Question 1

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Accepted Answer

A) True 
 B)False

Question 2

Any factor that shifts the supply curve inward and to the left and does not affect the demand curve will raise the equilibrium price and reduce the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 3

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

Accepted Answer

A) True 
 B)False

Question 4

The laws of supply and demand force prices to an equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

A demand schedule's position is determined partly by the supply of a good.

Accepted Answer

A) True 
 B)False

Question 6

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 7

If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of

Accepted Answer

A) both products to the right. 
B) both products to the left. 
C) grapefruit to the right. 
D) oranges to the left. 
A) both products to the right. 
B) both products to the left. 
C) grapefruit to the right. 
D) oranges to the left.

Question 8

Regulations are sometimes used to "correct" the failures of a market mechanism.

Accepted Answer

A) True 
 B)False

Question 9

When price is below the equilibrium level, there is a shortage of the commodity being sold.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following will tend to occur if price controls are imposed on a product?

Accepted Answer

A) persistent shortages 
B) illegal markets 
C) illicit channels of distribution 
D) industry investment slows or stops 
E) All of the above are correct. 
A) persistent shortages 
B) illegal markets 
C) illicit channels of distribution 
D) industry investment slows or stops 
E) All of the above are correct.

Question 11

If the government puts price controls on medical care, this will increase the supply of affordable care in the United States.

Accepted Answer

A) True 
 B)False

Question 12

Figure 4-16  
-Assume that Figure 4-16 shows the supply of new houses.An improvement in the technology for building houses will shift supply from

Accepted Answer

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

Question 13

Black-market prices are below equilibrium prices because sellers want to sell large quantities.

Accepted Answer

A) True 
 B)False

Question 14

The price for labor is the wage rate.What happens to the demand for labor if wages increase?

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 15

Figure 4-3  
-A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct, which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

Accepted Answer

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

Question 16

When people suddenly want to buy something, supply increases.

Accepted Answer

A) True 
 B)False

Question 17

A typical supply curve has

Accepted Answer

A) slope equal to zero. 
B) slope equal to infinity. 
C) negative slope. 
D) positive slope. 
E) constant slope. 
A) slope equal to zero. 
B) slope equal to infinity. 
C) negative slope. 
D) positive slope. 
E) constant slope.

Question 18

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
where QS1U1B1dS1U1B0 is the quantity demanded, QS1U1B1sS1U1B0 is the quantity supplied, and P is the price per weezil in dollars.
  
-Refer to Exhibit 4-1.According to the data given, the equilibrium price of a weezil is

Accepted Answer

A) $3. 
B) $5. 
C) $11. 
D) $14. 
A) $3. 
B) $5. 
C) $11. 
D) $14.

Question 19

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 20

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand an Initial Look

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Any factor that shifts the supply curve inward and to the left and does not affect the demand curve will raise the equilibrium price and reduce the equilibrium quantity.

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

The laws of supply and demand force prices to an equilibrium.

A demand schedule's position is determined partly by the supply of a good.

The mechanism of supply and demand is

If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of

Regulations are sometimes used to "correct" the failures of a market mechanism.

When price is below the equilibrium level, there is a shortage of the commodity being sold.

Which of the following will tend to occur if price controls are imposed on a product?

If the government puts price controls on medical care, this will increase the supply of affordable care in the United States.

Figure 4-16 -Assume that Figure 4-16 shows the supply of new houses.An improvement in the technology for building houses will shift supply from

Black-market prices are below equilibrium prices because sellers want to sell large quantities.

The price for labor is the wage rate.What happens to the demand for labor if wages increase?

Figure 4-3 -A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct, which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

When people suddenly want to buy something, supply increases.

A typical supply curve has

Exhibit 4-1 The following are the equations for the supply and demand curves in the market for weezils: where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. -Refer to Exhibit 4-1.According to the data given, the equilibrium price of a weezil is

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

"Equilibrium" is a situation in which there are no inherent forces to produce change.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Externalities the Environment and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

Filters

Exhibit 4-1 The following are the equations for the supply and demand curves in the market for weezils: where Q_d is the quantity demanded, Q_s is the quantity supplied, and P is the price per weezil in dollars. -Refer to Exhibit 4-1.According to the data given, the equilibrium price of a weezil is