Question 1

When quantity demanded decreases at every possible price, the demand curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted; rather, we have moved along the demand curve to a new point on the same curve.
D)   not shifted; rather, the demand curve has become flatter.E) C) and D)
F) B) and D)

Question 2

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4-12
Firm A Firm B
  
-Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

Accepted Answer

A)   14 units.
B)   15 units.
C)   16 units.
D)   29 units.E) A) and D)
F) B) and C)

Question 4

In competitive markets,

Accepted Answer

A)   firms produce identical products.
B)   no individual buyer can influence the market price.
C)   no individual seller can influence the market price.
D)   All of the above are correct.E) B) and D)
F) None of the above

Question 5

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 6

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 7

Suppose you make jewelry. If the price of gold falls, then we would expect you to

Accepted Answer

A)   be willing and able to produce less jewelry than before at each possible price.
B)   be willing and able to produce more jewelry than before at each possible price.
C)   face a greater demand for your jewelry.
D)   face a weaker demand for your jewelry.E) B) and C)
F) A) and B)

Question 8

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Accepted Answer

The supply...

Question 9

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of a substitute for this good becomes more expensive.

Accepted Answer

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

Question 10

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

Question 11

Figure 4-20 
-Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

Accepted Answer

A)   $15 and 400 units.
B)   $20 and 600 units.
C)   $25 and 500 units.
D)   $25 and 800 units.E) None of the above
F) A) and B)

Question 12

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 13

The following table contains a demand schedule for a good.  If the law of demand applies to this good, then Q1 could be

Accepted Answer

A)   0.
B)   100.
C)   200.
D)   400.E) A) and D)
F) C) and D)

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

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity supplied?

Accepted Answer

A)   Panel a) 
B)   Panel b) 
C)   Panel c) 
D)   Panel d) E) B) and C)
F) A) and D)

Question 16

Figure 4-30 
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curves) shifts) and in which direction?

Accepted Answer

Supply shi...

Question 17

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Accepted Answer

A) True 
 B)False

Question 18

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Accepted Answer

A movement...

Question 19

Figure 4-11 
-Refer to Figure 4-11. The movement from point A to point B on the graph represents

Accepted Answer

A)   an increased willingness and ability on the part of suppliers to supply the good at each possible price.
B)   an increase in the number of suppliers.
C)   a decrease in the price of a relevant input.
D)   an increase in the price of the good that is being supplied and the suppliers' responses to that price change.E) B) and D)
F) A) and D)

Question 20

A downward-sloping demand curve illustrates

Accepted Answer

A)   that demand decreases over time.
B)   that prices fall over time.
C)   the relationship between income and quantity demanded.
D)   the law of demand.E) None of the above
F) B) and D)

Exam 4: The Market Forces of Supply and Demand

Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Which of the four panels illustrates a decrease in quantity supplied?

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A downward-sloping demand curve illustrates

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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

Suppose you make jewelry. If the price of gold falls, then we would expect you to

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If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Correct AnswerverifiedThe supply...View AnswerShow Answer

In competitive markets,

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Price will rise to eliminate a shortage.

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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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Figure 4-11 -Refer to Figure 4-11. The movement from point A to point B on the graph represents

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Figure 4-20 -Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are

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Figure 4-12 Firm A Firm B -Refer to Figure 4-12. If these are the only two sellers in the market, then the market quantity supplied at a price of $8 is

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The following table contains a demand schedule for a good. If the law of demand applies to this good, then Q1 could be

Correct AnswerverifiedShow Answer

The law of demand is true for most goods in the economy.

Correct AnswerverifiedShow Answer

Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Which curves) shifts) and in which direction?

Correct AnswerverifiedSupply shi...View AnswerShow Answer

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Correct AnswerverifiedShow Answer

Does a change in the price in a market result in a shift of the demand curve or in a movement along the demand curve?

Correct AnswerverifiedA movement...View AnswerShow Answer

If there is an improvement in the technology used to produce a good, then the supply curve for that good will shift to the left.

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When quantity demanded decreases at every possible price, the demand curve has

Correct AnswerverifiedShow Answer

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if the price of a substitute for this good becomes more expensive.

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If a higher price means a greater quantity supplied, then the supply curve slopes upward.

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The supply...
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Supply shi...
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A movement...
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