Question 1

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 ambiguous.E) None of the above
F) C) and D)

Question 2

Table 4-7
 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $4 is

Accepted Answer

A)   4 gallons.
B)   5 gallons.
C)   20 gallons.
D)   80 gallons.E) A) and B)
F) A) and C)

Question 3

Figure 4-30 
-Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curves) shifts) and in which direction?

Accepted Answer

Demand shi...

Question 4

If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good?

Accepted Answer

The equilibrium pric...

Question 5

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)   1 percent reduction in the quantity demanded of cigarettes.
B)   4 percent reduction in the quantity demanded of cigarettes.
C)   10 percent reduction in the quantity demanded of cigarettes.
D)   12 percent reduction in the quantity demanded of cigarettes.E) B) and C)
F) All of the above

Question 6

When a shortage exists in a market, sellers

Accepted Answer

A)   raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
B)   raise price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
C)   lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
D)   lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.E) C) and D)
F) B) and D)

Question 7

According to the law of demand, when price increases the quantity demanded of a good

Accepted Answer

The answer of According to the law of demand, when...

Question 8

A newspaper's classified ads are an example of a market.

Accepted Answer

A) True 
 B)False

Question 9

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

Accepted Answer

A)   decrease in the demand for printers and a decrease in the quantity supplied of printers.
B)   decrease in the supply of printers and a decrease in the quantity demanded of printers.
C)   decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
D)   increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.E) None of the above
F) A) and D)

Question 10

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 11

Figure 4-17 
-Refer to Figure 4-17. At a price of

Accepted Answer

A)   $8, there is a surplus of 6 units.
B)   $5, there is neither a shortage nor a surplus.
C)   $2, there is a shortage of 6 units.
D)   All of the above are correct.E) B) and D)
F) None of the above

Question 12

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A)   Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)   Some degree of competition is present in most markets.
C)   There are many buyers and many sellers in all types of markets.
D)   Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) B) and C)
F) A) and B)

Question 13

Which of the following would shift the supply of Packers football jerseys to the right?

Accepted Answer

A)   The Packers make it to the Super Bowl.
B)   The price of the jerseys increases by $15.
C)   The cost to distribute the jerseys increases.
D)   The cost of the fabric used to make the jerseys decreases.E) B) and C)
F) C) and D)

Question 14

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. 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) A) and C)
F) None of the above

Question 15

In competitive markets, which of the following is not correct?

Accepted Answer

A)   Firms produce identical products.
B)   No individual buyer can influence the market price.
C)   Some sellers can set prices.
D)   Buyers are price takers.E) B) and C)
F) A) and B)

Question 16

Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament, but the club is considering allowing non-members to purchase tickets this year. The demand and supply schedules are as follows:
 
-Refer to Table 4-12. If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament, then what will be the equilibrium price?

Accepted Answer

A)   $10
B)   $15
C)   $20
D)   $25E) A) and D)
F) B) and C)

Question 17

Table 4-4
 
-Refer to Table 4-4. Suppose the market consists of Adam and Barb only. If the price rises by $2, the quantity demanded in the market falls by

Accepted Answer

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

Question 18

Table 4-7
 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Accepted Answer

A)   10 gallons.
B)   20 gallons.
C)   32 gallons.
D)   40 gallons.E) B) and C)
F) None of the above

Question 19

Suppose that demand for a good increases 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) A) and B)
F) None of the above

Question 20

Figure 4-18 
-Refer to Figure 4-18. At a price of $20, there would be an)

Accepted Answer

A)   shortage. The law of supply and demand predicts that the price will fall from $20 to a lower price.
B)   surplus. The law of supply and demand predicts that the price will rise from $20 to a higher price.
C)   excess demand. The law of supply and demand predicts that the price will rise from $20 to a higher price.
D)   excess supply. The law of supply and demand predicts that the price will fall from $20 to a lower price.E) A) and D)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from

Correct Answer
verified

Which of the following would shift the supply of Packers football jerseys to the right?

Correct Answer
verified

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct Answer
verified

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

Correct Answer
verified

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

In competitive markets, which of the following is not correct?

Correct Answer
verified

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Correct Answer
verified

A newspaper's classified ads are an example of a market.

Correct Answer
verified

When a shortage exists in a market, sellers

Correct Answer
verified

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam and Barb only. If the price rises by $2, the quantity demanded in the market falls by

Correct Answer
verified

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Correct Answer
verified

Correct Answer
verified

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $4 is

Correct Answer
verified

Figure 4-18 -Refer to Figure 4-18. At a price of $20, there would be an)

Correct Answer
verified

According to the law of demand, when price increases the quantity demanded of a good

Correct Answer
verified

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

Correct Answer
verified

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curves) shifts) and in which direction?

Correct Answer
verified
Demand shi...
View Answer

Figure 4-17 -Refer to Figure 4-17. At a price of

Correct Answer
verified

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Correct Answer
verified

If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good?

Correct Answer
verified
The equilibrium pric...
View Answer

Exam 4: The Market Forces of Supply and Demand

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from

Correct AnswerverifiedShow Answer

Which of the following would shift the supply of Packers football jerseys to the right?

Correct AnswerverifiedShow Answer

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 AnswerverifiedShow Answer

In competitive markets, which of the following is not correct?

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

A newspaper's classified ads are an example of a market.

Correct AnswerverifiedShow Answer

When a shortage exists in a market, sellers

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam and Barb only. If the price rises by $2, the quantity demanded in the market falls by

Correct AnswerverifiedShow Answer

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then the market quantity supplied at a price of $4 is

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $20, there would be an)

Correct AnswerverifiedShow Answer

According to the law of demand, when price increases the quantity demanded of a good

Correct AnswerverifiedShow Answer

Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause an)

Correct AnswerverifiedShow Answer

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Which curves) shifts) and in which direction?

Correct AnswerverifiedDemand shi...View AnswerShow Answer

Figure 4-17 -Refer to Figure 4-17. At a price of

Correct AnswerverifiedShow Answer

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Correct AnswerverifiedShow Answer

If the demand for a good increases at the same time as the supply of the same good decreases, what will happen to the equilibrium price and quantity of the good?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

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Demand shi...
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The equilibrium pric...
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