Question 1

An example of a perfectly competitive market would be the market for

Accepted Answer

A)  electricity.
B)  soybeans.
C)  coffee shops.
D)  restaurants.E) B) and D)
F) A) and C)

Question 2

A likely example of substitute goods for most people would be

Accepted Answer

A)  tables and chairs.
B)  bicycles and helmets.
C)  apple juice and orange juice.
D)  coffee and sugar.E) All of the above
F) None of the above

Question 3

Figure 4-18 
-Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Accepted Answer

A)  $15 and 200 units.
B)  $25 and 600 units.
C)  $25 and 400 units.
D)  $35 and 200 units.E) A) and B)
F) C) and D)

Question 4

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

Question 5

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Accepted Answer

A) True 
 B)False

Question 6

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

Question 7

Table 4-13
The demand schedule below pertains to sandwiches demanded per week. 
-Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

Accepted Answer

A)  -3.
B)  -1/3.
C)  1/3.
D)  3.E) B) and C)
F) A) and C)

Question 8

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Accepted Answer

A)  Perfectly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
B)  Some degree of competition is present in most markets.
C)  There are many buyers and many sellers in all types of markets.
D)  Many of the lessons that we learn by studying supply and demand under perfect competition apply in more complicated markets as well.E) All of the above
F) C) and D)

Question 9

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

Accepted Answer

A)  a decrease in demand and a decrease in quantity supplied
B)  a decrease in demand and a decrease in supply
C)  a decrease in quantity demanded and a decrease in quantity supplied
D)  a decrease in quantity demanded and a decrease in supplyE) None of the above
F) B) and C)

Question 10

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. 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 B)
F) A) and C)

Question 11

Table 4-7 
-Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Accepted Answer

A)  2.5 gallons.
B)  4 gallons.
C)  10 gallons.
D)  50 gallons.E) A) and B)
F) None of the above

Question 12

A decrease in supply is represented by a

Accepted Answer

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

Question 13

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 and the function for market demand is QD=1000-100P, where QD is the quantity demanded and P is the price, what is the equilibrium quantity?

Accepted Answer

Question 14

Table 4-1 
-Refer to Table 4-1. If the market consists of Michelle and Laura 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) All of the above
F) A) and B)

Question 15

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 C)
F) All of the above

Question 16

In a market economy, supply and demand determine

Accepted Answer

A)  both the quantity of each good produced and the price at which it is sold.
B)  the quantity of each good produced but not the price at which it is sold.
C)  the price at which each good is sold but not the quantity of each good produced.
D)  neither the quantity of each good produced nor the price at which it is sold.E) B) and C)
F) A) and D)

Question 17

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Accepted Answer

The supply...

Question 18

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Accepted Answer

The answer of Studies show that lower cigarette prices are...

Question 19

Figure 4-28
​ 
-Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Accepted Answer

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

Question 20

Scenario 4-1
Suppose the demand schedule in a market can be represented by the equation  , where  is the quantity demanded and  is the price. Also, suppose the supply schedule can be represented by the equation  , where  is the quantity supplied.
-Refer to Scenario 4-1. Suppose the price is currently equal to 10 in this market. Is there a shortage or surplus in this market, and how large is the shortage/surplus?

Accepted Answer

There is a...

Exam 4: The Market Forces of Supply and Demand

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There is a...
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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?

Correct Answer
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Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct Answer
verified

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct Answer
verified

In a market economy, supply and demand determine

Correct Answer
verified

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Correct Answer
verified

A likely example of substitute goods for most people would be

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

Correct Answer
verified

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Correct Answer
verified

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

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

Correct Answer
verified

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Correct Answer
verified
The supply...
View Answer

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Correct Answer
verified

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

Correct Answer
verified

An example of a perfectly competitive market would be the market for

Correct Answer
verified

Figure 4-18 -Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Correct Answer
verified

A decrease in supply is represented by a

Correct Answer
verified

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

Correct Answer
verified

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Correct AnswerverifiedThere is a...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

Figure 4-28 ​ -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct AnswerverifiedShow Answer

Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?

Correct AnswerverifiedShow Answer

In a market economy, supply and demand determine

Correct AnswerverifiedShow Answer

When quantity demanded exceeds quantity supplied at the current market price, the market has a shortage, and market price will likely rise in the future to eliminate the shortage.

Correct AnswerverifiedShow Answer

A likely example of substitute goods for most people would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If corn is an input into the production of ethanol, will a decrease in the price of corn increase the supply of ethanol or decrease the supply of ethanol?

Correct AnswerverifiedThe supply...View AnswerShow Answer

Studies show that lower cigarette prices are associated with greater use of marijuana; therefore, tobacco and marijuana are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An example of a perfectly competitive market would be the market for

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. Equilibrium price and quantity are, respectively,

Correct AnswerverifiedShow Answer

A decrease in supply is represented by a

Correct AnswerverifiedShow Answer

Table 4-13 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is

Correct AnswerverifiedShow Answer

Table 4-7 -Refer to Table 4-7. If these are the only four sellers in the market for ice cream, then when the price decreases from $10 to $8, the market quantity supplied decreases by

Correct AnswerverifiedShow Answer

Correct Answer
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There is a...
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Figure 4-28 -Refer to Figure 4-28. Using the points on the figure, describe the change that would occur if a news report stated that the price of this good was expected to increase next week.

Correct Answer
verified

Correct Answer
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The supply...
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