Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The interest rate is the price borrowers pay to borrow money.  Key interest rates are controlled by the Federal Reserve System.  If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

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 3

When a demand schedule is drawn as a graph,

Accepted Answer

A)  price is measured on the vertical axis. 
B)  quantity is measured on the horizontal axis. 
C)  the resulting curve has a negative slope. 
D)  the other variables (besides price and quantity) are held constant. 
E)  All of these responses are correct. 
A)  price is measured on the vertical axis. 
B)  quantity is measured on the horizontal axis. 
C)  the resulting curve has a negative slope. 
D)  the other variables (besides price and quantity) are held constant. 
E)  All of these responses are correct.

Question 4

The interest rate is the price borrowers pay to borrow money.  Key interest rates are controlled by the Federal Reserve System.  If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  be influenced by the interest rate, but with an uncertain effect. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  be influenced by the interest rate, but with an uncertain effect.

Question 5

Which of the following events would result in an increase in the demand for natural gas, causing the demand curve to shift outward?

Accepted Answer

A)  A decrease in the price of electricity 
B)  An increase in the price of furnaces 
C)  An increase in the price of heating oil 
D)  A decrease in the price of natural gas 
A)  A decrease in the price of electricity 
B)  An increase in the price of furnaces 
C)  An increase in the price of heating oil 
D)  A decrease in the price of natural gas

Question 6

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

Accepted Answer

A) True 
 B)False

Question 7

The wage rate. is the price of a unit of labor. What happens to the supply of labor if the wage 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 8

Which of the following is not a characteristic of a market with a price floor?

Accepted Answer

A)  Quantity demanded exceeds quantity supplied 
B)  Sellers offering discounts in disguised forms 
C)  Problem of disposal created by excess supply 
D)  Survival of less efficient businesses 
A)  Quantity demanded exceeds quantity supplied 
B)  Sellers offering discounts in disguised forms 
C)  Problem of disposal created by excess supply 
D)  Survival of less efficient businesses

Question 9

Which of the following would result in an increase in the demand for Toyota automobiles?

Accepted Answer

A)  An increase in the price of Toyota automobiles 
B)  A decrease in the price of Toyota automobiles 
C)  A decrease in the price of Honda automobiles 
D)  An increase in the price of Honda automobiles 
A)  An increase in the price of Toyota automobiles 
B)  A decrease in the price of Toyota automobiles 
C)  A decrease in the price of Honda automobiles 
D)  An increase in the price of Honda automobiles

Question 10

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 11

At price P  3  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 12

Both demand and supply curves usually have positive slopes.

Accepted Answer

A) True 
 B)False

Question 13

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 14

We observed that the price of a good rises and the quantity purchased also rises. Everything else being equal, it is consistent that

Accepted Answer

A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased. 
A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased.

Question 15

If the price of oil, a close substitute for coal, increases then the

Accepted Answer

A)  supply curve for coal will shift to the right. 
B)  demand curve for coal will shift to the right. 
C)  equilibrium price and quantity of coal will not change. 
D)  demand curve for coal will shift to the left. 
E)  supply curve of coal will shift to the left. 
A)  supply curve for coal will shift to the right. 
B)  demand curve for coal will shift to the right. 
C)  equilibrium price and quantity of coal will not change. 
D)  demand curve for coal will shift to the left. 
E)  supply curve of coal will shift to the left.

Question 16

A change in the price of a good has no effect on the supply schedule.

Accepted Answer

A) True 
 B)False

Question 17

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, when the market is in Equilibrium, how many weezils are sold?

Accepted Answer

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

Question 18

The quantity of DVD players purchased declined in spite of a decline in price. This implies that the

Accepted Answer

A)  supply curve for DVD players shifted to the left. 
B)  demand curve for DVD players shifted to the right. 
C)  demand curve for DVD players shifted to the left. 
D)  supply curve for DVD players shifted to the right. 
A)  supply curve for DVD players shifted to the left. 
B)  demand curve for DVD players shifted to the right. 
C)  demand curve for DVD players shifted to the left. 
D)  supply curve for DVD players shifted to the right.

Question 19

An economist would predict that if the government imposes price controls on medical care, the result will be an increase in the supply of affordable care in the United States.

Accepted Answer

A) True 
 B)False

Question 20

A demand schedule shows the time over which different quantities will be demanded.

Accepted Answer

A) True 
 B)False

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

The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

When a demand schedule is drawn as a graph,

The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

Which of the following events would result in an increase in the demand for natural gas, causing the demand curve to shift outward?

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

The wage rate. is the price of a unit of labor. What happens to the supply of labor if the wage rate increases?

Which of the following is not a characteristic of a market with a price floor?

Which of the following would result in an increase in the demand for Toyota automobiles?

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

At price P ₃ in Figure 4-21, what will tend to happen?

Both demand and supply curves usually have positive slopes.

The most basic investigative tool of economics is the

We observed that the price of a good rises and the quantity purchased also rises. Everything else being equal, it is consistent that

If the price of oil, a close substitute for coal, increases then the

A change in the price of a good has no effect on the supply schedule.

The quantity of DVD players purchased declined in spite of a decline in price. This implies that the

An economist would predict that if the government imposes price controls on medical care, the result will be an increase in the supply of affordable care in the United States.

A demand schedule shows the time over which different quantities will be demanded.

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

Exam 4: Supply and Demand: an Initial Look

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

The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

When a demand schedule is drawn as a graph,

The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to

Which of the following events would result in an increase in the demand for natural gas, causing the demand curve to shift outward?

The unemployment of some groups, such as low-skill workers, may increase as a result of the imposition of a minimum wage.

The wage rate. is the price of a unit of labor. What happens to the supply of labor if the wage rate increases?

Which of the following is not a characteristic of a market with a price floor?

Which of the following would result in an increase in the demand for Toyota automobiles?

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

At price P 3 in Figure 4-21, what will tend to happen?

Both demand and supply curves usually have positive slopes.

The most basic investigative tool of economics is the

We observed that the price of a good rises and the quantity purchased also rises. Everything else being equal, it is consistent that

If the price of oil, a close substitute for coal, increases then the

A change in the price of a good has no effect on the supply schedule.

The quantity of DVD players purchased declined in spite of a decline in price. This implies that the

An economist would predict that if the government imposes price controls on medical care, the result will be an increase in the supply of affordable care in the United States.

A demand schedule shows the time over which different quantities will be demanded.

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Us Economy

Filters

At price P ₃ in Figure 4-21, what will tend to happen?