Question 1

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

Question 2

Figure 4-7 
-Refer to Figure 4-7. The shift from Db to Da is called

Accepted Answer

A)  an increase in demand.
B)  a decrease in demand.
C)  a decrease in quantity demanded.
D)  an increase in quantity demanded.E) None of the above
F) C) and D)

Question 3

A market supply curve is determined by

Accepted Answer

A)  vertically summing individual supply curves.
B)  horizontally summing individual supply curves.
C)  finding the average quantity supplied by sellers at each possible price.
D)  finding the average price at which sellers are willing and able to sell a particular quantity of the good.E) B) and D)
F) None of the above

Question 4

When quantity supplied decreases 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) None of the above
F) A) and C)

Question 5

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)

Accepted Answer

A)  decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
B)  decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
C)  decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
D)  increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.E) A) and C)
F) A) and D)

Question 6

Figure 4-28
​ 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if consumer incomes increase and this is an inferior good.

Accepted Answer

The answer of Figure 4-28
​ 
-Refer to Figure 4-28. Using...

Question 7

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) None of the above
F) B) and D)

Question 8

Which of the following events could cause an increase in the supply of ceiling fans?

Accepted Answer

A)  The number of sellers of ceiling fans increases.
B)  There is an increase in the price of air conditioners, and consumers regard air conditioners and ceiling fans as substitutes.
C)  There is an increase in the price of the motor that powers ceiling fans.
D)  All of the above are correct.E) A) and D)
F) B) and C)

Question 9

An increase in the price of a good will

Accepted Answer

A)  increase demand.
B)  decrease demand.
C)  increase quantity demanded.
D)  decrease quantity demanded.E) All of the above
F) A) and B)

Question 10

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Accepted Answer

A) True 
 B)False

Question 11

The demand for a good or service is determined by

Accepted Answer

A)  those who buy the good or service.
B)  the government.
C)  those who sell the good or service.
D)  both those who buy and those who sell the good or service.E) B) and C)
F) None of the above

Question 12

In a market economy, supply and demand are important because they

Accepted Answer

A)  are direct policy tools used by government agencies to regulate the economy.
B)  illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.
C)  can be used to predict the impact on the economy of various events and policies.
D)  All of the above are correct.E) None of the above
F) B) and D)

Question 13

Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

Accepted Answer

A)  the price of pork increases.
B)  the price of pork decreases.
C)  the price of pork does not change.
D)  there is no longer a market for pork.E) All of the above
F) A) and D)

Question 14

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

A) True 
 B)False

Question 15

The law of supply states that, other things equal, an increase in

Accepted Answer

A)  price causes quantity supplied to increase.
B)  price causes quantity supplied to decrease.
C)  quantity supplied causes price to increase.
D)  quantity supplied causes price to decrease.E) B) and C)
F) A) and D)

Question 16

Figure 4-8 
-Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

Accepted Answer

A)  a movement along D2 from point A to point B
B)  a movement along D2 from point B to point A
C)  a shift from D1 to D2
D)  a shift from D2 to D1E) B) and D)
F) B) and C)

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) B) and C)
F) None of the above

Question 18

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)  government to allocate scarce resources.
B)  supply and demand to allocate scarce resources.
C)  credit cards to allocate scarce resources.
D)  nature to allocate scarce resources.E) A) and D)
F) B) and C)

Question 19

Figure 4-15 
-Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for sail boats?

Accepted Answer

A)  an increase in the price of sailboats
B)  a decrease in the number of firms selling sailboats
C)  a decrease in the price of fiberglass and sail cloth
D)  a decrease in the price of America's Cup sailing t-shirtsE) A) and B)
F) All of the above

Question 20

Table 4-16
The following table shows the supply and demand schedules in a market. 
-Refer to Table 4-16. What is the equilibrium quantity in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Exam 4: The Market Forces of Supply and Demand

The demand for a good or service is determined by

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

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Figure 4-28 ​ -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if consumer incomes increase and this is an inferior good.

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In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

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Figure 4-7 -Refer to Figure 4-7. The shift from Db to Da is called

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Figure 4-8 -Refer to Figure 4-8. Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur?

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

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A market supply curve is determined by

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Assume the market for pork is perfectly competitive. When one pork buyer exits the market,

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In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

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A monopoly is a market with one

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Which of the following events could cause an increase in the supply of ceiling fans?

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Figure 4-15 -Refer to Figure 4-15. Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for sail boats?

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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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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. What is the equilibrium quantity in this market?

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The law of supply states that, other things equal, an increase in

Correct AnswerverifiedShow Answer

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Correct AnswerverifiedShow Answer

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)

Correct AnswerverifiedShow Answer

An increase in the price of a good will

Correct AnswerverifiedShow Answer

In a market economy, supply and demand are important because they

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Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if consumer incomes increase and this is an inferior good.

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