Question 1

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Accepted Answer

A)   Price will fall and the effect on quantity is ambiguous.
B)   Price will rise and the effect on quantity is ambiguous.
C)   Quantity will fall and the effect on price is ambiguous.
D)   Quantity will rise and the effect on price is ambiguous.E) None of the above
F) C) and D)

Question 2

A rightward shift of a supply curve is called

Accepted Answer

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

Question 3

If the demand for a good falls when income falls,then the good is called

Accepted Answer

A)   a normal good.
B)   a regular good.
C)   a luxury good.
D)   an inferior good.E) None of the above
F) B) and D)

Question 4

A decrease in supply is represented by

Accepted Answer

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

Question 5

In a market economy,supply and demand determine

Accepted Answer

A)   both the quantity of each good produced and the price at which it is sold.
B)   the quantity of each good produced,but not the price at which it is sold.
C)   the price at which each good is sold,but not the quantity of each good produced.
D)   neither the quantity of each good produced nor the price at which it is sold.E) A) and B)
F) B) and C)

Question 6

Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

Accepted Answer

A)   Sellers would not be able to produce and sell as much as before at each relevant price.
B)   The supply would decrease.
C)   Buyers would not be willing to buy as much as before at each relevant price.
D)   The equilibrium price would rise.E) C) and D)
F) B) and D)

Question 7

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 8

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 9

An increase in the price of ink will shift the supply curve for pens to the left.

Accepted Answer

A) True 
 B)False

Question 10

Step one of the "Three Steps for Analyzing Changes in Equilibrium" is

Accepted Answer

A)   decide which direction the curve shifts.
B)   decide whether the event shifts the supply or demand curve.
C)   use the supply-and-demand diagram to see how the shift changes the equilibrium.
D)   Any of these could be used first.E) All of the above
F) A) and B)

Question 11

A decrease in quantity supplied

Accepted Answer

A)   results in a movement downward and to the left along a fixed supply curve.
B)   results in a movement upward and to the right along a fixed supply curve.
C)   shifts the supply curve to the left.
D)   shifts the supply curve to the right.E) None of the above
F) A) and C)

Question 12

Which of the following events would cause the price of oranges to fall?

Accepted Answer

A)   There is a shortage of oranges.
B)   An article is published in which it is claimed that tangerines cause a serious disease,and oranges and tangerines are substitutes.
C)   The price of land throughout Florida decreases,and Florida produces a significant proportion of the nation's oranges.
D)   All of the above are correct.E) None of the above
F) A) and D)

Question 13

When a seller expects the price of its product to decrease in the future,the seller's supply curve shifts left now.

Accepted Answer

A) True 
 B)False

Question 14

Today's supply curve for gasoline could shift in response to

Accepted Answer

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

Question 15

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) None of the above

Question 16

Today,people changed their expectations about the future.This change

Accepted Answer

A)   can cause a movement along a demand curve.
B)   can affect future demand,but not today's demand.
C)   can affect today's demand.
D)   cannot affect either today's demand or future demand.E) B) and C)
F) C) and D)

Question 17

When the price of a good or service changes,

Accepted Answer

A)   the supply curve shifts in the opposite direction.
B)   the demand curve shifts in the opposite direction.
C)   the demand curve shifts in the same direction.
D)   there is a movement along a given demand curve.E) A) and C)
F) B) and C)

Question 18

The market supply curve shows how the total quantity supplied of a good varies as input prices vary,holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Question 19

Equilibrium price will unambiguously decrease when

Accepted Answer

A)   demand increases and supply does not change,when demand does not change and supply decreases,and when demand decreases and supply increases simultaneously.
B)   demand increases and supply does not change,when demand does not change and supply decreases,and when demand increases and supply decreases simultaneously.
C)   demand decreases and supply does not change,when demand does not change and supply increases,and when demand decreases and supply increases simultaneously.
D)   demand decreases and supply does not change,when demand does not change and supply increases,and when demand increases and supply decreases simultaneously.E) C) and D)
F) A) and B)

Question 20

Which of the following would cause price to increase?

Accepted Answer

A)   an increase in supply
B)   a decrease in demand
C)   a surplus of the good
D)   a shortage of the goodE) All of the above
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

A decrease in supply is represented by

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A decrease in quantity supplied

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In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

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It is not possible for demand and supply to shift at the same time.

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If the number of buyers in a market decreases,then

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Step one of the "Three Steps for Analyzing Changes in Equilibrium" is

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Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

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Today,people changed their expectations about the future.This change

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto-workers negotiate higher wages?

Correct AnswerverifiedShow Answer

Which of the following would cause price to increase?

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Which of the following events would cause the price of oranges to fall?

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When a seller expects the price of its product to decrease in the future,the seller's supply curve shifts left now.

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The market supply curve shows how the total quantity supplied of a good varies as input prices vary,holding constant all the other factors that influence producers' decisions about how much to sell.

Correct AnswerverifiedShow Answer

When the price of a good or service changes,

Correct AnswerverifiedShow Answer

If the demand for a good falls when income falls,then the good is called

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An increase in the price of ink will shift the supply curve for pens to the left.

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Today's supply curve for gasoline could shift in response to

Correct AnswerverifiedShow Answer

A rightward shift of a supply curve is called

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Equilibrium price will unambiguously decrease when

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In a market economy,supply and demand determine

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