Question 1

The market for ice cream is a

Accepted Answer

A)   monopolistic market.
B)   highly competitive market.
C)   highly organized market.
D)   Both b)  and c)  are correct.E) A) and B)
F) A) and C)

Question 2

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

Accepted Answer

A)   result in either a decrease in demand or an increase in demand.
B)   result in a movement along a stationary demand curve.
C)   result in a shift of supply.
D)   have no effect on the quantity demanded.E) None of the above
F) A) and B)

Question 3

Table 4-4
 
-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) C) and D)
F) B) and C)

Question 4

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

Accepted Answer

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

Question 5

Once the demand 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) A) and D)

Question 6

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

Accepted Answer

A)   $2, there is a shortage 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 shortage of 4 units.E) None of the above
F) C) and D)

Question 7

The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-22
 
-Refer to Figure 4-22. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) C) and D)
F) B) and D)

Question 9

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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) C) and D)
F) A) and C)

Question 10

If something happens to alter the quantity supplied at any given price, then

Accepted Answer

A)   we move along the supply curve.
B)   the supply curve shifts.
C)   the supply curve becomes steeper.
D)   the supply curve becomes flatter.E) A) and B)
F) A) and C)

Question 11

Figure 4-16
 
-Refer to Figure 4-16. If there is currently a shortage of 20 units of the good, then the law of

Accepted Answer

A)   demand predicts that the price will rise by $2 to eliminate the shortage.
B)   supply predicts that the price will rise by $2 to eliminate the shortage.
C)   supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)   supply and demand predicts that the price will fall by $2 to eliminate the shortage.E) C) and D)
F) A) and B)

Question 12

The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

Accepted Answer

A) True 
 B)False

Question 13

If a good or service has only one seller, then the seller is called a monopoly.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-3
 
-Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

Accepted Answer

A)   0 units.
B)   10 units.
C)   15 units.
D)   25 units.E) B) and D)
F) None of the above

Question 15

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)   production technology
B)   the price of the good
C)   the prices of inputs
D)   expectationsE) All of the above
F) A) and C)

Question 16

At the equilibrium price, quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 17

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 18

When the price of a good or service changes,

Accepted Answer

A)   the demand curve shifts in the opposite direction.
B)   the supply curve shifts in the opposite direction.
C)   the supply curve shifts in the same direction.
D)   there is a movement along a given supply curve.E) B) and C)
F) None of the above

Question 19

When the price of a good or service changes,

Accepted Answer

A)   the supply curve shifts in the opposite direction.
B)   the demand curve shifts in the opposite direction.
C)   the demand curve shifts in the same direction.
D)   there is a movement along a given demand curve.E) C) and D)
F) A) and B)

Question 20

When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Figure 4-22 -Refer to Figure 4-22. Which of the four panels represents the market for peanut butter after a major hurricane hits the peanut-growing south?

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The market supply curve shows how the total quantity supplied of a good varies as input prices vary, holding constant all the other factors that influence producers' decisions about how much to sell.

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When the price of a good or service changes,

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At the equilibrium price, quantity demanded is equal to quantity supplied.

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Which of the following is not held constant in a supply schedule?

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The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well.

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

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

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If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

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The market for ice cream is a

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

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Table 4-4 -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

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Figure 4-3 -Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is

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

Correct AnswerverifiedShow Answer

When the price of a good or service changes,

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Figure 4-16 -Refer to Figure 4-16. If there is currently a shortage of 20 units of the good, then the law of

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If a good or service has only one seller, then the seller is called a monopoly.

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When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

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If something happens to alter the quantity supplied at any given price, then

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