Question 1

Two goods are complements when a decrease in the price of one good

Accepted Answer

A)   decreases the quantity demanded of the other good.
B)   decreases the demand for the other good.
C)   increases the quantity demanded of the other good.
D)   increases the demand for the other good.E) A) and B)
F) A) and C)

Question 2

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Accepted Answer

A) True 
 B)False

Question 3

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Accepted Answer

A)   Price will fall, and the effect on quantity is ambiguous.
B)   Price will rise, and the effect on quantity is ambiguous.
C)   Quantity will fall, and the effect on price is ambiguous.
D)   Quantity will rise, and the effect on price is ambiguous.E) A) and B)
F) B) and C)

Question 4

The dictionary defines equilibrium as a situation in which forces

Accepted Answer

A)   are in balance.
B)   are the same.
C)   clash.
D)   remain constant.E) B) and C)
F) A) and D)

Question 5

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation
     , where  is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied.
-Refer to Scenario 4-1. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

Accepted Answer

There is a...

Question 6

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise 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) C) and D)
F) None of the above

Question 7

A university's football stadium is never more than half-full during football games. This indicates

Accepted Answer

A)   the ticket price is above the equilibrium price.
B)   the ticket price is below the equilibrium price.
C)   the ticket price is at the equilibrium price.
D)   nothing about the equilibrium price.E) A) and B)
F) A) and C)

Question 8

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 9

A supply schedule is a table that shows the relationship between

Accepted Answer

A)   price and quantity supplied.
B)   input costs and quantity supplied.
C)   quantity demanded and quantity supplied.
D)   profit and quantity supplied.E) B) and C)
F) A) and D)

Question 10

Figure 4-20 
-Refer to Figure 4-20. If the price is $10, then there would be a

Accepted Answer

A)   shortage of 400 units, and price would rise.
B)   surplus of 400 units, and price would rise.
C)   shortage of 600 units, and price would rise.
D)   surplus of 600 units, and price would rise.E) A) and B)
F) A) and C)

Question 11

Figure 4-18 
-Refer to Figure 4-18. At a price of $35, there would be

Accepted Answer

A)   a shortage, and the price would tend to rise from $35 to a higher price.
B)   a surplus, and the price would tend to rise from $35 to a higher price.
C)   excess demand, and the price would tend to fall from $35 to a lower price.
D)   excess supply, and the price would tend to fall from $35 to a lower price.E) A) and D)
F) A) and C)

Question 12

Figure 4-1 
-Refer to Figure 4-1. The movement from point A to point B on the graph shows an:

Accepted Answer

A)   decrease in demand.
B)   increase in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) None of the above
F) A) and D)

Question 13

The law of demand states that, 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.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following would shift the demand curve for gasoline to the right?

Accepted Answer

A)   a decrease in the price of gasoline
B)   an increase in consumer income, assuming gasoline is a normal good
C)   an increase in the price of cars, a complement for gasoline
D)   a decrease in the expected future price of gasolineE) B) and C)
F) C) and D)

Question 15

Figure 4-22 
-Refer to Figure 4-22. What is the equilibrium quantity in this market?

Accepted Answer

A)   4 units
B)   8 units
C)   12 units
D)   16 unitsE) None of the above
F) All of the above

Question 16

In markets, prices move toward equilibrium because of

Accepted Answer

A)   the actions of buyers and sellers.
B)   government regulations placed on market participants.
C)   increased competition among sellers.
D)   buyers' ability to affect market outcomes.E) A) and C)
F) C) and D)

Question 17

If Max experiences a decrease in his income, then we would expect Max's demand for

Accepted Answer

A)   each good he purchases to remain unchanged.
B)   normal goods to decrease.
C)   luxury goods to increase.
D)   inferior goods to decrease.E) A) and D)
F) None of the above

Question 18

If a good is inferior, then an increase in income will result in an)

Accepted Answer

A)   increase in the demand for the good.
B)   decrease in the demand for the good.
C)   movement down and to the right along the demand curve for the good.
D)   movement up and to the left along the demand curve for the good.E) C) and D)
F) A) and B)

Question 19

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) None of the above
F) All of the above

Question 20

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) A) and D)

Exam 4: The Market Forces of Supply and Demand

Which of the following would shift the demand curve for gasoline to the right?

Correct Answer
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An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct Answer
verified

Two goods are complements when a decrease in the price of one good

Correct Answer
verified

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

Correct Answer
verified

If a good is inferior, then an increase in income will result in an)

Correct Answer
verified

If Max experiences a decrease in his income, then we would expect Max's demand for

Correct Answer
verified

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Correct Answer
verified

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

Correct Answer
verified

Holding all other things constant, a higher price for ski lift tickets would

Correct Answer
verified

Correct Answer
verified
There is a...
View Answer

The law of demand states that, 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.

Correct Answer
verified

In markets, prices move toward equilibrium because of

Correct Answer
verified

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Correct Answer
verified

A university's football stadium is never more than half-full during football games. This indicates

Correct Answer
verified

The dictionary defines equilibrium as a situation in which forces

Correct Answer
verified

Figure 4-20 -Refer to Figure 4-20. If the price is $10, then there would be a

Correct Answer
verified

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows an:

Correct Answer
verified

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be

Correct Answer
verified

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Correct Answer
verified

A supply schedule is a table that shows the relationship between

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Which of the following would shift the demand curve for gasoline to the right?

Correct AnswerverifiedShow Answer

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct AnswerverifiedShow Answer

Two goods are complements when a decrease in the price of one good

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. What is the equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

If a good is inferior, then an increase in income will result in an)

Correct AnswerverifiedShow Answer

If Max experiences a decrease in his income, then we would expect Max's demand for

Correct AnswerverifiedShow Answer

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Holding all other things constant, a higher price for ski lift tickets would

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThere is a...View AnswerShow Answer

The law of demand states that, 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.

Correct AnswerverifiedShow Answer

In markets, prices move toward equilibrium because of

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future would cause a current move from

Correct AnswerverifiedShow Answer

A university's football stadium is never more than half-full during football games. This indicates

Correct AnswerverifiedShow Answer

The dictionary defines equilibrium as a situation in which forces

Correct AnswerverifiedShow Answer

Figure 4-20 -Refer to Figure 4-20. If the price is $10, then there would be a

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. The movement from point A to point B on the graph shows an:

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be

Correct AnswerverifiedShow Answer

Demand refers to the amount buyers wish to buy, whereas the quantity demanded refers to the position of the demand curve.

Correct AnswerverifiedShow Answer

A supply schedule is a table that shows the relationship between

Correct AnswerverifiedShow Answer

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View Answer

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