Question 1

The two words most often used by economists are

Accepted Answer

A)  prices and quantities.
B)  resources and allocation.
C)  supply and demand.
D)  efficiency and equity.E) A) and B)
F) A) and C)

Question 2

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity demanded is 500 cases when the price is $5.00, which of the following statements is correct?

Accepted Answer

A)  The market is in equilibrium at a price of $5.00.
B)  There is a surplus of 100 cases at a price of $5.00.
C)  There is a shortage of 100 cases at a price of $5.00.
D)  There is a shortage of 50 cases at a price of $5.00.E) None of the above
F) A) and C)

Question 3

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 D)
F) B) and C)

Question 4

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Accepted Answer

A)  the ticket price is above the equilibrium price.
B)  the ticket price is below the equilibrium price.
C)  the ticket price is at the equilibrium price.
D)  nothing about the equilibrium price.E) B) and D)
F) All of the above

Question 5

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Accepted Answer

The demand...

Question 6

The line that relates the price of a good and the quantity supplied of that good is called the supply

Accepted Answer

A)  schedule, and it usually slopes upward.
B)  schedule, and it usually slopes downward.
C)  curve, and it usually slopes upward.
D)  curve, and it usually slopes downward.E) All of the above
F) None of the above

Question 7

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. Assume these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price. If the price is $6 per case, is there a shortage or surplus, and how large is the shortage or surplus?

Accepted Answer

There is a...

Question 8

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. 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) B) and C)

Question 9

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Accepted Answer

A) True 
 B)False

Question 10

Table 4-13
The demand schedule below pertains to sandwiches demanded per week. 
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following:
• x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 4.
• The slope of the supply curve is 2.
Then there is currently a

Accepted Answer

A)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
B)  shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
C)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
D)  surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.E) C) and D)
F) A) and B)

Question 11

Holding the nonprice determinants of demand constant, a change in price would

Accepted Answer

A)  result in either a decrease in demand or an increase in demand.
B)  result in a movement along a stationary demand curve.
C)  result in a shift of supply.
D)  have no effect on the quantity demanded.E) All of the above
F) None of the above

Question 12

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) All of the above
F) C) and D)

Question 13

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)  1 percent reduction in the quantity demanded of cigarettes.
B)  4 percent reduction in the quantity demanded of cigarettes.
C)  10 percent reduction in the quantity demanded of cigarettes.
D)  12 percent reduction in the quantity demanded of cigarettes.E) A) and C)
F) A) and D)

Question 14

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Accepted Answer

A)  The demand for shotgun-shell ammunition will increase.
B)  The demand for shotgun-shell ammunition will decrease.
C)  The demand for shotgun-shell ammunition will be unaffected.
D)  The supply of shotgun-shell ammunition will increase.E) A) and B)
F) A) and C)

Question 15

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A)  Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)  Some degree of competition is present in most markets.
C)  There are many buyers and many sellers in all types of markets.
D)  Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) A) and C)
F) A) and B)

Question 16

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Accepted Answer

A)  an increase in demand for brown rice and a decrease in demand for white rice.
B)  a decrease in demand for brown rice and an increase in demand for white rice.
C)  an increase in demand for both brown and white rice.
D)  no change in demand for either type of rice because weight loss is not a determinant of demand.E) A) and B)
F) B) and C)

Question 17

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation  , where  is the quantity demanded and  is the price. Also, suppose the supply schedule can be represented by the equation  , where  is the quantity supplied.
-Refer to Scenario 4-1. What is the equilibrium price in this market?

Accepted Answer

The answer of Scenario 4-1
Suppose the demand schedule in a...

Question 18

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 19

Figure 4-22 
-Refer to Figure 4-22. What is the equilibrium quantity in this market?

Accepted Answer

A)  4 units
B)  8 units
C)  12 units
D)  16 unitsE) All of the above
F) C) and D)

Question 20

Figure 4-13  
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Accepted Answer

A)  8 units.
B)  16 units.
C)  24 units.
D)  32 units.E) None of the above
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct Answer
verified

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Correct Answer
verified

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Correct Answer
verified

A market demand curve shows

Correct Answer
verified

Correct Answer
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There is a...
View Answer

The two words most often used by economists are

Correct Answer
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If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Correct Answer
verified
The demand...
View Answer

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Correct Answer
verified

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Correct Answer
verified

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Correct Answer
verified

Correct Answer
verified

Individual supply curves are summed vertically to obtain the market supply curve.

Correct Answer
verified

Correct Answer
verified

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Correct Answer
verified

Correct Answer
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Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

Correct Answer
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Holding the nonprice determinants of demand constant, a change in price would

Correct Answer
verified

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Correct Answer
verified

The line that relates the price of a good and the quantity supplied of that good is called the supply

Correct Answer
verified

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

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct AnswerverifiedShow Answer

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Correct AnswerverifiedShow Answer

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Correct AnswerverifiedShow Answer

A market demand curve shows

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThere is a...View AnswerShow Answer

The two words most often used by economists are

Correct AnswerverifiedShow Answer

If income rises in the market for a normal good, will the demand curve for the normal good shift to the right or to the left?

Correct AnswerverifiedThe demand...View AnswerShow Answer

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Correct AnswerverifiedShow Answer

What will happen in the market for shotgun-shell ammunition now if buyers expect higher shotgun-shell prices in the near future?

Correct AnswerverifiedShow Answer

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Individual supply curves are summed vertically to obtain the market supply curve.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

Holding the nonprice determinants of demand constant, a change in price would

Correct AnswerverifiedShow Answer

Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Correct AnswerverifiedShow Answer

The line that relates the price of a good and the quantity supplied of that good is called the supply

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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There is a...
View Answer

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The demand...
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