Question 1

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Accepted Answer

A)  supply curve for Ashley's bread will increase.
B)  supply curve for Ashley's bread will decrease.
C)  demand curve for Ashley's bread will increase.
D)  demand curve for Ashley's bread will decrease.E) None of the above
F) A) and C)

Question 2

Figure 4-20 
-Refer to Figure 4-20. If the price is $10, then there would be a

Accepted Answer

A)  shortage of 400 units, and price would rise.
B)  surplus of 400 units, and price would rise.
C)  shortage of 600 units, and price would rise.
D)  surplus of 600 units, and price would rise.E) A) and B)
F) None of the above

Question 3

Which of the following events would unambiguously cause a decrease 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) All of the above

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) A) and C)

Question 5

The law of demand is true for most goods in the economy.

Accepted Answer

A) True 
 B)False

Question 6

If a determinant of demand other than price changes, the demand curve shifts.

Accepted Answer

A) True 
 B)False

Question 7

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Accepted Answer

A) True 
 B)False

Question 8

Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve?

Accepted Answer

A)  B only
B)  B and D only
C)  A and C only
D)  D onlyE) A) and D)
F) None of the above

Question 9

Other things equal, when the price of a good falls, the

Accepted Answer

A)  quantity supplied of the good increases.
B)  supply decreases.
C)  quantity supplied of the good decreases.
D)  demand increases.E) All of the above
F) B) and C)

Question 10

Table 4-13
The demand schedule below pertains to sandwiches demanded per week. 
-Refer to Table 4-13. Suppose x = 1. Then it must be true that

Accepted Answer

A)  Harry and Jake have the same income, which is lower than Darby's income.
B)  if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake.
C)  Harry's demand curve is identical to Jake's demand curve.
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 11

Table 4-4 
-Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Accepted Answer

A)  4 units.
B)  6 units.
C)  8 units.
D)  10 units.E) B) and D)
F) A) and B)

Question 12

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Accepted Answer

A)  The number of sellers of mangos decreases.
B)  There is an advance in technology that reduces the cost of producing mangos.
C)  The price of mangos falls.
D)  The price of fertilizer increases, and fertilizer is an input in the production of mangos.E) A) and B)
F) B) and D)

Question 13

A surplus exists in a market if

Accepted Answer

A)  there is an excess demand for the good.
B)  quantity demanded exceeds quantity supplied.
C)  the current price is above its equilibrium price.
D)  All of the above are correct.E) C) and D)
F) All of the above

Question 14

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

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) B) and C)

Question 15

Baseballs and baseball bats are substitute goods.

Accepted Answer

A) True 
 B)False

Question 16

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Accepted Answer

A)  the government
B)  prices
C)  subsidies
D)  the Federal ReserveE) B) and D)
F) A) and D)

Question 17

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

Accepted Answer

A)  Price will rise.
B)  Price will fall.
C)  Price will stay exactly the same.
D)  The price change will be ambiguous.E) None of the above
F) C) and D)

Question 18

Figure 4-30
​ 
-Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Accepted Answer

Equilibrium price is...

Question 19

Another term for equilibrium price is

Accepted Answer

A)  dynamic price.
B)  market-clearing price.
C)  quantity-defining price.
D)  balance price.E) C) and D)
F) B) and D)

Question 20

If a firm is a price taker, it operates in a

Accepted Answer

A)  competitive market.
B)  monopoly market.
C)  oligopoly market.
D)  monopolistically competitive market.E) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Correct Answer
verified

Baseballs and baseball bats are substitute goods.

Correct Answer
verified

Figure 4-20 -Refer to Figure 4-20. If the price is $10, then there would be a

Correct Answer
verified

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Correct Answer
verified

Other things equal, when the price of a good falls, the

Correct Answer
verified

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Correct Answer
verified

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Correct Answer
verified

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Correct Answer
verified

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then it must be true that

Correct Answer
verified

The law of demand is true for most goods in the economy.

Correct Answer
verified

Another term for equilibrium price is

Correct Answer
verified

Correct Answer
verified

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Correct Answer
verified

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

Correct Answer
verified

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Correct Answer
verified

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

Correct Answer
verified

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct Answer
verified
Equilibrium price is...
View Answer

If a firm is a price taker, it operates in a

Correct Answer
verified

A surplus exists in a market if

Correct Answer
verified

If a determinant of demand other than price changes, the demand curve shifts.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Adam Smith suggested that an invisible had guides market economies. In this analogy, what is the baton that the invisible hand uses to conduct the economic orchestra?

Correct AnswerverifiedShow Answer

Baseballs and baseball bats are substitute goods.

Correct AnswerverifiedShow Answer

Figure 4-20 -Refer to Figure 4-20. If the price is $10, then there would be a

Correct AnswerverifiedShow Answer

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good?

Correct AnswerverifiedShow Answer

Other things equal, when the price of a good falls, the

Correct AnswerverifiedShow Answer

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Correct AnswerverifiedShow Answer

An increase in supply will cause a decrease in price, which will cause an increase in demand.

Correct AnswerverifiedShow Answer

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the

Correct AnswerverifiedShow Answer

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then it must be true that

Correct AnswerverifiedShow Answer

The law of demand is true for most goods in the economy.

Correct AnswerverifiedShow Answer

Another term for equilibrium price is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?

Correct AnswerverifiedShow Answer

What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?

Correct AnswerverifiedShow Answer

Table 4-4 -Refer to Table 4-4. Suppose the market consists of Adam, Barb, and Carl. If the price falls by $2, the quantity demanded in the market increases by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-30 ​ -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct AnswerverifiedEquilibrium price is...View AnswerShow Answer

If a firm is a price taker, it operates in a

Correct AnswerverifiedShow Answer

A surplus exists in a market if

Correct AnswerverifiedShow Answer

If a determinant of demand other than price changes, the demand curve shifts.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Figure 4-30 -Refer to Figure 4-30. In this market for tablet computers, more suppliers enter the market and the price of laptops, a substitute good, increases, while all other factors remain constant. Explain the change(s) in the equilibrium price and quantity.

Correct Answer
verified
Equilibrium price is...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified