)   markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.E) None of the above
F) A) and D)

Question 18

Table 4-7
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-7.Suppose x = 1.Then the slope of the market demand curve is

Accepted Answer

A)   -3.
B)   -1/3.
C)   1/3.
D)   3.E) B) and D)
F) A) and C)

Question 19

Figure 4-4
Panel (a) Panel (b)   
-Refer to Figure 4-4.The graphs show the demand for cigarettes.In Panel (b) ,the arrows are consistent with which of the following events?

Accepted Answer

A)   The price of cigarettes increased.
B)   A tax was placed on cigarettes.
C)   The prohibition of cigarette advertisements on television.
D)   Tobacco and marijuana are complements and the price of marijuana decreased.E) A) and C)
F) A) and D)

Question 20

Figure 4-7 
-Refer to Figure 4-7.The movement from S to S' could be caused by

Accepted Answer

A)   an increase in the price of the good.
B)   an improvement in technology.
C)   an increase in income.
D)   an increase in input prices.E) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

An increase in demand is represented by

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Figure 4-2 -Refer to Figure 4-2.The movement from point A to point B on the graph shows

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New oak tables are normal goods.What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises,the price of oak wood rises,more buyers enter the market for oak tables,and the price of wood saws increased?

Correct AnswerverifiedShow Answer

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next 6 months.As a result,we can expect the supply of lumber to

Correct AnswerverifiedShow Answer

A decrease in the number of sellers in the market causes

Correct AnswerverifiedShow Answer

Figure 4-4 Panel (a) Panel (b) -Refer to Figure 4-4.The graphs show the demand for cigarettes.In Panel (b) ,the arrows are consistent with which of the following events?

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Holding all other things constant,a higher price for ski lift tickets would

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In any economic system,scarce resources have to be allocated among competing uses.Market economies harness the forces of

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If the price of a good is low,

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At the equilibrium price,buyers have bought all they want to buy,but sellers have not sold all they want to sell.

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Figure 4-8 -Refer to Figure 4-8.At the equilibrium price,

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Figure 4-5 Firm A Firm B -Refer to Figure 4-5.If these are the only two sellers in the market,then the market quantity supplied at a price of $6 is

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A decrease in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

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Figure 4-11 -Refer to Figure 4-11.At a price of $12,which of the following is correct?

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When the market price is above the equilibrium price,the quantity of the good demanded exceeds the quantity supplied.

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A decrease in quantity demanded

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Table 4-7 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-7.Suppose x = 1.Then the slope of the market demand curve is

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Figure 4-7 -Refer to Figure 4-7.The movement from S to S' could be caused by

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Whenever a determinant of demand other than price changes,the demand curve shifts.

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The term price takers refers to buyers and sellers in

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