Question 1

Figure 4-16  
-Assume that Figure 4-16 shows the supply of steak.An increase in the price of pork will change the 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 2

The government of Economica announces that it will purchase its farmers' surplus of milk.From this announcement,you can infer that Economica has a

Accepted Answer

A)  free market for milk. 
B)  price ceiling above the equilibrium price for milk. 
C)  price floor above the equilibrium price for milk. 
D)  price floor below the equilibrium price for milk. 
A)  free market for milk. 
B)  price ceiling above the equilibrium price for milk. 
C)  price floor above the equilibrium price for milk. 
D)  price floor below the equilibrium price for milk.

Question 3

Rent controls are most often designed to protect the investment made by apartment building owners.

Accepted Answer

A) True 
 B)False

Question 4

An increase in the number of downed trees led to an increase in the demand for chain saws.When demand increases and supply is unchanged,equilibrium price and quantity increase (Figure 4-24)."Gouging" may be nothing more than a higher equilibrium price due to an increase in demand.
Figure 4-24  
-After Hurricane Andrew hit Florida and Louisiana,consumers expressed outrage at the high prices being charged for chainsaws,generators,and bottled water.If governments followed the consumers' demands and imposed price ceilings in these markets,what is the likely result?

Accepted Answer

Effective price ceilings (i.e.,price cei

Question 5

The removal in 1966 of the requirement that Catholics eat fish on Fridays was followed by a 12.5 percent fall in prices of fresh fish.From this it can be deduced that the

Accepted Answer

A)  demand curve for fish shifted to the left. 
B)  demand curve shifted to the right. 
C)  supply curve shifted to the left. 
D)  supply curve shifted to the right. 
A)  demand curve for fish shifted to the left. 
B)  demand curve shifted to the right. 
C)  supply curve shifted to the left. 
D)  supply curve shifted to the right.

Question 6

A demand schedule relates prices of a particular good to quantities demanded.

Accepted Answer

A) True 
 B)False

Question 7

A supply schedule can be plotted on a graph to yield a supply curve.

Accepted Answer

A) True 
 B)False

Question 8

Price controls are usually enacted in response to

Accepted Answer

A)  popular opinion. 
B)  governmental studies. 
C)  scholarly research on the effects of high prices. 
D)  laws enacted in other countries. 
E)  All of the above are correct. 
A)  popular opinion. 
B)  governmental studies. 
C)  scholarly research on the effects of high prices. 
D)  laws enacted in other countries. 
E)  All of the above are correct.

Question 9

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes,holding all other determinants of quantity demanded constant.

Accepted Answer

A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product 
A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product

Question 10

The mechanism of supply and demand is

Accepted Answer

A)  a fundamental tool in both microeconomics and macroeconomics. 
B)  the only real "law" of economics. 
C)  a fundamental tool only in microeconomics. 
D)  a fundamental tool only in macroeconomics. 
A)  a fundamental tool in both microeconomics and macroeconomics. 
B)  the only real "law" of economics. 
C)  a fundamental tool only in microeconomics. 
D)  a fundamental tool only in macroeconomics.

Question 11

On a traditional supply and demand diagram,

Accepted Answer

A)  price is measured along the horizontal axis and quantity along the vertical axis. 
B)  price is measured along the vertical axis and quantity along the horizontal axis. 
C)  quantity demanded is measured along the horizontal axis,quantity supplied is measured along the vertical axis,and price is indicated on the contour lines. 
D)  quantity is measured along both axes and price is indicated on the contour lines. 
A)  price is measured along the horizontal axis and quantity along the vertical axis. 
B)  price is measured along the vertical axis and quantity along the horizontal axis. 
C)  quantity demanded is measured along the horizontal axis,quantity supplied is measured along the vertical axis,and price is indicated on the contour lines. 
D)  quantity is measured along both axes and price is indicated on the contour lines.

Question 12

How will a decrease in price tend to affect supply?

Accepted Answer

A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  Uncertain. 
A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  Uncertain.

Question 13

The demand curve for a good connects points describing how much consumers

Accepted Answer

A)  actually bought at different prices during a particular period. 
B)  actually bought at different prices in different periods. 
C)  would have been willing and able to buy at different prices during a particular period. 
D)  would have been willing and able to buy at different prices in different periods. 
A)  actually bought at different prices during a particular period. 
B)  actually bought at different prices in different periods. 
C)  would have been willing and able to buy at different prices during a particular period. 
D)  would have been willing and able to buy at different prices in different periods.

Question 14

Figure 4-2  
-If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

Accepted Answer

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

Question 15

Throughout history,governments have used price controls to

Accepted Answer

A)  protect buyers. 
B)  protect sellers. 
C)  serve the "public interest." 
D)  All of the above are correct. 
A)  protect buyers. 
B)  protect sellers. 
C)  serve the "public interest." 
D)  All of the above are correct.

Question 16

Figure 4-14  
-Frustrated by the cost and ineffectiveness of the war on drugs,the U.S.government could consider "decriminalization" of the use and sale of cocaine.Critics contend that lower prices will expand drug use and that decriminalization will remove the stigma and danger from arrest associated with drug use,thus further increasing the demand and number of addicts.Which graph in Figure 4-14 best illustrates the critics' case?

Accepted Answer

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

Question 17

Price floors are only effective below the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-12  
-The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

Accepted Answer

A)  a rise in the price of crude oil. 
B)  a seasonal rise in the demand for gasoline. 
C)  use of a new public transit system. 
D)  the discovery of crude oil in New Jersey. 
A)  a rise in the price of crude oil. 
B)  a seasonal rise in the demand for gasoline. 
C)  use of a new public transit system. 
D)  the discovery of crude oil in New Jersey.

Question 19

Figure 4-20  
-The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

Accepted Answer

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

Question 20

A supply curve can be thought of as

Accepted Answer

A)  a graphical display of "market potential." 
B)  a graphical representation of the information in a supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
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 supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
D)  a forecasting tool. 
E)  All of the above are correct.

Figure 4-16 -Assume that Figure 4-16 shows the supply of steak.An increase in the price of pork will change the supply from

The government of Economica announces that it will purchase its farmers' surplus of milk.From this announcement,you can infer that Economica has a

Rent controls are most often designed to protect the investment made by apartment building owners.

The removal in 1966 of the requirement that Catholics eat fish on Fridays was followed by a 12.5 percent fall in prices of fresh fish.From this it can be deduced that the

A demand schedule relates prices of a particular good to quantities demanded.

A supply schedule can be plotted on a graph to yield a supply curve.

Price controls are usually enacted in response to

A demand schedule is a table showing how the of some product during a specified period of time changes as changes,holding all other determinants of quantity demanded constant.

The mechanism of supply and demand is

On a traditional supply and demand diagram,

How will a decrease in price tend to affect supply?

The demand curve for a good connects points describing how much consumers

Figure 4-2 -If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

Throughout history,governments have used price controls to

Price floors are only effective below the market equilibrium.

Figure 4-12 -The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

Figure 4-20 -The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

A supply curve can be thought of as

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

Figure 4-16 -Assume that Figure 4-16 shows the supply of steak.An increase in the price of pork will change the supply from

The government of Economica announces that it will purchase its farmers' surplus of milk.From this announcement,you can infer that Economica has a

Rent controls are most often designed to protect the investment made by apartment building owners.

The removal in 1966 of the requirement that Catholics eat fish on Fridays was followed by a 12.5 percent fall in prices of fresh fish.From this it can be deduced that the

A demand schedule relates prices of a particular good to quantities demanded.

A supply schedule can be plotted on a graph to yield a supply curve.

Price controls are usually enacted in response to

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes,holding all other determinants of quantity demanded constant.

The mechanism of supply and demand is

On a traditional supply and demand diagram,

How will a decrease in price tend to affect supply?

The demand curve for a good connects points describing how much consumers

Figure 4-2 -If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

Throughout history,governments have used price controls to

Price floors are only effective below the market equilibrium.

Figure 4-12 -The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

Figure 4-20 -The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

A supply curve can be thought of as

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

A demand schedule is a table showing how the of some product during a specified period of time changes as changes,holding all other determinants of quantity demanded constant.