Question 1

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 B)
F) C) and D)

Question 2

In a given market, how are the equilibrium price and the market-clearing price related?

Accepted Answer

A)   There is no relationship.
B)   They are the same price.
C)   The market-clearing price exceeds the equilibrium price.
D)   The equilibrium price exceeds the market-clearing price.E) C) and D)
F) B) and D)

Question 3

Figure 4-6 
-Refer to Figure 4-6. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. If the warning labels are successful, we could illustrate the plan as producing a movement from

Accepted Answer

A)   Point A to Point B in Panel 1.
B)   Point B to Point A in Panel 1.
C)   Point A to Point C in Panel 2.
D)   Point C to Point A in Panel 2.E) B) and D)
F) A) and B)

Question 4

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 4.
• The slope of the supply curve is 2.
Then there is currently a

Accepted Answer

A)   shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
B)   shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
C)   surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
D)   surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.E) A) and C)
F) All of the above

Question 5

When supply and demand both increase, equilibrium

Accepted Answer

A)   price will increase.
B)   price will decrease.
C)   quantity may increase, decrease, or remain unchanged.
D)   price may increase, decrease, or remain unchanged.E) B) and D)
F) B) and C)

Question 6

In a market economy,

Accepted Answer

A)   supply determines demand and demand, in turn, determines prices.
B)   demand determines supply and supply, in turn, determines prices.
C)   the allocation of scarce resources determines prices and prices, in turn, determine supply and demand.
D)   supply and demand determine prices and prices, in turn, allocate the economy's scarce resources.E) All of the above
F) B) and C)

Question 7

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) C) and D)
F) A) and D)

Question 8

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) None of the above
F) A) and D)

Question 9

Table 4-3
 
-Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Accepted Answer

A)   0 units.
B)   3.5 units.
C)   12 units.
D)   14 units.E) B) and C)
F) None of the above

Question 10

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Accepted Answer

A) True 
 B)False

Question 11

For a competitive market,

Accepted Answer

A)   a seller can always increase her profit by raising the price of her product.
B)   if a seller charges more than the going price, buyers will go elsewhere to make their purchases.
C)   a seller often charges less than the going price to increase sales and profit.
D)   a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.E) None of the above
F) B) and C)

Question 12

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Accepted Answer

A)   decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
B)   decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
C)   decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
D)   increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.E) A) and B)
F) B) and D)

Question 13

Assume Leo buys coffee beans in a competitive market. It follows that

Accepted Answer

A)   Leo has a limited number of sellers from which to buy coffee beans.
B)   Leo will negotiate with sellers whenever he buys coffee beans.
C)   Leo can influence the price of coffee beans if he buys a large quantity of them.
D)   None of the above is correct.E) B) and C)
F) A) and C)

Question 14

Figure 4-1 
-Refer to Figure 4-1. It is apparent from the figure that the

Accepted Answer

A)   good is inferior.
B)   demand for the good decreases as income increases.
C)   demand for the good conforms to the law of demand.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 15

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. What is the equilibrium quantity in this market?

Accepted Answer

The answer of Scenario 4-1
Suppose the demand schedule in a...

Question 16

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Accepted Answer

A) True 
 B)False

Question 17

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Accepted Answer

A) True 
 B)False

Question 18

Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose the following: • x = 2.
• The current price of a sandwich is $3.00.
• The market quantity supplied of sandwiches is 5.
• The slope of the supply curve is 1.
Then there is currently a

Accepted Answer

A)   shortage of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
B)   shortage of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
C)   surplus of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
D)   surplus of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.E) A) and C)
F) A) and B)

Question 19

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

Question 20

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Accepted Answer

A)   Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)   Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)   Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)   Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.E) B) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

Correct Answer
verified

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Correct Answer
verified

Assume Leo buys coffee beans in a competitive market. It follows that

Correct Answer
verified

In a given market, how are the equilibrium price and the market-clearing price related?

Correct Answer
verified

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct Answer
verified

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Correct Answer
verified

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Correct Answer
verified

Figure 4-1 -Refer to Figure 4-1. It is apparent from the figure that the

Correct Answer
verified

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct Answer
verified

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Correct Answer
verified

Correct Answer
verified

For a competitive market,

Correct Answer
verified

When supply and demand both increase, equilibrium

Correct Answer
verified

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Correct Answer
verified

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

Correct Answer
verified

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
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

In a market economy,

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Correct AnswerverifiedShow Answer

Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause an)

Correct AnswerverifiedShow Answer

Assume Leo buys coffee beans in a competitive market. It follows that

Correct AnswerverifiedShow Answer

In a given market, how are the equilibrium price and the market-clearing price related?

Correct AnswerverifiedShow Answer

The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.

Correct AnswerverifiedShow Answer

Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?

Correct AnswerverifiedShow Answer

Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1. It is apparent from the figure that the

Correct AnswerverifiedShow Answer

Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?

Correct AnswerverifiedShow Answer

If a higher price means a greater quantity supplied, then the supply curve slopes upward.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a competitive market,

Correct AnswerverifiedShow Answer

When supply and demand both increase, equilibrium

Correct AnswerverifiedShow Answer

If orange juice and apple juice are substitutes, an increase in the price of orange juice will shift the demand curve for apple juice to the left.

Correct AnswerverifiedShow Answer

Table 4-3 -Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $2 is

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 AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a market economy,

Correct AnswerverifiedShow Answer

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