Question 1

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-20 
-Refer to Figure 4-20. At a price of $15,

Accepted Answer

A)   quantity demanded exceeds quantity supplied.
B)   there is a shortage.
C)   there is an excess demand.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 3

Assume Diana buys computers in a competitive market. It follows that

Accepted Answer

A)   Diana has a limited number of sellers to turn to when she buys a computer.
B)   Diana will find herself negotiating with sellers whenever she buys a computer.
C)   if Diana buys a large number of computers, the price of computers will rise noticeably.
D)   None of the above is correct.E) B) and C)
F) A) and D)

Question 4

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Accepted Answer

The equilibrium pric...

Question 5

The quantity supplied of a good is the amount that

Accepted Answer

A)   buyers are willing and able to purchase.
B)   sellers are able to produce.
C)   buyers and sellers agree will be brought to market.
D)   sellers are willing and able to sell.E) All of the above
F) A) and B)

Question 6

Table 4-2 
-Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. When the price decreases from $6 to $4, the market quantity demanded

Accepted Answer

A)   increases by 0.75 units.
B)   increases by 3 units.
C)   increases by 4 units.
D)   decreases by 27 units.E) A) and D)
F) B) and D)

Question 7

Table 4-3 
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Accepted Answer

A)   0 units.
B)   3.5 units.
C)   12 units.
D)   14 units.E) A) and D)
F) None of the above

Question 8

Figure 4-3
Consumer 1 Consumer 2  
-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) None of the above
F) B) and C)

Question 9

A market is a group of buyers and sellers of a particular good or service.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following might cause the demand curve for an inferior good to shift to the left?

Accepted Answer

A)   a decrease in income
B)   an increase in the price of a substitute
C)   an increase in the price of a complement
D)   None of the above is correct.E) A) and D)
F) B) and C)

Question 11

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and D)
F) B) and D)

Question 12

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Different sellers sell identical products.
B)   There are many sellers.
C)   Sellers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.E) C) and D)
F) A) and B)

Question 13

Figure 4-12
Firm A Firm B  
-Refer to Figure 4-12. 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 B)
F) A) and C)

Question 14

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to

Accepted Answer

A)   decide which direction to shift the curve.
B)   decide whether the fires affected demand or supply.
C)   graph the shift to see the effect on equilibrium.
D)   None of the above is correct.E) B) and D)
F) C) and D)

Question 15

Table 4-4 
-Refer to Table 4-4. Suppose the market consists of Barb and Carl only. If the price falls by $2, the quantity demanded in the market increases by

Accepted Answer

A)   4 units.
B)   6 units.
C)   8 units.
D)   10 units.E) A) and B)
F) B) and D)

Question 16

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

Question 17

A decrease in the price of a good will

Accepted Answer

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

Question 18

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses?

Accepted Answer

A)   a decrease in the price of mattresses
B)   a decrease in the price of custom wooden sleigh bed frames
C)   a change in consumer tastes away from wooden bedroom furniture
D)   a decrease in the number of people in the United StatesE) B) and D)
F) B) and C)

Question 19

An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 4: The Market Forces of Supply and Demand

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the future would cause a current move from

Correct AnswerverifiedShow Answer

If the supply of tennis balls, a complement to tennis racquets, decreases, what will happen to the equilibrium price of tennis balls and to the equilibrium price of tennis racquets?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

A decrease in the price of a good will

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Table 4-2 -Refer to Table 4-2. Suppose Abby, Brandi, Carrie, and DeeDee are the only four buyers in the market. When the price decreases from $6 to $4, the market quantity demanded

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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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An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way.

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The quantity supplied of a good is the amount that

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At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

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Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

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Assume Diana buys computers in a competitive market. It follows that

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Which of the following is not a characteristic of a perfectly competitive market?

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Figure 4-20 -Refer to Figure 4-20. At a price of $15,

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Figure 4-3 Consumer 1 Consumer 2 -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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You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Barb and Carl only. If the price falls by $2, the quantity demanded in the market increases by

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Which of the following might cause the demand curve for an inferior good to shift to the left?

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Figure 4-12 Firm A Firm B -Refer to Figure 4-12. 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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A market is a group of buyers and sellers of a particular good or service.

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand C in the market for mattresses?

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Which of the following demonstrates the law of demand?

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