Question 1

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Accepted Answer

The answer of Figure 4-28 
-Refer to Figure 4-28. Using...

Question 2

A decrease in the number of sellers in the market causes

Accepted Answer

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

Question 3

A likely example of complementary goods for most people would be

Accepted Answer

A)   butter and margarine.
B)   lawnmowers and automobiles.
C)   chips and salsa.
D)   cola and lemonade.E) None of the above
F) C) and D)

Question 4

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) A) and B)
F) A) and C)

Question 5

Table 4-1 
-Refer to Table 4-1. Which of the following illustrates the market demand curve?

Accepted Answer

A)   
B)   
C)   
D)   E) B) and C)
F) A) and B)

Question 6

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

Accepted Answer

A)   above the equilibrium price, and quantity supplied is greater than quantity demanded.
B)   above the equilibrium price, and quantity demanded is greater than quantity supplied.
C)   below the equilibrium price, and quantity demanded is greater than quantity supplied.
D)   below the equilibrium price, and quantity supplied is greater than quantity demanded.E) All of the above
F) A) and B)

Question 7

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. Assuming these are the only four suppliers in this market and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium price?

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 8

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) All of the above
F) None of the above

Question 9

Table 4-9 
-Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) A) and B)
F) A) and C)

Question 10

Equilibrium price must increase when demand

Accepted Answer

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

Question 11

The highest form of competition is called

Accepted Answer

A)   arbitrage.
B)   monopolistic competition.
C)   equilibrium.
D)   perfect competition.E) None of the above
F) A) and B)

Question 12

When supply and demand both increase, equilibrium

Accepted Answer

A)   price will increase.
B)   price will decrease.
C)   quantity may increase, decrease, or remain unchanged.
D)   price may increase, decrease, or remain unchanged.E) A) and C)
F) B) and C)

Question 13

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

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) C) and D)
F) A) and D)

Question 14

The supply curve for a good is a line that relates

Accepted Answer

A)   profit and quantity supplied.
B)   quantity supplied and quantity demanded.
C)   price and quantity supplied.
D)   price and profit.E) A) and C)
F) A) and B)

Question 15

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

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) B) and C)

Question 16

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A)   luxury good.
B)   inferior good.
C)   normal good.
D)   complementary good.E) B) and C)
F) A) and D)

Question 17

Figure 4-13 
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $2 is

Accepted Answer

A)   4 units.
B)   6 units.
C)   8 units.
D)   10 units.E) A) and D)
F) None of the above

Question 18

Table 4-1 
-Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)   2 units.
B)   3 units.
C)   4 units.
D)   5 units.E) A) and B)
F) A) and C)

Question 19

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A)   The goods offered for sale are exactly the same.
B)   There are so many buyers and sellers that no single buyer or seller has any influence over the market price.
C)   It is difficult for new sellers to enter the market.
D)   Both a and b are correct.E) None of the above
F) B) and C)

Question 20

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Accepted Answer

A)   is greater than the quantity that sellers are willing and able to sell.
B)   exactly equals the quantity that sellers are willing and able to sell.
C)   is less than the quantity that sellers are willing and able to sell.
D)   Either a)  or c)  could be correct.E) None of the above
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

Equilibrium price must increase when demand

Correct Answer
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Correct Answer
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If a surplus exists in a market, then we know that the actual price is

Correct Answer
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Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct Answer
verified

A likely example of complementary goods for most people would be

Correct Answer
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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from

Correct Answer
verified

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct Answer
verified

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

Correct Answer
verified

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Correct Answer
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A decrease in the number of sellers in the market causes

Correct Answer
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At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Correct Answer
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Table 4-1 -Refer to Table 4-1. Which of the following illustrates the market demand curve?

Correct Answer
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When supply and demand both increase, equilibrium

Correct Answer
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Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Correct Answer
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Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $2 is

Correct Answer
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You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Correct Answer
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The highest form of competition is called

Correct Answer
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The supply curve for a good is a line that relates

Correct Answer
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Which of the following characteristics is required for a perfectly competitive market?

Correct Answer
verified

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct AnswerverifiedShow Answer

A likely example of complementary goods for most people would be

Correct AnswerverifiedShow Answer

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct AnswerverifiedShow Answer

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

Correct AnswerverifiedShow Answer

Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increases by

Correct AnswerverifiedShow Answer

A decrease in the number of sellers in the market causes

Correct AnswerverifiedShow Answer

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

Correct AnswerverifiedShow Answer

Table 4-1 -Refer to Table 4-1. Which of the following illustrates the market demand curve?

Correct AnswerverifiedShow Answer

When supply and demand both increase, equilibrium

Correct AnswerverifiedShow Answer

Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate change in equilibrium price?

Correct AnswerverifiedShow Answer

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $2 is

Correct AnswerverifiedShow Answer

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Correct AnswerverifiedShow Answer

The highest form of competition is called

Correct AnswerverifiedShow Answer

The supply curve for a good is a line that relates

Correct AnswerverifiedShow Answer

Which of the following characteristics is required for a perfectly competitive market?

Correct AnswerverifiedShow Answer

If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?

Correct AnswerverifiedShow Answer

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