Question 1

All goods and services are sold in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 2

If the supply of a product decreases, then we would expect equilibrium price

Accepted Answer

A)  to increase and equilibrium quantity to decrease.
B)  to decrease and equilibrium quantity to increase.
C)  and equilibrium quantity to both increase.
D)  and equilibrium quantity to both decrease.E) A) and B)
F) None of the above

Question 3

In competitive markets, which of the following is not correct?

Accepted Answer

A)  Firms produce identical products.
B)  No individual buyer can influence the market price.
C)  Some sellers can set prices.
D)  Buyers are price takers.E) C) and D)
F) All of the above

Question 4

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Accepted Answer

A) True 
 B)False

Question 5

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high-quality diamonds enters the market, then the

Accepted Answer

A)  supply curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
B)  supply curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
C)  demand curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
D)  demand curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.E) B) and D)
F) A) and B)

Question 6

The following table contains a demand schedule for a good.   Price  Quantit Demanded $10100$20Q1\begin{array} { | c | c | } \hline 	ext { Price } & 	ext { Quantit Demanded } \\hline \$ 10 & 100 \\hline \$ 20 & Q 1 \\hline\end{array} Price $10$20​ Quantit Demanded 100Q1​​  If the law of demand applies to this good, then Q1 could be

Accepted Answer

A)   0.
B)   100.
C)   200.
D)   400. E) C) and D)
F) B) and C)

Question 7

A decrease in income will shift the demand curve for an inferior good to the right.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Accepted Answer

A) True 
 B)False

Question 10

A market includes

Accepted Answer

A)  buyers only.
B)  sellers only.
C)  both buyers and sellers.
D)  the place where transactions occur but not the people involved.E) A) and B)
F) B) and C)

Question 11

The following table contains a supply schedule for a good.   Price  Quantit  Supplied $10100$20Q1\begin{array} { | c | c | } \hline 	ext { Price } & 	ext { Quantit } 	ext { Supplied } \\hline \$ 10 & 100 \\hline \$ 20 & Q 1 \\hline\end{array} Price $10$20​ Quantit  Supplied 100Q1​​  If the law of supply applies to this good, then Q1 could be

Accepted Answer

A)   0.
B)   50.
C)   100.
D)   150. E) B) and C)
F) A) and C)

Question 12

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 13

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-13 
-Refer to Figure 4-13. The shift from S' to S in the market for chocolate cake could be caused by a(n)

Accepted Answer

A)  decrease in the number of commercial bakers.
B)  improvement in oven technology.
C)  decrease in the price of butter.
D)  decrease in the price of chocolate cake.E) A) and D)
F) None of the above

Question 15

Surpluses drive price up, while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 16

A market supply curve shows how the total quantity supplied of a good varies as

Accepted Answer

A)  production technology varies.
B)  price varies.
C)  input prices vary.
D)  demand varies.E) None of the above
F) C) and D)

Question 17

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.   Price  Harry’s  Quantity  Demanded  Darby’s  Quantity  Denanded  Jake’s  Quantity  Denanded $3343$512x\begin{array} { | c | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Harry&#x27;s } \	ext { Quantity } \	ext { Demanded }\end{array} & \begin{array} { c } 	ext { Darby&#x27;s } \	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Jake&#x27;s } \	ext { Quantity } \	ext { Denanded }\end{array} \\hline \$ 3 & 3 & 4 & 3 \\hline \$ 5 & 1 & 2 & x \\hline\end{array} Price $3$5​ Harry’s  Quantity  Demanded ​31​ Darby’s  Quantity  Denanded ​42​ Jake’s  Quantity  Denanded ​3x​​ 
-Refer to Table 4-9. Suppose x = 1. Then the slope of the market demand curve is

Accepted Answer

A)  -3.
B)  -1/3.
C)  1/3.
D)  3. E) A) and B)
F) B) and D)

Question 18

Figure 4-21 
-Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) A) and B)
F) A) and C)

Question 19

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 $8 is

Accepted Answer

A)  14 units.
B)  15 units.
C)  16 units.
D)  29 units.E) B) and C)
F) A) and D)

Question 20

In a market economy, supply and demand are important because they

Accepted Answer

A)  are direct policy tools used by government agencies to regulate the economy.
B)  illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.
C)  can be used to predict the impact on the economy of various events and policies.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct Answer
verified

Correct Answer
verified

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 $8 is

Correct Answer
verified

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct Answer
verified

In a market economy, supply and demand are important because they

Correct Answer
verified

The following table contains a supply schedule for a good. $\begin{array} { | c | c | } \hline \text { Price } & \text { Quantit } \text { Supplied } \\\hline \$ 10 & 100 \\\hline \$ 20 & Q 1 \\\hline\end{array}$ If the law of supply applies to this good, then Q1 could be

Correct Answer
verified

The following table contains a demand schedule for a good. $\begin{array} { | c | c | } \hline \text { Price } & \text { Quantit Demanded } \\\hline \$ 10 & 100 \\\hline \$ 20 & Q 1 \\\hline\end{array}$ If the law of demand applies to this good, then Q1 could be

Correct Answer
verified

Figure 4-13 -Refer to Figure 4-13. The shift from S' to S in the market for chocolate cake could be caused by a(n)

Correct Answer
verified

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

Correct Answer
verified

Surpluses drive price up, while shortages drive price down.

Correct Answer
verified

A market supply curve shows how the total quantity supplied of a good varies as

Correct Answer
verified

A market includes

Correct Answer
verified

If the supply of a product decreases, then we would expect equilibrium price

Correct Answer
verified

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

Correct Answer
verified

In competitive markets, which of the following is not correct?

Correct Answer
verified

A decrease in income will shift the demand curve for an inferior good to the right.

Correct Answer
verified

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Correct Answer
verified

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.

Correct Answer
verified

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high-quality diamonds enters the market, then the

Correct Answer
verified

All goods and services are sold in perfectly competitive markets.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A decrease in the price of peanut butter will increase both the equilibrium price and quantity in the market for jelly.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 $8 is

Correct AnswerverifiedShow Answer

When quantity supplied exceeds quantity demanded at the current market price, the market has a surplus, and market price will likely rise in the future to eliminate the surplus.

Correct AnswerverifiedShow Answer

In a market economy, supply and demand are important because they

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-13 -Refer to Figure 4-13. The shift from S' to S in the market for chocolate cake could be caused by a(n)

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

Correct AnswerverifiedShow Answer

Surpluses drive price up, while shortages drive price down.

Correct AnswerverifiedShow Answer

A market supply curve shows how the total quantity supplied of a good varies as

Correct AnswerverifiedShow Answer

A market includes

Correct AnswerverifiedShow Answer

If the supply of a product decreases, then we would expect equilibrium price

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In competitive markets, which of the following is not correct?

Correct AnswerverifiedShow Answer

A decrease in income will shift the demand curve for an inferior good to the right.

Correct AnswerverifiedShow Answer

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high-quality diamonds enters the market, then the

Correct AnswerverifiedShow Answer

All goods and services are sold in perfectly competitive markets.

Correct AnswerverifiedShow Answer

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