Question 1

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Accepted Answer

A)   The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
B)   The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
C)   The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
D)   The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.E) A) and B)
F) B) and D)

Question 2

Buyers and sellers who have no influence on market price are referred to as

Accepted Answer

A)   market pawns.
B)   monopolists.
C)   price takers.
D)   price setters.E) C) and D)
F) B) and D)

Question 3

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) All of the above

Question 4

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)   government to allocate scarce resources.
B)   supply and demand to allocate scarce resources.
C)   credit cards to allocate scarce resources.
D)   nature to allocate scarce resources.E) C) and D)
F) None of the above

Question 5

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

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

Question 6

Equilibrium price must increase when demand

Accepted Answer

A)   increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously.
B)   increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
C)   decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.
D)   decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.E) B) and C)
F) All of the above

Question 7

Which of these statements does not apply to market economies?

Accepted Answer

A)   Prices prevent decentralized decision making from degenerating into chaos.
B)   Prices coordinate the actions of millions of people with varying abilities and desires.
C)   Prices ensure that anyone who wants a product can get it.
D)   Prices ensure that what needs to get done does in fact get done.E) None of the above
F) B) and D)

Question 8

A group of buyers and sellers of a particular good or service is called a

Accepted Answer

The answer of A group of buyers and sellers of...

Question 9

To obtain the market demand curve for a product, sum the individual demand curves

Accepted Answer

A)   vertically.
B)   diagonally.
C)   horizontally.
D)   and then average them.E) A) and B)
F) C) and D)

Question 10

Figure 4-18 
-Refer to Figure 4-18. At a price of $35, there would be a

Accepted Answer

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

Question 11

Suppose John and Wayne are the only two demanders of cowboy movies. Each month, John buys six cowboy movies when the price is $10 each, and he buys four cowboy movies when the price is $15 each. Each month, Wayne buys four cowboy movies when the price is $10 each, and he buys two cowboy movies when the price is $15 each. Which of the following points is on the market demand curve?

Accepted Answer

A)   quantity demanded = 2; price = $15
B)   quantity demanded = 4; price = $25
C)   quantity demanded = 10; price = $10
D)   quantity demanded = 16; price = $25E) A) and B)
F) A) and C)

Question 12

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 13

Which of the following characteristics is required for a perfectly competitive market?

Accepted Answer

A)   The goods offered for sale are exactly the same.
B)   There are so many buyers and sellers that no single buyer or seller has any influence over the market price.
C)   It is difficult for new sellers to enter the market.
D)   Both a and b are correct.E) A) and B)
F) B) and D)

Question 14

Figure 4-30 
-Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the changes) in the equilibrium price and quantity.

Accepted Answer

Equilibrium price de...

Question 15

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

Question 16

The signals that guide the allocation of resources in a market economy are

Accepted Answer

A)   surpluses and shortages.
B)   quantities.
C)   government policies.
D)   prices.E) B) and C)
F) A) and B)

Question 17

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) C) and D)

Question 18

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 19

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

Question 20

Table 4-8
 
-Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Accepted Answer

A)   6 units.
B)   12 units.
C)   18 units.
D)   24 units.E) A) and B)
F) A) and C)

Exam 4: The Market Forces of Supply and Demand

A group of buyers and sellers of a particular good or service is called a

Correct Answer
verified

Which of these statements does not apply to market economies?

Correct Answer
verified

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct Answer
verified

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=

Correct Answer
verified

The signals that guide the allocation of resources in a market economy are

Correct Answer
verified

Equilibrium price must increase when demand

Correct Answer
verified

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be a

Correct Answer
verified

Buyers and sellers who have no influence on market price are referred to as

Correct Answer
verified

Which of the following characteristics is required for a perfectly competitive market?

Correct Answer
verified

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.

Correct Answer
verified

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

Correct Answer
verified

Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the changes) in the equilibrium price and quantity.

Correct Answer
verified
Equilibrium price de...
View Answer

Correct Answer
verified

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Correct Answer
verified

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

To obtain the market demand curve for a product, sum the individual demand curves

Correct Answer
verified

A decrease in quantity supplied

Correct Answer
verified

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Correct Answer
verified

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

Correct Answer
verified

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

A group of buyers and sellers of a particular good or service is called a

Correct AnswerverifiedShow Answer

Which of these statements does not apply to market economies?

Correct AnswerverifiedShow Answer

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct AnswerverifiedShow Answer

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=

Correct AnswerverifiedShow Answer

The signals that guide the allocation of resources in a market economy are

Correct AnswerverifiedShow Answer

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. At a price of $35, there would be a

Correct AnswerverifiedShow Answer

Buyers and sellers who have no influence on market price are referred to as

Correct AnswerverifiedShow Answer

Which of the following characteristics is required for a perfectly competitive market?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 4-30 -Refer to Figure 4-30. In this market for iPhones, the technology improves while all other factors remain constant. Explain the changes) in the equilibrium price and quantity.

Correct AnswerverifiedEquilibrium price de...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Correct AnswerverifiedShow Answer

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

To obtain the market demand curve for a product, sum the individual demand curves

Correct AnswerverifiedShow Answer

A decrease in quantity supplied

Correct AnswerverifiedShow Answer

Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then the market quantity supplied at a price of $6 is

Correct AnswerverifiedShow Answer

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Equilibrium price de...
View Answer

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