Question 1

Equilibrium quantity must decrease when demand

Accepted Answer

A)  increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
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 increases, and when both demand and supply decrease.
D)  decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.E) A) and D)
F) A) and B)

Question 2

When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 3

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. A to DB. B) DB to DA. C) x to y. D) y to x." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from

Accepted Answer

A)  DA to DB.
B)  DB to DA.
C)  x to y.
D)  y to x.E) A) and B)
F) B) and C)

Question 4

If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

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

Question 5

Table 4-1 
-Refer to Table 4-1. If the market consists of Michelle and Hillary only and the price falls by $1, the quantity demanded in the market increases by

Accepted Answer

A)  2 units.
B)  3 units.
C)  4 units.
D)  5 units.E) A) and B)
F) A) and C)

Question 6

Table 4-6 
-Refer to Table 4-6. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied

Accepted Answer

A)  increases by 0.5 units.
B)  increases by 2 units.
C)  decreases by 4 units.
D)  increases by 42 units.E) A) and B)
F) All of the above

Question 7

If the demand for a good falls when income falls, then the good is called a(n)

Accepted Answer

A)  normal good.
B)  regular good.
C)  luxury good.
D)  inferior good.E) A) and C)
F) B) and C)

Question 8

The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

Accepted Answer

A) True 
 B)False

Question 9

Table 4-5
The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. 
-Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

Accepted Answer

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

Question 10

When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in demand is represented by a

Accepted Answer

A)  movement downward and to the right along a demand curve.
B)  movement upward and to the left along a demand curve.
C)  rightward shift of a demand curve.
D)  leftward shift of a demand curve.E) B) and C)
F) All of the above

Question 12

A market includes

Accepted Answer

A)  buyers only.
B)  sellers only.
C)  both buyers and sellers.
D)  the place where transactions occur but not the people involved.E) A) and B)
F) C) and D)

Question 13

Which of the following events must cause equilibrium price to rise?

Accepted Answer

A)  demand increases and supply decreases
B)  demand and supply both decrease
C)  demand decreases and supply increases
D)  demand and supply both increaseE) B) and C)
F) All of the above

Question 14

In a perfectly competitive market, buyers and sellers are price setters.

Accepted Answer

A) True 
 B)False

Question 15

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Monopolists are price takers.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-27
Panel (a) 
Panel (b)    Panel (c) 
Panel (d)   
-Refer to Figure 4-27. Panel (a)  shows which of the following?

Accepted Answer

A)  an increase in demand and an increase in quantity supplied
B)  an increase in demand and an increase in supply
C)  an increase in quantity demanded and an increase in quantity supplied
D)  an increase in quantity demanded and an increase in supplyE) B) and C)
F) All of the above

Question 19

The term price takers refers to buyers and sellers in

Accepted Answer

A)  perfectly competitive markets.
B)  monopolistic markets.
C)  markets that are regulated by the government.
D)  markets in which buyers cannot buy all they want and/or sellers cannot sell all they want.E) A) and D)
F) C) and D)

Question 20

Today's supply curve for gasoline could shift in response to a change in

Accepted Answer

A)  today's price of gasoline.
B)  the expected future price of gasoline.
C)  the number of buyers of gasoline.
D)  All of the above are correct.E) All of the above
F) C) and D)

Exam 4: The Market Forces of Supply and Demand

A market includes

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The market demand curve shows how the total quantity demanded of a good varies as the income of buyers varies, while all the other factors that affect how much consumers want to buy are held constant.

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The term price takers refers to buyers and sellers in

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Table 4-6 -Refer to Table 4-6. If these are the only four sellers in the market, then when the price increases from $6 to $8, the market quantity supplied

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Table 4-1 -Refer to Table 4-1. If the market consists of Michelle and Hillary only and the price falls by $1, the quantity demanded in the market increases by

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When the market price is below the equilibrium price, the quantity of the good demanded exceeds the quantity supplied.

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Table 4-5 The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices. -Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

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In a perfectly competitive market, buyers and sellers are price setters.

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If the demand for a good falls when income falls, then the good is called a(n)

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When an increase in the price of one good lowers the demand for another good, the two goods are called complements.

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Equilibrium quantity must decrease when demand

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Today's supply curve for gasoline could shift in response to a change in

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

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Figure 4-27 Panel (a) Panel (b) Panel (c) Panel (d) -Refer to Figure 4-27. Panel (a) shows which of the following?

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Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would cause a move from

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

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If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?

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A decrease in demand is represented by a

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Monopolists are price takers.

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Which of the following events must cause equilibrium price to rise?

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