Question 1

Technological advances shift the supply curve rightward.

Accepted Answer

A) True 
 B)False

Question 2

Economists use the mechanism of supply and demand to study: ​

Accepted Answer

A) ​inflation 
B) ​unemployment 
C) ​environmental protection 
D) ​both a and b 
E) ​all of these 
A) ​inflation 
B) ​unemployment 
C) ​environmental protection 
D) ​both a and b 
E) ​all of these

Question 3

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

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) The whole demand schedule shifts to the left. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) The whole demand schedule shifts to the left.

Question 4

If price rises, what happens to quantity supplied for a product?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) Quantity supplied is constant, but supply increases. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) Quantity supplied is constant, but supply increases.

Question 5

The demand curve for a typical good has

Accepted Answer

A) a negative slope because some consumers switch to other goods as the price of the good rises. 
B) a negative slope because the supply of the good rises as demand rises. 
C) a negative slope because the good has less "snob appeal" as its price falls. 
D) an inverse slope because as the price goes up, the good has more profitability. 
E) a positive slope because price is a clear indicator of need. 
A) a negative slope because some consumers switch to other goods as the price of the good rises. 
B) a negative slope because the supply of the good rises as demand rises. 
C) a negative slope because the good has less "snob appeal" as its price falls. 
D) an inverse slope because as the price goes up, the good has more profitability. 
E) a positive slope because price is a clear indicator of need.

Question 6

Sugar price supports ensure an abundance of sugar, and hence reasonable prices for consumers.

Accepted Answer

A) True 
 B)False

Question 7

An upward-sloping supply curve shows that

Accepted Answer

A) buyers are willing to pay more for a scarce product. 
B) suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C) buyers are unaffected by sellers' costs of production. 
D) the price of a product is not influenced by the price buyers are willing to pay. 
E) at higher prices, an envy effect begins to affect the demand curve. 
A) buyers are willing to pay more for a scarce product. 
B) suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C) buyers are unaffected by sellers' costs of production. 
D) the price of a product is not influenced by the price buyers are willing to pay. 
E) at higher prices, an envy effect begins to affect the demand curve.

Question 8

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Accepted Answer

A) True 
 B)False

Question 9

Figure 4-21  
-Which price in Figure 4-21 is equilibrium?

Accepted Answer

A) P1 
B) P2 
C) P3 
A) P1 
B) P2 
C) P3

Question 10

The price of one good produced by a multiproduct industry rises.For another good produced by that industry

Accepted Answer

A) the supply curve will shift to the left. 
B) the supply curve will remain constant. 
C) the supply curve will shift to the right. 
D) the demand curve will shift to the right. 
A) the supply curve will shift to the left. 
B) the supply curve will remain constant. 
C) the supply curve will shift to the right. 
D) the demand curve will shift to the right.

Question 11

If price rises, what happens to quantity demanded 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 12

Figure 4-16  
-In Figure 4-16, an increase in the number of producers 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

A common misperception about consumer demand is that

Accepted Answer

A) demand depends on many other variables. 
B) price is a major determinant of quantity. 
C) it is a fixed amount. 
D) quantity cannot be determined in advance. 
E) All of the above are correct. 
A) demand depends on many other variables. 
B) price is a major determinant of quantity. 
C) it is a fixed amount. 
D) quantity cannot be determined in advance. 
E) All of the above are correct.

Question 14

At an equilibrium price for gasoline,

Accepted Answer

A) everyone with the desire and the income to buy gasoline at that price can do so. 
B) surpluses are inevitable. 
C) inherent market forces will eventually change the quantities demanded and supplied. 
D) suppliers must be using the most efficient oil-drilling equipment available. 
A) everyone with the desire and the income to buy gasoline at that price can do so. 
B) surpluses are inevitable. 
C) inherent market forces will eventually change the quantities demanded and supplied. 
D) suppliers must be using the most efficient oil-drilling equipment available.

Question 15

Figure 4-6  
-Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption.Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer.Considering the market for alcohol, an economist would predict a movement

Accepted Answer

A) up the demand curve as quantity demanded falls. 
B) up the supply curve as the demand curve shifts. 
C) down the supply curve as the demand curve shifts. 
D) down the demand curve as quantity falls. 
A) up the demand curve as quantity demanded falls. 
B) up the supply curve as the demand curve shifts. 
C) down the supply curve as the demand curve shifts. 
D) down the demand curve as quantity falls.

Question 16

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 17

When price is above the equilibrium level, suppliers offer more than demanders wish to buy.

Accepted Answer

A) True 
 B)False

Question 18

The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.Economists call this type of program a(n)

Accepted Answer

A) price ceiling. 
B) price floor. 
C) opportunity cost. 
D) shortage. 
E) efficiency move. 
A) price ceiling. 
B) price floor. 
C) opportunity cost. 
D) shortage. 
E) efficiency move.

Question 19

How will an increase in price tend to affect demand?

Accepted Answer

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

Question 20

If demand increases, the equilibrium price and equilibrium quantity will both fall, everything else being equal.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand an Initial Look

Technological advances shift the supply curve rightward.

Economists use the mechanism of supply and demand to study: ​

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

If price rises, what happens to quantity supplied for a product?

The demand curve for a typical good has

Sugar price supports ensure an abundance of sugar, and hence reasonable prices for consumers.

An upward-sloping supply curve shows that

Scarcity and choice are the basic problems of economics; the supply and demand mechanism is the basic investigative tool of economics.

Figure 4-21 -Which price in Figure 4-21 is equilibrium?

The price of one good produced by a multiproduct industry rises.For another good produced by that industry

If price rises, what happens to quantity demanded for a product?

Figure 4-16 -In Figure 4-16, an increase in the number of producers will shift supply from

A common misperception about consumer demand is that

At an equilibrium price for gasoline,

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.

When price is above the equilibrium level, suppliers offer more than demanders wish to buy.

The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.Economists call this type of program a(n)

How will an increase in price tend to affect demand?

If demand increases, the equilibrium price and equilibrium quantity will both fall, everything else being equal.

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

Economists use the mechanism of supply and demand to study:

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.