Question 1

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 5.
• The slope of the supply curve is 1.
Then there is currently a

Accepted Answer

A)   shortage of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
B)   shortage of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
C)   surplus of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
D)   surplus of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.E) C) and D)
F) A) and D)

Question 2

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Accepted Answer

A)   decrease.
B)   increase.
C)   be unaffected.
D)   There is insufficient information given to answer the question.E) All of the above
F) A) and C)

Question 3

Figure 4-19 
-Refer to Figure 4-19. If price in this market is currently $14, then there would be an

Accepted Answer

A)   surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a higher price.
B)   excess supply of 20 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.
C)   surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a higher price.
D)   excess supply of 40 units. The law of supply and demand predicts that the price will fall from $14 to a lower price.E) A) and B)
F) A) and C)

Question 4

If sellers expect higher basket prices in the near future, the current

Accepted Answer

A)   supply of baskets will increase.
B)   supply of baskets will decrease.
C)   supply of baskets will be unaffected.
D)   demand for baskets will decrease.E) A) and B)
F) B) and D)

Question 5

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Accepted Answer

A)   "fight fire with fire" by decreasing supply of its doll for six weeks and then increasing the supply.
B)   increase the supply of its doll now before the other doll hits the market.
C)   increase the price of its doll now.
D)   discontinue its doll.E) None of the above
F) B) and C)

Question 6

If textbooks and study guides are complements, then an increase in the price of textbooks will result in

Accepted Answer

A)   more textbooks being sold.
B)   more study guides being sold.
C)   fewer study guides being sold.
D)   no difference in the quantity sold of either good.E) C) and D)
F) None of the above

Question 7

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Accepted Answer

A)   Price would fall, and the effect on quantity would be ambiguous.
B)   Price would rise, and the effect on quantity would be ambiguous.
C)   Quantity would fall, and the effect on price would be ambiguous.
D)   Quantity would rise, and the effect on price would be ambiguous.E) B) and C)
F) All of the above

Question 8

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Accepted Answer

A) True 
 B)False

Question 9

Suppose the number of buyers in a market decreases. As a result, would the demand curve in this market shift to the right or to the left?

Accepted Answer

The demand...

Question 10

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) None of the above
F) B) and D)

Question 11

Figure 4-7 
-Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then

Accepted Answer

A)   firms would be willing to supply more of Good X than before at each possible price.
B)   people are willing to buy less of Good X than before at each possible price.
C)   people's incomes must have increased.
D)   the price of Good X has increased.E) None of the above
F) A) and C)

Question 12

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 13

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 14

A monopoly is a market with one

Accepted Answer

A)   seller, and that seller is a price taker.
B)   seller, and that seller sets the price.
C)   buyer, and that buyer is a price taker.
D)   buyer, and that buyer sets the price.E) A) and B)
F) B) and C)

Question 15

Figure 4-21 
-Refer to Figure 4-21. What is the equilibrium quantity in this market?

Accepted Answer

A)   2.5 units
B)   5 units
C)   7.5 units
D)   10 unitsE) None of the above
F) All of the above

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

Question 17

Equilibrium price must increase when demand

Accepted Answer

A)   increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously.
B)   increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
C)   decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.
D)   decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.E) A) and D)
F) B) and C)

Question 18

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

Accepted Answer

A) True 
 B)False

Question 19

When we move along a given supply curve,

Accepted Answer

A)   only price is held constant.
B)   technology and price are held constant.
C)   all nonprice determinants of supply are held constant.
D)   all determinants of quantity supplied are held constant.E) B) and D)
F) B) and C)

Question 20

A likely example of complementary goods for most people would be

Accepted Answer

A)   butter and margarine.
B)   lawnmowers and automobiles.
C)   chips and salsa.
D)   cola and lemonade.E) B) and D)
F) All of the above

Exam 4: The Market Forces of Supply and Demand

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 coffee prevents heart attacks?

Correct Answer
verified

Equilibrium price must increase when demand

Correct Answer
verified

Suppose the number of buyers in a market decreases. As a result, would the demand curve in this market shift to the right or to the left?

Correct Answer
verified
The demand...
View Answer

Figure 4-19 -Refer to Figure 4-19. If price in this market is currently $14, then there would be an

Correct Answer
verified

A likely example of complementary goods for most people would be

Correct Answer
verified

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Correct Answer
verified

Correct Answer
verified

It is not possible for demand and supply to shift at the same time.

Correct Answer
verified

When we move along a given supply curve,

Correct Answer
verified

If textbooks and study guides are complements, then an increase in the price of textbooks will result in

Correct Answer
verified

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium quantity in this market?

Correct Answer
verified

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct Answer
verified

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

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

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then

Correct Answer
verified

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Correct Answer
verified

If sellers expect higher basket prices in the near future, the current

Correct Answer
verified

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Correct Answer
verified

A monopoly is a market with one

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

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 coffee prevents heart attacks?

Correct AnswerverifiedShow Answer

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Suppose the number of buyers in a market decreases. As a result, would the demand curve in this market shift to the right or to the left?

Correct AnswerverifiedThe demand...View AnswerShow Answer

Figure 4-19 -Refer to Figure 4-19. If price in this market is currently $14, then there would be an

Correct AnswerverifiedShow Answer

A likely example of complementary goods for most people would be

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

It is not possible for demand and supply to shift at the same time.

Correct AnswerverifiedShow Answer

When we move along a given supply curve,

Correct AnswerverifiedShow Answer

If textbooks and study guides are complements, then an increase in the price of textbooks will result in

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct AnswerverifiedShow Answer

When the market price is below the equilibrium price, suppliers are unable to sell all they want to sell.

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

Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. As a result, your demand for vanilla pudding would

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. If the demand curve for Good X shifts from Db to Da, then

Correct AnswerverifiedShow Answer

Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at shifting the demand curve for cigarettes to the right.

Correct AnswerverifiedShow Answer

If sellers expect higher basket prices in the near future, the current

Correct AnswerverifiedShow Answer

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Correct AnswerverifiedShow Answer

A monopoly is a market with one

Correct AnswerverifiedShow Answer

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The demand...
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The equilibrium pric...
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