Question 1

The highest form of competition is called

Accepted Answer

A)   arbitrage.
B)   monopolistic competition.
C)   equilibrium.
D)   perfect competition.E) A) and D)
F) B) and C)

Question 2

In a competitive market, each seller has limited control over the price of his product because

Accepted Answer

A)   other sellers are offering similar products.
B)   buyers exert more control over the price than do sellers.
C)   these markets are highly regulated by the government.
D)   sellers usually agree to set a common price that will allow each seller to earn a comfortable profit.E) B) and C)
F) C) and D)

Question 3

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 4

A decrease in the price of a good would

Accepted Answer

A)   increase the supply of the good.
B)   increase the quantity demanded of the good.
C)   give producers an incentive to produce more to keep profits from falling.
D)   shift the supply curve for the good to the left.E) A) and B)
F) A) and C) B

Question 5

Price will rise to eliminate a shortage.

Accepted Answer

A) True 
 B)False

Question 6

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 7

It is not possible for demand and supply to shift at the same time.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following might cause the demand curve for an inferior good to shift to the left?

Accepted Answer

A)   a decrease in income
B)   an increase in the price of a substitute
C)   an increase in the price of a complement
D)   None of the above is correct.E) None of the above
F) All of the above

Question 9

Which of the following is an example of a highly organized market?

Accepted Answer

A)   the market for textbooks
B)   the market for spa services
C)   the market for soybeans
D)   the market for ice creamE) None of the above
F) A) and C)

Question 10

If something happens to alter the quantity demanded at any given price, then

Accepted Answer

A)   the demand curve becomes steeper.
B)   the demand curve becomes flatter.
C)   the demand curve shifts.
D)   we move along the demand curve.E) A) and C)
F) B) and C)

Question 11

The belief that tobacco is a "gateway drug" is consistent with

Accepted Answer

A)   the idea that tobacco and marijuana are substitutes.
B)   the idea that an increase in income causes a decrease in the demand for tobacco and an increase in the demand for marijuanb.
C)   the idea that lower cigarette prices are associated with less use of marijuana.
D)   most of the available evidence.E) All of the above
F) B) and C)

Question 12

When quantity supplied decreases at every possible price, we know that the supply curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted; rather, we have moved along the supply curve to a new point on the same curve.
D)   not shifted; rather, the supply curve has become flatter.E) B) and C)
F) None of the above

Question 13

Figure 4-21 
-Refer to Figure 4-21. What is the equilibrium price in this market?

Accepted Answer

A)   $0
B)   $5
C)   $10
D)   $20E) C) and D)
F) None of the above

Question 14

Which of the following does not affect an individual's demand curve?

Accepted Answer

A)   expectations
B)   income
C)   prices of related goods
D)   the number of buyersE) None of the above
F) B) and C)

Question 15

Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
 
-Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is:  the equilibrium price and quantity are

Accepted Answer

A)   $0.00 and 1200 cases
B)   $3.00 and 300 cases
C)   $6.00 and 600 cases
D)   $9.00 and 600 casesE) A) and B)
F) A) and D) C

Question 16

Two goods are complements when 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) A) and C)
F) B) and C)

Question 17

If the price of a good is low,

Accepted Answer

A)   firms would increase profit by increasing output.
B)   the quantity supplied of the good could be zero.
C)   the supply curve for the good will shift to the left.
D)   firms can and should raise the price of the product.E) C) and D)
F) A) and B)

Question 18

Which of the following is not an expression for the sum of all the individual demand curves for a product?

Accepted Answer

A)   total demand
B)   market demand
C)   equilibrium demand
D)   aggregate demandE) B) and C)
F) A) and C)

Question 19

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

Question 20

Figure 4-24
The diagram below pertains to the demand for turkey in the United States. 
-Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Accepted Answer

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

Exam 4: The Market Forces of Supply and Demand

The highest form of competition is called

Correct Answer
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In a competitive market, each seller has limited control over the price of his product because

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

Correct Answer
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A decrease in the price of a good would

Correct Answer
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B

Price will rise to eliminate a shortage.

Correct Answer
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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?

Correct Answer
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It is not possible for demand and supply to shift at the same time.

Correct Answer
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Which of the following might cause the demand curve for an inferior good to shift to the left?

Correct Answer
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Which of the following is an example of a highly organized market?

Correct Answer
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If something happens to alter the quantity demanded at any given price, then

Correct Answer
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The belief that tobacco is a "gateway drug" is consistent with

Correct Answer
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When quantity supplied decreases at every possible price, we know that the supply curve has

Correct Answer
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Figure 4-21 -Refer to Figure 4-21. What is the equilibrium price in this market?

Correct Answer
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Which of the following does not affect an individual's demand curve?

Correct Answer
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Table 4-10 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is: the equilibrium price and quantity are

Correct Answer
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C

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

Correct Answer
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If the price of a good is low,

Correct Answer
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Which of the following is not an expression for the sum of all the individual demand curves for a product?

Correct Answer
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Correct Answer
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C

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

The highest form of competition is called

Correct AnswerverifiedShow Answer

In a competitive market, each seller has limited control over the price of his product because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the price of a good would

Correct AnswerverifiedB

Price will rise to eliminate a shortage.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

It is not possible for demand and supply to shift at the same time.

Correct AnswerverifiedShow Answer

Which of the following might cause the demand curve for an inferior good to shift to the left?

Correct AnswerverifiedShow Answer

Which of the following is an example of a highly organized market?

Correct AnswerverifiedShow Answer

If something happens to alter the quantity demanded at any given price, then

Correct AnswerverifiedShow Answer

The belief that tobacco is a "gateway drug" is consistent with

Correct AnswerverifiedShow Answer

When quantity supplied decreases at every possible price, we know that the supply curve has

Correct AnswerverifiedShow Answer

Figure 4-21 -Refer to Figure 4-21. What is the equilibrium price in this market?

Correct AnswerverifiedShow Answer

Which of the following does not affect an individual's demand curve?

Correct AnswerverifiedShow Answer

Table 4-10 The following table shows the number of cases of water each seller is willing to sell at the prices listed. -Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule is: the equilibrium price and quantity are

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

If the price of a good is low,

Correct AnswerverifiedShow Answer

Which of the following is not an expression for the sum of all the individual demand curves for a product?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedC

Figure 4-24 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Correct AnswerverifiedShow Answer

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B

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C

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C

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