Question 1

Suppose you make jewelry.If the price of gold falls,we would expect you to

Accepted Answer

A)  be willing and able to produce less jewelry than before at each possible price.
B)  be willing and able to produce more jewelry than before at each possible price.
C)  face a greater demand for your jewelry.
D)  face a weaker demand for your jewelry.E) A) and D)
F) All of the above

Question 2

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 respond by purchasing more of most goods.
C)  When the price of a good falls, buyers respond by purchasing more of the good.
D)  When buyers' demands for a good increase, the price of the good will increase.E) A) and D)
F) C) and D)

Question 3

The law of demand states that the quantity demanded of a product is positively related to price.

Accepted Answer

A) True 
 B)False

Question 4

Figure 4-7
 
-Refer to Figure 4-7.Equilibrium price and quantity are,respectively,

Accepted Answer

A)  $35 and 200.
B)  $35 and 600.
C)  $25 and 400.
D)  $15 and 200.E) C) and D)
F) B) and C)

Question 5

Nancy likes pasta today more than she did yesterday.This fact leads us to conclude that

Accepted Answer

A)  Nancy must now consider pasta a luxury.
B)  Nancy must have experienced an increase in her income.
C)  Nancy is now willing to pay more than before for pasta at each relevant price of pasta.
D)  the supply of pasta must have increased and stimulated Nancy's enhanced taste for pasta.E) A) and C)
F) B) and C)

Question 6

Figure 4-9
 
-Refer to Figure 4-9.If price is $25,quantity demanded and quantity supplied,respectively,are

Accepted Answer

A)  400 and 600.
B)  500 and 800.
C)  600 and 600
D)  800 and 500.E) B) and D)
F) A) and D)

Question 7

Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month.As a result of this information,today's demand curve for Mustangs

Accepted Answer

A)  shifts to the right.
B)  shifts to the left.
C)  shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information.
D)  will not shift; rather, the demand curve for Mustangs will shift to the right next month.E) A) and B)
F) All of the above

Question 8

At the equilibrium price,quantity demanded is equal to quantity supplied.

Accepted Answer

A) True 
 B)False

Question 9

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events would cause the price of oranges to fall?

Accepted Answer

A)  There is a shortage of oranges.
B)  An article is published in which it is claimed that tangerines cause a serious disease, and oranges and tangerines are substitutes.
C)  The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.
D)  All of the above are correct.E) C) and D)
F) None of the above

Question 11

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Accepted Answer

A)  a substitute good.
B)  a normal good.
C)  an inferior good.
D)  a law-of-demand good.E) B) and C)
F) A) and B)

Question 12

A leftward shift of a supply curve is called

Accepted Answer

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

Question 13

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Accepted Answer

A)  Beef producers, concerned about the health of their customers, decided to produce relatively less beef.
B)  Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef.
C)  Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the relative price of beef, making it less attractive to produce.
D)  Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.E) A) and D)
F) A) and C)

Question 14

When we compare an increase in supply with an increase in quantity supplied,we know that

Accepted Answer

A)  the former is depicted by a movement along the supply curve and the latter is depicted by a shift of the curve.
B)  the former could be caused by a decrease in input costs and the latter would be caused by an increase in the price of the good.
C)  both are always caused by a change in demand.
D)  both are always caused by a change in the number of market participants.E) A) and C)
F) A) and B)

Question 15

Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 an hour it is likely that the

Accepted Answer

A)  demand for bicycle assembly workers will increase.
B)  supply of bicycles will shift to the right.
C)  supply of bicycles will shift to the left.
D)  firm must increase output to maintain profit levels.E) B) and C)
F) A) and D)

Question 16

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

Accepted Answer

A)  Income of gasoline buyers rises, and gasoline is a normal good.
B)  Income of gasoline buyers falls, and gasoline is an inferior good.
C)  Public service announcements are run on television, encouraging 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 17

Figure 4-9
 
-Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

Accepted Answer

A)  $15 and 400.
B)  $20 and 600.
C)  $25 and 500.
D)  $25 and 800.E) A) and B)
F) A) and C)

Question 18

Figure 4-9
 
-Refer to Figure 4-9.At a price of $20,which of the following statements is not correct?

Accepted Answer

A)  The market is in equilibrium.
B)  Equilibrium price is equal to equilibrium quantity.
C)  There is no pressure for price to change.
D)  The quantity of the good that is bought and sold is 600.E) C) and D)
F) All of the above

Question 19

Two goods are complements if a decrease in the price of one good

Accepted Answer

A)  decreases the quantity demanded of the other good.
B)  decreases the demand for the other good.
C)  increases the quantity demanded of the other good.
D)  increases the demand for the other good.E) None of the above
F) A) and D)

Question 20

Table 4-4
 
-Refer to Table 4-4.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)  a.
B)  B.
C)  C.
D)  D.E) B) and C)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

During the last few decades in the United States,health officials have argued that eating too much beef might be harmful to human health.As a result,there has been a significant decrease in the amount of beef produced.Which of the following best explains the decrease in production?

Correct AnswerverifiedShow Answer

Figure 4-9 -Refer to Figure 4-9.If price is $25,quantity demanded and quantity supplied,respectively,are

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7.Equilibrium price and quantity are,respectively,

Correct AnswerverifiedShow Answer

Ford Motor Company announces that it will offer $3,000 rebates on new Mustangs starting next month.As a result of this information,today's demand curve for Mustangs

Correct AnswerverifiedShow Answer

Figure 4-9 -Refer to Figure 4-9.At a price of $20,which of the following statements is not correct?

Correct AnswerverifiedShow Answer

A leftward shift of a supply curve is called

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Which of these statements best represents the law of demand?

Correct AnswerverifiedShow Answer

Figure 4-9 -Refer to Figure 4-9.In this market,equilibrium price and quantity,respectively,are

Correct AnswerverifiedShow Answer

Nancy likes pasta today more than she did yesterday.This fact leads us to conclude that

Correct AnswerverifiedShow Answer

In a market,the price of any good adjusts until quantity demanded equals quantity supplied.

Correct AnswerverifiedShow Answer

Which of the following events would cause the price of oranges to fall?

Correct AnswerverifiedShow Answer

The law of demand states that the quantity demanded of a product is positively related to price.

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4.Which space represents an increase in equilibrium price and an indeterminate change in equilibrium quantity?

Correct AnswerverifiedShow Answer

Two goods are complements if a decrease in the price of one good

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Workers at a bicycle assembly plant currently earn the mandatory minimum wage.If the federal government increases the minimum wage by $1.00 an hour it is likely that the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose you make jewelry.If the price of gold falls,we would expect you to

Correct AnswerverifiedShow Answer

At the equilibrium price,quantity demanded is equal to quantity supplied.

Correct AnswerverifiedShow Answer

Currently you purchase 6 packages of hot dogs a month.You will graduate from college in December and you will start a new job in January.You have no plans to purchase hot dogs in January.For you,hot dogs are

Correct AnswerverifiedShow Answer

When we compare an increase in supply with an increase in quantity supplied,we know that

Correct AnswerverifiedShow Answer

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