Question 1

A decrease in the price of baseball bats will decrease the demand for baseballs.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a characteristic of a perfectly competitive market?

Accepted Answer

A)   Sellers set the price of the product.
B)   There are many sellers.
C)   Buyers must accept the price the market determines.
D)   All of the above are characteristics of a perfectly competitive market.

Question 3

A movement along the demand curve might be caused by a change in

Accepted Answer

A)   income.
B)   the prices of substitutes or complements.
C)   expectations about future prices.
D)   the price of the good or service that is being demanded.

Question 4

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Accepted Answer

A)   crystal to be unaffected.
B)   crystal to decrease.
C)   crystal to increase.
D)   lead to increase.

Question 5

Figure 4-1 
-Refer to Figure 4-1.The movement from point A to point B on the graph is caused by

Accepted Answer

A)   an increase in price.
B)   a decrease in price.
C)   a decrease in the price of a substitute good.
D)   an increase in income.

Question 6

When the price of hot dogs changes,the demand curve for hot dogs

Accepted Answer

A)   shifts because the price of hot dogs is measured on the vertical axis of the graph.
B)   shifts because the quantity demanded of hot dogs is measured on the horizontal axis of the graph.
C)   does not shift because the price of hot dogs is measured on the vertical axis of the graph.
D)   does not shift because the price of hot dogs is measured on the horizontal axis of the graph.

Question 7

Table 4-3
 
-Refer to Table 4-3.For whom is the good a normal good?

Accepted Answer

A)   Bert only
B)   Grover only
C)   Bert,Ernie,Grover,and Oscar
D)   This cannot be determined from the table.

Question 8

Figure 4-2  
-Refer to Figure 4-2.If Consumer A and Consumer B are the only consumers in the market,then the market quantity demanded when the price is $10 is

Accepted Answer

A)   0 units.
B)   4 units.
C)   10 units.
D)   12 units.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)   play a critical role in the allocation of the economy's scarce resources.
B)   determine how much of each good gets produced.
C)   can be used to predict the impact on the economy of various events and policies.
D)   All of the above are correct.

Question 11

Today's demand curve for gasoline could shift in response to a change in

Accepted Answer

A)   today's price of gasoline.
B)   the expected future price of gasoline.
C)   the number of sellers of gasoline.
D)   All of the above are correct.

Question 12

When quantity demanded increases at every possible price,the demand curve has

Accepted Answer

A)   shifted to the left.
B)   shifted to the right.
C)   not shifted; rather,we have moved along the demand curve to a new point on the same curve.
D)   not shifted; rather,the demand curve has become steeper.

Question 13

A movement upward and to the right along a supply curve is called a(n)

Accepted Answer

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

Question 14

The law of supply states that,other things equal,when the price of a good

Accepted Answer

A)   falls,the supply of the good rises.
B)   rises,the quantity supplied of the good rises.
C)   rises,the supply of the good falls.
D)   falls,the quantity supplied of the good rises.

Question 15

Suppose buyers of computers and printers regard the two goods as complements.Then an increase in the price of computers will cause a(n)

Accepted Answer

A)   decrease in the demand for printers and a decrease in the quantity supplied of printers.
B)   decrease in the supply of printers and a decrease in the quantity demanded of printers.
C)   decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
D)   increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

Question 16

Which of the following is not held constant in a demand schedule?

Accepted Answer

A)   income
B)   tastes
C)   price
D)   expectations

Question 17

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises.

Accepted Answer

A) True 
 B)False

Question 18

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 19

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Accepted Answer

A) True 
 B)False

Question 20

Holding the nonprice determinants of demand constant,a change in price would

Accepted Answer

A)   result in either a decrease in demand or an increase in demand.
B)   result in a movement along a stationary demand curve.
C)   result in a shift of supply.
D)   have no effect on the quantity demanded.

Exam 4: The Market Forces of Supply and Demand

A movement upward and to the right along a supply curve is called a(n)

Correct AnswerverifiedShow Answer

Holding the nonprice determinants of demand constant,a change in price would

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When the price of hot dogs changes,the demand curve for hot dogs

Correct AnswerverifiedShow Answer

When quantity demanded increases at every possible price,the demand curve has

Correct AnswerverifiedShow Answer

Figure 4-1 -Refer to Figure 4-1.The movement from point A to point B on the graph is caused by

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The law of supply states that,other things equal,when the price of a good

Correct AnswerverifiedShow Answer

A decrease in the price of baseball bats will decrease the demand for baseballs.

Correct AnswerverifiedShow Answer

Figure 4-2 -Refer to Figure 4-2.If Consumer A and Consumer B are the only consumers in the market,then the market quantity demanded when the price is $10 is

Correct AnswerverifiedShow Answer

Lead is an important input in the production of crystal.If the price of lead decreases,then we would expect the supply of

Correct AnswerverifiedShow Answer

Today's demand curve for gasoline could shift in response to a change in

Correct AnswerverifiedShow Answer

The law of demand states that,other things equal,when the price of a good rises,the quantity demanded of the good falls,and when the price falls,the quantity demanded rises.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a competitive market,the quantity of each good produced and the price at which it is sold are not determined by any single buyer or seller.

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a perfectly competitive market?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose buyers of computers and printers regard the two goods as complements.Then an increase in the price of computers will cause a(n)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 4-3 -Refer to Table 4-3.For whom is the good a normal good?

Correct AnswerverifiedShow Answer

A movement along the demand curve might be caused by a change in

Correct AnswerverifiedShow Answer

Which of the following is not held constant in a demand schedule?

Correct AnswerverifiedShow Answer

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