Question 1

What does an increase in population do to the demand for a product?

Accepted Answer

It increas...

Question 2

When a supply curve is drawn,which of the following is NOT held constant?

Accepted Answer

A)   taxes and subsidies
B)   the state of production technology
C)   prices of inputs
D)   the price of the good

Question 3

The effect of income on the demand for normal goods is such that

Accepted Answer

A)   as the price of a normal good falls, people are likely to buy less of the good.
B)   as the price of a good falls, people are likely to buy more of all normal goods.
C)   as the price of a good falls, people are likely to buy less of all normal goods.
D)   both A and C.

Question 4

Suppose that the price for fully electric cars made by Toyota increases.The quantity of fully electric cars supplied in the market will

Accepted Answer

A)   increase, because Toyota would be willing to sell more fully electric vehicles.
B)   decrease, because Toyota believes that to maintain the higher prices, it must sell a smaller quantity.
C)   increase, because other auto manufacturers would want to enter the market and also sell fully electric vehicles.
D)   Both A and C are correct.

Question 5

Figure 4.1
-Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant.Assuming Mary and Tom are the only consumers in the market,if the market quantity demanded is 6,the price must be

Accepted Answer

A)   $5.
B)   $10.
C)   $15.
D)   $20.

Question 6

Suppose that in October the price of a cup of cafe latte was $1.50 and 400 lattes were consumed.In November the price of a latte was $2.00 and 600 lattes were consumed.What might have caused this change?

Accepted Answer

A)   The price of tea (a substitute for cafe lattes)  fell.
B)   The price of tea (a substitute for cafe lattes)  rose.
C)   The price of coffee beans (an input of production of cafe lattes)  rose.
D)   The price of coffee beans (an input of production of cafe lattes)  fell.

Question 7

Suppose that a product benefits from a successful advertising campaign.The result is that

Accepted Answer

A)   the demand for the product increases.
B)   the demand for the product decreases.
C)   the supply of the product increases.
D)   the supply of the product decreases.

Question 8

Figure 4.5
-Figure 4.5 illustrates the supply of guitars.A technological advancement that makes guitars cheaper to produce would most likely cause a movement from

Accepted Answer

A)   point B to point C.
B)   point B to point A.
C)   S₁ to S₀.
D)   S₁ to S₂.

Question 9

Bananas and apples are substitutes.When the price of bananas falls and a technological advancement in apple production occurs at the same time,

Accepted Answer

A)   the equilibrium price of apples rises and the equilibrium quantity of apples falls.
B)   the equilibrium price of apples rises and the equilibrium quantity of apples rises.
C)   the equilibrium price of apples rises and the equilibrium quantity of apples might rise or fall.
D)   the equilibrium price of apples falls and the equilibrium quantity of apples might rise or fall.

Question 10

Figure 4.7
-If supply increases in Figure 4.7,then the equilibrium

Accepted Answer

A)   price and quantity rise.
B)   price rises and quantity falls.
C)   price falls and quantity rises.
D)   price and quantity fall.

Question 11

People will buy more of a normal good when their income decreases.

Accepted Answer

A) True 
 B)False

Question 12

Two goods are substitutes if an increase in the price of one good leads to an increase in demand for the other.

Accepted Answer

A) True 
 B)False

Question 13

A surplus occurs when producers are willing to sell more than consumers are willing to buy.This is called a(n)________.

Accepted Answer

The answer of A surplus occurs when producers are willing...

Question 14

Which of the following is the least likely complement for hamburgers?

Accepted Answer

A)   beef
B)   cheese
C)   hamburger buns
D)   soda

Question 15

Recall the Application about the harmattan and how it affects the price of cocoa to answer the following question(s) .
-Recall the Application.Using supply and demand analysis,if the harmattan caused a decrease in supply for cocoa,then which of the following must be true?

Accepted Answer

A)   The equilibrium price of cocoa increased and the equilibrium quantity decreased.
B)   The equilibrium price of cocoa decreased and the equilibrium quantity decreased.
C)   The equilibrium price of cocoa increased and the equilibrium quantity increased.
D)   The equilibrium price of cocoa decreased and the equilibrium quantity increased.

Question 16

The market demand curve is

Accepted Answer

A)   negatively sloped.
B)   upward sloping.
C)   always vertical
D)   always horizontal.

Question 17

Which of the following is most likely to be considered a substitute for pizza?

Accepted Answer

A)   hamburgers
B)   cheese
C)   pepperoni
D)   soda

Question 18

What happens if the price of a product is below the equilibrium price?

Accepted Answer

A)   The buyers will stop purchasing a "cheap" product.
B)   The producer will lower the price to make more profit.
C)   There will be an excess demand for the product.
D)   none of the above

Question 19

Which of the following is the most likely complement for hamburgers?

Accepted Answer

A)   chicken
B)   beef
C)   hamburger buns
D)   All of the above are complements.

Question 20

Peaches and cream are complements.When the price of peaches falls,the equilibrium quantity of cream will ________ and the equilibrium price of cream will ________.

Accepted Answer

A)   rise; rise
B)   rise; fall
C)   fall; rise
D)   fall; fall

Exam 4: Demand,supply,and Market Equilibrium

People will buy more of a normal good when their income decreases.

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Suppose that the price for fully electric cars made by Toyota increases.The quantity of fully electric cars supplied in the market will

Correct AnswerverifiedShow Answer

Recall the Application about the harmattan and how it affects the price of cocoa to answer the following question(s) . -Recall the Application.Using supply and demand analysis,if the harmattan caused a decrease in supply for cocoa,then which of the following must be true?

Correct AnswerverifiedShow Answer

Figure 4.5 -Figure 4.5 illustrates the supply of guitars.A technological advancement that makes guitars cheaper to produce would most likely cause a movement from

Correct AnswerverifiedShow Answer

Peaches and cream are complements.When the price of peaches falls,the equilibrium quantity of cream will ________ and the equilibrium price of cream will ________.

Correct AnswerverifiedShow Answer

Which of the following is most likely to be considered a substitute for pizza?

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Which of the following is the least likely complement for hamburgers?

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A surplus occurs when producers are willing to sell more than consumers are willing to buy.This is called a(n)________.

Correct AnswerverifiedShow Answer

Suppose that in October the price of a cup of cafe latte was $1.50 and 400 lattes were consumed.In November the price of a latte was $2.00 and 600 lattes were consumed.What might have caused this change?

Correct AnswerverifiedShow Answer

Figure 4.7 -If supply increases in Figure 4.7,then the equilibrium

Correct AnswerverifiedShow Answer

Two goods are substitutes if an increase in the price of one good leads to an increase in demand for the other.

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What happens if the price of a product is below the equilibrium price?

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Which of the following is the most likely complement for hamburgers?

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Figure 4.1 -Refer to Figure 4.1 that shows Mary and Tom's individual demand curves for meals per week at Fratelli's Italian Restaurant.Assuming Mary and Tom are the only consumers in the market,if the market quantity demanded is 6,the price must be

Correct AnswerverifiedShow Answer

The market demand curve is

Correct AnswerverifiedShow Answer

The effect of income on the demand for normal goods is such that

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When a supply curve is drawn,which of the following is NOT held constant?

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What does an increase in population do to the demand for a product?

Correct AnswerverifiedIt increas...View AnswerShow Answer

Suppose that a product benefits from a successful advertising campaign.The result is that

Correct AnswerverifiedShow Answer

Bananas and apples are substitutes.When the price of bananas falls and a technological advancement in apple production occurs at the same time,

Correct AnswerverifiedShow Answer

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Peaches and cream are complements.When the price of peaches falls,the equilibrium quantity of cream will and the equilibrium price of cream will .

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It increas...
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