Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Accepted Answer

A)   crystal to be unaffected.
B)   crystal to decrease.
C)   crystal to increase.
D)   lead to increase.E) C) and D)
F) A) and B)

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)   Consumers have experienced an increase in income, and beef-production technology has improved.
B)   The price of chicken has risen, and the price of steak sauce has fallen.
C)   New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)   The demand curve for beef must be positively sloped.E) All of the above
F) C) and D)

Question 5

An increase in the price of a good will

Accepted Answer

A)   increase supply.
B)   decrease supply.
C)   increase quantity supplied.
D)   decrease quantity supplied.E) A) and D)
F) A) and C)

Question 6

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Accepted Answer

A)   encourage marijuana use, and the evidence supports this argument.
B)   encourage marijuana use, but the evidence does not support this argument.
C)   discourage marijuana use, and the evidence supports this argument.
D)   discourage marijuana use, but the evidence does not support this argument.E) All of the above
F) None of the above

Question 7

Which of the following is not a determinant of the demand for a particular good?

Accepted Answer

A)   the prices of related goods
B)   income
C)   tastes
D)   the prices of the inputs used to produce the goodE) All of the above
F) A) and B)

Question 8

If Miguel 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) None of the above
F) B) and C)

Question 9

Which of the following is not an example of a market?

Accepted Answer

A)   A small town has only one seller of electricity.
B)   In the United States, a sick person cannot legally purchase a kidney.
C)   In Florida, there are many buyers and sellers of key lime pie.
D)   The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities.E) B) and D)
F) A) and D)

Question 10

Individual demand curves are summed horizontally to obtain the market demand curve.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-12
  
-Refer to Figure 4-12. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is

Accepted Answer

A)   4 units.
B)   8 units.
C)   12 units.
D)   16 units.E) None of the above
F) C) and D)

Question 12

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) B) and D)

Question 13

Most studies indicate that tobacco and marijuana tend to be

Accepted Answer

A)   substitutes.
B)   complements.
C)   unrelated because one good is legal while the other one is illegal.
D)   inferior goods.E) A) and B)
F) A) and C)

Question 14

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.
 A to DB. B)  DB to DA. C)  x to y. D)  y to x. " class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-19. 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 B)
F) B) and C)

Question 16

Most markets in the economy are highly competitive.

Accepted Answer

A) True 
 B)False

Question 17

If a shortage 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) C) and D)
F) A) and B)

Question 18

Figure 4-22
 
-Refer to Figure 4-22. Which of the four panels illustrates a decrease in quantity supplied?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) A) and B)
F) A) and C)

Question 19

Figure 4-2
  
-Refer to Figure 4-2. If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $10 is

Accepted Answer

A)   0 units.
B)   4 units.
C)   10 units.
D)   12 units.E) All of the above
F) C) and D)

Question 20

Table 4-8
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
 
-Refer to Table 4-8. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at $20, then there will be

Accepted Answer

A)   a shortage of 300 tickets.
B)   a surplus of 300 tickets.
C)   300 tickets sold.
D)   600 tickets unsold.E) A) and D)
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Most markets in the economy are highly competitive.

Correct Answer
verified

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct Answer
verified

Most studies indicate that tobacco and marijuana tend to be

Correct Answer
verified

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

Figure 4-12 -Refer to Figure 4-12. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is

Correct Answer
verified

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Correct Answer
verified

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct Answer
verified

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not a determinant of the demand for a particular good?

Correct Answer
verified

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Correct Answer
verified

Individual demand curves are summed horizontally to obtain the market demand curve.

Correct Answer
verified

An increase in the price of a good will

Correct Answer
verified

Which of the following is not an example of a market?

Correct Answer
verified

Figure 4-22 -Refer to Figure 4-22. Which of the four panels illustrates a decrease in quantity supplied?

Correct Answer
verified

Figure 4-2 -Refer to Figure 4-2. If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $10 is

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most markets in the economy are highly competitive.

Correct AnswerverifiedShow Answer

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct AnswerverifiedShow Answer

Most studies indicate that tobacco and marijuana tend to be

Correct AnswerverifiedShow Answer

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

Figure 4-12 -Refer to Figure 4-12. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is

Correct AnswerverifiedShow Answer

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Correct AnswerverifiedShow Answer

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct AnswerverifiedShow Answer

Opponents of cigarette taxes often argue that tobacco and marijuana are substitutes so that high cigarette prices

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a determinant of the demand for a particular good?

Correct AnswerverifiedShow Answer

Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?

Correct AnswerverifiedShow Answer

Individual demand curves are summed horizontally to obtain the market demand curve.

Correct AnswerverifiedShow Answer

An increase in the price of a good will

Correct AnswerverifiedShow Answer

Which of the following is not an example of a market?

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. Which of the four panels illustrates a decrease in quantity supplied?

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to Figure 4-2. If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $10 is

Correct AnswerverifiedShow Answer

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