Question 1

Which of the following demonstrates the law of demand?

Accepted Answer

A)   After Jon got a raise at work, he bought more pretzels at $1.50 per pretzel than he did before his raise.
B)   Melissa buys fewer muffins at $0.75 per muffin than at $1 per muffin, other things equal.
C)   Dave buys more donuts at $0.25 per donut than at $0.50 per donut, other things equal.
D)   Kendra buys fewer Snickers at $0.60 per Snickers after the price of Milky Ways falls to $0.50 per Milky Way.E) A) and C)
F) B) and D)

Question 2

Figure 4-14 
-Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

Accepted Answer

A)   There is an improvement in the technology used to produce this good.
B)   The cost of an input to the production of this good increases.
C)   This good becomes very popular.
D)   The price of a substitute good decreases.E) A) and D)
F) All of the above

Question 3

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

Accepted Answer

A)   price-quantity schedule.
B)   buyer schedule.
C)   demand schedule.
D)   demand curve.E) None of the above
F) A) and B)

Question 4

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 5

Figure 4-11 
-Refer to Figure 4-11. The movement from point A to point B on the graph represents

Accepted Answer

A)   an increased willingness and ability on the part of suppliers to supply the good at each possible price.
B)   an increase in the number of suppliers.
C)   a decrease in the price of a relevant input.
D)   an increase in the price of the good that is being supplied and the suppliers' responses to that price change.E) A) and B)
F) A) and C)

Question 6

If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

Accepted Answer

A) True 
 B)False

Question 7

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring?

Accepted Answer

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

Question 8

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) All of the above
F) None of the above

Question 9

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 D)
F) All of the above

Question 10

Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

Accepted Answer

The answer of Since individual buyers and individual sellers in...

Question 11

The quantity demanded of a good is the amount that buyers are

Accepted Answer

A)   willing to purchase.
B)   willing and able to purchase.
C)   willing, able, and need to purchase.
D)   able to purchase.E) A) and B)
F) A) and C)

Question 12

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) B) and C)
F) A) and B)

Question 13

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-13. Suppose x = 1. Then it must be true that

Accepted Answer

A)   Harry and Jake have the same income, which is lower than Darby's income.
B)   if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake.
C)   Harry's demand curve is identical to Jake's demand curve.
D)   All of the above are correct.E) A) and D)
F) C) and D)

Question 14

Figure 4-19 
-Refer to Figure 4-19. 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) All of the above
F) A) and C)

Question 15

Figure 4-16 
-Refer to Figure 4-16. The shift from S to S' could be caused by an

Accepted Answer

A)   increase in the price of the good.
B)   improvement in production technology.
C)   increase in income.
D)   increase in input prices.E) A) and B)
F) All of the above

Question 16

Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

Accepted Answer

A) True 
 B)False

Question 17

Table 4-16
The following table shows the supply and demand schedules in a market.
 
-Refer to Table 4-16. If the supply curve shifts to the right, will the price in this market rise or fall?

Accepted Answer

The price ...

Question 18

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 19

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

Question 20

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A)   Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)   Some degree of competition is present in most markets.
C)   There are many buyers and many sellers in all types of markets.
D)   Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) None of the above
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

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

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Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph represents

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If something happens to alter the quantity supplied at any given price, then we move along the fixed supply curve to a new quantity supplied.

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Figure 4-14 -Refer to Figure 4-14. Which of the following would explain a movement from E1 to E2?

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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

Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

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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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Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels represents the market for winter coats as we progress from winter to spring?

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Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

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Which of the following demonstrates the law of demand?

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Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then it must be true that

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A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

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

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Figure 4-19 -Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of

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Sellers as a group determine the demand for a product, and buyers as a group determine the supply of a product.

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Figure 4-16 -Refer to Figure 4-16. The shift from S to S' could be caused by an

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All goods and services are sold in perfectly competitive markets.

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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. If the supply curve shifts to the right, will the price in this market rise or fall?

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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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The quantity demanded of a good is the amount that buyers are

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