Question 1

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.E) B) and C)
F) C) and D)

Question 2

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 3

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 4

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 5

A market demand curve shows

Accepted Answer

A)   the relationship between price and the number of buyers in a market.
B)   how quantity demanded changes when the number of sellers changes.
C)   the sum of all prices that individual buyers are willing and able to pay for each possible quantity of the good.
D)   how much of a good all buyers are willing and able to buy at each possible price.E) A) and B)
F) A) and C)

Question 6

A reduction in an input price will cause a change in quantity supplied but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Figure 4-22 
-Refer to Figure 4-22. At a price of $20, there is a

Accepted Answer

A)   surplus of 4 units.
B)   surplus of 8 units.
C)   shortage of 4 units.
D)   shortage of 8 units.E) All of the above
F) None of the above

Question 9

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. 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) A) and D)
F) A) and C)

Question 11

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

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 increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and D)
F) A) and B)

Question 12

When it comes to people's tastes, economists generally believe that

Accepted Answer

A)   tastes are based on forces that are well within the realm of economics.
B)   tastes are based on historical and psychological forces that are beyond the realm of economics.
C)   tastes can only be studied through well-constructed, real-life models.
D)   because tastes do not directly affect demand, there is little need to explain people's tastes.E) None of the above
F) All of the above

Question 13

Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

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) C) and D)
F) A) and C)

Question 14

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

Question 15

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Accepted Answer

A)   demand for flour to increase.
B)   demand for flour to decrease.
C)   supply of flour to increase.
D)   supply of flour to decrease.E) A) and C)
F) A) and B)

Question 16

Table 4-16
The following table shows the supply and demand schedules in a market. 
-Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Accepted Answer

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

Question 17

Table 4-7 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Accepted Answer

A)   10 gallons.
B)   20 gallons.
C)   32 gallons.
D)   40 gallons.E) B) and D)
F) A) and D)

Question 18

A supply schedule is a table that shows the relationship between

Accepted Answer

A)   price and quantity supplied.
B)   input costs and quantity supplied.
C)   quantity demanded and quantity supplied.
D)   profit and quantity supplied.E) A) and D)
F) B) and C)

Question 19

In a market economy, prices are the signals that guide the allocation of scarce resources.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)   Abby's
B)   Brandi's
C)   Carrie's
D)   DeeDee'sE) None of the above
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

A reduction in an input price will cause a change in quantity supplied but not a change in supply.

Correct Answer
verified

When it comes to people's tastes, economists generally believe that

Correct Answer
verified

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Correct Answer
verified

Which of the following demonstrates the law of supply?

Correct Answer
verified

In a market economy, prices are the signals that guide the allocation of scarce resources.

Correct Answer
verified

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

Correct Answer
verified

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct Answer
verified

A market demand curve shows

Correct Answer
verified

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct Answer
verified

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Correct Answer
verified

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.

Correct Answer
verified

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Correct Answer
verified

Figure 4-22 -Refer to Figure 4-22. At a price of $20, there is a

Correct Answer
verified

Correct Answer
verified

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 Answer
verified
The equilibrium pric...
View Answer

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

Correct Answer
verified

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur?

Correct Answer
verified

A supply schedule is a table that shows the relationship between

Correct Answer
verified

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

Correct Answer
verified

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A reduction in an input price will cause a change in quantity supplied but not a change in supply.

Correct AnswerverifiedShow Answer

When it comes to people's tastes, economists generally believe that

Correct AnswerverifiedShow Answer

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedShow Answer

In a market economy, prices are the signals that guide the allocation of scarce resources.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct AnswerverifiedShow Answer

A market demand curve shows

Correct AnswerverifiedShow Answer

In a competitive market, the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct AnswerverifiedShow Answer

Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. At a price of $20, there is a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?

Correct AnswerverifiedShow Answer

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for coffee. Suppose the price of tea, a substitute good, increases. Which of the following changes would occur?

Correct AnswerverifiedShow Answer

A supply schedule is a table that shows the relationship between

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Correct AnswerverifiedShow Answer

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The equilibrium pric...
View Answer

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