Question 1

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 2

A surplus is the same as an excess demand.

Accepted Answer

A) True 
 B)False

Question 3

The market supply curve

Accepted Answer

A)   is found by vertically adding the individual supply curves.
B)   slopes downward.
C)   represents the sum of the prices that all the sellers are willing to accept for a given quantity of the good.
D)   represents the sum of the quantities supplied by all the sellers at each price of the good.E) B) and D)
F) A) and B)

Question 4

Figure 4-22
 
-Refer to Figure 4-22.Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) 
D)   Panel (d) E) C) and D)
F) A) and D)

Question 5

Figure 4-7
 
-Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (a) ,the arrows are consistent with which of the following events?

Accepted Answer

A)   Tobacco and marijuana are complements,and the price of marijuana decreased.
B)   Tobacco is a "gateway drug," and the price of marijuana increased.
C)   The price of cigarettes increased.
D)   The arrows are consistent with all of these events.E) A) and B)
F) B) and D)

Question 6

An increase in the price of a substitute good will shift the demand curve for a good to the right.

Accepted Answer

A) True 
 B)False

Question 7

Suppose that Amanda receives a pay increase.We would expect

Accepted Answer

A)   to observe Amanda moving down and to the right along her given demand curve.
B)   Amanda's demand for inferior goods to decrease.
C)   Amanda's demand for each of two goods that are complements to increase.
D)   Amanda's demand for normal goods to decrease.E) A) and B)
F) C) and D)

Question 8

The law of supply states that,other things equal,an increase in

Accepted Answer

A)   price causes quantity supplied to increase.
B)   price causes quantity supplied to decrease.
C)   quantity supplied causes price to increase.
D)   quantity supplied causes price to decrease.E) B) and C)
F) None of the above

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events could shift the demand curve for gasoline to the left?

Accepted Answer

A)   The income of gasoline buyers rises,and gasoline is a normal good.
B)   The income of gasoline buyers falls,and gasoline is an inferior good.
C)   Public service announcements run on television encourage people to walk or ride bicycles instead of driving cars.
D)   The price of gasoline rises.E) A) and D)
F) A) and C)

Question 11

The forces that make market economies work are

Accepted Answer

A)   work and leisure.
B)   politics and religion.
C)   supply and demand.
D)   taxes and government spending.E) B) and D)
F) C) and D)

Question 12

A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

Accepted Answer

A)   price-quantity schedule.
B)   buyer schedule.
C)   demand schedule.
D)   demand curve.E) C) and D)
F) B) and C)

Question 13

Figure 4-21 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for doctor's visits of an increase in the number of medical students graduating from medical school and successfully completing their residency programs?

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

Question 14

Which of these statements best represents the law of demand?

Accepted Answer

A)   When buyers' tastes for a good increase,they purchase more of the good.
B)   When income levels increase,buyers purchase more of most goods.
C)   When the price of a good decreases,buyers purchase more of the good.
D)   When buyers' demands for a good increase,the price of the good increases.E) B) and D)
F) A) and B)

Question 15

Which of the following would most likely serve as an example of a monopoly?

Accepted Answer

A)   a restaurant in a large city
B)   a dry cleaners in a large city
C)   a local gas station
D)   a local electrical companyE) A) and D)
F) B) and C)

Question 16

Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

Accepted Answer

A)   Consumers have experienced an increase in income,and beef-production technology has improved.
B)   The price of chicken has risen,and the price of steak sauce has fallen.
C)   New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
D)   The demand curve for beef must be positively sloped.E) All of the above
F) A) and B)

Question 17

An increase in quantity demanded

Accepted Answer

A)   results in a movement downward and to the right along a demand curve.
B)   results in a movement upward and to the left along a demand curve.
C)   shifts the demand curve to the left.
D)   shifts the demand curve to the right.E) B) and D)
F) C) and D)

Question 18

Prices allocate a market economy's scarce resources.

Accepted Answer

A) True 
 B)False

Question 19

Figure 4-15 
-Refer to Figure 4-15.At a price of $15,there would be a

Accepted Answer

A)   surplus of 400 units.
B)   shortage of 200 units.
C)   shortage of 400 units.
D)   shortage of 600 units.E) All of the above
F) A) and B)

Question 20

The market supply curve shows how the total quantity supplied of a good varies as input prices vary,holding constant all the other factors that influence producers' decisions about how much to sell.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

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

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A table that shows the relationship between the price of a good and the quantity demanded of that good is called a

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Suppose that Amanda receives a pay increase.We would expect

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A surplus is the same as an excess demand.

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The market supply curve shows how the total quantity supplied of a good varies as input prices vary,holding constant all the other factors that influence producers' decisions about how much to sell.

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Figure 4-15 -Refer to Figure 4-15.At a price of $15,there would be a

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An increase in quantity demanded

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An increase in the price of a substitute good will shift the demand curve for a good to the right.

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Prices allocate a market economy's scarce resources.

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The forces that make market economies work are

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Which of these statements best represents the law of demand?

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Figure 4-21 -Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for doctor's visits of an increase in the number of medical students graduating from medical school and successfully completing their residency programs?

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Which of the following events could shift the demand curve for gasoline to the left?

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Figure 4-22 -Refer to Figure 4-22.Which of the four panels represents the market for cars as a result of the adoption of new technology on assembly lines?

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Which of the following would most likely serve as an example of a monopoly?

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Beef is a normal good.You observe that both the equilibrium price and quantity of beef have fallen over time.Which of the following explanations would be most consistent with this observation?

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The law of supply states that,other things equal,an increase in

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

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Figure 4-7 -Refer to Figure 4-7.The graphs show the demand for cigarettes.In Panel (a) ,the arrows are consistent with which of the following events?

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The market supply curve

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