Question 1

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)   4 units.
B)   7.5 units.
C)   10 units.
D)   30 units.E) None of the above
F) A) and B)

Question 3

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A)   increase the supply of education.
B)   decrease the supply of education.
C)   increase the demand for education.
D)   decrease the demand for education.E) A) and C)
F) A) and B)

Question 4

In a perfectly competitive market, the goods offered for sale are all exactly the same.

Accepted Answer

A) True 
 B)False

Question 5

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

Accepted Answer

A)   prices at and above the equilibrium price.
B)   prices at and below the equilibrium price.
C)   prices above and below the equilibrium price, but not at the equilibrium price.
D)   the equilibrium price but not above or below the equilibrium price.E) None of the above
F) C) and D)

Question 6

When quantity demanded has increased at every price, it might be because

Accepted Answer

A)   the number of buyers in the market has decreased.
B)   income has increased, and the good is an inferior good.
C)   the costs incurred by sellers producing the good have decreased.
D)   the price of a complementary good has decreased.E) All of the above
F) A) and D)

Question 7

A decrease in quantity supplied

Accepted Answer

A)   results in a movement downward and to the left along a fixed supply curve.
B)   results in a movement upward and to the right along a fixed supply curve.
C)   shifts the supply curve to the left.
D)   shifts the supply curve to the right.E) None of the above
F) B) and D)

Question 8

Figure 4-22 
-Refer to Figure 4-22. What is the equilibrium price in this market?

Accepted Answer

A)   $8
B)   $12
C)   $16
D)   $20E) B) and C)
F) A) and D)

Question 9

When quantity demanded decreases 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 flatter.E) B) and D)
F) B) and C)

Question 10

The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.

Accepted Answer

A) True 
 B)False

Question 11

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) A) and D)
F) A) and C)

Question 12

The law of supply and demand asserts that

Accepted Answer

A)   demand curves and supply curves tend to shift to the right as time goes by.
B)   the price of a good will eventually rise in response to an excess demand for that good.
C)   when the supply curve for a good shifts, the demand curve for that good shifts in response.
D)   the equilibrium price of a good will be rising more often than it will be falling.E) All of the above
F) A) and B)

Question 13

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) C) and D)
F) All of the above

Question 14

Table 4-15
The following table shows the number of cases of water each seller is willing to sell at the prices listed. 
-Refer to Table 4-15. Assuming these are the only four suppliers in this market, the function for market supply can be written as QS=

Accepted Answer

The answer of Table 4-15
The following table shows the number...

Question 15

Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

Accepted Answer

A)   an increase in the price of wool shirts and a decrease in the price of raw cotton
B)   a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)   an increase in the price of wool shirts and an increase in the price of raw cotton
D)   a decrease in the price of wool shirts and an increase in the price of raw cottonE) A) and B)
F) A) and C)

Question 16

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

Accepted Answer

A)   an increase in the price of DVDs
B)   a decrease in the price of DVD players
C)   a change in consumer preferences toward watching movies in movie theaters rather than at home
D)   an expectation by buyers that their incomes will increase in the very near futureE) None of the above
F) C) and D)

Question 17

When the price of a good is lower than the equilibrium price,

Accepted Answer

A)   a surplus will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity supplied exceeds quantity demanded.E) A) and D)
F) A) and C)

Question 18

Table 4-14
The table below shows the quantities demanded of milk per month by four families at various prices. 
-Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

Accepted Answer

The answer of Table 4-14
The table below shows the quantities...

Question 19

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 20

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 demanded?

Accepted Answer

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

Exam 4: The Market Forces of Supply and Demand

Table 4-15 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-15. Assuming these are the only four suppliers in this market, the function for market supply can be written as QS=

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

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The law of supply and demand asserts that

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A decrease in quantity supplied

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Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a current move from

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When the price of a good is lower than the equilibrium price,

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for DVDs?

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

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Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

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Table 4-14 The table below shows the quantities demanded of milk per month by four families at various prices. -Refer to Table 4-14. If the four families listed are the only demanders in this market and the price of a gallon of milk is $4.00, what is the market quantity demanded?

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When quantity demanded has increased at every price, it might be because

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Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?

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Figure 4-22 -Refer to Figure 4-22. What is the equilibrium price in this market?

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The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.

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

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In competitive markets,

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An increase in the number of college scholarships issued by private foundations would

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When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

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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 demanded?

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In a perfectly competitive market, the goods offered for sale are all exactly the same.

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