Question 1

Which of the following is not an example of a market?

Accepted Answer

A)   A small town has only one seller of electricity.
B)   In the United States, a sick person cannot legally purchase a kidney.
C)   In Florida, there are many buyers and sellers of key lime pie.
D)   The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities.E) None of the above
F) All of the above

Question 2

A demand schedule is a table that shows the relationship between

Accepted Answer

A)   quantity demanded and quantity supplied.
B)   income and quantity demanded.
C)   price and quantity demanded.
D)   price and income.E) None of the above
F) A) and C)

Question 3

The sum of all the individual supply curves for a product is called

Accepted Answer

A)   total supply.
B)   market supply.
C)   aggregate supply.
D)   total output.E) A) and B)
F) A) and C)

Question 4

If a increase in income decreases the demand for a good,then the good is a(n)

Accepted Answer

A)   substitute good.
B)   complementary good.
C)   normal good.
D)   inferior good.E) A) and B)
F) All of the above

Question 5

Equilibrium quantity must decrease when demand

Accepted Answer

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

Question 6

A movement upward and to the right 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) B) and C)
F) C) and D)

Question 7

A decrease in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a demand curve.
B)   results in a movement upward and to the left along a demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) B) and C)
F) A) and D)

Question 8

In a market economy,supply and demand are important because they

Accepted Answer

A)   play a critical role in the allocation of the economy's scarce resources.
B)   determine how much of each good gets produced.
C)   can be used to predict the impact on the economy of various events and policies.
D)   All of the above are correct.E) A) and D)
F) All of the above

Question 9

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 10

You love peanut butter.You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year.As a result,your demand for peanut butter

Accepted Answer

A)   will increase but not until the end of the year.
B)   increases today.
C)   decreases as you look for a substitute good.
D)   shifts left today.E) A) and B)
F) All of the above

Question 11

The market demand curve

Accepted Answer

A)   is found by vertically adding the individual demand curves.
B)   slopes upward.
C)   represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.
D)   represents the sum of the quantities demanded by all the buyers at each price of the good.E) All of the above
F) A) and B)

Question 12

A decrease in supply is represented by a

Accepted Answer

A)   movement downward and to the left along a supply curve.
B)   movement upward and to the right along a supply curve.
C)   rightward shift of a supply curve.
D)   leftward shift of a supply curve.E) A) and B)
F) B) and C)

Question 13

A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

There is no shortage of scarce resources in a market economy because

Accepted Answer

A)   the government makes shortages illegal.
B)   resources are abundant in market economies.
C)   prices adjust to eliminate shortages.
D)   quantity supplied is always greater than quantity demanded in market economies.E) A) and D)
F) None of the above

Question 16

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months.As a result,we can expect the supply of lumber to

Accepted Answer

A)   fall in six months but not now.
B)   increase in six months when the price goes up.
C)   fall now.
D)   increase now to meet as much demand as possible.E) A) and C)
F) B) and C)

Question 17

The supply curve for milk

Accepted Answer

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

Question 18

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 19

Supply and demand together determine the price and quantity of a good sold in a market.

Accepted Answer

A) True 
 B)False

Question 20

Table 4-5
 
-Refer to Table 4-5.If these are the only four sellers in the market,then the market quantity supplied at a price of $8 is

Accepted Answer

A)   10 units.
B)   20 units.
C)   32 units.
D)   40 units.E) A) and D)
F) B) and D)

Exam 4: The Market Forces of Supply and Demand.

Supply and demand together determine the price and quantity of a good sold in a market.

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The supply curve for milk

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Equilibrium quantity must decrease when demand

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A movement upward and to the right along a supply curve is called a(n)

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Table 4-5 -Refer to Table 4-5.If these are the only four sellers in the market,then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

In a market economy,supply and demand are important because they

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A decrease in the price of creamer will increase the equilibrium price and decrease the equilibrium quantity in the market for coffee.

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Which of the following is not an example of a market?

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A demand schedule is a table that shows the relationship between

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

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The sum of all the individual supply curves for a product is called

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A decrease in quantity demanded

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In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

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A decrease in supply is represented by a

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There is no shortage of scarce resources in a market economy because

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The market demand curve

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If a increase in income decreases the demand for a good,then the good is a(n)

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You love peanut butter.You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year.As a result,your demand for peanut butter

Correct AnswerverifiedShow Answer

Recent forest fires in the western states are expected to cause the price of lumber to rise in the next six months.As a result,we can expect the supply of lumber to

Correct AnswerverifiedShow Answer

A decrease in the price of pizza will shift the supply curve for pizza to the left.

Correct AnswerverifiedShow Answer

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