Question 1

The cost of processors and memory has decreased dramatically in the past twenty-five years.As a result,we have seen

Accepted Answer

A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply. 
A)  an increase in demand. 
B)  an increase in supply. 
C)  a decrease in demand. 
D)  a decrease in supply. B

Question 2

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  Uncertain-economic theory has no answer to this question. B

Question 3

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

Accepted Answer

Quantity demanded is the number of units consumers want to buy at a specific price over a specified period.It depends upon the price charged.Demand,or a demand schedule,shows how the quantity demanded of some product during a specified period will change as the price of the product changes,holding all other determinants of quantity demanded constant.On a demand curve,quantity demanded is a single point. Similarly,quantity supplied is the number of units sellers are willing to sell over a specified period at a specific price.Supply,or a supply schedule,is a table showing how the quantity supplied of some product during a specified period changes as the price of the product changes,holding all other determinants of quantity supplied constant.In a supply curve,quantity supplied is a single point.

Question 4

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

Accepted Answer

A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased. 
A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased.

Question 5

The quantity of Blu-Ray players purchased declined in spite of a decline in price.This implies that the

Accepted Answer

A)  supply curve for Blu-Ray players shifted to the left. 
B)  demand curve for Blu-Ray players shifted to the right. 
C)  demand curve for Blu-Ray players shifted to the left. 
D)  supply curve for Blu-Ray players shifted to the right. 
A)  supply curve for Blu-Ray players shifted to the left. 
B)  demand curve for Blu-Ray players shifted to the right. 
C)  demand curve for Blu-Ray players shifted to the left. 
D)  supply curve for Blu-Ray players shifted to the right.

Question 6

The major drawback of a price ceiling is

Accepted Answer

A)  it causes a surplus. 
B)  government regulations of this kind are difficult to enforce. 
C)  it causes a shortage. 
D)  There is no drawback. 
A)  it causes a surplus. 
B)  government regulations of this kind are difficult to enforce. 
C)  it causes a shortage. 
D)  There is no drawback.

Question 7

Figure 4-10  
-The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However,demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 8

As more firms are attracted to an industry,the supply curve can be expected to shift to the right.

Accepted Answer

A) True 
 B)False

Question 9

The laws of supply and demand did not apply to elephant tusks.

Accepted Answer

A) True 
 B)False

Question 10

Figure 4-6  
-The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

Accepted Answer

A)  supply curve for gold for dental use. 
B)  demand curve for dental use. 
C)  equilibrium curve for dental use. 
D)  production possibilities curve for dental use. 
A)  supply curve for gold for dental use. 
B)  demand curve for dental use. 
C)  equilibrium curve for dental use. 
D)  production possibilities curve for dental use.

Question 11

Rent controls encourage investment in housing because they bring stability to the market.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

Accepted Answer

A)  outside forces disturbing an equilibrium 
B)  persistent shortages or surpluses 
C)  the market never moving from an equilibrium 
D)  "other things" not always being equal 
A)  outside forces disturbing an equilibrium 
B)  persistent shortages or surpluses 
C)  the market never moving from an equilibrium 
D)  "other things" not always being equal

Question 13

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Accepted Answer

A) True 
 B)False

Question 14

Figure 4-8  
-Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 15

An increase in the price of gasoline shifts the demand for tires to the

Accepted Answer

A)  left,because gasoline and tires are substitutes. 
B)  left,because gasoline and tires are normally used together. 
C)  right,because gasoline and tires are substitutes. 
D)  right,because gasoline and tires are normally used together. 
A)  left,because gasoline and tires are substitutes. 
B)  left,because gasoline and tires are normally used together. 
C)  right,because gasoline and tires are substitutes. 
D)  right,because gasoline and tires are normally used together.

Question 16

Firms often seek to borrow money to expand their capital stock,and the price they pay for that money is the interest rate.What happens to quantity of money demanded if the interest rate increases?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-the law of demand does not apply to money. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-the law of demand does not apply to money.

Question 17

If the U.S.government starts to sell off its stockpile of cheese,

Accepted Answer

A)  consumers will be less willing to purchase cheese. 
B)  the equilibrium quantity demanded will rise. 
C)  farmers will hoard the cheese they produce. 
D)  the quantity of cheese that spoils before sale will rise. 
A)  consumers will be less willing to purchase cheese. 
B)  the equilibrium quantity demanded will rise. 
C)  farmers will hoard the cheese they produce. 
D)  the quantity of cheese that spoils before sale will rise.

Question 18

The demand curve for a typical good has

Accepted Answer

A)  a negative slope because some consumers switch to other goods as the price of the good rises. 
B)  a negative slope because the supply of the good rises as demand rises. 
C)  a negative slope because the good has less "snob appeal" as its price falls. 
D)  an inverse slope because as the price goes up,the good has more profitability. 
E)  a positive slope because price is a clear indicator of need. 
A)  a negative slope because some consumers switch to other goods as the price of the good rises. 
B)  a negative slope because the supply of the good rises as demand rises. 
C)  a negative slope because the good has less "snob appeal" as its price falls. 
D)  an inverse slope because as the price goes up,the good has more profitability. 
E)  a positive slope because price is a clear indicator of need.

Question 19

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Accepted Answer

A) True 
 B)False

Question 20

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

Accepted Answer

A)  supply of the product. 
B)  a quantity supplied at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to sell to buyers of different incomes. 
E)  All of the above are correct. 
A)  supply of the product. 
B)  a quantity supplied at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to sell to buyers of different incomes. 
E)  All of the above are correct.

The cost of processors and memory has decreased dramatically in the past twenty-five years.As a result,we have seen

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

The quantity of Blu-Ray players purchased declined in spite of a decline in price.This implies that the

The major drawback of a price ceiling is

As more firms are attracted to an industry,the supply curve can be expected to shift to the right.

The laws of supply and demand did not apply to elephant tusks.

Figure 4-6 -The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

Rent controls encourage investment in housing because they bring stability to the market.

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Figure 4-8 -Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

An increase in the price of gasoline shifts the demand for tires to the

Firms often seek to borrow money to expand their capital stock,and the price they pay for that money is the interest rate.What happens to quantity of money demanded if the interest rate increases?

If the U.S.government starts to sell off its stockpile of cheese,

The demand curve for a typical good has

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

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Exam 4: Supply and Demand An Initial Look

The cost of processors and memory has decreased dramatically in the past twenty-five years.As a result,we have seen

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

Distinguish between demand and quantity demanded.Do the same for supply and quantity supplied.

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

The quantity of Blu-Ray players purchased declined in spite of a decline in price.This implies that the

The major drawback of a price ceiling is

As more firms are attracted to an industry,the supply curve can be expected to shift to the right.

The laws of supply and demand did not apply to elephant tusks.

Figure 4-6 -The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

Rent controls encourage investment in housing because they bring stability to the market.

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Figure 4-8 -Women today are having more babies than women did fifteen years ago.The result is that mothers today have trouble finding baby-sitters and are shocked at what they must pay for child care.Which graph in Figure 4-8 best illustrates how the situation has changed?

An increase in the price of gasoline shifts the demand for tires to the

Firms often seek to borrow money to expand their capital stock,and the price they pay for that money is the interest rate.What happens to quantity of money demanded if the interest rate increases?

If the U.S.government starts to sell off its stockpile of cheese,

The demand curve for a typical good has

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters