Question 1

If macaroni and cheese is an inferior good, then an increase in

Accepted Answer

A)  the price will cause the demand curve for macaroni and cheese to shift to the left.
B)  the price will cause the demand curve for macaroni and cheese to shift to the right.
C)  a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.
D)  a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.E) None of the above
F) B) and D)

Question 2

Table 4-4
   Price  Firm A’s  Quantity  Supplied  Firm B’s  Quantity  Supplied  Firm C’s  Quantity  Supplied  Firm D’s  Quantity  Supplied $010000$28345$466810$6491215$8212820$10015425\begin{array}{|c|c|c|c|c|}\hline 	ext { Price } & \begin{array}{c}	ext { Firm A&#x27;s } \	ext { Quantity } \	ext { Supplied }\end{array} & \begin{array}{c}	ext { Firm B&#x27;s } \	ext { Quantity } \	ext { Supplied }\end{array} & \begin{array}{c}	ext { Firm C&#x27;s } \	ext { Quantity } \	ext { Supplied }\end{array} & \begin{array}{c}	ext { Firm D&#x27;s } \	ext { Quantity } \	ext { Supplied }\end{array} \\hline \$ 0 & 10 & 0 & 0 & 0 \\hline \$ 2 & 8 & 3 & 4 & 5 \\hline \$ 4 & 6 & 6 & 8 & 10 \\hline \$ 6 & 4 & 9 & 12 & 15 \\hline \$ 8 & 2 & 12 & 8 & 20 \\hline \$ 10 & 0 & 15 & 4 & 25 \\hline\end{array} Price $0$2$4$6$8$10​ Firm A’s  Quantity  Supplied ​1086420​ Firm B’s  Quantity  Supplied ​03691215​ Firm C’s  Quantity  Supplied ​0481284​ Firm D’s  Quantity  Supplied ​0510152025​​

-Refer to Table 4-4. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied

Accepted Answer

A)  increases by 0.5 units.
B)  increases by 2 units.
C)  decreases by 4 units.
D)  increases by 42 units. E) B) and C)
F) A) and D)

Question 3

Which of these statements does not apply to market economies?

Accepted Answer

A)  Prices prevent decentralized decision making from degenerating into chaos.
B)  Prices coordinate the actions of millions of people with varying abilities and desires.
C)  Prices ensure that anyone who wants a product can get it.
D)  Prices ensure that what needs to get done does in fact get done.E) B) and C)
F) A) and D)

Question 4

In a market economy, supply and demand determine

Accepted Answer

A)  both the quantity of each good produced and the price at which it is sold.
B)  the quantity of each good produced but not the price at which it is sold.
C)  the price at which each good is sold but not the quantity of each good produced.
D)  neither the quantity of each good produced nor the price at which it is sold.E) A) and D)
F) All of the above

Question 5

Suppose there is an earthquake that destroys several corn canneries. Which of the following would not be a direct result of this event?

Accepted Answer

A)  Sellers would not be able to produce and sell as much as before at each relevant price.
B)  The supply would decrease.
C)  Buyers would not be willing to buy as much as before at each relevant price.
D)  The equilibrium price would rise.E) A) and D)
F) B) and C)

Question 6

A movement downward and to the right along a demand curve is called a(n)

Accepted Answer

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

Question 7

Table 4-7
   Price  Quantity  Denanded  Quantity  Supplied $101060$82045$63030$44015$2500\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Supplied }\end{array} \\hline \$ 10 & 10 & 60 \\hline \$ 8 & 20 & 45 \\hline \$ 6 & 30 & 30 \\hline \$ 4 & 40 & 15 \\hline \$ 2 & 50 &0 \\hline\end{array} Price $10$8$6$4$2​ Quantity  Denanded ​1020304050​ Quantity  Supplied ​604530150​​ 
-Refer to Table 4-7. If the price were $4, a

Accepted Answer

A)  surplus of 15 units would exist, and price would tend to fall.
B)  shortage of 25 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 40 units would exist, and price would tend to rise. E) All of the above
F) C) and D)

Question 8

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Accepted Answer

A)  increases.
B)  decreases.
C)  remains constant, but we observe a movement downward and to the right along the demand curve.
D)  remains constant, but we observe a movement upward and to the left along the demand curve.E) B) and C)
F) A) and D)

Question 9

Which of the following is the least likely to be a competitive market?

Accepted Answer

A)  ice cream
B)  soybeans
C)  cable television
D)  new housesE) A) and C)
F) None of the above

Question 10

Once the supply curve for a product or service is drawn, it

Accepted Answer

A)  remains stable over time.
B)  can shift either rightward or leftward.
C)  is possible to move along the curve, but the curve will not shift.
D)  tends to become steeper over time.E) All of the above
F) None of the above

Question 11

Advances in production technology typically reduce firms' costs.

Accepted Answer

A) True 
 B)False

Question 12

Holding the nonprice determinants of supply constant, a change in price would

Accepted Answer

A)  result in either a decrease in supply or an increase in supply.
B)  result in a movement along a stationary supply curve.
C)  result in a shift of demand.
D)  have no effect on the quantity supplied.E) A) and D)
F) B) and C)

Question 13

In a perfectly competitive market, at the market price, buyers

Accepted Answer

A)  cannot buy all they want, and sellers cannot sell all they want.
B)  cannot buy all they want, but sellers can sell all they want.
C)  can buy all they want, but sellers cannot sell all they want.
D)  can buy all they want, and sellers can sell all they want.E) B) and D)
F) A) and B)

Question 14

Figure 4-15 
-Refer to Figure 4-15. At the equilibrium price,

Accepted Answer

A)  200 units would be supplied and demanded.
B)  400 units would be supplied and demanded.
C)  600 units would be supplied and demanded.
D)  600 units would be supplied, but only 200 would be demanded.E) All of the above
F) None of the above

Question 15

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 16

If the number of sellers in a market increases, then the

Accepted Answer

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

Question 17

In a market economy,

Accepted Answer

A)  supply determines demand and demand, in turn, determines prices.
B)  demand determines supply and supply, in turn, determines prices.
C)  the allocation of scarce resources determines prices and prices, in turn, determine supply and demand.
D)  supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.E) B) and D)
F) None of the above

Question 18

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase.
B)  shortage to exist and the market price of roses to decrease.
C)  surplus to exist and the market price of roses to increase.
D)  surplus to exist and the market price of roses to decrease.E) A) and C)
F) None of the above

Question 19

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 4: The Market Forces of Supply and Demand

Which of the following is the least likely to be a competitive market?

Correct Answer
verified

A movement downward and to the right along a demand curve is called a(n)

Correct Answer
verified

Correct Answer
verified

In a market economy, supply and demand determine

Correct Answer
verified

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Correct Answer
verified

In a perfectly competitive market, buyers and sellers are price setters.

Correct Answer
verified

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Correct Answer
verified

In a perfectly competitive market, at the market price, buyers

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Which of these statements does not apply to market economies?

Correct Answer
verified

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Correct Answer
verified

Figure 4-15 -Refer to Figure 4-15. At the equilibrium price,

Correct Answer
verified

Holding the nonprice determinants of supply constant, a change in price would

Correct Answer
verified

Suppose there is an earthquake that destroys several corn canneries. Which of the following would not be a direct result of this event?

Correct Answer
verified

If macaroni and cheese is an inferior good, then an increase in

Correct Answer
verified

Once the supply curve for a product or service is drawn, it

Correct Answer
verified

Advances in production technology typically reduce firms' costs.

Correct Answer
verified

In a market economy,

Correct Answer
verified

If the number of sellers in a market increases, then the

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Which of the following is the least likely to be a competitive market?

Correct AnswerverifiedShow Answer

A movement downward and to the right along a demand curve is called a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine

Correct AnswerverifiedShow Answer

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Correct AnswerverifiedShow Answer

In a perfectly competitive market, buyers and sellers are price setters.

Correct AnswerverifiedShow Answer

Warrensburg is a small college town in Missouri. At the end of August each year, the market demand for fast food in Warrensburg

Correct AnswerverifiedShow Answer

In a perfectly competitive market, at the market price, buyers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of these statements does not apply to market economies?

Correct AnswerverifiedShow Answer

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Correct AnswerverifiedShow Answer

Figure 4-15 -Refer to Figure 4-15. At the equilibrium price,

Correct AnswerverifiedShow Answer

Holding the nonprice determinants of supply constant, a change in price would

Correct AnswerverifiedShow Answer

Suppose there is an earthquake that destroys several corn canneries. Which of the following would not be a direct result of this event?

Correct AnswerverifiedShow Answer

If macaroni and cheese is an inferior good, then an increase in

Correct AnswerverifiedShow Answer

Once the supply curve for a product or service is drawn, it

Correct AnswerverifiedShow Answer

Advances in production technology typically reduce firms' costs.

Correct AnswerverifiedShow Answer

In a market economy,

Correct AnswerverifiedShow Answer

If the number of sellers in a market increases, then the

Correct AnswerverifiedShow Answer

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