Question 1

When a surplus arises in the market for swimwear:​

Accepted Answer

A)  the price of swimwear will increase.
B)  the production of swimwear will increase.
C)  the supply of swimwear will increase.
D)  the price of swimwear at retail outlets will fall.
E)  the demand for swimwear will increase.

Question 2

When both supply and demand for a good increases, the change in equilibrium quantity is indeterminate.​

Accepted Answer

A) True 
 B)False

Question 3

Jennifer expects the price of CDs to go up by 10 percent next week. Which of these is most likely to result from such an expectation?​

Accepted Answer

A)  Jennifer's demand for CD players will decrease during this week.
B)  Jennifer's demand for CDs will decrease during this week.
C)  Jennifer's demand for CDs will increase during the following week.
D)  Jennifer's demand for CDs will increase during this week.
E)  Jennifer's demand for CD players will increase during the following week.

Question 4

A price ceiling set above the equilibrium price of a good will result in a shortage.​

Accepted Answer

A) True 
 B)False

Question 5

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that:​

Accepted Answer

A)  the price of the tickets is set by the football teams.
B)  the price of the tickets is set below the equilibrium level.
C)  the football stadium is relatively small.
D)  the demand for the tickets is highly price elastic.
E)  the price of the tickets is set above the equilibrium level.

Question 6

Suppose a market is in equilibrium. An increase in demand in this market will lead to a(n) :​

Accepted Answer

A)  increase in supply.
B)  decrease in supply.
C)  decrease in quantity supplied.
D)  increase in quantity supplied.
E)  decrease in equilibrium price.

Question 7

Which of the following is likely to increase the supply of wheat?​

Accepted Answer

A)  An increase in the cost of fertilizer
B)  A decrease in the price of bread
C)  A decrease in the price of corn
D)  An increase in land prices
E)  An expectation that the price of wheat will be higher in near future

Question 8

Studies show that the demand curve for peas has shifted over the years. Which of the following explanations would you reject first?​

Accepted Answer

A)  The price of string beans has changed.
B)  The demand for corn has changed.
C)  The demand for string beans has changed.
D)  The income of consumers has changed.
E)  The price of peas has changed.

Question 9

The income effect refers to the impact of a change in:​

Accepted Answer

A)  money income of consumers on the price of a good.
B)  the relative price of a good on the demand for other goods.
C)  the price of a good on a consumer's real income.
D)  the price of a substitute good on a consumer's budget.
E)  money income of consumers on the demand for a good.

Question 10

Consider a market for coffee that is initially in equilibrium. If tea harvest is bad in a particular year, then identify the most likely impact on the equilibrium price and quantity of coffee.​

Accepted Answer

A)  The price of coffee will increase, while the quantity of coffee will decrease.
B)  Both the price and the quantity of coffee will increase.
C)  The price of coffee will decrease while the quantity of coffee will increase.
D)  Both the price and the quantity of coffee will decrease.
E)  There will be no impact on the equilibrium price and quantity of coffee.

Question 11

Which of these is likely to decrease the supply of leather jackets?​

Accepted Answer

A)  An increase in the price of leather jackets
B)  An increase in the price of leather
C)  A decrease in the price of zippers
D)  An increase in the demand for leather jackets
E)  A decrease in consumer income

Question 12

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful, all other things remaining constant.​

Accepted Answer

A)  The equilibrium price will increase and the equilibrium quantity will decrease.
B)  The equilibrium price will decrease and the equilibrium quantity will increase.
C)  Both equilibrium price and quantity will decrease.
D)  Both equilibrium price and quantity will increase.
E)  There will be no change in the equilibrium price and quantity.

Question 13

Figure 4.5 shows the supply curves of a durable good. A shift from the supply curve S to S' could be caused by a(n) :​ ​
Figure 4.5

Accepted Answer

A)  decrease in consumer income.
B)  increase in the current price of the product.
C)  patent application that restricts the use of a particular production technology.
D)  several competing producers going out of business.
E)  expectation of a higher product price in the future among suppliers.

Question 14

If we say that demand for a good has increased, we mean that there has been:​

Accepted Answer

A)  a leftward movement along the demand curve.
B)  a rightward movement along the demand curve.
C)  a leftward shift of the demand curve.
D)  a rightward shift of the demand curve.
E)  an increase in the slope of the demand curve.

Question 15

If the price of potato chips increases, other things constant, demand for potato chip dip will:​

Accepted Answer

A)  decrease because potato chip is an inferior good.
B)  increase because the goods are substitutes.
C)  decrease because the goods are substitutes.
D)  decrease because the goods are complements.
E)  increase because the goods are complements.

Question 16

The income effect of a decrease in the price of legal services, a normal good, is a(n) :​

Accepted Answer

A)  decrease in the demand for legal services.
B)  decrease in the quantity demanded of legal services.
C)  increase in the quantity supplied of lawyers.
D)  increase in the quantity demanded of legal services.
E)  increase in the supply of lawyers.

Question 17

In the figure given below that shows the demand for baby formula, which of the following changes will be caused by the discovery that breast milk provides more protection against a life threatening disease than baby formula?​ ​
Figure 4.1
1 to D2 B) A movement along the demand curve D1 from point a to point b C) A shift in the demand curve from D2 to D1 D) A movement along the demand curve D2 from point d to point c E) A movement from point b on the demand curve D1 to point c on the demand curve D2" class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  A shift in the demand curve from D1 to D2
B)  A movement along the demand curve D1 from point a to point b
C)  A shift in the demand curve from D2 to D1
D)  A movement along the demand curve D2 from point d to point c
E)  A movement from point b on the demand curve D1 to point c on the demand curve D2

Question 18

The market supply curve of a particular product indicates the total quantities:​

Accepted Answer

A)  that are actually sold during a given time period.
B)  that buyers are willing to purchase at alternative prices.
C)  that sellers are willing and able to offer at alternative prices.
D)  that sellers are willing to offer for sale at a fixed price.
E)  of complements offered for sale.

Question 19

Consider the market for a good that is in equilibrium. Which of these is most likely to occur if both demand and supply for this good decrease during a particular point in time?​

Accepted Answer

A)  The equilibrium price will increase.
B)  The equilibrium price will decrease.
C)  The equilibrium quantity will increase.
D)  The equilibrium quantity will decrease.
E)  Both equilibrium price and quantity will increase.

Question 20

A shortage of textbooks is most likely to cause:​

Accepted Answer

A)  a decrease in the supply of textbooks.
B)  a decrease in the demand for textbooks.
C)  a decrease in the price of paper.
D)  an increase in the cost of printing.
E)  an increase in the price of textbooks.

Exam 4: Demand, Supply, and Markets

Consider the market for a good that is in equilibrium. Which of these is most likely to occur if both demand and supply for this good decrease during a particular point in time?​

Correct AnswerverifiedShow Answer

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful, all other things remaining constant.​

Correct AnswerverifiedShow Answer

In the figure given below that shows the demand for baby formula, which of the following changes will be caused by the discovery that breast milk provides more protection against a life threatening disease than baby formula?​ ​ Figure 4.1

Correct AnswerverifiedShow Answer

Which of the following is likely to increase the supply of wheat?​

Correct AnswerverifiedShow Answer

The income effect refers to the impact of a change in:​

Correct AnswerverifiedShow Answer

A shortage of textbooks is most likely to cause:​

Correct AnswerverifiedShow Answer

When a surplus arises in the market for swimwear:​

Correct AnswerverifiedShow Answer

The income effect of a decrease in the price of legal services, a normal good, is a(n) :​

Correct AnswerverifiedShow Answer

Studies show that the demand curve for peas has shifted over the years. Which of the following explanations would you reject first?​

Correct AnswerverifiedShow Answer

Figure 4.5 shows the supply curves of a durable good. A shift from the supply curve S to S' could be caused by a(n) :​ ​ Figure 4.5

Correct AnswerverifiedShow Answer

The market supply curve of a particular product indicates the total quantities:​

Correct AnswerverifiedShow Answer

When both supply and demand for a good increases, the change in equilibrium quantity is indeterminate.​

Correct AnswerverifiedShow Answer

Suppose a market is in equilibrium. An increase in demand in this market will lead to a(n) :​

Correct AnswerverifiedShow Answer

If we say that demand for a good has increased, we mean that there has been:​

Correct AnswerverifiedShow Answer

Which of these is likely to decrease the supply of leather jackets?​

Correct AnswerverifiedShow Answer

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that:​

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price of a good will result in a shortage.​

Correct AnswerverifiedShow Answer

If the price of potato chips increases, other things constant, demand for potato chip dip will:​

Correct AnswerverifiedShow Answer

Consider a market for coffee that is initially in equilibrium. If tea harvest is bad in a particular year, then identify the most likely impact on the equilibrium price and quantity of coffee.​

Correct AnswerverifiedShow Answer

Jennifer expects the price of CDs to go up by 10 percent next week. Which of these is most likely to result from such an expectation?​

Correct AnswerverifiedShow Answer

Consider the market for a good that is in equilibrium. Which of these is most likely to occur if both demand and supply for this good decrease during a particular point in time?

Correct Answer
verified

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful, all other things remaining constant.

Correct Answer
verified

In the figure given below that shows the demand for baby formula, which of the following changes will be caused by the discovery that breast milk provides more protection against a life threatening disease than baby formula? Figure 4.1

Correct Answer
verified

Which of the following is likely to increase the supply of wheat?

Correct Answer
verified

The income effect refers to the impact of a change in:

Correct Answer
verified

A shortage of textbooks is most likely to cause:

Correct Answer
verified

When a surplus arises in the market for swimwear:

Correct Answer
verified

The income effect of a decrease in the price of legal services, a normal good, is a(n) :

Correct Answer
verified

Studies show that the demand curve for peas has shifted over the years. Which of the following explanations would you reject first?

Correct Answer
verified

Figure 4.5 shows the supply curves of a durable good. A shift from the supply curve S to S' could be caused by a(n) : Figure 4.5

Correct Answer
verified

The market supply curve of a particular product indicates the total quantities:

Correct Answer
verified

When both supply and demand for a good increases, the change in equilibrium quantity is indeterminate.

Correct Answer
verified

Suppose a market is in equilibrium. An increase in demand in this market will lead to a(n) :

Correct Answer
verified

If we say that demand for a good has increased, we mean that there has been:

Correct Answer
verified

Which of these is likely to decrease the supply of leather jackets?

Correct Answer
verified

Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that:

Correct Answer
verified

A price ceiling set above the equilibrium price of a good will result in a shortage.

Correct Answer
verified

If the price of potato chips increases, other things constant, demand for potato chip dip will:

Correct Answer
verified

Consider a market for coffee that is initially in equilibrium. If tea harvest is bad in a particular year, then identify the most likely impact on the equilibrium price and quantity of coffee.

Correct Answer
verified

Jennifer expects the price of CDs to go up by 10 percent next week. Which of these is most likely to result from such an expectation?

Correct Answer
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