Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Accepted Answer

A)  fall in six months but not now.
B)  increase in six months when the price goes up.
C)  fall now.
D)  increase now to meet as much demand as possible.E) A) and B)
F) A) and C)

Question 3

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 $5.00.
• The market quantity supplied of sandwiches is 10.
• The law of supply applies to the supply of sandwiches.
Then there is a

Accepted Answer

A)  shortage of 5 sandwiches, and the price would be expected to rise from its current level of $5.00.
B)  shortage of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.
C)  surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00.
D)  surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.E) B) and D)
F) A) and D)

Question 4

When quantity supplied increases at every possible price, we know that the supply curve has

Accepted Answer

A)  shifted to the left.
B)  shifted to the right.
C)  not shifted; rather, we have moved along the supply curve to a new point on the same curve.
D)  not shifted; rather, the supply curve has become flatter.E) A) and B)
F) B) and D)

Question 5

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) B) and D)
F) A) and D)

Question 6

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Accepted Answer

A)  increase in price.
B)  decrease in price.
C)  decrease in the price of a substitute good.
D)  increase in income.E) B) and C)
F) All of the above

Question 7

A movement upward and to the right along a supply curve is called a(n)

Accepted Answer

A)  increase in supply.
B)  decrease in supply.
C)  decrease in quantity supplied.
D)  increase in quantity supplied.E) B) and D)
F) None of the above

Question 8

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Accepted Answer

A)  Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)  Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)  Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) All of the above
F) B) and D)

Question 9

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Accepted Answer

A)  Price will fall, and the effect on quantity is ambiguous.
B)  Price will rise, and the effect on quantity is ambiguous.
C)  Quantity will fall, and the effect on price is ambiguous.
D)  Quantity will rise, and the effect on price is ambiguous.E) None of the above
F) A) and B)

Question 10

An example of a perfectly competitive market would be the

Accepted Answer

A)  cable TV market.
B)  soybean market.
C)  breakfast cereal market.
D)  shampoo market.E) None of the above
F) All of the above

Question 11

Figure 4-12
Firm A
Firm B  
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)  2 units.
B)  10 units.
C)  12 units.
D)  22 units.E) A) and D)
F) None of the above

Question 12

Table 4-12
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 4-12. 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) None of the above
F) A) and D)

Question 13

Surpluses drive price up, while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 14

Kara receives a promotion at work, which increases her income. We would expect Kara's demand for

Accepted Answer

A)  each good she purchases to remain unchanged.
B)  normal goods to decrease.
C)  substitute goods to increase.
D)  inferior goods to decrease.E) C) and D)
F) A) and C)

Question 15

Which of the following might cause the demand curve for an inferior good to shift to the left?

Accepted Answer

A)  a decrease in income
B)  an increase in the price of a substitute
C)  an increase in the price of a complement
D)  None of the above is correct.E) A) and D)
F) C) and D)

Question 16

In competitive markets, buyers

Accepted Answer

A)  are price takers, but sellers are price setters.
B)  are price setters, but sellers are price takers.
C)  and sellers are price takers.
D)  and sellers are price setters.E) A) and D)
F) B) and C)

Question 17

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)  prices at and above the equilibrium price.
B)  prices at and below the equilibrium price.
C)  prices above and below the equilibrium price, but not at the equilibrium price.
D)  the equilibrium price but not above or below the equilibrium price.E) A) and D)
F) A) and C)

Question 18

A likely example of substitute goods for most people would be

Accepted Answer

A)  peanut butter and jelly.
B)  tennis balls and tennis rackets.
C)  televisions and subscriptions to cable television services.
D)  pencils and pens.E) B) and C)
F) C) and D)

Question 19

An increase in the price of a good would

Accepted Answer

A)  increase the supply of the good.
B)  increase the amount purchased by buyers.
C)  give producers an incentive to produce more.
D)  decrease both the quantity demanded of the good and the quantity supplied of the good.E) None of the above
F) B) and D)

Question 20

If the demand for 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 both to increase.
D)  and equilibrium quantity both to decrease.E) A) and B)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Correct Answer
verified

If the demand for a product increases, then we would expect equilibrium price

Correct Answer
verified

A movement upward and to the right along a supply curve is called a(n)

Correct Answer
verified

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Correct Answer
verified

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct Answer
verified

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Correct Answer
verified

An example of a perfectly competitive market would be the

Correct Answer
verified

Correct Answer
verified

When quantity supplied increases at every possible price, we know that the supply curve has

Correct Answer
verified

A likely example of substitute goods for most people would be

Correct Answer
verified

Which of the following might cause the demand curve for an inferior good to shift to the left?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Kara receives a promotion at work, which increases her income. We would expect Kara's demand for

Correct Answer
verified

Surpluses drive price up, while shortages drive price down.

Correct Answer
verified

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Correct Answer
verified

An increase in the price of a good would

Correct Answer
verified

In competitive markets, buyers

Correct Answer
verified

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Correct AnswerverifiedShow Answer

If the demand for a product increases, then we would expect equilibrium price

Correct AnswerverifiedShow Answer

A movement upward and to the right along a supply curve is called a(n)

Correct AnswerverifiedShow Answer

Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct AnswerverifiedShow Answer

Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is

Correct AnswerverifiedShow Answer

An example of a perfectly competitive market would be the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When quantity supplied increases at every possible price, we know that the supply curve has

Correct AnswerverifiedShow Answer

A likely example of substitute goods for most people would be

Correct AnswerverifiedShow Answer

Which of the following might cause the demand curve for an inferior good to shift to the left?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Kara receives a promotion at work, which increases her income. We would expect Kara's demand for

Correct AnswerverifiedShow Answer

Surpluses drive price up, while shortages drive price down.

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph is caused by a(n)

Correct AnswerverifiedShow Answer

An increase in the price of a good would

Correct AnswerverifiedShow Answer

In competitive markets, buyers

Correct AnswerverifiedShow Answer

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result, we can expect the supply of lumber to

Correct AnswerverifiedShow Answer

Correct Answer
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