Question 1

For teenagers,a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)   1 percent reduction in the quantity demanded of cigarettes.
B)   4 percent reduction in the quantity demanded of cigarettes.
C)   10 percent reduction in the quantity demanded of cigarettes.
D)   12 percent reduction in the quantity demanded of cigarettes.E) B) and C)
F) B) and D)

Question 2

Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

Accepted Answer

A)   shortage to exist and the market price of roses to increase.
B)   shortage to exist and the market price of roses to decrease.
C)   surplus to exist and the market price of roses to increase.
D)   surplus to exist and the market price of roses to decrease.E) B) and D)
F) C) and D)

Question 3

A movement upward and to the right along a supply curve is called

Accepted Answer

A)   an increase in supply.
B)   a decrease in supply.
C)   a decrease in quantity supplied.
D)   an increase in quantity supplied.E) A) and D)
F) B) and C)

Question 4

When quantity demanded has increased at every price,it might be because

Accepted Answer

A)   the number of buyers in the market has decreased.
B)   income has increased and the good is an inferior good.
C)   the costs incurred by sellers producing the good have decreased.
D)   the price of a complementary good has decreased.E) A) and B)
F) B) and C)

Question 5

Table 4-8
 
-Refer to Table 4-8.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

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

Question 6

If a higher price means a greater quantity supplied,then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following events would cause a movement upward and to the left along the demand curve for olives?

Accepted Answer

A)   The number of buyers of olives decreases.
B)   Consumer income decreases,and olives are a normal good.
C)   The price of pickles decreases,and pickles are a substitute for olives.
D)   The price of olives rises.E) B) and D)
F) B) and C)

Question 8

What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

Accepted Answer

A)   Price will rise.
B)   Price will fall.
C)   Price will stay exactly the same.
D)   The price change will be ambiguous.E) C) and D)
F) A) and D)

Question 9

Benny rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental.Benny's demand demonstrates the law of

Accepted Answer

A)   price.
B)   supply.
C)   demand.
D)   income.E) C) and D)
F) B) and D)

Question 10

Figure 4-6 
-Refer to Figure 4-6.The movement from point A to point B on the graph is caused by

Accepted Answer

A)   a decrease in the price of the good.
B)   an increase in the price of the good.
C)   an advance in technology.
D)   a decrease in input prices.E) A) and D)
F) A) and C)

Question 11

If car manufacturers begin utilizing new labor-saving technology on their assembly lines,we would not expect

Accepted Answer

A)   a smaller quantity of labor to be used.
B)   the supply of cars to increase.
C)   the firms' costs to fall.
D)   individual car manufacturers to move up and to the right along their individual supply curves.E) None of the above
F) A) and B)

Question 12

Buyers and sellers who have no influence on market price are referred to as

Accepted Answer

A)   market pawns.
B)   monopolists.
C)   price takers.
D)   price makers.E) B) and D)
F) All of the above

Question 13

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A)   a change in income
B)   a change in the price of the good or service
C)   a change in expectations about the future price of the good or service
D)   a change in the price of a related good or serviceE) All of the above
F) A) and D)

Question 14

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)   Consumers have experienced an increase in income and beef-production technology has improved.
B)   The price of chicken has risen and the price of steak sauce has fallen.
C)   New medical evidence has been released that indicates a negative correlation between a person's beef consumption and his or her longevity.
D)   The demand curve for beef must be positively sloped.E) C) and D)
F) B) and D)

Question 15

Figure 4-14
Panel (a) Panel (b)    Panel (c) Panel (d)   
-Refer to Figure 4-14.Which of the four panels illustrates a decrease in quantity demanded?

Accepted Answer

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

Question 16

An increase in the price of oranges would lead to

Accepted Answer

A)   an increased supply of oranges.
B)   a reduction in the prices of inputs used in orange production.
C)   an increased demand for oranges.
D)   a movement up and to the right along the supply curve for oranges.E) None of the above
F) C) and D)

Question 17

A downward-sloping demand curve illustrates

Accepted Answer

A)   that demand decreases over time.
B)   that prices fall over time.
C)   the relationship between income and quantity demanded.
D)   the law of demand.E) B) and C)
F) A) and B)

Question 18

An increase in the price of a good will

Accepted Answer

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

Question 19

Table 4-3
 
-Refer to Table 4-3.Which supply schedules obey the law of supply?

Accepted Answer

A)   Firm A's only.
B)   Firm B's,Firm C's,and Firm D's.
C)   Firm A's and Firm C's.
D)   Firm B's and Firm D's.E) A) and D)
F) A) and C)

Question 20

Suppose that demand for a good increases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Accepted Answer

A)   Equilibrium price would decrease,but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase,but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.E) A) and C)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

A movement upward and to the right along a supply curve is called

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An increase in the price of oranges would lead to

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Which of the following events would cause a movement upward and to the left along the demand curve for olives?

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Figure 4-14 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-14.Which of the four panels illustrates a decrease in quantity demanded?

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Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

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An increase in the price of a good will

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Which of the following changes would not shift the demand curve for a good or service?

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When quantity demanded has increased at every price,it might be because

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If car manufacturers begin utilizing new labor-saving technology on their assembly lines,we would not expect

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For teenagers,a 10 percent increase in the price of cigarettes leads to a

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Figure 4-6 -Refer to Figure 4-6.The movement from point A to point B on the graph is caused by

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Benny rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental.Benny's demand demonstrates the law of

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Table 4-3 -Refer to Table 4-3.Which supply schedules obey the law of supply?

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A downward-sloping demand curve illustrates

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Buyers and sellers who have no influence on market price are referred to as

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Table 4-8 -Refer to Table 4-8.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

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If a higher price means a greater quantity supplied,then the supply curve slopes upward.

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Suppose that demand for a good increases and,at the same time,supply of the good decreases.What would happen in the market for the good?

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Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

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What will happen to the equilibrium price of new textbooks if more students attend college,paper becomes cheaper,textbook authors accept lower royalties,and fewer used textbooks are sold?

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