Question 1

Table 4-3. The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-3.Suppose x = 1.Then the slope of the market demand curve is

Accepted Answer

A)  -1/3.
B)  -1/2.
C)   -2.
D)   -3.E) C) and D)
F) B) and D)

Question 2

In a given market,how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)  There is no relationship.
B)  They are the same price.
C)  The market-clearing price exceeds the equilibrium price.
D)  The equilibrium price exceeds the market-clearing price.E) None of the above
F) A) and D)

Question 3

Holding the nonprice determinants of supply constant,a change in price would

Accepted Answer

A)  result in either a decrease in supply or an increase in supply.
B)  result in a movement along a stationary supply curve.
C)  result in a shift of demand.
D)  have no effect on the quantity supplied.E) None of the above
F) C) and D)

Question 4

Another term for equilibrium price is

Accepted Answer

A)  dynamic price.
B)  market-clearing price.
C)  quantity-defining price.
D)  satisfactory price.E) B) and D)
F) All of the above

Question 5

Suppose the number of buyers in a market increases and a technological advancement occurs also.What would we expect to happen in the market?

Accepted Answer

A)  The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)  The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)  Both equilibrium price and equilibrium quantity would increase.E) C) and D)
F) A) and D)

Question 6

Suppose scientists provide evidence to the effect that chocolate pudding increases cholesterol.We would expect to see

Accepted Answer

A)  no change in the demand for chocolate pudding.
B)  a decrease in the demand for chocolate pudding.
C)  an increase in the demand for chocolate pudding.
D)  a decrease in the supply of chocolate pudding.E) B) and D)
F) A) and B)

Question 7

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Accepted Answer

A)  It would decrease.
B)  It would increase.
C)  It would be unaffected.
D)  There is insufficient information given to answer the question.E) None of the above
F) All of the above

Question 8

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)  Different sellers sell identical products.
B)  There are many sellers.
C)  Sellers must accept the price the market determines.
D)  All of the above are characteristics of a perfectly competitive market.E) None of the above
F) A) and B)

Question 9

A decrease in the price of a good would

Accepted Answer

A)  increase the supply of the good.
B)  increase the quantity demanded of the good.
C)  give producers an incentive to produce more to keep profits from falling.
D)  shift the supply curve for the good to the left.E) None of the above
F) A) and B)

Question 10

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

Accepted Answer

A)  surpluses and shortages.
B)  quantities.
C)  property rights.
D)  prices.E) A) and B)
F) B) and D)

Question 11

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)  a shortage will exist.
B)  buyers desire to purchase more than is produced.
C)  sellers desire to produce and sell more than buyers wish to purchase.
D)  quantity demanded exceeds quantity supplied.E) A) and B)
F) A) and C)

Question 12

Which of the following statements is correct?

Accepted Answer

A)  Buyers determine supply and sellers determine demand.
B)  Buyers determine demand and sellers determine supply.
C)  Buyers and sellers as one group determine supply, but only buyers determine demand.
D)  Buyers and sellers as one group determine demand, but only sellers determine supply.E) B) and C)
F) A) and D)

Question 13

In a competitive market,each seller has limited control over the price of his product because

Accepted Answer

A)  other sellers are offering similar products.
B)  buyers exert more control over the price than do sellers.
C)  these markets are highly regulated by government.
D)  sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.E) C) and D)
F) None of the above

Question 14

Other things equal,when the price of a good rises,the

Accepted Answer

A)  quantity demanded of the good increases.
B)  supply increases.
C)  quantity supplied of the good increases.
D)  demand curve shifts to the left.E) A) and B)
F) B) and D)

Question 15

A downward-sloping demand curve illustrates the

Accepted Answer

A)  relationship between consumers' income and their willingness to purchase the good in question, provided the good is inferior.
B)  negative relationship between quantity demanded and quantity supplied.
C)  idea that the more of one good that a consumer buys, the less income she has to spend on other goods.
D)  law of demand.E) C) and D)
F) A) and D)

Question 16

Figure 4-10
 
-Refer to Figure 4-10.Suppose the events depicted in graphs A and C were illustrated together on a single graph.A definitive result of the two events would be

Accepted Answer

A)  an increase in the equilibrium quantity.
B)  an increase in the equilibrium price.
C)  an instance in which the law of demand fails to hold.
D)  All of the above are correct.E) B) and C)
F) C) and D)

Question 17

Pens are normal goods.What will happen to the equilibrium price of pens if the price of pencils rises,consumers experience an increase in income,writing in ink becomes fashionable,people expect the price of pens to fall in the near future,the population increases,fewer firms manufacture pens,and the wages of pen-makers decrease?

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

Question 18

"Other things equal,when the price of a good rises,the quantity supplied of the good rises also." This is a statement of the law of

Accepted Answer

A)  increasing costs.
B)  diminishing returns.
C)  supply.
D)  supply and demand.E) A) and B)
F) None of the above

Question 19

If a surplus exists in a market we know that the actual price is

Accepted Answer

A)  above equilibrium price and quantity supplied is greater than quantity demanded.
B)  above equilibrium price and quantity demanded is greater than quantity supplied.
C)  below equilibrium price and quantity demanded is greater than quantity supplied.
D)  below equilibrium price and quantity supplied is greater than quantity demanded.E) None of the above
F) A) and D)

Question 20

Which of the following events will definitely cause equilibrium quantity to fall?

Accepted Answer

A)  demand increases and supply decreases
B)  demand and supply both decrease
C)  demand decreases and supply increases
D)  demand and supply both increaseE) All of the above
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

If a surplus exists in a market we know that the actual price is

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Suppose scientists provide evidence to the effect that chocolate pudding increases cholesterol.We would expect to see

Correct Answer
verified

"Other things equal,when the price of a good rises,the quantity supplied of the good rises also." This is a statement of the law of

Correct Answer
verified

When the price of a good is higher than the equilibrium price,

Correct Answer
verified

Correct Answer
verified

Figure 4-10 -Refer to Figure 4-10.Suppose the events depicted in graphs A and C were illustrated together on a single graph.A definitive result of the two events would be

Correct Answer
verified

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

Correct Answer
verified

Table 4-3. The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-3.Suppose x = 1.Then the slope of the market demand curve is

Correct Answer
verified

Another term for equilibrium price is

Correct Answer
verified

A decrease in the price of a good would

Correct Answer
verified

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Correct Answer
verified

Which of the following is not a characteristic of a perfectly competitive market?

Correct Answer
verified

Suppose the number of buyers in a market increases and a technological advancement occurs also.What would we expect to happen in the market?

Correct Answer
verified

Other things equal,when the price of a good rises,the

Correct Answer
verified

In a competitive market,each seller has limited control over the price of his product because

Correct Answer
verified

A downward-sloping demand curve illustrates the

Correct Answer
verified

Which of the following events will definitely cause equilibrium quantity to fall?

Correct Answer
verified

In a given market,how are the equilibrium price and the market-clearing price related?

Correct Answer
verified

Holding the nonprice determinants of supply constant,a change in price would

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

If a surplus exists in a market we know that the actual price is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose scientists provide evidence to the effect that chocolate pudding increases cholesterol.We would expect to see

Correct AnswerverifiedShow Answer

"Other things equal,when the price of a good rises,the quantity supplied of the good rises also." This is a statement of the law of

Correct AnswerverifiedShow Answer

When the price of a good is higher than the equilibrium price,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 4-10 -Refer to Figure 4-10.Suppose the events depicted in graphs A and C were illustrated together on a single graph.A definitive result of the two events would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 4-3. The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-3.Suppose x = 1.Then the slope of the market demand curve is

Correct AnswerverifiedShow Answer

Another term for equilibrium price is

Correct AnswerverifiedShow Answer

A decrease in the price of a good would

Correct AnswerverifiedShow Answer

Suppose you like to make,from scratch,pies filled with banana cream and vanilla pudding.You notice that the price of bananas has increased.How would this price increase affect your demand for vanilla pudding?

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a perfectly competitive market?

Correct AnswerverifiedShow Answer

Suppose the number of buyers in a market increases and a technological advancement occurs also.What would we expect to happen in the market?

Correct AnswerverifiedShow Answer

Other things equal,when the price of a good rises,the

Correct AnswerverifiedShow Answer

In a competitive market,each seller has limited control over the price of his product because

Correct AnswerverifiedShow Answer

A downward-sloping demand curve illustrates the

Correct AnswerverifiedShow Answer

Which of the following events will definitely cause equilibrium quantity to fall?

Correct AnswerverifiedShow Answer

In a given market,how are the equilibrium price and the market-clearing price related?

Correct AnswerverifiedShow Answer

Holding the nonprice determinants of supply constant,a change in price would

Correct AnswerverifiedShow Answer

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