Question 1

Figure 4-7 
-Refer to Figure 4-7. What would cause the movement from point B to point A on the graph?

Accepted Answer

A)  an increase in price
B)  a decrease in price
C)  a decrease in the price of a substitute good
D)  an increase in incomeE) A) and C)
F) A) and D)

Question 2

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Accepted Answer

A) True 
 B)False

Question 3

What is a market?

Accepted Answer

A)  a group of demanders and suppliers of a particular good or service
B)  a group of people with common desires
C)  a place where only sellers meet
D)  a place where only buyers come togetherE) B) and D)
F) A) and B)

Question 4

Suppose you make jewellery. If the price of gold falls, what would we expect you to do?

Accepted Answer

A)  be willing and able to produce less jewellery than before at each possible price
B)  be willing and able to produce more jewellery than before at each possible price
C)  face a greater demand for your jewellery
D)  face a weaker demand for your jewelleryE) All of the above
F) A) and B)

Question 5

Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. What would we expect?

Accepted Answer

A)  a shortage to exist and the market price of roses to increase
B)  a shortage to exist and the market price of roses to decrease
C)  a surplus to exist and the market price of roses to increase
D)  a surplus to exist and the market price of roses to decreaseE) None of the above
F) A) and B) D

Question 6

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

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

Question 7

You lose your job and as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Accepted Answer

A)  a normal good
B)  an inferior good
C)  a luxury good
D)  a complementary goodE) B) and D)
F) None of the above A

Question 8

What is market demand?

Accepted Answer

A)  It is a vertical summation of individual demand curves.
B)  It is a horizontal summation of individual demand curves.
C)  It is not responsive to change in tastes and preferences.
D)  It is determined solely by the number of buyers and sellers in the market.E) None of the above
F) A) and C)

Question 9

To find the market demand for a product, how are individual demand curves summed?

Accepted Answer

A)  vertically
B)  diagonally
C)  horizontally
D)  by averagingE) A) and C)
F) A) and B)

Question 10

Which chain of events occurs in the correct order?

Accepted Answer

A)  quantity supplied increases, price increases, demand increases
B)  price increases, demand increases, quantity supplied increases
C)  demand increases, price increases, quantity supplied increases
D)  demand increases, quantity supplied increases, price increases.E) A) and D)
F) A) and C)

Question 11

If the price of a substitute to good X increases, what will happen?

Accepted Answer

A)  Demand for good X will decrease.
B)  Market price of good X will decrease.
C)  Demand for good X will increase.
D)  Quantity demanded for good X will increase.E) B) and C)
F) B) and D)

Question 12

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Accepted Answer

A)  complementary goods
B)  normal goods
C)  inferior goods
D)  substitute goodsE) A) and B)
F) B) and D)

Question 13

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices. What would we expect to occur in this 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)  Both equilibrium price and equilibrium quantity would increase.
D)  Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) A) and B)
F) A) and C)

Question 14

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 15

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good)  increased, more 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 increase and the effect on price is ambiguousE) A) and D)
F) B) and D)

Question 16

This question deals with demand and supply and refers you to the table below.
a.Given the table, graph the demand and supply curves for flashlights. Make certain to label equilibrium price and equilibrium quantity.PriceQuantity Demanded/MonthQuantity Supplied/Month$56,00010,000$48,0008,000$310,0006,000$212,0004,000$114,0002,000
b.What is the equilibrium price and equilibrium quantity?
c.Suppose the price is currently at $5. What problem would exist in the economy? What would you expect to happen to price? Show this on your graph.
d.Suppose the price is currently $2. What problem exists in the economy? What would you expect to happen to price? Show this on your graph.

Accepted Answer

a. <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> b.Equilibrium price would be $4 and ...

Question 17

Market demand is given as Qd = 100 - 2P. Market supply is given as Qs = P + 10. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $25 and quantity will be 50
B)  price will be $40 and quantity will be 30
C)  price will be $30 and quantity will be 40
D)  price will be $35 and quantity will be 30E) B) and C)
F) A) and B)

Question 18

Figure 4-4 
-Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?

Accepted Answer

A)  400
B)  500
C)  600
D)  800E) A) and B)
F) A) and C)

Question 19

What impact does a person's expectations about the future have?

Accepted Answer

A)  cannot affect demand because expectations change
B)  can affect future demand
C)  can affect current demand
D)  cannot shift a demand curveE) A) and B)
F) A) and C)

Question 20

Figure 4-7 
-Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

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

Exam 4: The Market Forces of Supply and Demand

Figure 4-7 -Refer to Figure 4-7. What would cause the movement from point B to point A on the graph?

Correct Answer
verified

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Correct Answer
verified

What is a market?

Correct Answer
verified

Suppose you make jewellery. If the price of gold falls, what would we expect you to do?

Correct Answer
verified

Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. What would we expect?

Correct Answer
verified
D

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Correct Answer
verified
D

You lose your job and as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Correct Answer
verified
A

What is market demand?

Correct Answer
verified

To find the market demand for a product, how are individual demand curves summed?

Correct Answer
verified

Which chain of events occurs in the correct order?

Correct Answer
verified

If the price of a substitute to good X increases, what will happen?

Correct Answer
verified

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Correct Answer
verified

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices. What would we expect to occur in this market?

Correct Answer
verified

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct Answer
verified

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good) increased, more firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct Answer
verified

Correct Answer
verified
a. b.Equilibrium price would be $4 and ...
View Answer

Market demand is given as Qd = 100 - 2P. Market supply is given as Qs = P + 10. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Correct Answer
verified

Figure 4-4 -Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?

Correct Answer
verified

What impact does a person's expectations about the future have?

Correct Answer
verified

Figure 4-7 -Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Figure 4-7 -Refer to Figure 4-7. What would cause the movement from point B to point A on the graph?

Correct AnswerverifiedShow Answer

A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.

Correct AnswerverifiedShow Answer

What is a market?

Correct AnswerverifiedShow Answer

Suppose you make jewellery. If the price of gold falls, what would we expect you to do?

Correct AnswerverifiedShow Answer

Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. What would we expect?

Correct AnswerverifiedD

Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?

Correct AnswerverifiedD

You lose your job and as a result, you buy fewer mystery books. What does this show that you consider mystery books to be?

Correct AnswerverifiedA

What is market demand?

Correct AnswerverifiedShow Answer

To find the market demand for a product, how are individual demand curves summed?

Correct AnswerverifiedShow Answer

Which chain of events occurs in the correct order?

Correct AnswerverifiedShow Answer

If the price of a substitute to good X increases, what will happen?

Correct AnswerverifiedShow Answer

Suppose that a decrease in the price of X results in less of good Y sold. What are X and Y called?

Correct AnswerverifiedShow Answer

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices. What would we expect to occur in this market?

Correct AnswerverifiedShow Answer

An increase in the price of pizza will shift the demand curve for pizza to the left.

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts fell, the price of jelly (a complementary good) increased, more firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. b.Equilibrium price would be $4 and ...View AnswerShow Answer

Market demand is given as Qd = 100 - 2P. Market supply is given as Qs = P + 10. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Correct AnswerverifiedShow Answer

Figure 4-4 -Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?

Correct AnswerverifiedShow Answer

What impact does a person's expectations about the future have?

Correct AnswerverifiedShow Answer

Figure 4-7 -Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this?

Correct AnswerverifiedShow Answer

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D

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D

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A

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a. b.Equilibrium price would be $4 and ...
View Answer

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