Question 1

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Accepted Answer

A) True 
 B)False

Question 2

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 the demand for money if the interest rate increases?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The quantity of money demanded will increase. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The quantity of money demanded will increase.

Question 3

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

Accepted Answer

A)  the price of sausage will rise. 
B)  the price of sausage will fall. 
C)  the resources used in raising Pork will become more expensive. 
D)  the resources used in raising Pork will become less expensive. 
A)  the price of sausage will rise. 
B)  the price of sausage will fall. 
C)  the resources used in raising Pork will become more expensive. 
D)  the resources used in raising Pork will become less expensive.

Question 4

A decrease in the price of VCRs will increase demand for video cassettes.

Accepted Answer

A) True 
 B)False

Question 5

Figure 4-16  
-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Accepted Answer

A)  S1 to S2. 
B)  S2 to S1. 
C)  S2 to S3. 
D)  S1 to S3. 
A)  S1 to S2. 
B)  S2 to S1. 
C)  S2 to S3. 
D)  S1 to S3.

Question 6

The position of a demand curve is unaffected by changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 7

A shift in the demand curve occurs when

Accepted Answer

A)  suppliers place more goods on the market. 
B)  the price of a good rises. 
C)  consumers want to buy more or less than before at a given price. 
D)  the price of the good falls. 
A)  suppliers place more goods on the market. 
B)  the price of a good rises. 
C)  consumers want to buy more or less than before at a given price. 
D)  the price of the good falls.

Question 8

Demand shifts due to changes in price.

Accepted Answer

A) True 
 B)False

Question 9

Price supports increase the supply of affordable milk for U.S.families.

Accepted Answer

A) True 
 B)False

Question 10

An increase in the number of nursing homes and community health centers and the expansion of home care has led to an increase in the demand for nurses.At the same time,improving opportunities for women in business have reduced the supply of nurses.Hospitals,the major employers of nurses,have resisted wage increases.The resulting situation could be described as

Accepted Answer

A)  the cost disease of the service sector. 
B)  a shortage of nurses. 
C)  the problem of auxiliary restrictions. 
D)  the wage floor problem. 
A)  the cost disease of the service sector. 
B)  a shortage of nurses. 
C)  the problem of auxiliary restrictions. 
D)  the wage floor problem.

Question 11

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

Accepted Answer

A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price. 
A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price.

Question 12

Figure 4-23  
-In Figure 4-23,which movement will be caused by changes in income?

Accepted Answer

A)  A to C 
B)  C to A 
C)  B to D 
D)  B to A 
A)  A to C 
B)  C to A 
C)  B to D 
D)  B to A

Question 13

An increase in supply will have what effect on equilibrium price and quantity?

Accepted Answer

A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease. 
A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease.

Question 14

The demand by sterile couples for babies to adopt has grown rapidly,while the supply has dwindled because of improved contraception,liberal abortion laws,and an increase in the probability that unwed mothers will keep their children.It violates the law to sell human beings at any age,but for every twenty legal adoptions there seemingly is one baby sale at a price up to $50,000.The generic term economists apply to the market produced by this type of shortage is

Accepted Answer

A)  "black market." 
B)  "white slave market." 
C)  "the adoption market." 
D)  "baby market." 
A)  "black market." 
B)  "white slave market." 
C)  "the adoption market." 
D)  "baby market."

Question 15

Tampering with the price mechanism

Accepted Answer

A)  can be efficient for a while. 
B)  cannot be attempted in a market economy. 
C)  can enhance societal welfare if done properly. 
D)  often produces undesired side effects. 
A)  can be efficient for a while. 
B)  cannot be attempted in a market economy. 
C)  can enhance societal welfare if done properly. 
D)  often produces undesired side effects.

Question 16

If price rises,what happens to quantity demanded for a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question.

Question 17

Distinguish between scarcity and shortage.

Accepted Answer

Scarcity implies that people want more o

Question 18

A demand curve can be thought of as

Accepted Answer

A)  a graphical display of "market potential." 
B)  a graphical representation of the information in a demand schedule. 
C)  showing how much people want to buy. 
D)  a forecasting tool. 
E)  All of the above are correct. 
A)  a graphical display of "market potential." 
B)  a graphical representation of the information in a demand schedule. 
C)  showing how much people want to buy. 
D)  a forecasting tool. 
E)  All of the above are correct.

Question 19

Figure 4-6  
-Grapes can be used for wine or for raisins.Which graph in Figure 4-6 best depicts the effects on the U.S.raisin market of a decrease in purchases of domestic wines?

Accepted Answer

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

Question 20

Who tends to benefit from the sugar price supports?

Accepted Answer

A)  users of sugar in other products 
B)  individual users of sugar 
C)  producers of other agricultural products 
D)  producers of sugar 
E)  All of the above are correct. 
A)  users of sugar in other products 
B)  individual users of sugar 
C)  producers of other agricultural products 
D)  producers of sugar 
E)  All of the above are correct.

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

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 the demand for money if the interest rate increases?

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

A decrease in the price of VCRs will increase demand for video cassettes.

Figure 4-16 -Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

The position of a demand curve is unaffected by changes in the price of the good.

A shift in the demand curve occurs when

Demand shifts due to changes in price.

Price supports increase the supply of affordable milk for U.S.families.

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

Figure 4-23 -In Figure 4-23,which movement will be caused by changes in income?

An increase in supply will have what effect on equilibrium price and quantity?

Tampering with the price mechanism

If price rises,what happens to quantity demanded for a product?

Distinguish between scarcity and shortage.

A demand curve can be thought of as

Figure 4-6 -Grapes can be used for wine or for raisins.Which graph in Figure 4-6 best depicts the effects on the U.S.raisin market of a decrease in purchases of domestic wines?

Who tends to benefit from the sugar price supports?

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

Exam 4: Supply and Demand An Initial Look

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

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 the demand for money if the interest rate increases?

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

A decrease in the price of VCRs will increase demand for video cassettes.

Figure 4-16 -Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

The position of a demand curve is unaffected by changes in the price of the good.

A shift in the demand curve occurs when

Demand shifts due to changes in price.

Price supports increase the supply of affordable milk for U.S.families.

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

Figure 4-23 -In Figure 4-23,which movement will be caused by changes in income?

An increase in supply will have what effect on equilibrium price and quantity?

Tampering with the price mechanism

If price rises,what happens to quantity demanded for a product?

Distinguish between scarcity and shortage.

A demand curve can be thought of as

Figure 4-6 -Grapes can be used for wine or for raisins.Which graph in Figure 4-6 best depicts the effects on the U.S.raisin market of a decrease in purchases of domestic wines?

Who tends to benefit from the sugar price supports?

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