Question 1

In a market economy,prices are the signals that guide the allocation of scarce resources.

Accepted Answer

a.b.The equilibrium price (Pe)is $4 and ...

Question 2

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

Question 3

The quantity supplied of a good is the amount that

Accepted Answer

A)   buyers are willing and able to purchase.
B)   sellers are able to produce.
C)   buyers and sellers agree will be brought to market.
D)   sellers are willing and able to sell.E) A) and B)
F) A) and C)

Question 4

Table 4-7
 
-Refer to Table 4-7.The equilibrium price and quantity,respectively,are

Accepted Answer

A)   $2 and 50 units.
B)   $6 and 30 units.
C)   $6 and 60 units.
D)   $12 and 30 units.E) A) and B)
F) B) and D)

Question 5

The two words economists use most often are

Accepted Answer

A)   inflation and trade.
B)   supply and demand.
C)   competition and prices.
D)   markets and equilibrium.E) A) and B)
F) A) and C)

Question 6

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 7

In a market economy,supply and demand are important because they

Accepted Answer

A)   are direct policy tools used by government agencies to regulate the economy.
B)   illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.
C)   can be used to predict the impact on the economy of various events and policies.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 8

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Accepted Answer

A)   the dress manufacturer to supply more dresses now than it was supplying previously.
B)   the dress manufacturer to supply fewer dresses now than it was supplying previously.
C)   the demand for this manufacturer's dresses to fall.
D)   no change in the dress manufacturer's current supply; instead, future supply will be affected.E) A) and B)
F) A) and C)

Question 9

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 marijuana.
C)   the idea that lower cigarette prices are associated with less use of marijuana.
D)   most of the available evidence.E) B) and C)
F) None of the above

Question 10

Which of the following demonstrates the law of supply?

Accepted Answer

A)   When leather became more expensive, belt producers decreased their supply of belts.
B)   When car production technology improved, car producers increased their supply of cars.
C)   When sweater producers expected sweater prices to rise in the near future, they decreased their current supply of sweaters.
D)   When ketchup prices rose, ketchup sellers increased their quantity supplied of ketchup.E) None of the above
F) C) and D)

Question 11

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

Accepted Answer

A)   a bakery in a large city
B)   a bank in a large city
C)   a local cable television company
D)   a small group of corn farmersE) A) and B)
F) A) and C)

Question 12

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

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Question 15

Who gets scarce resources in a market economy?

Accepted Answer

A)   the government
B)   whoever the government decides gets them
C)   whoever wants them
D)   whoever is willing and able to pay the priceE) C) and D)
F) A) and C)

Question 16

A shortage exists in a market if

Accepted Answer

A)   there is an excess supply of the good.
B)   quantity supplied exceeds quantity demanded.
C)   the current price is below its equilibrium price.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 17

Figure 4-3
 
-Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $6 is

Accepted Answer

A)   12 units.
B)   14 units.
C)   19 units.
D)   21 units.E) A) and B)
F) All of the above

Question 18

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 19

If suppliers expect the price of their product to fall in the future,then they will

Accepted Answer

A)   decrease supply now.
B)   increase supply now.
C)   decrease supply in the future but not now.
D)   increase supply in the future but not now.E) B) and C)
F) C) and D)

Question 20

Equilibrium price must decrease when demand

Accepted Answer

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

Exam 4: The Market Forces of Supply and Demand.

A dress manufacturer recently has come to expect higher prices for dresses in the near future.We would expect

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If suppliers expect the price of their product to fall in the future,then they will

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

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A shortage exists in a market if

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Who gets scarce resources in a market economy?

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A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Equilibrium price must decrease when demand

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Table 4-7 -Refer to Table 4-7.The equilibrium price and quantity,respectively,are

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In a market economy,prices are the signals that guide the allocation of scarce resources.

Correct Answerverifieda.b.The equilibrium price (Pe)is $4 and ...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the price of a good would

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

In a market economy,supply and demand are important because they

Correct AnswerverifiedShow Answer

Which of the following demonstrates the law of supply?

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Figure 4-3 -Refer to Figure 4-3.If these are the only two consumers in the market,then the market quantity demanded at a price of $6 is

Correct AnswerverifiedShow Answer

The two words economists use most often are

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The quantity supplied of a good is the amount that

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

Correct AnswerverifiedShow Answer

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a.b.The equilibrium price (Pe)is $4 and ...
View Answer

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