Question 1

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

Question 2

A university's football stadium is never more than half-full during football games.This indicates

Accepted Answer

A)   the ticket price is above the equilibrium price.
B)   the ticket price is below the equilibrium price.
C)   the ticket price is at the equilibrium price.
D)   nothing about the equilibrium price.E) A) and C)
F) B) and D)

Question 3

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

Question 4

The market demand curve

Accepted Answer

A)   is found by vertically adding the individual demand curves.
B)   slopes upward.
C)   represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.
D)   represents the sum of the quantities demanded by all the buyers at each price of the good.E) A) and B)
F) A) and C)

Question 5

A leftward shift of a supply curve is called a(n)

Accepted Answer

A)   increase in supply.
B)   decrease in supply.
C)   decrease in quantity supplied.
D)   increase in quantity supplied.E) A) and B)
F) A) and C)

Question 6

If there is an improvement in the technology used to produce a good,then the supply curve for that good will shift to the left.

Accepted Answer

A) True 
 B)False

Question 7

Figure 4-14 
-Refer to Figure 4-14.At a price of

Accepted Answer

A)   $2,there is a surplus of 6 units.
B)   $5,there is a surplus of 25 units.
C)   $5,there is a shortage of $25.
D)   $7,there is a surplus of 4 units.E) A) and B)
F) None of the above

Question 8

Which of the following is not held constant in a supply schedule?

Accepted Answer

A)   production technology
B)   the price of the good
C)   the prices of inputs
D)   expectationsE) None of the above
F) A) and B)

Question 9

Table 4-4
 
-Refer to Table 4-4.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) None of the above
F) All of the above

Question 10

Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs.As a result of this information,today's demand curve for Mustangs

Accepted Answer

A)   shifts to the right.
B)   shifts to the left.
C)   shifts either to the right or to the left,but we cannot determine the direction of the shift from the given information.
D)   will not shift; rather,the demand curve for Mustangs will shift to the right next month.E) A) and C)
F) A) and B)

Question 11

A very hot summer in Atlanta will cause

Accepted Answer

A)   the demand curve for lemonade to shift to the left.
B)   the demand for air conditioners to decrease.
C)   the demand for jackets to decrease.
D)   a movement downward and to the right along the demand curve for tank tops.E) A) and B)
F) A) and D)

Question 12

When the market price is above the equilibrium price,suppliers are unable to sell all they want to sell.

Accepted Answer

A) True 
 B)False

Question 13

Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

Accepted Answer

A)   Sellers would not be able to produce and sell as much as before at each relevant price.
B)   The supply would decrease.
C)   Buyers would not be willing to buy as much as before at each relevant price.
D)   The equilibrium price would rise.E) A) and D)
F) None of the above

Question 14

If macaroni and cheese is an inferior good,then an increase in

Accepted Answer

A)   the price will cause the demand curve for macaroni and cheese to shift to the left.
B)   the price will cause the demand curve for macaroni and cheese to shift to the right.
C)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the left.
D)   a consumer's income will cause the demand curve for macaroni and cheese to shift to the right.E) A) and C)
F) C) and D)

Question 15

When the price of a good is higher than the equilibrium price,

Accepted Answer

A)   a shortage will exist.
B)   buyers desire to purchase more than is produced.
C)   sellers desire to produce and sell more than buyers wish to purchase.
D)   quantity demanded exceeds quantity supplied.E) A) and B)
F) A) and C)

Question 16

A movement upward and to the left along a demand curve is called a(n)

Accepted Answer

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

Question 17

"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." This relationship between price and quantity demanded is referred to as

Accepted Answer

A)   equilibrium.
B)   the law of demand.
C)   the relationship between supply and demand.
D)   the definition of an inferior good.E) B) and C)
F) A) and B)

Question 18

Figure 4-6 
-Refer to Figure 4-6.The movement from D' to D could be caused by

Accepted Answer

A)   a decrease in price.
B)   a decrease in income,assuming the good is inferior.
C)   buyers expecting the price of the good to fall in the near future.
D)   an increase in the price of a complement.E) All of the above
F) A) and C)

Question 19

If consumers view cappuccinos and lattés as substitutes,what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos 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) A) and B)
F) A) and C)

Question 20

Figure 4-11
 
-Refer to Figure 4-11.If these are the only two sellers in the market,then the market quantity supplied at a price of $8 is

Accepted Answer

A)   14 units.
B)   15 units.
C)   16 units.
D)   29 units.E) B) and C)
F) A) and D)

Exam 4: The Market Forces of Supply and Demand

When the price of a good is higher than the equilibrium price,

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The market demand curve

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Suppose there is an earthquake that destroys several corn canneries.Which of the following would not be a direct result of this event?

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Figure 4-14 -Refer to Figure 4-14.At a price of

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If there is an improvement in the technology used to produce a good,then the supply curve for that good will shift to the left.

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

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Figure 4-6 -Refer to Figure 4-6.The movement from D' to D could be caused by

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Figure 4-11 -Refer to Figure 4-11.If these are the only two sellers in the market,then the market quantity supplied at a price of $8 is

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A university's football stadium is never more than half-full during football games.This indicates

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Table 4-4 -Refer to Table 4-4.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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If macaroni and cheese is an inferior good,then an increase in

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"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." This relationship between price and quantity demanded is referred to as

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A leftward shift of a supply curve is called a(n)

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A very hot summer in Atlanta will cause

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

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A movement upward and to the left along a demand curve is called a(n)

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Which of the following is not held constant in a supply schedule?

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When the market price is above the equilibrium price,suppliers are unable to sell all they want to sell.

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If consumers view cappuccinos and lattés as substitutes,what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?

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Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs.As a result of this information,today's demand curve for Mustangs

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