Question 1

In a given market, how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)  There is no relationship.
B)  They are the same price.
C)  The market-clearing price exceeds the equilibrium price.
D)  The equilibrium price exceeds the market-clearing price.E) C) and D)
F) None of the above

Question 2

The highest form of competition is called

Accepted Answer

A)  arbitrage.
B)  monopolistic competition.
C)  equilibrium.
D)  perfect competition.E) None of the above
F) C) and D)

Question 3

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. A to SB. D) SB to SA." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking 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 B)
F) B) and C)

Question 4

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Accepted Answer

A)  Both the equilibrium price and quantity would increase.
B)  Both the equilibrium price and quantity would decrease.
C)  The equilibrium price would increase, and the equilibrium quantity would decrease.
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and D)
F) All of the above

Question 5

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Accepted Answer

A)  Both the equilibrium price and quantity would increase.
B)  Both the equilibrium price and quantity would decrease.
C)  The equilibrium price would increase, and the equilibrium quantity would decrease.
D)  The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and D)
F) All of the above

Question 6

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Accepted Answer

The equilibrium quan...

Question 7

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  Panel (a) 
B)  Panel (b) 
C)  Panel (c) 
D)  Panel (d) E) C) and D)
F) All of the above

Question 9

Which of the following is an example of a highly organized market?

Accepted Answer

A)  the market for textbooks
B)  the market for spa services
C)  the market for soybeans
D)  the market for ice creamE) B) and C)
F) All of the above

Question 10

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are a(n)

Accepted Answer

A)  luxury good.
B)  inferior good.
C)  normal good.
D)  complementary good.E) C) and D)
F) A) and B)

Question 11

Price will rise to eliminate a surplus.

Accepted Answer

A) True 
 B)False

Question 12

Table 4-2 
-Refer to Table 4-2. Whose demand does not obey the law of demand?

Accepted Answer

A)  Abby's
B)  Brandi's
C)  Carrie's
D)  DeeDee'sE) A) and C)
F) A) and B)

Question 13

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point DE) B) and C)
F) B) and D)

Question 14

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is:  the equilibrium price and quantity are

Accepted Answer

A)  $0.00 and 1200 cases
B)  $3.00 and 300 cases
C)  $6.00 and 600 cases
D)  $9.00 and 600 casesE) A) and C)
F) All of the above

Question 15

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 16

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

Question 17

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) None of the above
F) B) and C)

Question 18

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Accepted Answer

A)  demand for flour to increase.
B)  demand for flour to decrease.
C)  supply of flour to increase.
D)  supply of flour to decrease.E) A) and B)
F) All of the above

Question 19

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Accepted Answer

A)  a freeze in Florida
B)  a technological advance that allows oranges to ripen faster
C)  a decrease in the price of apples
D)  an announcement by the FDA that oranges prevent heart diseaseE) A) and D)
F) B) and C)

Question 20

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) A) and B)
F) None of the above

Exam 4: The Market Forces of Supply and Demand

Which of the following is an example of a highly organized market?

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

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

Correct AnswerverifiedShow Answer

Table 4-10 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is: the equilibrium price and quantity are

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Correct AnswerverifiedShow Answer

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Correct AnswerverifiedShow Answer

Price will rise to eliminate a surplus.

Correct AnswerverifiedShow Answer

In a given market, how are the equilibrium price and the market-clearing price related?

Correct AnswerverifiedShow Answer

The highest form of competition is called

Correct AnswerverifiedShow Answer

What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?

Correct AnswerverifiedShow Answer

An increase in the price of maple syrup will decrease both the equilibrium price and quantity in the market for pancakes.

Correct AnswerverifiedShow Answer

You lose your job and, as a result, you buy more frozen pizzas. For you, frozen pizza are a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Correct AnswerverifiedThe equilibrium quan...View AnswerShow Answer

Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand B to Demand A in the market for oranges in the United States?

Correct AnswerverifiedShow Answer

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking would cause a move from

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

Table 4-2 -Refer to Table 4-2. Whose demand does not obey the law of demand?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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The equilibrium quan...
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A movement...
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