Question 1

Price cannot fall so low that some sellers choose to supply a quantity of zero.

Accepted Answer

A) True 
 B)False

Question 2

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Accepted Answer

A)   hair gel to increase.
B)   razors to increase.
C)   combs to increase.
D)   shampoo to increase.

Question 3

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Accepted Answer

A) True 
 B)False

Question 4

Table 4-5
 
-Refer to Table 4-5. If these are the only four sellers in the market, then the market quantity supplied at a price of $8 is

Accepted Answer

A)   10 units.
B)   20 units.
C)   32 units.
D)   40 units.

Question 5

Figure 4-18
 
-Refer to Figure 4-18. What is the equilibrium quantity in this market?

Accepted Answer

A)   5 units
B)   7.5 units
C)   10 units
D)   The equilibrium quantity cannot be determined from this graph.

Question 6

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following changes would not shift the demand curve for a good or service?

Accepted Answer

A)   a change in income
B)   a change in the price of the good or service
C)   a change in expectations about the future price of the good or service
D)   a change in the price of a related good or service

Question 8

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

Accepted Answer

A)   are direct policy tools used by government agencies to regulate the economy.
B)   illustrate when an market is in equilibrium, but they are not helpful when a market is out of equilibrium.
C)   can be used to predict the impact on the economy of various events and policies.
D)   All of the above are correct.

Question 9

A decrease in the price of a good will

Accepted Answer

A)   increase demand.
B)   decrease demand.
C)   increase quantity demanded.
D)   decrease quantity demanded.

Question 10

A supply schedule is a table that shows the relationship between

Accepted Answer

A)   price and quantity supplied.
B)   input costs and quantity supplied.
C)   quantity demanded and quantity supplied.
D)   profit and quantity supplied.

Question 11

Figure 4-19
The diagram below pertains to the demand for turkey in the United States.
 A to DB. B)  DB to DA. C)  x to y. D)  y to x. " class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 4-19. All else equal, a large number of people becoming vegetarians would cause a move from

Accepted Answer

A)   DA to DB.
B)   DB to DA.
C)   x to y.
D)   y to x.

Question 12

For a market for a good or service to exist, there must be a

Accepted Answer

A)   group of buyers and sellers.
B)   specific time and place at which the good or service is traded.
C)   high degree of organization present.
D)   All of the above are correct.

Question 13

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Accepted Answer

A)   government to allocate scarce resources.
B)   supply and demand to allocate scarce resources.
C)   credit cards to allocate scarce resources.
D)   nature to allocate scarce resources.

Question 14

Which of the following does not affect an individual's demand curve?

Accepted Answer

A)   expectations
B)   income
C)   prices of related goods
D)   the number of buyers

Question 15

Table 4-9
The demand schedule below pertains to sandwiches demanded per week.
 
-Refer to Table 4-9. Regarding Harry and Darby, for whom are sandwiches a normal good?

Accepted Answer

A)   only for Harry
B)   only for Darby
C)   for both Harry and Darby
D)   This cannot be determined from the given information.

Question 16

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We would expect to see

Accepted Answer

A)   no change in the demand for chocolate pudding.
B)   a decrease in the demand for chocolate pudding.
C)   an increase in the demand for chocolate pudding.
D)   a decrease in the supply of chocolate pudding.

Question 17

An increase in the number of college scholarships issued by private foundations would

Accepted Answer

A)   increase the supply of education.
B)   decrease the supply of education.
C)   increase the demand for education.
D)   decrease the demand for education.

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

Question 19

Which of the following would not shift the supply curve for mp3 players?

Accepted Answer

A)   an increase in the price of mp3 players
B)   a decrease in the number of sellers of mp3 players
C)   an increase in the price of plastic, an input into the production of mp3 players
D)   an improvement in the technology used to produce mp3 players

Question 20

Nemo rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Nemo's demand demonstrates the law of

Accepted Answer

A)   price.
B)   supply.
C)   demand.
D)   income.

Exam 4: The Market Forces of Supply and Demand

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

Correct AnswerverifiedShow Answer

Which of the following would cause price to increase?

Correct AnswerverifiedShow Answer

Which of the following does not affect an individual's demand curve?

Correct AnswerverifiedShow Answer

For a market for a good or service to exist, there must be a

Correct AnswerverifiedShow Answer

Price cannot fall so low that some sellers choose to supply a quantity of zero.

Correct AnswerverifiedShow Answer

Suppose scientists provide evidence that chocolate pudding increases the bad cholesterol levels of those who eat it. We would expect to see

Correct AnswerverifiedShow Answer

Figure 4-19 The diagram below pertains to the demand for turkey in the United States. -Refer to Figure 4-19. All else equal, a large number of people becoming vegetarians would cause a move from

Correct AnswerverifiedShow Answer

A movement along a supply curve is called a change in supply while a shift of the supply curve is called a change in quantity supplied.

Correct AnswerverifiedShow Answer

Which of the following would not shift the supply curve for mp3 players?

Correct AnswerverifiedShow Answer

In any economic system, scarce resources have to be allocated among competing uses. Market economies harness the forces of

Correct AnswerverifiedShow Answer

An increase in the number of college scholarships issued by private foundations would

Correct AnswerverifiedShow Answer

Nemo rents 5 movies per month when the price is $3.00 per rental and 7 movies per month when the price is $2.50 per rental. Nemo's demand demonstrates the law of

Correct AnswerverifiedShow Answer

Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for

Correct AnswerverifiedShow Answer

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. -Refer to Table 4-9. Regarding Harry and Darby, for whom are sandwiches a normal good?

Correct AnswerverifiedShow Answer

At the equilibrium price, buyers have bought all they want to buy, but sellers have not sold all they want to sell.

Correct AnswerverifiedShow Answer

Which of the following changes would not shift the demand curve for a good or service?

Correct AnswerverifiedShow Answer

Table 4-5 -Refer to Table 4-5. If these are the only four sellers in the market, then the market quantity supplied at a price of $8 is

Correct AnswerverifiedShow Answer

A supply schedule is a table that shows the relationship between

Correct AnswerverifiedShow Answer

A decrease in the price of a good will

Correct AnswerverifiedShow Answer

Figure 4-18 -Refer to Figure 4-18. What is the equilibrium quantity in this market?

Correct AnswerverifiedShow Answer

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