Question 1

Figure 4-20
The graph below pertains to the supply of paper to colleges and universities.
 A to SB. D)  SB to SA. " class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-20. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) C) and D)
F) All of the above

Question 2

If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

Accepted Answer

A)   an increase in demand for brown rice and a decrease in demand for white rice.
B)   a decrease in demand for brown rice and an increase in demand for white rice.
C)   an increase in demand for both brown and white rice.
D)   no change in demand for either type of rice because weight loss is not a determinant of demand.E) All of the above
F) A) and D)

Question 3

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)   today's price of gasoline.
B)   the expected future price of gasoline.
C)   the number of sellers of gasoline.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 4

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) A) and B)
F) A) and D)

Question 5

Figure 4-2
  
-Refer to Figure 4-2. If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $6 is

Accepted Answer

A)   4 units.
B)   6 units.
C)   8 units.
D)   12 units.E) All of the above
F) A) and B)

Question 6

The two words most often used by economists are

Accepted Answer

A)   prices and quantities.
B)   resources and allocation.
C)   supply and demand.
D)   efficiency and equity.E) A) and D)
F) All of the above

Question 7

Figure 4-18
 
-Refer to Figure 4-18. What is the equilibrium price in this market?

Accepted Answer

A)   $0
B)   $5
C)   $7.50
D)   $10E) All of the above
F) B) and C)

Question 8

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-8
 
-Refer to Figure 4-8. The movement from Point A to Point B represents a(n)

Accepted Answer

A)   increase in the price.
B)   decrease in the quantity supplied.
C)   shift in the supply curve.
D)   Both a)  and b)  are correct.E) None of the above
F) A) and D)

Question 10

A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

Accepted Answer

A) True 
 B)False

Question 11

An increase in quantity supplied

Accepted Answer

A)   results in a movement downward and to the left along a fixed supply curve.
B)   results in a movement upward and to the right along a fixed supply curve.
C)   shifts the supply curve to the left.
D)   shifts the supply curve to the right.E) B) and D)
F) A) and D)

Question 12

In a given market, how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)   There is no relationship.
B)   They are the same price.
C)   The market-clearing price exceeds the equilibrium price.
D)   The equilibrium price exceeds the market-clearing price.E) C) and D)
F) A) and B)

Question 13

If buyers and sellers in a certain market are price takers, then individually

Accepted Answer

A)   they have no influence on market price.
B)   they have some influence on market price but that influence is limited.
C)   buyers will be able to find prices lower than those determined in the market.
D)   sellers will find it difficult to sell all they want to sell at the market price.E) A) and B)
F) A) and C)

Question 14

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

Accepted Answer

A)   decreases, and the supply of tires increases.
B)   is unaffected, and the supply of tires decreases.
C)   is unaffected, and the supply of tires increases.
D)   None of the above is necessarily correct.E) B) and C)
F) A) and D)

Question 15

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

Accepted Answer

A)   schedule, and it usually slopes upward.
B)   schedule, and it usually slopes downward.
C)   curve, and it usually slopes upward.
D)   curve, and it usually slopes downward.E) All of the above
F) B) and C)

Question 16

A reduction in an input price will cause a change in quantity supplied but not a change in supply.

Accepted Answer

A) True 
 B)False

Question 17

Figure 4-11
 
-Refer to Figure 4-11. If these are the only two sellers in the market, then the market quantity supplied at a price of $4 is

Accepted Answer

A)   6 units.
B)   7 units.
C)   8 units.
D)   14 units.E) A) and C)
F) B) and C)

Question 18

In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 19

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Accepted Answer

A)   demand for bicycle assembly workers will increase.
B)   supply of bicycles will shift to the right.
C)   supply of bicycles will shift to the left.
D)   firm must increase output to maintain profit levels.E) A) and B)
F) B) and C)

Question 20

"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

Accepted Answer

A)   equilibrium.
B)   the law of demand.
C)   the relationship between supply and demand.
D)   the definition of an inferior good.E) B) and C)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

Today's demand curve for gasoline could shift in response to a change in

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A shortage will occur at any price below equilibrium price and a surplus will occur at any price above equilibrium price.

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In a given market, how are the equilibrium price and the market-clearing price related?

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Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

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

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"Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises." This relationship between price and quantity demanded is referred to as

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Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

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Figure 4-8 -Refer to Figure 4-8. The movement from Point A to Point B represents a(n)

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An increase in quantity supplied

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In a market, the price of any good adjusts until quantity demanded equals quantity supplied.

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The law of demand is true for most goods in the economy.

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If a study by medical researchers finds that eating brown rice causes weight loss while eating white rice causes weight gain, then we likely would see

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Figure 4-2 -Refer to Figure 4-2. If Consumer A and Consumer B are the only consumers in the market, then the market quantity demanded when the price is $6 is

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The two words most often used by economists are

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Figure 4-18 -Refer to Figure 4-18. What is the equilibrium price in this market?

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A reduction in an input price will cause a change in quantity supplied but not a change in supply.

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Figure 4-11 -Refer to Figure 4-11. If these are the only two sellers in the market, then the market quantity supplied at a price of $4 is

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Figure 4-20 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-20. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

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A likely example of substitute goods for most people would be

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If buyers and sellers in a certain market are price takers, then individually

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