Question 1

Figure 4-4  
-Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

Accepted Answer

A) D1 to D2. 
B) D2 to D1. 
C) D2 to D3. 
D) D1 to D3. 
A) D1 to D2. 
B) D2 to D1. 
C) D2 to D3. 
D) D1 to D3.

Question 2

An important assumption that is made when constructing a supply schedule is

Accepted Answer

A) only price and quantity matter in determining supply. 
B) firms always want to sell a certain amount of a product. 
C) supply is too important to be left to the marketplace. 
D) all other determinants of supply are held constant. 
E) demand has a positive slope. 
A) only price and quantity matter in determining supply. 
B) firms always want to sell a certain amount of a product. 
C) supply is too important to be left to the marketplace. 
D) all other determinants of supply are held constant. 
E) demand has a positive slope.

Question 3

What factors are held constant along a given demand curve for a good?

Accepted Answer

A) the price of the good 
B) the technology used to produce the good 
C) the supply of the good 
D) consumer incomes and the prices of other goods 
A) the price of the good 
B) the technology used to produce the good 
C) the supply of the good 
D) consumer incomes and the prices of other goods

Question 4

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

Accepted Answer

A) higher prices of sailboats. 
B) lower prices of sailboats. 
C) a corresponding shift in the supply curve for sailboats. 
D) lower output of sailboats. 
E) no change in the price of sailboats. 
A) higher prices of sailboats. 
B) lower prices of sailboats. 
C) a corresponding shift in the supply curve for sailboats. 
D) lower output of sailboats. 
E) no change in the price of sailboats.

Question 5

The most basic investigative tool of economics is the

Accepted Answer

A) concept of scarcity. 
B) mechanism of supply and demand. 
C) coordination and trade syndrome. 
D) inflation-unemployment trade-off. 
E) regulation of business. 
A) concept of scarcity. 
B) mechanism of supply and demand. 
C) coordination and trade syndrome. 
D) inflation-unemployment trade-off. 
E) regulation of business.

Question 6

Which of the following is a symptom of a price floor?

Accepted Answer

A) scalping of Super Bowl tickets 
B) surplus cheese 
C) the New York city housing shortage 
D) black markets 
E) milk shortages 
A) scalping of Super Bowl tickets 
B) surplus cheese 
C) the New York city housing shortage 
D) black markets 
E) milk shortages

Question 7

In high schools, all teachers were paid the same based on years of service and regardless of specialization.Beginning in the 1970s, a shortage of science and math teachers developed as private industry paid more for math and science skills than schools could offer.At the same time, a decline in the number of school-age children tended to reduce the demand for all other teachers, which led to a surplus.The economist's solution to this problem would be

Accepted Answer

A) merit pay to reward the best teachers. 
B) recognition that all teachers do comparable work and should be paid the same. 
C) to raise the wages of all teachers. 
D) to raise the wages of teachers in fields that are in short supply and lower those of others. 
A) merit pay to reward the best teachers. 
B) recognition that all teachers do comparable work and should be paid the same. 
C) to raise the wages of all teachers. 
D) to raise the wages of teachers in fields that are in short supply and lower those of others.

Question 8

A price ceiling is only effective if it is above the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 9

Advertising has no effect on the demand schedule for a good.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

All other factors held constant, if the price of game consoles rise, the demand for gaming titles will

Accepted Answer

A) shift to the left, because they are normally used together. 
B) remain constant. 
C) shift to the right, because they are normally used together. 
D) shift to the right, because they are substitutes. 
A) shift to the left, because they are normally used together. 
B) remain constant. 
C) shift to the right, because they are normally used together. 
D) shift to the right, because they are substitutes.

Question 12

List some of the problems that may arise when prices are controlled.

Accepted Answer

Apart from the standard set of

Question 13

Figure 4-11  
-The Russian government has restricted sugar availability to reduce the supply of illegal liquor (sugar is used to increase alcohol content).Russians also like to sweeten their tea with jam, another sugar product.Which graph in Figure 4-11 depicts the impact of sugar rationing on the Russian tea market?

Accepted Answer

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

Question 14

Price floors lead to market surpluses.

Accepted Answer

A) True 
 B)False

Question 15

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a price floor?

Accepted Answer

A) rent controls 
B) maximum prices for gasoline 
C) usury laws that set maximum interest rates 
D) the minimum wage 
A) rent controls 
B) maximum prices for gasoline 
C) usury laws that set maximum interest rates 
D) the minimum wage

Question 17

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.

Question 18

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.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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.

Figure 4-4 -Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

An important assumption that is made when constructing a supply schedule is

What factors are held constant along a given demand curve for a good?

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

The most basic investigative tool of economics is the

Which of the following is a symptom of a price floor?

A price ceiling is only effective if it is above the market equilibrium.

Advertising has no effect on the demand schedule for a good.

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

All other factors held constant, if the price of game consoles rise, the demand for gaming titles will

List some of the problems that may arise when prices are controlled.

Price floors lead to market surpluses.

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Which of the following is an example of a price floor?

A supply curve can be thought of as

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

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

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

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

Exam 4: Supply and Demand an Initial Look

Figure 4-4 -Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

An important assumption that is made when constructing a supply schedule is

What factors are held constant along a given demand curve for a good?

A shift in the demand curve for sailboats resulting from an increase in incomes will lead to

The most basic investigative tool of economics is the

Which of the following is a symptom of a price floor?

A price ceiling is only effective if it is above the market equilibrium.

Advertising has no effect on the demand schedule for a good.

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

All other factors held constant, if the price of game consoles rise, the demand for gaming titles will

List some of the problems that may arise when prices are controlled.

Price floors lead to market surpluses.

If the price of hamburger rises, we would expect the demand for steak to shift to the right.

Which of the following is an example of a price floor?

A supply curve can be thought of as

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

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

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

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