Question 1

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of a market?

Accepted Answer

A)   a gas station
B)   a garage sale
C)   a barber shop
D)   All of the above are examples of markets.E) C) and D)
F) B) and D)

Question 3

Figure 4-2 
-Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Accepted Answer

A)   0 units.
B)   2 units.
C)   4 units.
D)   6 units.E) A) and B)
F) None of the above

Question 4

There is no shortage of scarce resources in a market economy because

Accepted Answer

A)   the government makes shortages illegal.
B)   resources are abundant in market economies.
C)   prices adjust to eliminate shortages.
D)   quantity supplied is always greater than quantity demanded in market economies.E) B) and C)
F) A) and B)

Question 5

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 Refer to Figure 4-28. Using the points...

Question 6

When quantity demanded increases 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 steeper.E) B) and C)
F) A) and B)

Question 7

Individual demand curves are summed horizontally to obtain the market demand curve.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an example of a market?

Accepted Answer

A)   A small town has only one seller of electricity.
B)   In the United States, a sick person cannot legally purchase a kidney.
C)   In Florida, there are many buyers and sellers of key lime pie.
D)   The availability of Internet shopping has expanded the clothing choices for buyers who do not live near large cities.E) C) and D)
F) A) and D)

Question 9

Table 4-8
 
-Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)   6 units.
B)   12 units.
C)   18 units.
D)   24 units.E) A) and D)
F) A) and C)

Question 10

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) All of the above
F) None of the above

Question 11

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Accepted Answer

A) True 
 B)False

Question 12

Figure 4-27
Panel a)  Panel b) 
   Panel c)  Panel d) 
  
-Refer to Figure 4-27. Panel a)  shows which of the following?

Accepted Answer

A)   an increase in demand and an increase in quantity supplied
B)   an increase in demand and an increase in supply
C)   an increase in quantity demanded and an increase in quantity supplied
D)   an increase in quantity demanded and an increase in supplyE) None of the above
F) A) and C)

Question 13

Which of the following would increase in response to a decrease in the price of ironing boards?

Accepted Answer

A)   the quantity of irons demanded at each possible price of irons
B)   the equilibrium quantity of irons
C)   the equilibrium price of irons
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 14

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Accepted Answer

A)   Sellers would not be able to produce and sell as much as before at each relevant price.
B)   The supply would decrease.
C)   Buyers would not be willing to buy as much as before at each relevant price.
D)   The equilibrium price would rise.E) None of the above
F) B) and C)

Question 15

An increase in the price of ink will shift the supply curve for pens to the left.

Accepted Answer

A) True 
 B)False

Question 16

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Accepted Answer

A)   shift rightward.
B)   shift leftward.
C)   become flatter.
D)   remain unchanged.E) B) and D)
F) C) and D)

Question 17

A likely example of substitute goods for most people would be

Accepted Answer

A)   peanut butter and jelly.
B)   tennis balls and tennis rackets.
C)   televisions and subscriptions to cable television services.
D)   pencils and pens.E) None of the above
F) A) and B)

Question 18

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Accepted Answer

A)   The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
B)   The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
C)   The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
D)   The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.E) None of the above
F) A) and D)

Question 19

Pizza is a normal good if the demand

Accepted Answer

A)   for pizza rises when income rises.
B)   for pizza rises when the price of pizza falls.
C)   curve for pizza slopes upward.
D)   curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos are substitutes.E) A) and D)
F) C) and D)

Question 20

Local cable television companies frequently are monopolists.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Figure 4-2 -Refer to Figure 4-2. Suppose Phil and Miss Kay are the only consumers in the market. If the price is $12, then the market quantity demanded is

Correct AnswerverifiedShow Answer

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Correct AnswerverifiedShow Answer

Which of the following would increase in response to a decrease in the price of ironing boards?

Correct AnswerverifiedShow Answer

Which of the following is an example of a market?

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An increase in the price of ink will shift the supply curve for pens to the left.

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Which of the following is not an example of a market?

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Figure 4-27 Panel a) Panel b) Panel c) Panel d) -Refer to Figure 4-27. Panel a) shows which of the following?

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Holding all other things constant, a higher price for ski lift tickets would

Correct AnswerverifiedShow Answer

A likely example of substitute goods for most people would be

Correct AnswerverifiedShow Answer

When the price of a good is low, selling the good is profitable, and so the quantity supplied is large.

Correct AnswerverifiedShow Answer

Individual demand curves are summed horizontally to obtain the market demand curve.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Suppose there is an increase in the price of steel. We would expect the supply curve for steel beams to

Correct AnswerverifiedShow Answer

Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?

Correct AnswerverifiedShow Answer

There is no shortage of scarce resources in a market economy because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a seller expects the price of its product to decrease in the future, the seller's supply curve shifts left now.

Correct AnswerverifiedShow Answer

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Correct AnswerverifiedShow Answer

Pizza is a normal good if the demand

Correct AnswerverifiedShow Answer

Local cable television companies frequently are monopolists.

Correct AnswerverifiedShow Answer

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