Question 1

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

Accepted Answer

A)   a bakery in a large city
B)   a bank in a large city
C)   a local cable television company
D)   a small group of corn farmersE) A) and D)
F) B) and D)

Question 2

Which of the following events must result in a higher price in the market for Snickers?

Accepted Answer

A)   Demand for Snickers increases, and supply of Snickers decreases.
B)   Demand for Snickers and supply of Snickers both decrease.
C)   Demand for Snickers decreases, and supply of Snickers increases.
D)   Demand for Snickers and supply of Snickers both increaseE) None of the above
F) A) and B)

Question 3

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) A) and C)

Question 4

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

Question 5

When quantity supplied decreases at every possible price, we know that the supply curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted; rather, we have moved along the supply curve to a new point on the same curve.
D)   not shifted; rather, the supply curve has become flatter.E) B) and C)
F) A) and B)

Question 6

Figure 4-9
 
-Refer to Figure 4-9. The movement from point A to point B on the graph is called

Accepted Answer

A)   a decrease in supply.
B)   an increase in supply.
C)   an increase in the quantity supplied.
D)   a decrease in the quantity supplied.E) C) and D)
F) B) and C)

Question 7

Suppose that demand for a good decreases 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) B) and C)
F) C) and D)

Question 8

Table 4-4
 
-Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Accepted Answer

A)   3 units.
B)   11 units.
C)   25 units.
D)   44 units.E) B) and C)
F) All of the above

Question 9

If macaroni and cheese is an inferior good, then an increase in

Accepted Answer

A)   the price will cause the demand curve for macaroni and cheese to shift to the left.
B)   the price will cause the demand curve for macaroni and cheese to shift to the right.
C)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.
D)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.E) A) and C)
F) B) and C)

Question 10

Figure 4-21
 
-Refer to Figure 4-21. 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) C) and D)
F) B) and C)

Question 11

A movement downward and to the right along a demand curve is called a(n)

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) A) and B)
F) A) and D)

Question 12

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-21
 
-Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of a decrease in the price of flour?

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) A) and B)
F) A) and D)

Question 14

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Accepted Answer

A) True 
 B)False

Question 15

Suppose that when income rises, the demand curve for doctor's visits shifts to the right. In this case, we know doctor's visits are

Accepted Answer

A)   inferior goods.
B)   normal goods.
C)   perfectly competitive goods.
D)   durable goods.E) None of the above
F) A) and D)

Question 16

Figure 4-6
 
-Refer to Figure 4-6. The movement from D to D' could be caused by

Accepted Answer

A)   an increase in price.
B)   a decrease in the price of a complement.
C)   a technological advance.
D)   a decrease in the price of a substitute.E) B) and C)
F) C) and D)

Question 17

Figure 4-21
 
-Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

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) All of the above
F) A) and B)

Question 18

In a market economy, supply and demand determine

Accepted Answer

A)   both the quantity of each good produced and the price at which it is sold.
B)   the quantity of each good produced but not the price at which it is sold.
C)   the price at which each good is sold but not the quantity of each good produced.
D)   neither the quantity of each good produced nor the price at which it is sold.E) B) and C)
F) A) and B)

Question 19

A market supply curve is determined by

Accepted Answer

A)   vertically summing individual supply curves.
B)   horizontally summing individual supply curves.
C)   finding the average quantity supplied by sellers at each possible price.
D)   finding the average price at which sellers are willing and able to sell a particular quantity of the good.E) None of the above
F) A) and D)

Question 20

A rightward shift of a supply curve is called a(n)

Accepted Answer

A)   increase in supply.
B)   decrease in supply.
C)   decrease in quantity supplied.
D)   increase in quantity supplied.E) All of the above
F) B) and C)

Exam 4: The Market Forces of Supply and Demand

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for chocolate chip cookies of a decrease in the price of flour?

Correct AnswerverifiedShow Answer

Suppose that when income rises, the demand curve for doctor's visits shifts to the right. In this case, we know doctor's visits are

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Table 4-4 -Refer to Table 4-4. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is

Correct AnswerverifiedShow Answer

A market supply curve is determined by

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Figure 4-6 -Refer to Figure 4-6. The movement from D to D' could be caused by

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Which of the following events must result in a higher price in the market for Snickers?

Correct AnswerverifiedShow Answer

In a competitive market, there are so few buyers and so few sellers that each has a significant impact on the market price.

Correct AnswerverifiedShow Answer

A rightward shift of a supply curve is called a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the demand for movies increases at the same time as the movie industry adopts labor-saving technology for producing movies, the equilibrium price for movies will increase, but the effect on the equilibrium quantity of movies is ambiguous.

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine

Correct AnswerverifiedShow Answer

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

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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 ballroom dancing lessons resulting from the introduction of a popular new television show called "Dancing with the Stars"?

Correct AnswerverifiedShow Answer

Figure 4-9 -Refer to Figure 4-9. The movement from point A to point B on the graph is called

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for bread of an increase in the price of flour?

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

When quantity supplied decreases at every possible price, we know that the supply curve has

Correct AnswerverifiedShow Answer

A movement downward and to the right along a demand curve is called a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If macaroni and cheese is an inferior good, then an increase in

Correct AnswerverifiedShow Answer

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