Question 1

A shortage exists in a market if

Accepted Answer

A)  there is an excess supply of the good.
B)  quantity supplied exceeds quantity demanded.
C)  the current price is below its equilibrium price.
D)  All of the above are correct.E) B) and C)
F) A) and B)

Question 2

The law of demand states that, other things equal, an increase in

Accepted Answer

A)  price causes quantity demanded to increase.
B)  price causes quantity demanded to decrease.
C)  quantity demanded causes price to increase.
D)  quantity demanded causes price to decrease.E) C) and D)
F) A) and B)

Question 3

Equilibrium price must increase when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously.
B)  increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
C)  decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.
D)  decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.E) B) and C)
F) None of the above

Question 4

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Accepted Answer

A)  crystal to be unaffected.
B)  crystal to decrease.
C)  crystal to increase.
D)  lead to increase.E) A) and B)
F) None of the above

Question 5

Table 4-1 
-Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)  2 units.
B)  3 units.
C)  4 units.
D)  5 units.E) C) and D)
F) None of the above

Question 6

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 7

A market supply curve shows

Accepted Answer

A)  the total quantity supplied at all possible prices.
B)  the average quantity supplied by producers at all possible prices.
C)  how quantity supplied changes when consumer income changes.
D)  suppliers' responses, in terms of the amounts they will supply, to the demands of buyers.E) A) and D)
F) B) and C)

Question 8

Which of the following sets of events must cause an increase in the price of a new house?

Accepted Answer

A)  higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future
B)  lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future
C)  lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future
D)  higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the futureE) A) and D)
F) A) and C)

Question 9

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A)  The goods offered for sale are exactly the same.
B)  There are so many buyers and sellers that no single buyer or seller has any influence over the market price.
C)  It is difficult for new sellers to enter the market.
D)  Both a and b are correct.E) A) and B)
F) A) and C)

Question 10

Which of the following events must result in a lower price in the market for Snickers?

Accepted Answer

A)  Demand for Snickers increases, and supply of Snickers decreases.
B)  Demand for Snickers and supply of Snickers both decrease.
C)  Demand for Snickers decreases, and supply of Snickers increases.
D)  Demand for Snickers and supply of Snickers both increaseE) All of the above
F) A) and C)

Question 11

When all market participants are price takers who have no influence over prices, the markets have

Accepted Answer

A)  only a few buyers and sellers.
B)  numerous sellers but only a few buyers.
C)  numerous buyers but only a few sellers.
D)  numerous buyers and sellers.E) A) and D)
F) All of the above

Question 12

If there is a shortage of farm laborers, we would expect

Accepted Answer

A)  the wage of farm laborers to increase.
B)  the wage of farm laborers to decrease.
C)  the price of farm commodities to decrease.
D)  a decrease in the demand for substitutes for farm labor.E) None of the above
F) All of the above

Question 13

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 14

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Question 15

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 C)
F) All of the above

Question 16

An decrease in the price of oranges would lead to a(n)

Accepted Answer

A)  increased supply of oranges.
B)  increase in the prices of inputs used in orange production.
C)  a movement down and to the left along the supply curve for oranges.
D)  a movement up and to the right along the supply curve for oranges.E) A) and D)
F) A) and C)

Question 17

Which of the following statements is correct?

Accepted Answer

A)  Buyers determine supply, and sellers determine demand.
B)  Buyers determine demand, and sellers determine supply.
C)  Buyers determine both demand and supply.
D)  Sellers determine both demand and supply.E) A) and B)
F) A) and C)

Question 18

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium price?

Accepted Answer

Question 19

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

Question 20

A very hot summer in Atlanta will cause

Accepted Answer

A)  the demand curve for lemonade to shift to the left.
B)  the demand for air conditioners to decrease.
C)  the demand for jackets to decrease.
D)  a movement downward and to the right along the demand curve for tank tops.E) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

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?

Correct Answer
verified

When all market participants are price takers who have no influence over prices, the markets have

Correct Answer
verified

The law of demand states that, other things equal, an increase in

Correct Answer
verified

A market supply curve shows

Correct Answer
verified

A shortage exists in a market if

Correct Answer
verified

Which of the following sets of events must cause an increase in the price of a new house?

Correct Answer
verified

If there is a shortage of farm laborers, we would expect

Correct Answer
verified

Which of the following events must result in a lower price in the market for Snickers?

Correct Answer
verified

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Correct Answer
verified

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

Correct Answer
verified

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Correct Answer
verified

Correct Answer
verified

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct Answer
verified

Which of the following characteristics is required for a perfectly competitive market?

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

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct Answer
verified

Equilibrium price must increase when demand

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

An decrease in the price of oranges would lead to a(n)

Correct Answer
verified

A very hot summer in Atlanta will cause

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

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?

Correct AnswerverifiedShow Answer

When all market participants are price takers who have no influence over prices, the markets have

Correct AnswerverifiedShow Answer

The law of demand states that, other things equal, an increase in

Correct AnswerverifiedShow Answer

A market supply curve shows

Correct AnswerverifiedShow Answer

A shortage exists in a market if

Correct AnswerverifiedShow Answer

Which of the following sets of events must cause an increase in the price of a new house?

Correct AnswerverifiedShow Answer

If there is a shortage of farm laborers, we would expect

Correct AnswerverifiedShow Answer

Which of the following events must result in a lower price in the market for Snickers?

Correct AnswerverifiedShow Answer

Cocoa and marshmallows are complements, so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of

Correct AnswerverifiedShow Answer

Which of the following characteristics is required for a perfectly competitive market?

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

If something happens to alter the quantity demanded at any given price, then the demand curve shifts.

Correct AnswerverifiedShow Answer

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

An decrease in the price of oranges would lead to a(n)

Correct AnswerverifiedShow Answer

A very hot summer in Atlanta will cause

Correct AnswerverifiedShow Answer

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