Question 1

Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

Accepted Answer

A)   production technology
B)   expectations
C)   input prices
D)   the number of sellersE) C) and D)
F) A) and B)

Question 2

The demand curve is the upward-sloping line relating price and quantity demanded.

Accepted Answer

A) True 
 B)False

Question 3

An increase in the price of blueberries would lead to an)

Accepted Answer

A)   increased supply of blueberries.
B)   a movement up and to the right along the supply curve for blueberries.
C)   a movement down and to the left along the supply curve for blueberries.
D)   Both a and b are correct.E) C) and D)
F) B) and C)

Question 4

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

Accepted Answer

A)   an increase in the price of wool shirts and a decrease in the price of raw cotton
B)   a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)   an increase in the price of wool shirts and an increase in the price of raw cotton
D)   a decrease in the price of wool shirts and an increase in the price of raw cottonE) A) and C)
F) B) and D)

Question 5

A market demand curve shows how the total quantity demanded of a good varies as

Accepted Answer

A)   income varies.
B)   price varies.
C)   price of the nearest substitute good varies.
D)   supply varies.E) A) and B)
F) C) and D)

Question 6

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

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) B) and C)
F) A) and B)

Question 7

A decrease in supply shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 8

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) All of the above
F) C) and D)

Question 9

The unique point at which the supply and demand curves intersect is called

Accepted Answer

A)   market harmony.
B)   coincidence.
C)   equivalence.
D)   equilibrium.E) A) and B)
F) A) and C)

Question 10

A decrease in the price of a good will

Accepted Answer

A)   increase demand.
B)   decrease demand.
C)   increase quantity demanded.
D)   decrease quantity demanded.E) B) and D)
F) A) and C)

Question 11

Two goods are complements when a decrease in the price of one good

Accepted Answer

A)   decreases the quantity demanded of the other good.
B)   decreases the demand for the other good.
C)   increases the quantity demanded of the other good.
D)   increases the demand for the other good.E) A) and C)
F) A) and B)

Question 12

Which of the following events must cause equilibrium price to fall?

Accepted Answer

A)   demand increases and supply decreases
B)   demand and supply both decrease
C)   demand decreases and supply increases
D)   demand and supply both increaseE) C) and D)
F) None of the above

Question 13

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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

Question 14

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) C) and D)
F) B) and D)

Question 15

The equilibrium price is the same as the market-clearing price.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a market?

Accepted Answer

A)   a gas station
B)   a garage sale
C)   a barber shop
D)   All of the above are examples of markets.E) A) and D)
F) All of the above

Question 17

Figure 4-14 
-Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

Accepted Answer

A)   There is an improvement in the technology used to produce this good.
B)   The cost of an input to the production of this good increases.
C)   This good becomes very popular.
D)   The price of a substitute good decreases.E) All of the above
F) C) and D)

Question 18

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 19

Figure 4-23 
-Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

Accepted Answer

A)   increases and the equilibrium quantity decreases.
B)   decreases and the equilibrium quantity increases.
C)   is ambiguous and the equilibrium quantity increases.
D)   decreases and the equilibrium quantity is ambiguous.E) B) and D)
F) All of the above

Question 20

Table 4-1
 
-Refer to Table 4-1. Which of the following illustrates the market demand curve?

Accepted Answer

A)   
B)   
C)  
D)   E) A) and B)
F) None of the above

Exam 4: The Market Forces of Supply and Demand

A market demand curve shows how the total quantity demanded of a good varies as

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

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Which of the following is a determinant of the market supply curve but not a determinant of an individual seller's supply?

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Which of the following events must cause equilibrium price to fall?

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The unique point at which the supply and demand curves intersect is called

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Table 4-1 -Refer to Table 4-1. Which of the following illustrates the market demand curve?

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Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

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Which of the following is an example of a market?

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Holding all other things constant, a higher price for ski lift tickets would

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Two goods are complements when a decrease in the price of one good

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An increase in the price of blueberries would lead to an)

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A decrease in supply shifts the supply curve to the left.

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Figure 4-14 -Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

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The demand curve is the upward-sloping line relating price and quantity demanded.

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What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?

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A decrease in the price of a good will

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The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

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The equilibrium price is the same as the market-clearing price.

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Figure 4-23 -Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price

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Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

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