Question 1

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Accepted Answer

A)  decide which direction to shift the curve.
B)  decide whether the fires affected demand or supply.
C)  graph the shift to see the affect on equilibrium.
D)  None of the above are correct.E) A) and B)
F) All of the above

Question 2

When the number of buyers in a market increases,

Accepted Answer

A)  the market demand curve shifts to the right.
B)  the demand curves of the individual demanders in the market are unaffected.
C)  the market demand for the good in question increases.
D)  Al of the above are correct.E) B) and C)
F) All of the above

Question 3

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

The line that relates the price of a good to the quantity demanded of that good is called the

Accepted Answer

A)  demand schedule, and it usually slopes upward.
B)  demand schedule, and it usually slopes downward.
C)  demand curve, and it usually slopes upward.
D)  demand curve, and it usually slopes downward.E) All of the above
F) None of the above

Question 5

Wheat is the main input in the production of flour.If the price of wheat decreases,all else equal,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) None of the above
F) A) and B)

Question 6

When quantity demanded has increased at every price,it might be because

Accepted Answer

A)  the number of buyers in the market has decreased.
B)  income has increased and the good is an inferior good.
C)  the costs incurred by sellers in producing the good have decreased.
D)  the price of a complementary good has decreased.E) B) and C)
F) C) and D)

Question 7

Which of the following events would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Accepted Answer

A)  an increase in supply and an increase in demand
B)  an increase in supply and a decrease in demand
C)  a decrease in supply and an increase in demand
D)  a decrease in supply and a decrease in demandE) None of the above
F) B) and C)

Question 8

Quantity demanded falls as the price rises and rises as the price falls,so we say that

Accepted Answer

A)  quantity demanded is determined by quantity supplied.
B)  price is determined by quantity demanded.
C)  quantity demanded is a function of demand.
D)  quantity demanded is negatively related to the price.E) B) and C)
F) All of the above

Question 9

When supply and demand both increase,equilibrium

Accepted Answer

A)  price will increase.
B)  price will decrease.
C)  quantity may increase, decrease, or remain unchanged.
D)  price may increase, decrease, or remain unchanged.E) A) and B)
F) A) and C)

Question 10

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Accepted Answer

A) True 
 B)False

Question 11

If a decrease in income increases the demand for a good,then the good is

Accepted Answer

A)  a substitute good.
B)  a complement good.
C)  a normal good.
D)  an inferior good.E) C) and D)
F) None of the above

Question 12

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 his or her longevity.
D)  The demand curve for beef must be positively sloped.E) B) and D)
F) A) and C)

Question 13

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 14

This question deals with demand and supply and refers you to the table below.
a.Given the table, graph the demand and supply curves for flashlights.Make certain to label equilibrium price and equilibrium quantity.
  
b.What is the equilibrium price and equilibrium quantity?
c.Suppose the price is currently at $5.What problem would exist in the economy? What would you expect to happen to price? Show this on your graph.
d.Suppose the price is currently $2.What problem exists in the economy? What would you expect to happen to price? Show this on your graph.

Accepted Answer

a.

b. Equilibrium price would be $4 a...

Question 15

A likely example of substitute goods for most people would be

Accepted Answer

A)  peanut butter and jelly.
B)  tennis balls and tennis rackets.
C)  televisions and subscriptions to cable television services.
D)  pencils and pens.E) All of the above
F) A) and C)

Question 16

Economists in general

Accepted Answer

A)  do not try to explain people's tastes, but they do try to explain what happens when tastes change.
B)  believe that they must be able to explain people's tastes in order to explain what happens when tastes change.
C)  do not believe that people's tastes determine demand and therefore they ignore the subject of tastes.
D)  incorporate tastes into economic models only to the extent that tastes determine whether pairs of goods are substitutes or complements.E) A) and C)
F) A) and B)

Question 17

If there is an improvement in the technology used to produce a good,the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 18

If suppliers expect the price of their product to fall in the future they will

Accepted Answer

A)  decrease supply now.
B)  increase supply now.
C)  decrease supply in the future but not now.
D)  increase supply in the future but not now.E) None of the above
F) A) and C)

Question 19

Table 4-2
 
-Refer to Table 4-2.If the price were $2,a

Accepted Answer

A)  shortage of 25 units would exist and price would tend to fall.
B)  surplus of 50 units would exist and price would tend to rise.
C)  surplus of 25 units would exist and price would tend to fall.
D)  shortage of 50 units would exist and price would tend to rise.E) A) and C)
F) C) and D)

Question 20

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

Accepted Answer

A)  a bakery in a large city
B)  a bank in a large city
C)  a local cable television company
D)  a small group of corn farmersE) A) and B)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct Answer
verified

Correct Answer
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a.

b. Equilibrium price would be $4 a...
View Answer

Economists in general

Correct Answer
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If there is an improvement in the technology used to produce a good,the supply curve for that good will shift to the left.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

When supply and demand both increase,equilibrium

Correct Answer
verified

Which of the following events would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Correct Answer
verified

When quantity demanded has increased at every price,it might be because

Correct Answer
verified

A likely example of substitute goods for most people would be

Correct Answer
verified

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?

Correct Answer
verified

If suppliers expect the price of their product to fall in the future they will

Correct Answer
verified

Quantity demanded falls as the price rises and rises as the price falls,so we say that

Correct Answer
verified

The line that relates the price of a good to the quantity demanded of that good is called the

Correct Answer
verified

When the number of buyers in a market increases,

Correct Answer
verified

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct Answer
verified

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Correct Answer
verified

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Correct Answer
verified

If a decrease in income increases the demand for a good,then the good is

Correct Answer
verified

Table 4-2 -Refer to Table 4-2.If the price were $2,a

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

Correct AnswerverifiedShow Answer

Correct Answerverifieda. b. Equilibrium price would be $4 a...View AnswerShow Answer

Economists in general

Correct AnswerverifiedShow Answer

If there is an improvement in the technology used to produce a good,the supply curve for that good will shift to the left.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When supply and demand both increase,equilibrium

Correct AnswerverifiedShow Answer

Which of the following events would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?

Correct AnswerverifiedShow Answer

When quantity demanded has increased at every price,it might be because

Correct AnswerverifiedShow Answer

A likely example of substitute goods for most people would be

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

If suppliers expect the price of their product to fall in the future they will

Correct AnswerverifiedShow Answer

Quantity demanded falls as the price rises and rises as the price falls,so we say that

Correct AnswerverifiedShow Answer

The line that relates the price of a good to the quantity demanded of that good is called the

Correct AnswerverifiedShow Answer

When the number of buyers in a market increases,

Correct AnswerverifiedShow Answer

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct AnswerverifiedShow Answer

The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price.

Correct AnswerverifiedShow Answer

A supply curve slopes upward because,all else equal,a higher price means a greater quantity supplied.

Correct AnswerverifiedShow Answer

If a decrease in income increases the demand for a good,then the good is

Correct AnswerverifiedShow Answer

Table 4-2 -Refer to Table 4-2.If the price were $2,a

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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a.

b. Equilibrium price would be $4 a...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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