Question 1

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Accepted Answer

A) True 
 B)False

Question 2

If orange juice and apple juice are substitutes,an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

A) True 
 B)False

Question 3

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive,digital cameras become cheaper,the cost of the resources needed to manufacture traditional film falls,and more firms decide to manufacture traditional film?

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) All of the above
F) None of the above

Question 4

The forces that make market economies work are

Accepted Answer

A)   work and leisure.
B)   politics and religion.
C)   supply and demand.
D)   taxes and government spending.E) B) and D)
F) B) and C)

Question 5

If sellers expect higher basket prices in the near future,the current

Accepted Answer

A)   supply of baskets will increase.
B)   supply of baskets will decrease.
C)   supply of baskets will be unaffected.
D)   demand for baskets will decrease.E) B) and D)
F) C) and D)

Question 6

When the market price is below the equilibrium price,suppliers are unable to sell all they want to sell.

Accepted Answer

A) True 
 B)False

Question 7

A higher price for batteries would result in a(n)

Accepted Answer

A)   increase in the demand for flashlights.
B)   decrease in the demand for flashlights.
C)   increase in the demand for batteries.
D)   decrease in the demand for batteries.E) B) and C)
F) None of the above

Question 8

Figure 4-20
The graph below pertains to the supply of paper to colleges and universities.
 
-Refer to Figure 4-20.All else equal,the return of college students to campus in the fall would cause a move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) B) and C)
F) A) and D)

Question 9

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

Question 10

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A)   coalition.
B)   economy.
C)   market.
D)   competition.E) All of the above
F) C) and D)

Question 11

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.
 
-Refer to Figure 4-19.All else equal,a sale on chicken would cause a move from

Accepted Answer

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

Question 12

If the supply of a product decreases,then we would expect equilibrium price

Accepted Answer

A)   to increase and equilibrium quantity to decrease.
B)   to decrease and equilibrium quantity to increase.
C)   and equilibrium quantity to both increase.
D)   and equilibrium quantity to both decrease.E) A) and C)
F) B) and C)

Question 13

When quantity supplied increases at every possible price,we know that the supply curve has

Accepted Answer

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

Question 14

Price will rise to eliminate a surplus.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following does not affect an individual's demand curve?

Accepted Answer

A)   expectations
B)   income
C)   prices of related goods
D)   the number of buyersE) All of the above
F) None of the above

Question 16

Cocoa and marshmallows are complements,so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) B) and C)
F) All of the above

Question 18

Once the demand curve for a product or service is drawn,it

Accepted Answer

A)   remains stable over time.
B)   can shift either rightward or leftward.
C)   is possible to move along the curve, but the curve will not shift.
D)   tends to become steeper over time.E) None of the above
F) A) and D)

Question 19

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.
 
-Refer to Figure 4-19.All else equal,sellers expecting the price of turkey to rise in the future would cause a current move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.E) None of the above
F) A) and C)

Question 20

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Accepted Answer

A)   crystal to be unaffected.
B)   crystal to decrease.
C)   crystal to increase.
D)   lead to increase.E) A) and B)
F) B) and C)

Exam 4: The Market Forces of Supply and Demand.

What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive,digital cameras become cheaper,the cost of the resources needed to manufacture traditional film falls,and more firms decide to manufacture traditional film?

Correct AnswerverifiedShow Answer

Price will rise to eliminate a surplus.

Correct AnswerverifiedShow Answer

Cocoa and marshmallows are complements,so a decrease in the price of cocoa will cause an increase in the demand for marshmallows.

Correct AnswerverifiedShow Answer

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19.All else equal,sellers expecting the price of turkey to rise in the future would cause a current move from

Correct AnswerverifiedShow Answer

A higher price for batteries would result in a(n)

Correct AnswerverifiedShow Answer

If the supply of a product decreases,then we would expect equilibrium price

Correct AnswerverifiedShow Answer

In competitive markets,

Correct AnswerverifiedShow Answer

An increase in the price of blue pens will increase both the equilibrium price and quantity in the market for black pens.

Correct AnswerverifiedShow Answer

Which of the following does not affect an individual's demand curve?

Correct AnswerverifiedShow Answer

A group of buyers and sellers of a particular good or service is called a(n)

Correct AnswerverifiedShow Answer

Once the demand curve for a product or service is drawn,it

Correct AnswerverifiedShow Answer

Figure 4-20 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-20.All else equal,the return of college students to campus in the fall would cause a move from

Correct AnswerverifiedShow Answer

If sellers expect higher basket prices in the near future,the current

Correct AnswerverifiedShow Answer

If orange juice and apple juice are substitutes,an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Correct AnswerverifiedShow Answer

When the market price is below the equilibrium price,suppliers are unable to sell all they want to sell.

Correct AnswerverifiedShow Answer

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19.All else equal,a sale on chicken would cause a move from

Correct AnswerverifiedShow Answer

When quantity supplied increases at every possible price,we know that the supply curve has

Correct AnswerverifiedShow Answer

Suppose that demand for a good decreases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Correct AnswerverifiedShow Answer

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Correct AnswerverifiedShow Answer

The forces that make market economies work are

Correct AnswerverifiedShow Answer

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