Question 1

An increase in the price of poultry would lead to

Accepted Answer

A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish. 
A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish.

Question 2

A price above equilibrium always yields a surplus.

Accepted Answer

A) True 
 B)False

Question 3

One motive for "battling the invisible hand" is

Accepted Answer

A) unhappiness about the prices that occur in free markets. 
B) envy toward those who apparently benefit from certain prices. 
C) a desire to have government "correct" some problems. 
D) an attempt to produce justice between buyers and sellers. 
E) All of the above are correct. 
A) unhappiness about the prices that occur in free markets. 
B) envy toward those who apparently benefit from certain prices. 
C) a desire to have government "correct" some problems. 
D) an attempt to produce justice between buyers and sellers. 
E) All of the above are correct.

Question 4

Any change that shifts the supply curve outward to the right, and does not affect ​the demand durve will lower the equilibrium price and raise the equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

If price rises, what happens to demand 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 6

Which of the following is not a symptom associated with a price floor?

Accepted Answer

A) Excess of quantity demanded over quantity supplied. 
B) Sellers offering discounts in disguised forms. 
C) Problem of disposal created by excess supply. 
D) Survival of inefficient businesses. 
A) Excess of quantity demanded over quantity supplied. 
B) Sellers offering discounts in disguised forms. 
C) Problem of disposal created by excess supply. 
D) Survival of inefficient businesses.

Question 7

Why do airlines tend to lower ticket prices in the winter?

Accepted Answer

A) Supply is relatively variable, and a drop in demand lowers equilibrium price. 
B) Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C) A drop in both supply and demand lowers equilibrium price. 
D) Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E) Demand is relatively fixed, and a drop in supply lowers equilibrium price. 
A) Supply is relatively variable, and a drop in demand lowers equilibrium price. 
B) Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C) A drop in both supply and demand lowers equilibrium price. 
D) Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E) Demand is relatively fixed, and a drop in supply lowers equilibrium price.

Question 8

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

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) It depends entirely on the interest rate. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) It depends entirely on the interest rate.

Question 9

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

Accepted Answer

A) True 
 B)False

Question 10

A demand schedule shows

Accepted Answer

A) the "market potential" for a product. 
B) how much consumers are willing and able to buy at different prices. 
C) possible combinations of output under different conditions. 
D) how much producers would like to sell at different prices. 
E) All of the above are correct. 
A) the "market potential" for a product. 
B) how much consumers are willing and able to buy at different prices. 
C) possible combinations of output under different conditions. 
D) how much producers would like to sell at different prices. 
E) All of the above are correct.

Question 11

The supply curve shows

Accepted Answer

A) the same basic information as the demand curve. 
B) who will have an opportunity to produce or purchase an item. 
C) the quantity produced as a function of the price. 
D) plots of what quantities have been sold over the past few weeks or months. 
A) the same basic information as the demand curve. 
B) who will have an opportunity to produce or purchase an item. 
C) the quantity produced as a function of the price. 
D) plots of what quantities have been sold over the past few weeks or months.

Question 12

Figure 4-16  
-Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry 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

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 14

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

Accepted Answer

A) True 
 B)False

Question 15

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

Accepted Answer

A) a decrease in price and no predictable impact on output. 
B) a definite decrease in price and increase in output. 
C) an increase in output with no predictable change in price. 
D) no predictable changes in either price or output. 
A) a decrease in price and no predictable impact on output. 
B) a definite decrease in price and increase in output. 
C) an increase in output with no predictable change in price. 
D) no predictable changes in either price or output.

Question 16

Supply can shift due to changes in price.

Accepted Answer

A) True 
 B)False

Question 17

Table 4-1
Use this table for the following questions.
  
-Refer to Table 4-1.At $4, what is the shortage?

Accepted Answer

A) 0 
B) 1,500 
C) 3,000 
D) 4,500 
E) 6,000 
A) 0 
B) 1,500 
C) 3,000 
D) 4,500 
E) 6,000

Question 18

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

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 19

Figure 4-21  
-At price P1 in Figure 4-21, what will tend to happen?

Accepted Answer

A) There will be a shortage, and the price will fall. 
B) There will be a shortage, and the price will rise. 
C) There will be a surplus, and the price will rise. 
D) There will be a surplus, and the price will fall. 
E) Equilibrium will occur in the market. 
A) There will be a shortage, and the price will fall. 
B) There will be a shortage, and the price will rise. 
C) There will be a surplus, and the price will rise. 
D) There will be a surplus, and the price will fall. 
E) Equilibrium will occur in the market.

Question 20

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to ____, and quantity sold to ____.

Accepted Answer

A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same. 
A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same.

Exam 4: Supply and Demand an Initial Look

An increase in the price of poultry would lead to

A price above equilibrium always yields a surplus.

One motive for "battling the invisible hand" is

Any change that shifts the supply curve outward to the right, and does not affect ​the demand durve will lower the equilibrium price and raise the equilibrium.

If price rises, what happens to demand for a product?

Which of the following is not a symptom associated with a price floor?

Why do airlines tend to lower ticket prices in the winter?

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

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

A demand schedule shows

The supply curve shows

Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

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

Price ceilings are designed to protect sellers, while price floors are designed to protect buyers.

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result, we can expect

Supply can shift due to changes in price.

Table 4-1 Use this table for the following questions. -Refer to Table 4-1.At $4, what is the shortage?

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

Figure 4-21 -At price P1 in Figure 4-21, what will tend to happen?

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to ____, and quantity sold to ____.

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

Any change that shifts the supply curve outward to the right, and does not affect the demand durve will lower the equilibrium price and raise the equilibrium.

Figure 4-21 -At price P₁ in Figure 4-21, what will tend to happen?

Sugarcane can be used for producing both sugar and ethanol.New regulations in certain countries now allow a higher level of ethanol in gasoline.An economist would expect sugarcane prices to , and quantity sold to .