Question 1

The market demand curve

Accepted Answer

A)   is the sum of all individual demand curves.
B)   is the demand curve for every product in an industry.
C)   shows the average quantity demanded by individual demanders at each price.
D)   is always flatter than an individual demand curve.E) B) and D)
F) None of the above

Question 2

Table 4-8
 
-Refer to Table 4-8.Which space represents an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) None of the above
F) A) and D)

Question 3

If a surplus exists in a market,then we know that the actual price is

Accepted Answer

A)   above the equilibrium price and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price and quantity supplied is greater than quantity demanded.E) All of the above
F) A) and B)

Question 4

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following events will definitely cause equilibrium quantity to fall?

Accepted Answer

A)   demand increases and supply decreases
B)   demand and supply both decrease
C)   demand decreases and supply increases
D)   demand and supply both increaseE) A) and B)
F) B) and D)

Question 6

A market supply curve shows how the total quantity supplied of a good varies as

Accepted Answer

A)   technology varies.
B)   price varies.
C)   input prices vary.
D)   demand varies.E) B) and C)
F) A) and D)

Question 7

Figure 4-9 
-Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A)   $10 and 30.
B)   $10 and 50.
C)   $10 and 70.
D)   $4 and 50.E) C) and D)
F) None of the above

Question 8

When the price of a good is lower than the equilibrium price,

Accepted Answer

A)   a surplus will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity supplied exceeds quantity demanded.E) B) and C)
F) All of the above

Question 9

A very hot summer in Atlanta will cause

Accepted Answer

A)   the demand curve for lemonade to shift to the left.
B)   the demand for air conditioners to decrease.
C)   the demand for jackets to decrease.
D)   a movement downward and to the right along the demand curve for tank tops.E) A) and D)
F) C) and D)

Question 10

A likely example of complementary goods for most people would be

Accepted Answer

A)   butter and margarine.
B)   lawnmowers and automobiles.
C)   chips and salsa.
D)   cola and lemonade.E) B) and D)
F) B) and C)

Question 11

Equilibrium quantity will unambiguously increase when

Accepted Answer

A)   demand increases and supply does not change,when demand does not change and supply increases,and when both demand and supply increase.
B)   demand increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
C)   demand decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply increase.
D)   demand decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.E) All of the above
F) B) and D)

Question 12

A decrease in input costs to firms in a market will result in

Accepted Answer

A)   a decrease in equilibrium price and an increase in equilibrium quantity.
B)   a decrease in equilibrium price and a decrease in equilibrium quantity.
C)   an increase in equilibrium price and a decrease in equilibrium quantity.
D)   an increase in equilibrium price and an increase in equilibrium quantity.E) All of the above
F) A) and C)

Question 13

If Juan expects to earn a higher income next month,he may choose to

Accepted Answer

A)   save more now and spend less of his current income on goods and services.
B)   save less now and spend more of his current income on goods and services.
C)   decrease his current demand for goods and services.
D)   move along his current demand curves for goods and services.E) C) and D)
F) A) and D)

Question 14

Which of the following would increase in response to a decrease in the price of ironing boards?

Accepted Answer

A)   the quantity of irons demanded at each possible price of irons
B)   the equilibrium quantity of irons
C)   the equilibrium price of irons
D)   All of the above are correct.E) A) and B)
F) C) and D)

Question 15

Another term for equilibrium price is

Accepted Answer

A)   dynamic price.
B)   market-clearing price.
C)   quantity-defining price.
D)   balance price.E) A) and D)
F) B) and C)

Question 16

New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

Accepted Answer

A)   Price will rise.
B)   Price will fall.
C)   Price will stay exactly the same.
D)   The price change will be ambiguous.E) A) and B)
F) A) and C)

Question 17

Table 4-4
 
-Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied

Accepted Answer

A)   decreases by 2.5 units.
B)   decreases by 4 units.
C)   decreases by 10 units.
D)   decreases by 50 units.E) All of the above
F) C) and D)

Question 18

You lose your job and,as a result,you buy fewer romance novels.This shows that you consider romance novels to be a(n)

Accepted Answer

A)   luxury good.
B)   inferior good.
C)   normal good.
D)   complementary good.E) B) and D)
F) C) and D)

Question 19

Table 4-2
 
-Refer to Table 4-2.Whose demand does not obey the law of demand?

Accepted Answer

A)   Audrey's
B)   Bob's
C)   Chuck's
D)   Dottie'sE) C) and D)
F) B) and D)

Question 20

Figure 4-1
Consumer 1 Consumer 2  
-Refer to Figure 4-1.If these are the only two consumers in the market,then the market quantity demanded at a price of $6 is

Accepted Answer

A)   12 units.
B)   14 units.
C)   19 units.
D)   21 units.E) A) and B)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

A market supply curve shows how the total quantity supplied of a good varies as

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Equilibrium quantity will unambiguously increase when

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When the price of a good is lower than the equilibrium price,

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The market demand curve

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Table 4-4 -Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $10 to $8,the market quantity supplied

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Another term for equilibrium price is

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Which of the following would increase in response to a decrease in the price of ironing boards?

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Figure 4-1 Consumer 1 Consumer 2 -Refer to Figure 4-1.If these are the only two consumers in the market,then the market quantity demanded at a price of $6 is

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New cars are normal goods.What will happen to the equilibrium price of new cars if the price of gasoline rises,the price of steel falls,public transportation becomes cheaper and more comfortable,auto-workers accept lower wages,and automobile insurance becomes more expensive?

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You lose your job and,as a result,you buy fewer romance novels.This shows that you consider romance novels to be a(n)

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If a surplus exists in a market,then we know that the actual price is

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Figure 4-9 -Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

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Which of the following events will definitely cause equilibrium quantity to fall?

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If Juan expects to earn a higher income next month,he may choose to

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A very hot summer in Atlanta will cause

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A likely example of complementary goods for most people would be

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A decrease in input costs to firms in a market will result in

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Table 4-2 -Refer to Table 4-2.Whose demand does not obey the law of demand?

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Table 4-8 -Refer to Table 4-8.Which space represents an increase in equilibrium quantity and an indeterminate change in equilibrium price?

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An increase in the price of pizza will shift the demand curve for pizza to the left.

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