Question 1

A demand schedule's position is determined partly by the supply of a good.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Following the removal of this requirement, it was found that the

Accepted Answer

A)  demand curve for fish shifted to the right. 
B)  demand curve for fish shifted to the left. 
C)  demand for meat decreased. 
D)  price of fish increased. 
A)  demand curve for fish shifted to the right. 
B)  demand curve for fish shifted to the left. 
C)  demand for meat decreased. 
D)  price of fish increased.

Question 5

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Following this removal, there was a 12.5 percent fall in prices of fresh fish. From this, it can be deduced that the

Accepted Answer

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

Question 6

When a supply curve is constructed, data are required for price and quantity. Each point on the supply curve is

Accepted Answer

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

Question 7

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Given this, economics would predict that

Accepted Answer

A)  the price of both meat and fish would rise. 
B)  the price of fish would increase and the price of meat would fall. 
C)  the price of fish would decrease and the price of meat would rise. 
D)  the price of both meat and fish would fall. 
A)  the price of both meat and fish would rise. 
B)  the price of fish would increase and the price of meat would fall. 
C)  the price of fish would decrease and the price of meat would rise. 
D)  the price of both meat and fish would fall.

Question 8

How do legal controls on prices lead to corruption?

Accepted Answer

A)  Persons who benefit from the controls are willing to bribe officials to keep the controls in place. 
B)  Persons who make the laws may favor certain groups at the expense of others. 
C)  Selling in the black market is very profitable, and persons therefore willingly break the law. 
D)  Discrimination may occur as a means to limit buying or selling select groups. 
E)  All of these responses are correct. 
A)  Persons who benefit from the controls are willing to bribe officials to keep the controls in place. 
B)  Persons who make the laws may favor certain groups at the expense of others. 
C)  Selling in the black market is very profitable, and persons therefore willingly break the law. 
D)  Discrimination may occur as a means to limit buying or selling select groups. 
E)  All of these responses are correct.

Question 9

The laws of supply and demand did not apply to elephant tusks.

Accepted Answer

A) True 
 B)False

Question 10

A shortage occurs when price is higher than the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 11

A supply schedule can be plotted on a graph to yield a supply curve.

Accepted Answer

A) True 
 B)False

Question 12

The development of new technology reduces the cost of producing calculators. In addition, assume that consumers have cut back on their scheduled purchases in anticipation of further cost-saving developments. As a result, we can expect

Accepted Answer

A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price. 
A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price.

Question 13

A decrease in the price of VCRs will increase demand for video cassettes.

Accepted Answer

A) True 
 B)False

Question 14

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

Accepted Answer

A) True 
 B)False

Question 15

When the market price is above equilibrium then ____ and when the market price is below equilibrium, then ____.

Accepted Answer

A)  quantity demanded is greater than quantity supplied; quantity supplied is greater than quantity demanded. 
B)  quantity supplied is greater than quantity demanded; quantity supplied is greater than quantity demanded. 
C)  quantity supplied is greater than quantity demanded; quantity demanded is greater than quantity supplied 
D)  the market is in equilibrium; the market is in equilibrium. 
A)  quantity demanded is greater than quantity supplied; quantity supplied is greater than quantity demanded. 
B)  quantity supplied is greater than quantity demanded; quantity supplied is greater than quantity demanded. 
C)  quantity supplied is greater than quantity demanded; quantity demanded is greater than quantity supplied 
D)  the market is in equilibrium; the market is in equilibrium.

Question 16

Ticket "scalping" is an example of

Accepted Answer

A)  experimental economics. 
B)  the limitation of the volume of transactions. 
C)  the development of a black market. 
D)  favoritism. 
A)  experimental economics. 
B)  the limitation of the volume of transactions. 
C)  the development of a black market. 
D)  favoritism.

Question 17

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Accepted Answer

A) True 
 B)False

Question 18

An increase in price will decrease demand.

Accepted Answer

A) True 
 B)False

Question 19

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 20

The price of one good produced by a multiproduct industry rises. The effect on a second good produced by that industry will be

Accepted Answer

A)  a shift left in the supply curve for the second good. 
B)  no change in the supply curve for the second good. 
C)  a shift right of the supply curve for the second good. 
D)  a shift right of the demand curve for the second good. 
A)  a shift left in the supply curve for the second good. 
B)  no change in the supply curve for the second good. 
C)  a shift right of the supply curve for the second good. 
D)  a shift right of the demand curve for the second good.

Exam 4: Supply and Demand: an Initial Look

A demand schedule's position is determined partly by the supply of a good.

How will a decrease in price tend to affect supply?

Refer to Table 4-1. At $4, what is the shortage?

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Following the removal of this requirement, it was found that the

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Following this removal, there was a 12.5 percent fall in prices of fresh fish. From this, it can be deduced that the

When a supply curve is constructed, data are required for price and quantity. Each point on the supply curve is

In 1966, the Catholic Church eliminated the centuries-old requirement that members abstain from eating meat on Fridays. Catholics customarily ate fish on Friday. Given this, economics would predict that

How do legal controls on prices lead to corruption?

The laws of supply and demand did not apply to elephant tusks.

A shortage occurs when price is higher than the market equilibrium.

A supply schedule can be plotted on a graph to yield a supply curve.

The development of new technology reduces the cost of producing calculators. In addition, assume that consumers have cut back on their scheduled purchases in anticipation of further cost-saving developments. As a result, we can expect

A decrease in the price of VCRs will increase demand for video cassettes.

Even though prices may change frequently, they can be expected to gravitate toward equilibrium.

When the market price is above equilibrium then ____ and when the market price is below equilibrium, then ____.

Ticket "scalping" is an example of

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

An increase in price will decrease demand.

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

The price of one good produced by a multiproduct industry rises. The effect on a second good produced by that industry will be

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

When the market price is above equilibrium then and when the market price is below equilibrium, then .