Question 1

Figure 4-26 
-Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Accepted Answer

A)  Point A to Point B
B)  Point C to Point B
C)  Point C to Point D
D)  Point A to Point D

Question 2

Figure 4-22 
-Refer to Figure 4-22. At a price of $12, there is a

Accepted Answer

A)  surplus of 2 units.
B)  surplus of 4 units.
C)  shortage of 2 units.
D)  shortage of 4 units.

Question 3

Figure 4-13  
-Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Accepted Answer

A)  8 units.
B)  16 units.
C)  24 units.
D)  32 units.

Question 4

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Accepted Answer

A)  luxury good.
B)  inferior good.
C)  normal good.
D)  complementary good.

Question 5

An increase 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.

Question 6

Figure 4-7 
-Refer to Figure 4-7. The shift from Da to Db is called

Accepted Answer

A)  an increase in demand.
B)  a decrease in demand.
C)  a decrease in quantity demanded.
D)  an increase in quantity demanded.

Question 7

Individual supply curves are summed vertically to obtain the market supply curve.

Accepted Answer

A) True 
 B)False

Question 8

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Accepted Answer

A)  The demand for gasoline will increase.
B)  The demand for gasoline will decrease.
C)  The demand for gasoline will be unaffected.
D)  The supply of gasoline will increase.

Question 9

Equilibrium price must increase 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.

Question 10

Table 4-8 
-Refer to Table 4-8. If these are the only three sellers in the market, then an increase in the market price from $6 to $12 will increase quantity supplied by

Accepted Answer

A)  12 units.
B)  24 units.
C)  36 units.
D)  48 units.

Question 11

Which of these statements best represents the law of demand?

Accepted Answer

A)  When buyers' tastes for a good increase, they purchase more of the good.
B)  When income levels increase, buyers purchase more of most goods.
C)  When the price of a good decreases, buyers purchase more of the good.
D)  When buyers' demands for a good increase, the price of the good increases.

Question 12

A competitive market is a market in which

Accepted Answer

A)  an auctioneer helps set prices and arrange sales.
B)  there are only a few sellers.
C)  the forces of supply and demand do not apply.
D)  no individual buyer or seller has any significant impact on the market price.

Question 13

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Accepted Answer

A)  "fight fire with fire" by decreasing supply of its doll for six weeks and then increasing the supply.
B)  increase the supply of its doll now before the other doll hits the market.
C)  increase the price of its doll now.
D)  discontinue its doll.

Question 14

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Accepted Answer

A)  shortage to exist and the market price of roses to increase.
B)  shortage to exist and the market price of roses to decrease.
C)  surplus to exist and the market price of roses to increase.
D)  surplus to exist and the market price of roses to decrease.

Question 15

Suppose consumers expect the price of a good to be higher in the future than it is today. Would the current demand for the good increase or decrease?

Accepted Answer

The current demand will increase.

Question 16

If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the

Accepted Answer

A)  law of supply.
B)  law of demand.
C)  difference between normal and inferior goods.
D)  difference between substitute and complement goods.

Question 17

Table 4-11 
-Refer to Table 4-11. 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. B

Question 18

Which of the following would cause price to increase?

Accepted Answer

A)  an increase in supply
B)  a decrease in demand
C)  a surplus of the good
D)  a shortage of the good D

Question 19

A higher price for batteries would result in a(n)

Accepted Answer

A)  increase in the demand for flashlights.
B)  decrease in the demand for flashlights.
C)  increase in the demand for batteries.
D)  decrease in the demand for batteries.

Question 20

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Accepted Answer

A) True 
 B)False

Exam 4: The Market Forces of Supply and Demand

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Correct Answer
verified

Figure 4-22 -Refer to Figure 4-22. At a price of $12, there is a

Correct Answer
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Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Correct Answer
verified

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Correct Answer
verified

An increase in supply is represented by a

Correct Answer
verified

Figure 4-7 -Refer to Figure 4-7. The shift from Da to Db is called

Correct Answer
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Individual supply curves are summed vertically to obtain the market supply curve.

Correct Answer
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What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Correct Answer
verified

Equilibrium price must increase when demand

Correct Answer
verified

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then an increase in the market price from $6 to $12 will increase quantity supplied by

Correct Answer
verified

Which of these statements best represents the law of demand?

Correct Answer
verified

A competitive market is a market in which

Correct Answer
verified

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct Answer
verified

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Correct Answer
verified

Suppose consumers expect the price of a good to be higher in the future than it is today. Would the current demand for the good increase or decrease?

Correct Answer
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The current demand will increase.

Correct Answer
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Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Correct Answer
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B

Which of the following would cause price to increase?

Correct Answer
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D

A higher price for batteries would result in a(n)

Correct Answer
verified

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Correct Answer
verified

Exam 4: The Market Forces of Supply and Demand

Figure 4-26 -Refer to Figure 4-26. Which of the following movements would illustrate the effect in the market for orange juice of an announcement by the American Dental Association that orange juice erodes tooth enamel?

Correct AnswerverifiedShow Answer

Figure 4-22 -Refer to Figure 4-22. At a price of $12, there is a

Correct AnswerverifiedShow Answer

Figure 4-13 -Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $8 is

Correct AnswerverifiedShow Answer

You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n)

Correct AnswerverifiedShow Answer

An increase in supply is represented by a

Correct AnswerverifiedShow Answer

Figure 4-7 -Refer to Figure 4-7. The shift from Da to Db is called

Correct AnswerverifiedShow Answer

Individual supply curves are summed vertically to obtain the market supply curve.

Correct AnswerverifiedShow Answer

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future?

Correct AnswerverifiedShow Answer

Equilibrium price must increase when demand

Correct AnswerverifiedShow Answer

Table 4-8 -Refer to Table 4-8. If these are the only three sellers in the market, then an increase in the market price from $6 to $12 will increase quantity supplied by

Correct AnswerverifiedShow Answer

Which of these statements best represents the law of demand?

Correct AnswerverifiedShow Answer

A competitive market is a market in which

Correct AnswerverifiedShow Answer

Funsters, Inc., the largest toy company in the country, sells its most popular doll for $15. It has just learned that its leading competitor, Toysorama, is mass-producing an excellent copy and plans to flood the market with their $5 doll in six weeks. Funsters should

Correct AnswerverifiedShow Answer

Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

Correct AnswerverifiedShow Answer

Suppose consumers expect the price of a good to be higher in the future than it is today. Would the current demand for the good increase or decrease?

Correct AnswerverifiedThe current demand will increase.

Correct AnswerverifiedShow Answer

Table 4-11 -Refer to Table 4-11. The equilibrium price and quantity, respectively, are

Correct AnswerverifiedB

Which of the following would cause price to increase?

Correct AnswerverifiedD

A higher price for batteries would result in a(n)

Correct AnswerverifiedShow Answer

If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase.

Correct AnswerverifiedShow Answer

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The current demand will increase.

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B

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D

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