Question 1

Figure 4-22
 
-Refer to Figure 4-22. Panel (b)  shows which of the following?

Accepted Answer

A)   a decrease in demand and a decrease in quantity supplied
B)   a decrease in demand and a decrease in supply
C)   a decrease in quantity demanded and a decrease in quantity supplied
D)   a decrease in quantity demanded and a decrease in supplyE) A) and B)
F) B) and D)

Question 2

Local cable television companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

Figure 4-17
 
-Refer to Figure 4-17. If the price is $25, then there would be an excess

Accepted Answer

A)   supply of 100 units, and price would fall.
B)   supply of 300 units, and price would fall.
C)   demand of 100 units, and price would fall.
D)   demand of 300 units, and price would fall.E) None of the above
F) C) and D)

Question 5

In a competitive market, the quantity of a product produced and the price of the product are determined by

Accepted Answer

A)   buyers.
B)   sellers.
C)   both buyers and sellers.
D)   None of the above is correct.E) B) and D)
F) All of the above

Question 6

Figure 4-14
 
-Refer to Figure 4-14. At a price of

Accepted Answer

A)   $2, there is a surplus of 6 units.
B)   $5, there is a surplus of 25 units.
C)   $5, there is a shortage of $25.
D)   $7, there is a surplus of 4 units.E) A) and C)
F) C) and D)

Question 7

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 8

In competitive markets,

Accepted Answer

A)   firms produce identical products.
B)   buyers can influence the market price more easily than sellers.
C)   markets are more likely to be in equilibrium.
D)   sellers are price setters.E) None of the above
F) A) and B)

Question 9

Table 4-3
 
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Accepted Answer

A)   0 units.
B)   3.5 units.
C)   12 units.
D)   14 units.E) A) and B)
F) A) and C)

Question 10

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Accepted Answer

A)   demand for flour to increase.
B)   demand for flour to decrease.
C)   supply of flour to increase.
D)   supply of flour to decrease.E) All of the above
F) A) and D)

Question 11

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)   a restaurant in a large city
B)   a dry cleaners in a large city
C)   a local gas station
D)   a local electrical companyE) B) and D)
F) All of the above

Question 12

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)   the idea that tobacco and marijuana are substitutes.
B)   the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuana.
C)   the idea that lower cigarette prices are associated with less use of marijuana.
D)   most of the available evidence.E) None of the above
F) B) and D)

Question 13

If a good is inferior, then an increase in income will result in

Accepted Answer

A)   an increase in the demand for the good.
B)   a decrease in the demand for the good.
C)   a movement down and to the right along the demand curve for the good.
D)   a movement up and to the left along the demand curve for the good.E) A) and B)
F) A) and C)

Question 14

When it comes to people's tastes, economists generally believe that

Accepted Answer

A)   tastes are based on forces that are well within the realm of economics.
B)   tastes are based on historical and psychological forces that are beyond the realm of economics.
C)   tastes can only be studied through well-constructed, real-life models.
D)   because tastes do not directly affect demand, there is little need to explain people's tastes.E) B) and C)
F) A) and D)

Question 15

A decrease in quantity supplied

Accepted Answer

A)   results in a movement downward and to the left along a fixed supply curve.
B)   results in a movement upward and to the right along a fixed supply curve.
C)   shifts the supply curve to the left.
D)   shifts the supply curve to the right.E) A) and C)
F) All of the above

Question 16

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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 equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and B)
F) All of the above

Question 17

If American cheese and cheddar cheese are substitutes, then which of the following would increase the demand for cheddar cheese?

Accepted Answer

A)   a decrease in the price of cheddar cheese
B)   an increase in the price of American cheese
C)   a decrease in the price of American cheese
D)   Both a)  and b)  are correct.E) None of the above
F) A) and B)

Question 18

If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

Accepted Answer

A) True 
 B)False

Question 19

Table 4-4
 
-Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A)   4 units.
B)   7.5 units.
C)   10 units.
D)   30 units.E) B) and D)
F) A) and B)

Question 20

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) None of the above
F) All of the above

Exam 4: The Market Forces of Supply and Demand

The belief that tobacco is a "gateway drug" is consistent with

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Figure 4-22 -Refer to Figure 4-22. Panel (b) shows which of the following?

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Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

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

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If a higher price means a greater quantity supplied, then the supply curve slopes upward.

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Table 4-4 -Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $4 is

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Figure 4-17 -Refer to Figure 4-17. If the price is $25, then there would be an excess

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In competitive markets,

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In a competitive market, the quantity of a product produced and the price of the product are determined by

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Figure 4-14 -Refer to Figure 4-14. At a price of

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Which of the following would most likely serve as an example of a monopoly?

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If a company making frozen orange juice expects the price of its product to be higher next month, it will supply more to the market this month.

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When it comes to people's tastes, economists generally believe that

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A decrease in quantity supplied

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Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Correct AnswerverifiedShow Answer

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

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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 American cheese and cheddar cheese are substitutes, then which of the following would increase the demand for cheddar cheese?

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If a good is inferior, then an increase in income will result in

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Local cable television companies frequently are monopolists.

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