Question 1

If the supply of a product decreases, 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 to both increase.
D)   and equilibrium quantity to both decrease.E) B) and C)
F) A) and B)

Question 2

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph shows an)

Accepted Answer

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

Question 3

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, if the size of the shift of the demand curve is larger than the size of the shift of the supply curve, then the equilibrium quantity rises.

Accepted Answer

A) True 
 B)False

Question 4

Today, people changed their expectations about the future. This change

Accepted Answer

A)   can cause a movement along a demand curve.
B)   can affect future demand but not today's demand.
C)   can affect today's demand.
D)   cannot affect either today's demand or future demand.E) C) and D)
F) B) and D)

Question 5

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

Accepted Answer

A) True 
 B)False

Question 6

Economists normally

Accepted Answer

A)   do not try to explain people's tastes, but they do try to explain what happens when tastes change.
B)   believe that they must be able to explain people's tastes in order to explain what happens when tastes change.
C)   do not believe that people's tastes determine demand, so they ignore the subject of tastes.
D)   incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.E) C) and D)
F) All of the above

Question 7

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and D)
F) B) and C)

Question 9

A market includes

Accepted Answer

A)   buyers only.
B)   sellers only.
C)   both buyers and sellers.
D)   the place where transactions occur but not the people involved.E) A) and D)
F) B) and C)

Question 10

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Accepted Answer

A) True 
 B)False

Question 11

Table 4-3
 
-Refer to Table 4-3. For whom is the good a normal good?

Accepted Answer

A)   Bert only
B)   Grover only
C)   Bert, Ernie, Grover, and Oscar
D)   This cannot be determined from the table.E) C) and D)
F) A) and D)

Question 12

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
 
-Refer to Table 4-15. If all four suppliers operate in this market, what is the market quantity supplied when the price is $6.00 per case?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 13

In a market, to find the total amount supplied at a particular price, we must

Accepted Answer

A)   sum the quantities that individual firms are willing and able to supply at that price.
B)   calculate the average of the quantities that individual firms are willing and able to supply at that price.
C)   sum the costs that individual firms incur to supply the product at that price.
D)   account for all determinants of demand.E) All of the above
F) None of the above

Question 14

A higher price for batteries would result in an)

Accepted Answer

A)   increase in the demand for flashlights.
B)   decrease in the demand for flashlights.
C)   increase in the demand for batteries.
D)   decrease in the demand for batteries.E) None of the above
F) All of the above

Question 15

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices.
 
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Accepted Answer

The answer of Table 4-14
The table below shows the quantities...

Question 16

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
D)   The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.E) B) and C)
F) B) and D)

Question 17

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Accepted Answer

The answer of Figure 4-28 
-Refer to Figure 4-28. Using...

Question 18

Figure 4-19 
-Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Accepted Answer

A)   demand predicts that the price will rise by $2 to eliminate the shortage.
B)   supply predicts that the price will rise by $2 to eliminate the shortage.
C)   supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)   supply and demand predicts that the price will fall by $2 to eliminate the shortage.E) None of the above
F) All of the above

Question 19

Assume Leo buys coffee beans in a competitive market. It follows that

Accepted Answer

A)   Leo has a limited number of sellers from which to buy coffee beans.
B)   Leo will negotiate with sellers whenever he buys coffee beans.
C)   Leo cannot influence the price of coffee beans even if he buys a large quantity of them.
D)   None of the above is correct.E) A) and B)
F) B) and D)

Question 20

Figure 4-16 
-Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by an)

Accepted Answer

A)   increase in the price of apartments which are a substitute for single-family houses for many people looking for a place to live.
B)   newly-formed expectation by house-builders that prices of houses will increase significantly in the next six months.
C)   decrease in the price of lumber.
D)   All of the above are correct.E) A) and D)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

Table 4-14 The table below shows the quantities demanded of milk per month by four families at various prices. -Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Correct Answer
verified

Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by an)

Correct Answer
verified

Economists normally

Correct Answer
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Correct Answer
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If the supply of a product decreases, then we would expect equilibrium price

Correct Answer
verified

Today, people changed their expectations about the future. This change

Correct Answer
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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, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct Answer
verified

Assume Leo buys coffee beans in a competitive market. It follows that

Correct Answer
verified

Figure 4-19 -Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Correct Answer
verified

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Correct Answer
verified

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

Correct Answer
verified

In a market, to find the total amount supplied at a particular price, we must

Correct Answer
verified

A market includes

Correct Answer
verified

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct Answer
verified

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Correct Answer
verified

In a perfectly competitive market, buyers and sellers are price setters.

Correct Answer
verified

Table 4-15 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-15. If all four suppliers operate in this market, what is the market quantity supplied when the price is $6.00 per case?

Correct Answer
verified

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows an)

Correct Answer
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A higher price for batteries would result in an)

Correct Answer
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Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

Correct Answer
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Exam 4: The Market Forces of Supply and Demand

Table 4-14 The table below shows the quantities demanded of milk per month by four families at various prices. -Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Correct AnswerverifiedShow Answer

Figure 4-16 -Refer to Figure 4-16. If the supply curves that are drawn represent supply curves for single-family residential houses, then the movement from S to S' could be caused by an)

Correct AnswerverifiedShow Answer

Economists normally

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the supply of a product decreases, then we would expect equilibrium price

Correct AnswerverifiedShow Answer

Today, people changed their expectations about the future. This change

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct AnswerverifiedShow Answer

Assume Leo buys coffee beans in a competitive market. It follows that

Correct AnswerverifiedShow Answer

Figure 4-19 -Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?

Correct AnswerverifiedShow Answer

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls.

Correct AnswerverifiedShow Answer

In a market, to find the total amount supplied at a particular price, we must

Correct AnswerverifiedShow Answer

A market includes

Correct AnswerverifiedShow Answer

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct AnswerverifiedShow Answer

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Correct AnswerverifiedShow Answer

In a perfectly competitive market, buyers and sellers are price setters.

Correct AnswerverifiedShow Answer

Table 4-15 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-15. If all four suppliers operate in this market, what is the market quantity supplied when the price is $6.00 per case?

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows an)

Correct AnswerverifiedShow Answer

A higher price for batteries would result in an)

Correct AnswerverifiedShow Answer

Table 4-3 -Refer to Table 4-3. For whom is the good a normal good?

Correct AnswerverifiedShow Answer

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