Question 1

If car manufacturers begin using new labor-saving technology on their assembly lines,we would not expect

Accepted Answer

A)   a smaller quantity of labor to be used.
B)   the supply of cars to increase.
C)   the firms' costs to fall.
D)   individual car manufacturers to move up and to the right along their individual supply curves.E) B) and D)
F) All of the above

Question 2

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

Accepted Answer

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

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

If the number of buyers in a market decreases,then

Accepted Answer

A)   demand will increase.
B)   demand will decrease.
C)   supply will increase.
D)   supply will decrease.E) A) and B)
F) A) and C)

Question 5

Figure 4-17 
-Refer to Figure 4-17.At a price of $20,which of the following statements is not correct?

Accepted Answer

A)   The market is in equilibrium.
B)   Equilibrium price is equal to equilibrium quantity.
C)   There is no pressure for price to change.
D)   The quantity of the good that is bought and sold is 600 units.E) A) and D)
F) All of the above

Question 6

An increase in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a demand curve.
B)   results in a movement upward and to the left along a demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) A) and D)
F) None of the above

Question 7

If the supply of a product decreases,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 to both increase.
D)   and equilibrium quantity to both decrease.E) A) and C)
F) B) and C)

Question 8

Figure 4-2 
-Refer to Figure 4-2.At a price of $24,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) None of the above

Question 9

For a market for a good or service to exist,there must be a

Accepted Answer

A)   group of buyers and sellers.
B)   specific time and place at which the good or service is traded.
C)   high degree of organization present.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 10

In markets,prices move toward equilibrium because of

Accepted Answer

A)   the actions of buyers and sellers.
B)   government regulations placed on market participants.
C)   increased competition among sellers.
D)   buyers' ability to affect market outcomes.E) B) and C)
F) A) and D)

Question 11

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A)   coalition.
B)   economy.
C)   market.
D)   competition.E) All of the above
F) C) and D)

Question 12

Table 4-4
 
-Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $4 to $2,the market quantity supplied

Accepted Answer

A)   increases by 10 units.
B)   decreases by 10 units.
C)   decreases by 20 units.
D)   decreases by 30 units.E) None of the above
F) A) and B)

Question 13

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

Question 14

Figure 4-21 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

Accepted Answer

A)   Point A to Point B
B)   Point C to Point B
C)   Point C to Point D
D)   Point A to Point DE) C) and D)
F) A) and C)

Question 15

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

Question 16

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)   surpluses and shortages.
B)   quantities.
C)   government policies.
D)   prices.E) B) and C)
F) None of the above

Question 17

The demand curve for textbooks shifts

Accepted Answer

A)   only when income changes.
B)   when a determinant of the demand for textbooks other than the price of textbooks changes.
C)   when the price of textbooks changes.
D)   Both b and c are correct.E) None of the above
F) A) and C)

Question 18

Suppose there are five suppliers of ice cream in the town of Summerville.If we add the respective quantities that each firm would produce at each of the five ice cream parlors when the price of ice cream is $2 per scoop,$2.50 per scoop,and $3 per scoop,and so forth,we have found the

Accepted Answer

A)   market demand curve.
B)   market supply curve.
C)   equilibrium curve.
D)   surplus or shortage depending on market conditions.E) C) and D)
F) None of the above

Question 19

An increase in demand will cause an increase in price,which will cause an increase in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Figure 4-17 -Refer to Figure 4-17.At a price of $20,which of the following statements is not correct?

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Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for golf balls of an increase in green fees?

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

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If car manufacturers begin using new labor-saving technology on their assembly lines,we would not expect

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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?

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If the number of buyers in a market decreases,then

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In markets,prices move toward equilibrium because of

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Table 4-4 -Refer to Table 4-4.If these are the only four sellers in the market,then when the price decreases from $4 to $2,the market quantity supplied

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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?

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If the supply of a product decreases,then we would expect equilibrium price

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Suppose there are five suppliers of ice cream in the town of Summerville.If we add the respective quantities that each firm would produce at each of the five ice cream parlors when the price of ice cream is $2 per scoop,$2.50 per scoop,and $3 per scoop,and so forth,we have found the

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to Figure 4-2.At a price of $24,there is a

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An increase in quantity demanded

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A group of buyers and sellers of a particular good or service is called a(n)

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The demand curve for textbooks shifts

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For a market for a good or service to exist,there must be a

Correct AnswerverifiedShow Answer

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

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The signals that guide the allocation of resources in a market economy are

Correct AnswerverifiedShow Answer

An increase in demand will cause an increase in price,which will cause an increase in quantity supplied.

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

Correct AnswerverifiedShow Answer

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