Question 1

If Diet Pepsi and Diet Coke are substitutes than an increase in the price of Diet Pepsi will cause a decrease in demand for Diet Coke.

Accepted Answer

A) True 
 B)False

Question 2

​Exhibit 4-4 
-Refer to Exhibit 4-4. A change from Point A to Point E represents 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) B) and C)

Question 3

Which of the following is true?

Accepted Answer

A)  ​A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve.
B)  ​According to the law of demand, other things equal, when the price of a good or service falls, demand increases.
C)  ​A change in demand for chocolate bars is caused by a change in the price of chocolate bars.
D)  ​None of the above is true.E) All of the above
F) None of the above

Question 4

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Accepted Answer

A)  ​a decrease in the price of electricity
B)  ​an increase in the price of air conditioners
C)  ​an increase in the price of heating oil
D)  ​a decrease in the price of natural gasE) B) and C)
F) A) and B)

Question 5

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

Accepted Answer

A)  ​demand has increased.
B)  ​demand has decreased.
C)  ​quantity demanded has increased.
D)  ​quantity demanded has decreased.E) B) and C)
F) None of the above

Question 6

​Exhibit 4-6 0 to S2 can be best explained by: A) ​input price increases. B) ​rise in taxes. C) ​bad weather. D) ​a technological advance." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-6. A supply shift from S0 to S2 can be best explained by:

Accepted Answer

A)  ​input price increases.
B)  ​rise in taxes.
C)  ​bad weather.
D)  ​a technological advance.E) None of the above
F) B) and D)

Question 7

According to the law of supply, when the price of a good increases we would predict that:

Accepted Answer

A)  ​less will be produced.
B)  ​less will be consumed.
C)  ​more will be produced.
D)  ​more will be consumed.E) A) and C)
F) A) and D)

Question 8

Which of the following is not a valid relationship?

Accepted Answer

A)  ​For a normal good: demand for a good increases when income falls.
B)  ​For a normal good: demand for a good decreases when income falls.
C)  ​For an inferior good: demand for a good decreases when income rises.
D)  ​For an inferior good: demand for a good increases when income falls.E) A) and C)
F) B) and D)

Question 9

​Exhibit 4-5 
-Refer to Exhibit 4-5. A change from Point A to Point D represents a(n) :

Accepted Answer

A)  ​increase in supply.
B)  ​decrease in supply.
C)  ​increase in quantity supplied.
D)  ​decrease in quantity supplied.E) C) and D)
F) All of the above

Question 10

A supply schedule shows:

Accepted Answer

A)  ​projected sales as ad spending varies.
B)  ​how many units producers are willing and able to sell at various prices.
C)  ​possible combinations of output as input prices vary.
D)  ​how many units consumers would like to buy at various prices.E) B) and C)
F) None of the above

Question 11

Which of the following would shift a supply curve to the right?

Accepted Answer

A)  ​Taxes
B)  ​Import restrictions
C)  ​Import duties
D)  ​SubsidiesE) None of the above
F) All of the above

Question 12

According to the law of supply, other things equal, when the price of a good or service rises, the quantity supplied increases, but supply does not.

Accepted Answer

A) True 
 B)False

Question 13

If a shortage exists in a market, then we know that the actual price is

Accepted Answer

A)  ​above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)  ​above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)  ​below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)  ​below the equilibrium price, and quantity supplied is greater than quantity demanded.E) None of the above
F) A) and D)

Question 14

A competitive market is one in which a number of buyers and sellers are offering similar products, and no single buyer or seller can influence the market price.

Accepted Answer

A) True 
 B)False

Question 15

If Eric expects to earn more income next month, he may choose to

Accepted Answer

A)  ​save more now and spend less of his current income on goods and services.
B)  ​save less now and spend more of his current income on goods and services.
C)  ​decrease his current demand for goods and services.
D)  ​decrease his late demand for goods and services.E) A) and B)
F) A) and C)

Question 16

The law of demand refers to the:

Accepted Answer

A)  ​decrease in price that results as more units of a product are demanded.
B)  ​increase in price that results from an increase in demand for a good of limited supply.
C)  ​inverse relationship between the price of a good and the quantity demanded.
D)  ​increase in the quantity of a good made available when its price increases.E) B) and C)
F) None of the above

Question 17

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n) :

Accepted Answer

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

Question 18

Exhibit 4-2 1, a shift to D0 would indicate a(n) : A) ​increase in demand. B) ​decrease in demand. C) ​increase in quantity demanded. D) ​decrease in quantity demanded." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D0 would indicate a(n) :

Accepted Answer

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

Question 19

At the equilibrium price for gasoline:

Accepted Answer

A)  ​everyone with the desire and the income to buy gasoline at that price can do so.
B)  ​surpluses are inevitable.
C)  ​quantity demanded exceeds the quantity supplied.
D)  ​none of the aboveE) All of the above
F) B) and D)

Question 20

The quantity supplied of a good is the amount that

Accepted Answer

A)  ​buyers are willing and able to purchase.
B)  ​sellers are able to produce.
C)  ​buyers and sellers agree will be brought to market.
D)  ​sellers are willing and able to sell.E) A) and D)
F) A) and C)

Exam 4: Demand, Supply, and Market Equilibrium

​Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point D represents a(n) :

Correct AnswerverifiedShow Answer

The quantity supplied of a good is the amount that

Correct AnswerverifiedShow Answer

Skateboards International of Mavericks Beach, California, was able to sell 20,000 skateboards at a price of $60 last year. This year it is able to sell only 12,000 of the same skateboards at a price of $60. Evidently, Skateboard International has experienced a(n) :

Correct AnswerverifiedShow Answer

A supply schedule shows:

Correct AnswerverifiedShow Answer

If a shortage exists in a market, then we know that the actual price is

Correct AnswerverifiedShow Answer

A competitive market is one in which a number of buyers and sellers are offering similar products, and no single buyer or seller can influence the market price.

Correct AnswerverifiedShow Answer

If Eric expects to earn more income next month, he may choose to

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Which of the following is not a valid relationship?

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​Exhibit 4-6 -Refer to Exhibit 4-6. A supply shift from S0 to S2 can be best explained by:

Correct AnswerverifiedShow Answer

The price of automobiles has increased sharply lately. As a result, automobile dealers have noticed that:

Correct AnswerverifiedShow Answer

Which of the following would be most likely to cause an outward shift of the demand curve for electricity?

Correct AnswerverifiedShow Answer

​Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n) :

Correct AnswerverifiedShow Answer

If Diet Pepsi and Diet Coke are substitutes than an increase in the price of Diet Pepsi will cause a decrease in demand for Diet Coke.

Correct AnswerverifiedShow Answer

Which of the following is true?

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At the equilibrium price for gasoline:

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Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D1, a shift to D0 would indicate a(n) :

Correct AnswerverifiedShow Answer

Which of the following would shift a supply curve to the right?

Correct AnswerverifiedShow Answer

According to the law of supply, other things equal, when the price of a good or service rises, the quantity supplied increases, but supply does not.

Correct AnswerverifiedShow Answer

According to the law of supply, when the price of a good increases we would predict that:

Correct AnswerverifiedShow Answer

The law of demand refers to the:

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Exhibit 4-5 -Refer to Exhibit 4-5. A change from Point A to Point D represents a(n) :

Correct Answer
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Exhibit 4-6 -Refer to Exhibit 4-6. A supply shift from S₀ to S₂ can be best explained by:

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Exhibit 4-4 -Refer to Exhibit 4-4. A change from Point A to Point E represents a(n) :

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Exhibit 4-2 -Refer to Exhibit 4-2. Using the graph and beginning on D₁, a shift to D₀ would indicate a(n) :

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