Question 1

Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of

Accepted Answer

A)   price.
B)   supply.
C)   demand.
D)   income.E) B) and D)
F) C) and D)

Question 2

Equilibrium quantity must increase when demand

Accepted Answer

A)   increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.
B)   increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
C)   decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase.
D)   decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) None of the above
F) A) and D)

Question 3

Figure 4-7 
-Refer to Figure 4-7. The shift from Da to Db is called

Accepted Answer

A)   an increase in demand.
B)   a decrease in demand.
C)   a decrease in quantity demanded.
D)   an increase in quantity demanded.E) None of the above
F) B) and C)

Question 4

Holding the nonprice determinants of supply constant, a change in price would

Accepted Answer

A)   result in either a decrease in supply or an increase in supply.
B)   result in a movement along a stationary supply curve.
C)   result in a shift of demand.
D)   have no effect on the quantity supplied.E) A) and C)
F) None of the above

Question 5

Table 4-16
The following table shows the supply and demand schedules in a market.
 
-Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

Accepted Answer

The answer of Table 4-16
The following table shows the supply...

Question 6

Table 4-6
 
-Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

Accepted Answer

A)   increases by 10 units.
B)   decreases by 10 units.
C)   decreases by 20 units.
D)   decreases by 30 units.E) A) and C)
F) B) and C)

Question 7

If sellers expect higher basket prices in the near future, the current

Accepted Answer

A)   supply of baskets will increase.
B)   supply of baskets will decrease.
C)   supply of baskets will be unaffected.
D)   demand for baskets will decrease.E) None of the above
F) A) and B)

Question 8

An increase in the price of a good would

Accepted Answer

A)   increase the supply of the good.
B)   increase the amount purchased by buyers.
C)   give producers an incentive to produce more.
D)   decrease both the quantity demanded of the good and the quantity supplied of the good.E) B) and C)
F) A) and C)

Question 9

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Different sellers sell identical products.
B)   There are many sellers.
C)   Sellers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.E) A) and C)
F) None of the above

Question 11

Figure 4-22 
-Refer to Figure 4-22. At a price of $12, there is a

Accepted Answer

A)   surplus of 2 units.
B)   surplus of 4 units.
C)   shortage of 2 units.
D)   shortage of 4 units.E) C) and D)
F) B) and C)

Question 12

An early frost in the vineyards of Napa Valley would cause an)

Accepted Answer

A)   increase in the demand for wine, increasing price.
B)   increase in the supply of wine, decreasing price.
C)   decrease in the demand for wine, decreasing price.
D)   decrease in the supply of wine, increasing price.E) B) and D)
F) None of the above

Question 13

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

Question 14

Whenever a determinant of supply other than price changes, the supply curve shifts.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for tennis balls in the United States?

Accepted Answer

A)   an increase in the price of tennis balls
B)   a decrease in the price of tennis racquets
C)   an expectation by buyers that their incomes will increase in the very near future
D)   a decrease in the number of people in the United States under age 70E) B) and D)
F) A) and B)

Question 16

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) A) and C)

Question 17

Figure 4-25
The graph below pertains to the supply of paper to colleges and universities. 
-Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

Accepted Answer

A)   x to y.
B)   y to x.
C)   SA to SB.
D)   SB to SA.E) B) and C)
F) None of the above

Question 18

Figure 4-28 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if consumer incomes increase and this is an inferior good.

Accepted Answer

The answer of Figure 4-28 
-Refer to Figure 4-28. Using...

Question 19

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar?

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 C)

Question 20

Figure 4-31
Consider the market for 2-packs of light bulbs below. 
-Refer to Figure 4-31. What are the values of the equilibrium price and quantity?

Accepted Answer

The answer of Figure 4-31
Consider the market for 2-packs of...

Exam 4: The Market Forces of Supply and Demand

Figure 4-7 -Refer to Figure 4-7. The shift from Da to Db is called

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An early frost in the vineyards of Napa Valley would cause an)

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Holding the nonprice determinants of supply constant, a change in price would

Correct AnswerverifiedShow Answer

Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price decreases from $4 to $2, the market quantity supplied

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Equilibrium quantity must increase when demand

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Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. -Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future would cause a current move from

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand C to Demand A in the market for tennis balls in the United States?

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Figure 4-22 -Refer to Figure 4-22. At a price of $12, there is a

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Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of

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

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Table 4-16 The following table shows the supply and demand schedules in a market. -Refer to Table 4-16. At a price of $8, how large of a surplus will there be in this market?

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Whenever a determinant of supply other than price changes, the supply curve shifts.

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An increase in the price of a good would

Correct AnswerverifiedShow Answer

Suppose the demand for calendars increases in November. At the same time, the price of the ink used in the production of calendars increases. In the market for calendars, the equilibrium price rises, but the effect on the equilibrium quantity is ambiguous.

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

Correct AnswerverifiedShow Answer

Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if consumer incomes increase and this is an inferior good.

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a perfectly competitive market?

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Figure 4-31 Consider the market for 2-packs of light bulbs below. -Refer to Figure 4-31. What are the values of the equilibrium price and quantity?

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Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for bullet-proof vests of an increase in the price of Kevlar?

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If sellers expect higher basket prices in the near future, the current

Correct AnswerverifiedShow Answer

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