Question 1

Figure 4.5
-Figure 4.5 illustrates the supply of guitars.An increase in the price of rosewood,which is used to make guitars,would most likely cause a movement from

Accepted Answer

A)   point B to point C.
B)   point B to point A.
C)   S₁ to S₀.
D)   S₁ to S₂.E) A) and B)
F) B) and C)

Question 2

A major freeze in Florida has reduced the orange yield this winter.What will be the effect of this freeze on the price and quantity in the orange market and also in the peach market? (Assume that oranges and peaches are substitutes.)

Accepted Answer

The Florida freeze results in decreased ...

Question 3

As the price of a product rises,the demand for the product falls.

Accepted Answer

A) True 
 B)False

Question 4

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s) .
-According to the Application,we can infer that the presence of wine lakes indicate that the market is experiencing

Accepted Answer

A)   an equilibrium.
B)   a shortage.
C)   a surplus.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 5

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s) .
-According to the Application,we can infer that the wine lakes will disappear if

Accepted Answer

A)   the government sets the price at the equilibrium.
B)   the government sets minimum prices below the equilibrium.
C)   the government sets maximum prices above the equilibrium.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 6

Figure 4.1
-Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant.Assuming Mary and Tom are the only consumers in the market,if the market quantity demanded is 9,the price must be

Accepted Answer

A)   $5.
B)   $10.
C)   $15.
D)   $20.E) A) and C)
F) A) and B)

Question 7

Figure 4.6
-Figure 4.6 illustrates a set of supply and demand curves for a product.When the economy moves from point C to point E,there has been

Accepted Answer

A)   an increase in supply and a decrease in quantity demanded.
B)   a decrease in supply and a decrease in quantity demanded.
C)   a decrease in quantity supplied and a decrease in demand.
D)   an increase in quantity supplied and a decrease in quantity demanded.E) A) and B)
F) C) and D)

Question 8

Peaches and cream are complements.When the price of peaches rises and the price of raw milk (used to make cream) rises

Accepted Answer

A)   the equilibrium price of cream rises and the equilibrium quantity of cream might rise or fall.
B)   the equilibrium price of cream falls and the equilibrium quantity of cream might rise or fall.
C)   the equilibrium price of cream falls and the equilibrium quantity of cream rises.
D)   the equilibrium quantity of cream falls and the equilibrium price of cream might rise or fall.E) A) and D)
F) C) and D)

Question 9

Decreases in the demand for products can be caused by which of the following?

Accepted Answer

A)   decreases in income
B)   decreases in population
C)   decreases in the prices of substitute goods
D)   all of the aboveE) All of the above
F) B) and D)

Question 10

Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s) .
-According to the Application,what should we observe before we can undoubtedly attribute the lower drug prices to a decrease in demand?

Accepted Answer

A)   an increase in the equilibrium quantity
B)   a shortage
C)   a decrease in the equilibrium quantity
D)   a surplusE) B) and C)
F) A) and D)

Question 11

As the price of a product rises,the quantity supplied increases.

Accepted Answer

A) True 
 B)False

Question 12

When the price of peanuts falls,

Accepted Answer

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

Question 13

When Tom's income decreases,he purchases more hamburgers.We can conclude that for Tom,hamburger is a(n) ________ good.

Accepted Answer

A)   substitute
B)   complementary
C)   normal
D)   inferiorE) All of the above
F) A) and C)

Question 14

Figure 4.4
-Figure 4.4 illustrates the demand for guitars.Assume that guitars and guitar strings are complements.A decrease in the price of guitar strings would bring about a movement from

Accepted Answer

A)   point B to point C.
B)   point B to point A.
C)   D₁ to D₀.
D)   D₁ to D₂.E) A) and B)
F) A) and C)

Question 15

Why do the demand curves for inferior goods slope downward,even though the law of demand is driven in part by the income effect?

Accepted Answer

Remember that there are two effects of a...

Question 16

Suppose that the price of fertilizer,an input in the production of corn,falls.We would predict that the equilibrium quantity of corn will ________ and the equilibrium price of corn will ________.

Accepted Answer

A)   rise; rise
B)   rise; fall
C)   fall; rise
D)   fall; fallE) All of the above
F) A) and C)

Question 17

What is a "change in quantity demanded"? How is a "change in quantity demanded" illustrated in a demand diagram?

Accepted Answer

A "change in quantity demanded" refers t...

Question 18

If the population increases,what will this do for the market demand for most products?

Accepted Answer

A)   no change
B)   decrease
C)   increase
D)   none of the aboveE) A) and C)
F) None of the above

Question 19

Explain how an excess supply would lead to a decrease in prices in an unregulated market.

Accepted Answer

With an excess supply,the quantity avail...

Question 20

Suppose that the price of oranges increases and the quantity of oranges in the market decreases.Suggest two reasons why this might have happened.

Accepted Answer

This could have been caused by any numbe...

Exam 4: Demand,supply,and Market Equilibrium

Suppose that the price of oranges increases and the quantity of oranges in the market decreases.Suggest two reasons why this might have happened.

Correct AnswerverifiedThis could have been caused by any numbe...View AnswerShow Answer

As the price of a product rises,the quantity supplied increases.

Correct AnswerverifiedShow Answer

Peaches and cream are complements.When the price of peaches rises and the price of raw milk (used to make cream) rises

Correct AnswerverifiedShow Answer

Figure 4.1 -Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant.Assuming Mary and Tom are the only consumers in the market,if the market quantity demanded is 9,the price must be

Correct AnswerverifiedShow Answer

When Tom's income decreases,he purchases more hamburgers.We can conclude that for Tom,hamburger is a(n) ________ good.

Correct AnswerverifiedShow Answer

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s) . -According to the Application,we can infer that the wine lakes will disappear if

Correct AnswerverifiedShow Answer

Why do the demand curves for inferior goods slope downward,even though the law of demand is driven in part by the income effect?

Correct AnswerverifiedRemember that there are two effects of a...View AnswerShow Answer

Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s) . -According to the Application,what should we observe before we can undoubtedly attribute the lower drug prices to a decrease in demand?

Correct AnswerverifiedShow Answer

Decreases in the demand for products can be caused by which of the following?

Correct AnswerverifiedShow Answer

When the price of peanuts falls,

Correct AnswerverifiedShow Answer

What is a "change in quantity demanded"? How is a "change in quantity demanded" illustrated in a demand diagram?

Correct AnswerverifiedA "change in quantity demanded" refers t...View AnswerShow Answer

Figure 4.4 -Figure 4.4 illustrates the demand for guitars.Assume that guitars and guitar strings are complements.A decrease in the price of guitar strings would bring about a movement from

Correct AnswerverifiedShow Answer

Figure 4.5 -Figure 4.5 illustrates the supply of guitars.An increase in the price of rosewood,which is used to make guitars,would most likely cause a movement from

Correct AnswerverifiedShow Answer

If the population increases,what will this do for the market demand for most products?

Correct AnswerverifiedShow Answer

Figure 4.6 -Figure 4.6 illustrates a set of supply and demand curves for a product.When the economy moves from point C to point E,there has been

Correct AnswerverifiedShow Answer

Explain how an excess supply would lead to a decrease in prices in an unregulated market.

Correct AnswerverifiedWith an excess supply,the quantity avail...View AnswerShow Answer

A major freeze in Florida has reduced the orange yield this winter.What will be the effect of this freeze on the price and quantity in the orange market and also in the peach market? (Assume that oranges and peaches are substitutes.)

Correct AnswerverifiedThe Florida freeze results in decreased ...View AnswerShow Answer

Suppose that the price of fertilizer,an input in the production of corn,falls.We would predict that the equilibrium quantity of corn will ________ and the equilibrium price of corn will ________.

Correct AnswerverifiedShow Answer

As the price of a product rises,the demand for the product falls.

Correct AnswerverifiedShow Answer

Recall the Application about the policies used by the European Union to support the agricultural sectors of is member countries to answer the following question(s) . -According to the Application,we can infer that the presence of wine lakes indicate that the market is experiencing

Correct AnswerverifiedShow Answer

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This could have been caused by any numbe...
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Remember that there are two effects of a...
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A "change in quantity demanded" refers t...
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With an excess supply,the quantity avail...
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Correct Answer
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The Florida freeze results in decreased ...
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Suppose that the price of fertilizer,an input in the production of corn,falls.We would predict that the equilibrium quantity of corn will and the equilibrium price of corn will .

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Correct Answer
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Correct Answer
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