Question 1

Gains from trade are maximized when:

Accepted Answer

A)   the market price is higher than the equilibrium price.
B)   the market price is less than the equilibrium price.
C)   the market price is equal to the equilibrium price.
D)   there are additional potential trades available that have not been completed.

Question 2

Accepted Answer

Equilibrium price is $6, and equilibrium quantity is 24.

Question 3

Reference: Ref 4-7 (Figure: Market Changes)  Refer to the figures. If the figures represent the market for wool sweaters, which figure shows the effect of an unseasonably warm winter?

Accepted Answer

A)   Figure A
B)   Figure B
C)   Figure C
D)   Figure D

Question 4

There is no difference in saying that there is a change in supply and in saying there is a change in the quantity supplied.

Accepted Answer

A) True 
 B)False

Question 5

Reference: Ref 4-1 (Figure: Equilibrium)  Refer to the figure. The equilibrium price (in $)  is:

Accepted Answer

A)   8.
B)   10.
C)   16.
D)   12.

Question 6

(Figure: Supply-Driven Price Change)  Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:

Accepted Answer

A)   $12 and the equilibrium quantity falls to 70.
B)   $10 and the equilibrium quantity falls to 100.
C)   $12 and the equilibrium quantity falls to 40.
D)   $10 and the equilibrium quantity falls to 70. A

Question 7

A free market achieves an equilibrium price and quantity due to:

Accepted Answer

A)   the actions of buyers and sellers.
B)   increased competition among sellers.
C)   government regulations placed on market participants.
D)   buyers' ability to affect market outcomes.

Question 8

If sellers want to sell more products than buyers are willing to purchase, we know that:

Accepted Answer

A)   the current price is less than the equilibrium price.
B)   quantity demanded exceeds quantity supplied.
C)   the current price is greater than the equilibrium price.
D)   the demand curve will likely increase.

Question 9

Suppose the price of oil is falling due to a drop-off in demand after the summer driving season. Explain what a group of oil- producing nations (like OPEC), that control a significant amount of the world's oil supplies, could do in order to keep prices (and hence profits) high.
B. OPEC nations would want to decrease the supply of oil on world markets, since a decrease in supply would lead to an increase in the price of oil.

Accepted Answer

B. OPEC nations would want to ...

Question 10

(Figure: Demand-Driven Price Change)  Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

Accepted Answer

A)   $9 and the equilibrium quantity rises to 120.
B)   $9 and the equilibrium quantity rises to 160.
C)   $8 and the equilibrium quantity rises to 140.
D)   $8 and the equilibrium quantity rises to 160.

Question 11

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> equilibrium quantit...

Question 12

What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer.

Accepted Answer

A change in demand refers to a shift in ...

Question 13

Accepted Answer

A)   10.
B)   250.
C)   100 and 400.
D)   275.5.

Question 14

Technological advances have increased the supply of digital cameras. As a result the:

Accepted Answer

A)   demand for digital cameras will increase, putting downward pressure on the price of digital cameras.
B)   quantity demanded for digital cameras will increase.
C)   quantity supplied of digitals cameras will increase, putting downward pressure on the price of digital cameras.
D)   demand and supply of digital cameras will both increase. B

Question 15

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Therefore, there is a surplus (excess s...

Question 16

When the price of a good decreases:

Accepted Answer

A)   the quantity demanded increases.
B)   demand increases.
C)   the quantity supplied increases.
D)   supply increases.

Question 17

Reference: Ref 4-2 (Figure: Market Equilibrium)  Refer to the figure. At a price of $1, the market is characterized by a(n) :

Accepted Answer

A)   excess supply of 2 units.
B)   excess demand of 4 units.
C)   surplus of 4 units.
D)   shortage of 6 units.

Question 18

In a free market equilibrium, demand equals supply at the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would cause the current supply of iPods to increase?

Accepted Answer

A)   an economic boom, which increases the amount that people are willing to spend on personal electronics
B)   a decrease in the price of songs on iTunes
C)   the expectation that the future price of iPods will decrease
D)   an increase in the wages offered to manufacturers of iPods

Question 20

(Figure: Demand Shift)  In the figure, the demand curve shifted from D0 to D1. To describe this movement, we would say that:

Accepted Answer

A)   demand increased, which caused an increase in supply.
B)   quantity demanded increased, which caused an increase in supply.
C)   demand increased, which caused an increase in quantity supplied.
D)   quantity demanded increased, which caused an increase in quantity supplied.

Exam 4: Equilibrium: How Supply and Demand Determine Prices

Gains from trade are maximized when:

Correct Answer
verified

Correct Answer
verified
Equilibrium price is $6, and equilibrium quantity is 24.

Reference: Ref 4-7 (Figure: Market Changes) Refer to the figures. If the figures represent the market for wool sweaters, which figure shows the effect of an unseasonably warm winter?

Correct Answer
verified

There is no difference in saying that there is a change in supply and in saying there is a change in the quantity supplied.

Correct Answer
verified

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium price (in $) is:

Correct Answer
verified

(Figure: Supply-Driven Price Change) Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:

Correct Answer
verified
A

A free market achieves an equilibrium price and quantity due to:

Correct Answer
verified

If sellers want to sell more products than buyers are willing to purchase, we know that:

Correct Answer
verified

Correct Answer
verified
B. OPEC nations would want to ...
View Answer

(Figure: Demand-Driven Price Change) Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

Correct Answer
verified

Correct Answer
verified
equilibrium quantit...
View Answer

What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer.

Correct Answer
verified
A change in demand refers to a shift in ...
View Answer

Correct Answer
verified

Technological advances have increased the supply of digital cameras. As a result the:

Correct Answer
verified
B

Correct Answer
verified
Therefore, there is a surplus (excess s...
View Answer

When the price of a good decreases:

Correct Answer
verified

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $1, the market is characterized by a(n) :

Correct Answer
verified

In a free market equilibrium, demand equals supply at the equilibrium price.

Correct Answer
verified

Which of the following would cause the current supply of iPods to increase?

Correct Answer
verified

(Figure: Demand Shift) In the figure, the demand curve shifted from D0 to D1. To describe this movement, we would say that:

Correct Answer
verified

Exam 4: Equilibrium: How Supply and Demand Determine Prices

Gains from trade are maximized when:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedEquilibrium price is $6, and equilibrium quantity is 24.

Reference: Ref 4-7 (Figure: Market Changes) Refer to the figures. If the figures represent the market for wool sweaters, which figure shows the effect of an unseasonably warm winter?

Correct AnswerverifiedShow Answer

There is no difference in saying that there is a change in supply and in saying there is a change in the quantity supplied.

Correct AnswerverifiedShow Answer

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium price (in $) is:

Correct AnswerverifiedShow Answer

(Figure: Supply-Driven Price Change) Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:

Correct AnswerverifiedA

A free market achieves an equilibrium price and quantity due to:

Correct AnswerverifiedShow Answer

If sellers want to sell more products than buyers are willing to purchase, we know that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB. OPEC nations would want to ...View AnswerShow Answer

(Figure: Demand-Driven Price Change) Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

Correct AnswerverifiedShow Answer

Correct Answerverified equilibrium quantit...View AnswerShow Answer

What is the difference between a "change in demand" and a "change in quantity demanded"? Graph your answer.

Correct AnswerverifiedA change in demand refers to a shift in ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Technological advances have increased the supply of digital cameras. As a result the:

Correct AnswerverifiedB

Correct Answerverified Therefore, there is a surplus (excess s...View AnswerShow Answer

When the price of a good decreases:

Correct AnswerverifiedShow Answer

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $1, the market is characterized by a(n) :

Correct AnswerverifiedShow Answer

In a free market equilibrium, demand equals supply at the equilibrium price.

Correct AnswerverifiedShow Answer

Which of the following would cause the current supply of iPods to increase?

Correct AnswerverifiedShow Answer

(Figure: Demand Shift) In the figure, the demand curve shifted from D0 to D1. To describe this movement, we would say that:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Equilibrium price is $6, and equilibrium quantity is 24.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B. OPEC nations would want to ...
View Answer

Correct Answer
verified

Correct Answer
verified
equilibrium quantit...
View Answer

Correct Answer
verified
A change in demand refers to a shift in ...
View Answer

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified
Therefore, there is a surplus (excess s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified