Question 1

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 18 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 2

Table 4-7 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Accepted Answer

A)  2.5 gallons.
B)  4 gallons.
C)  10 gallons.
D)  50 gallons.E) A) and B)
F) A) and C)

Question 3

Which of the following demonstrates the law of supply?

Accepted Answer

A)  When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts.
B)  When car production technology improved, car producers increased their supply of cars.
C)  When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)  When ketchup prices rose, ketchup sellers decreased their quantity supplied of ketchup.E) B) and C)
F) A) and D) A

Question 4

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) B) and C)
F) C) and D)

Question 5

Figure 4-21 
-Refer to Figure 4-21. At a price of $16, there is a

Accepted Answer

A)  surplus of 1 unit.
B)  surplus of 3 units.
C)  shortage of 1 unit.
D)  shortage of 3 units.E) B) and C)
F) None of the above

Question 6

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)  prices at and above the equilibrium price.
B)  prices at and below the equilibrium price.
C)  prices above and below the equilibrium price, but not at the equilibrium price.
D)  the equilibrium price but not above or below the equilibrium price.E) None of the above
F) A) and B)

Question 7

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) B) and D)

Question 8

Today's supply curve for iPods could shift in response to a change in

Accepted Answer

A)  today's price of iPods.
B)  the expected future price of iPods.
C)  the number of buyers of iPods.
D)  All of the above are correct.E) A) and C)
F) A) and D)

Question 9

Assume a market is perfectly competitive. When a new producer enters the market, the

Accepted Answer

A)  price in the market increases.
B)  price in the market decreases.
C)  price in the market does not change.
D)  market is no longer a competitive market.E) A) and D)
F) B) and D)

Question 10

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

Accepted Answer

A)  shortage to exist and the market price of chocolate-dipped strawberries to increase.
B)  shortage to exist and the market price of chocolate-dipped strawberries to decrease.
C)  surplus to exist and the market price of chocolate-dipped strawberries to increase.
D)  surplus to exist and the market price of chocolate-dipped strawberries to decrease.E) A) and B)
F) All of the above

Question 11

Which of the following is not held constant in a demand schedule?

Accepted Answer

A)  income
B)  tastes
C)  price
D)  expectationsE) C) and D)
F) B) and C) C

Question 12

A decrease in the price of baseball bats will decrease the demand for baseballs.

Accepted Answer

A) True 
 B)False

Question 13

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)  surpluses and shortages.
B)  quantities.
C)  government policies.
D)  prices.E) None of the above
F) All of the above D

Question 14

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 15

Figure 4-10 
-Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Accepted Answer

A)  increase in the price.
B)  decrease in the quantity supplied.
C)  shift in the supply curve.
D)  Both a and b are correct.E) B) and C)
F) None of the above

Question 16

If, at the current price, there is a surplus of a good, then

Accepted Answer

A)  sellers are producing more than buyers wish to buy.
B)  the market must be in equilibrium.
C)  the price is below the equilibrium price.
D)  quantity demanded equals quantity supplied.E) A) and B)
F) B) and C)

Question 17

The supply curve for stand up paddle boards

Accepted Answer

A)  shifts when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph.
B)  shifts when the price of stand up paddle boards changes because the quantity supplied of stand up paddle boards is measured on the horizontal axis of the graph.
C)  does not shift when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph.
D)  does not shift when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the horizontal axis of the graph.E) All of the above
F) C) and D)

Question 18

If the number of buyers in a market decreases, then

Accepted Answer

A)  demand will increase.
B)  demand will decrease.
C)  supply will increase.
D)  supply will decrease.E) B) and C)
F) A) and B)

Question 19

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Accepted Answer

A)  Both the equilibrium price and quantity would increase.
B)  Both the equilibrium price and quantity would decrease.
C)  The equilibrium price would increase, and the equilibrium quantity would decrease.
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.E) C) and D)
F) A) and C)

Question 20

When drawing a demand curve,

Accepted Answer

A)  demand is measured along the vertical axis, and price is measured along the horizontal axis.
B)  quantity demanded is measured along the vertical axis, and price is measured along the horizontal axis.
C)  price is measured along the vertical axis, and demand is measured along the horizontal axis.
D)  price is measured along the vertical axis, and quantity demanded is measured along the horizontal axis.E) A) and D)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

Correct Answer
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Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Correct Answer
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Which of the following demonstrates the law of supply?

Correct Answer
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A

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

Correct Answer
verified

Figure 4-21 -Refer to Figure 4-21. At a price of $16, there is a

Correct Answer
verified

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Correct Answer
verified

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?

Correct Answer
verified

Today's supply curve for iPods could shift in response to a change in

Correct Answer
verified

Assume a market is perfectly competitive. When a new producer enters the market, the

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not held constant in a demand schedule?

Correct Answer
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C

A decrease in the price of baseball bats will decrease the demand for baseballs.

Correct Answer
verified

The signals that guide the allocation of resources in a market economy are

Correct Answer
verified
D

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

Correct Answer
verified

Figure 4-10 -Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Correct Answer
verified

If, at the current price, there is a surplus of a good, then

Correct Answer
verified

The supply curve for stand up paddle boards

Correct Answer
verified

If the number of buyers in a market decreases, then

Correct Answer
verified

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Correct Answer
verified

When drawing a demand curve,

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Correct AnswerverifiedThere is a...View AnswerShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. At a price of $16, there is a

Correct AnswerverifiedShow Answer

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Today's supply curve for iPods could shift in response to a change in

Correct AnswerverifiedShow Answer

Assume a market is perfectly competitive. When a new producer enters the market, the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not held constant in a demand schedule?

Correct AnswerverifiedC

A decrease in the price of baseball bats will decrease the demand for baseballs.

Correct AnswerverifiedShow Answer

The signals that guide the allocation of resources in a market economy are

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to Figure 4-10. The movement from Point A to Point B represents a(n)

Correct AnswerverifiedShow Answer

If, at the current price, there is a surplus of a good, then

Correct AnswerverifiedShow Answer

The supply curve for stand up paddle boards

Correct AnswerverifiedShow Answer

If the number of buyers in a market decreases, then

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Correct AnswerverifiedShow Answer

When drawing a demand curve,

Correct AnswerverifiedShow Answer

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There is a...
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A

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C

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D

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