Question 1

Figure 4-18 
-Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Accepted Answer

A)  $15 and 200 units.
B)  $25 and 600 units.
C)  $25 and 400 units.
D)  $35 and 200 units.E) All of the above
F) A) and D)

Question 2

Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

Accepted Answer

The answer of Since individual buyers and individual sellers in...

Question 3

A decrease in the price of a complement will shift the demand curve for a good to the left.

Accepted Answer

A) True 
 B)False

Question 4

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

Accepted Answer

A)  complementary goods.
B)  normal goods.
C)  inferior goods.
D)  substitute goods.E) A) and B)
F) A) and C)

Question 5

If sellers expect higher basket prices in the near future, the current

Accepted Answer

A)  supply of baskets will increase.
B)  supply of baskets will decrease.
C)  supply of baskets will be unaffected.
D)  demand for baskets will decrease.E) B) and C)
F) A) and D)

Question 6

Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would

Accepted Answer

A)  rise.
B)  fall.
C)  stay the same.
D)  could rise, fall, or remain unchanged.E) B) and C)
F) A) and D)

Question 7

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Accepted Answer

A) True 
 B)False

Question 8

"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied

Accepted Answer

A)  is referred to as the law of supply.
B)  applies only to a few goods in the economy.
C)  is represented by a downward-sloping supply curve.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 9

Figure 4-29
​ 
-Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

Accepted Answer

The answer of Figure 4-29
​ 
-Refer to Figure 4-29. If...

Question 10

Which of the following would not shift the demand curve for mp3 players?

Accepted Answer

A)  a decrease in the price of mp3 players
B)  a fad that makes mp3 players more popular among 12-25 year olds
C)  an increase in the price of digital music downloads, a complement for mp3 players
D)  a decrease in the price of satellite radio, a substitute for mp3 playersE) A) and B)
F) C) and D)

Question 11

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

Accepted Answer

A)  production technology
B)  the price of the good
C)  the prices of inputs
D)  expectationsE) A) and B)
F) A) and C)

Question 12

If toast and butter are complements, then which of the following would increase the demand for toast?

Accepted Answer

A)  a decrease in the price of toast
B)  a decrease in the price of butter
C)  an increase in the price of butter
D)  Both a and b are correct.E) All of the above
F) C) and D)

Question 13

Suppose roses are currently selling for $40 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) A) and B)
F) C) and D)

Question 14

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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) All of the above
F) C) and D)

Question 15

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Accepted Answer

A)  supply curve for Ashley's bread will increase.
B)  supply curve for Ashley's bread will decrease.
C)  demand curve for Ashley's bread will increase.
D)  demand curve for Ashley's bread will decrease.E) A) and B)
F) A) and D)

Question 16

Figure 4-22 
-Refer to Figure 4-22. At a price of $20, there is a

Accepted Answer

A)  surplus of 4 units.
B)  surplus of 8 units.
C)  shortage of 4 units.
D)  shortage of 8 units.E) All of the above
F) None of the above

Question 17

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-20 
-Refer to Figure 4-20. If the price is $25, then there would be an excess

Accepted Answer

A)  supply of 100 units, and price would fall.
B)  supply of 300 units, and price would fall.
C)  demand of 100 units, and price would fall.
D)  demand of 300 units, and price would fall.E) A) and B)
F) A) and C)

Question 19

A movement downward and to the left along a supply curve is called a(n)

Accepted Answer

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

Question 20

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Accepted Answer

The supply...

Exam 4: The Market Forces of Supply and Demand

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Correct AnswerverifiedShow Answer

A decrease in supply will cause an increase in price, which will cause a decrease in quantity demanded.

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Which of the following would not shift the demand curve for mp3 players?

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Since individual buyers and individual sellers in a competitive market have no influence on the market price, what do we call the buyers and sellers in a competitive market?

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Figure 4-22 -Refer to Figure 4-22. At a price of $20, there is a

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"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied

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A decrease in the price of a complement will shift the demand curve for a good to the left.

Correct AnswerverifiedShow Answer

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

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If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?

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If toast and butter are complements, then which of the following would increase the demand for toast?

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Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Correct AnswerverifiedShow Answer

Figure 4-20 -Refer to Figure 4-20. If the price is $25, then there would be an excess

Correct AnswerverifiedShow Answer

A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Correct AnswerverifiedShow Answer

If sellers expect higher basket prices in the near future, the current

Correct AnswerverifiedShow Answer

A movement downward and to the left along a supply curve is called a(n)

Correct AnswerverifiedShow Answer

Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are

Correct AnswerverifiedShow Answer

Figure 4-29 ​ -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

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If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

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Figure 4-18 -Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

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Figure 4-29 -Refer to Figure 4-29. If the price increases from $5 to $6, how does the quantity demanded change?

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The supply...
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