Question 1

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

Accepted Answer

A) supply of the product. 
B) a quantity supplied at that price. 
C) the amount that people want to buy. 
D) the amount people want to sell to buyers of different incomes. 
E) All of the above are correct. 
A) supply of the product. 
B) a quantity supplied at that price. 
C) the amount that people want to buy. 
D) the amount people want to sell to buyers of different incomes. 
E) All of the above are correct.

Question 2

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price which borrowers pay.As a result, economists expected the quantity of money demanded to

Accepted Answer

A) increase. 
B) decrease. 
C) not change. 
D) not change, although the demand schedule itself will shift outward. 
A) increase. 
B) decrease. 
C) not change. 
D) not change, although the demand schedule itself will shift outward.

Question 3

The law of increasing relative costs, depicted by the concavity of the production opportunities frontier, is most closely related to the

Accepted Answer

A) downward slope of the demand curve. 
B) upward slope of the demand curve. 
C) downward slope of the supply curve. 
D) upward slope of the supply curve. 
A) downward slope of the demand curve. 
B) upward slope of the demand curve. 
C) downward slope of the supply curve. 
D) upward slope of the supply curve.

Question 4

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 5

Why do price ceilings tend to cause persistent imbalances in the market?

Accepted Answer

A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus. 
A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

Question 6

When GM advertises its cars, the company is trying to cause a

Accepted Answer

A) rightward shift in the supply. 
B) rightward shift in the demand. 
C) leftward shift in the supply. 
D) leftward shift in the demand. 
A) rightward shift in the supply. 
B) rightward shift in the demand. 
C) leftward shift in the supply. 
D) leftward shift in the demand.

Question 7

A shift in the supply curve of bicycles resulting from higher steel prices will lead to

Accepted Answer

A) higher prices of bicycles. 
B) lower prices of bicycles. 
C) a shift in the demand curve for bicycles. 
D) larger output of bicycles. 
E) no change in the price of bicycles. 
A) higher prices of bicycles. 
B) lower prices of bicycles. 
C) a shift in the demand curve for bicycles. 
D) larger output of bicycles. 
E) no change in the price of bicycles.

Question 8

A report on the dangers of cholesterol would likely shift the demand curve for beef downward and to the left.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-21  
-At price P3 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 10

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 11

An increase in consumer income will shift both the supply and demand curves.

Accepted Answer

A) True 
 B)False

Question 12

A minimum wage law may cause unemployment among low-skill workers.

Accepted Answer

A) True 
 B)False

Question 13

The supply curve of books (which are produced using paper made from trees) will shift to the left in response to

Accepted Answer

A) a decline in college tuition. 
B) an increase in home building. 
C) an increase in the supply of lumberjacks. 
D) an end to government regulations that limit timber harvesting in national forests. 
A) a decline in college tuition. 
B) an increase in home building. 
C) an increase in the supply of lumberjacks. 
D) an end to government regulations that limit timber harvesting in national forests.

Question 14

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 15

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 16

Price controls usually enhance efficiency in the allocation of resources.

Accepted Answer

A) True 
 B)False

Question 17

Demand shifts due to changes in price.

Accepted Answer

A) True 
 B)False

Question 18

Figure 4-4  
-Assume that Figure 4-4 shows demand for soda.A decrease in the price of apple juice will change 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 19

Any ​event that causes either the demand curve or the supply curve to shift will also change the equilibrium price and quantity.

Accepted Answer

A) True 
 B)False

Question 20

During the Revolutionary War, the Pennsylvania legislature attempted to help the Continental Army by enacting

Accepted Answer

A) wage floors for soldiers in the army. 
B) bonuses for soldiers who re-enlisted. 
C) laws to buy food for the soldiers stationed in Pennsylvania. 
D) price controls on essential commodities. 
E) All of the above are correct. 
A) wage floors for soldiers in the army. 
B) bonuses for soldiers who re-enlisted. 
C) laws to buy food for the soldiers stationed in Pennsylvania. 
D) price controls on essential commodities. 
E) All of the above are correct.

Exam 4: Supply and Demand an Initial Look

To construct a supply curve, an economist needs data on price and quantity.Each point on the supply curve is

From 2007 to 2008, the Federal Reserve System reduced interest rates, the price which borrowers pay.As a result, economists expected the quantity of money demanded to

The law of increasing relative costs, depicted by the concavity of the production opportunities frontier, is most closely related to the

How will a decrease in price tend to affect supply?

Why do price ceilings tend to cause persistent imbalances in the market?

When GM advertises its cars, the company is trying to cause a

A shift in the supply curve of bicycles resulting from higher steel prices will lead to

A report on the dangers of cholesterol would likely shift the demand curve for beef downward and to the left.

Figure 4-21 -At price P3 in Figure 4-21, what will tend to happen?

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?

An increase in consumer income will shift both the supply and demand curves.

A minimum wage law may cause unemployment among low-skill workers.

The supply curve of books (which are produced using paper made from trees) will shift to the left in response to

A shift in the demand curve occurs when

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

Price controls usually enhance efficiency in the allocation of resources.

Demand shifts due to changes in price.

Figure 4-4 -Assume that Figure 4-4 shows demand for soda.A decrease in the price of apple juice will change demand from

Any ​event that causes either the demand curve or the supply curve to shift will also change the equilibrium price and quantity.

During the Revolutionary War, the Pennsylvania legislature attempted to help the Continental Army by enacting

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

Figure 4-21 -At price P₃ in Figure 4-21, what will tend to happen?

Any event that causes either the demand curve or the supply curve to shift will also change the equilibrium price and quantity.