Question 1

The position of a demand curve is unaffected by changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 2

A shift in the demand curve will occur 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 3

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The demand for money will increase. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The demand for money will increase.

Question 5

The quantity of newspapers sold will decline if

Accepted Answer

A)  newsprint becomes more expensive. 
B)  the printers' union makes wage concessions. 
C)  prices are reduced. 
D)  magazine prices rise. 
A)  newsprint becomes more expensive. 
B)  the printers' union makes wage concessions. 
C)  prices are reduced. 
D)  magazine prices rise.

Question 6

When there is a decrease in demand,

Accepted Answer

A)  the demand curve shifts to the right of the original demand curve. 
B)  the demand curve rotates clockwise. 
C)  the demand curve shifts to the left of the original demand curve. 
D)  the demand curve rotates counterclockwise. 
E)  a lower price has increased the amount of the good that consumers will buy. 
A)  the demand curve shifts to the right of the original demand curve. 
B)  the demand curve rotates clockwise. 
C)  the demand curve shifts to the left of the original demand curve. 
D)  the demand curve rotates counterclockwise. 
E)  a lower price has increased the amount of the good that consumers will buy.

Question 7

When the price of a good increases, it

Accepted Answer

A)  leads suppliers to place few goods on the market. 
B)  the demand for the good shifts. 
C)  leads consumers to want to buy more or less than before at a given price. 
D)  a movement down along the demand curve will occur. 
A)  leads suppliers to place few goods on the market. 
B)  the demand for the good shifts. 
C)  leads consumers to want to buy more or less than before at a given price. 
D)  a movement down along the demand curve will occur.

Question 8

If the demand for steak shifts to the right, a likely reason is that

Accepted Answer

A)  the price of cattle feed has fallen. 
B)  consumer income has risen. 
C)  the price of steak has fallen. 
D)  cattle production has fallen. 
A)  the price of cattle feed has fallen. 
B)  consumer income has risen. 
C)  the price of steak has fallen. 
D)  cattle production has fallen.

Question 9

A government policy that prevents the price of a good or service from falling below a specified level is called a price floor and usually results in

Accepted Answer

A)  a shortage. 
B)  a surplus. 
C)  a black market. 
D)  fewer producers of the good or service. 
E)  a decrease in demand. 
A)  a shortage. 
B)  a surplus. 
C)  a black market. 
D)  fewer producers of the good or service. 
E)  a decrease in demand.

Question 10

In Figure 4-18, there would be a surplus of T-shirts if the price were

Accepted Answer

A)  $10. 
B)  $8. 
C)  below $8. 
D)  between $8 and $6. 
A)  $10. 
B)  $8. 
C)  below $8. 
D)  between $8 and $6.

Question 11

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 these responses 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 these responses are correct.

Question 12

Firms often seek to borrow money to expand their capital stock, and the price they pay for that 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 13

Higher steel prices will result in a  shift in the supply curve of bicycles, and this will lead to

Accepted Answer

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

Question 14

Governments of market-oriented economies never tamper with the price mechanism.

Accepted Answer

A) True 
 B)False

Question 15

Very few societies have used price controls.

Accepted Answer

A) True 
 B)False

Question 16

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Accepted Answer

A) True 
 B)False

Question 17

A decrease in the price of gasoline shifts the demand for auto batteries to the

Accepted Answer

A)  left, because gasoline and auto batteries are substitutes. 
B)  left, because gasoline and auto batteries are normally used together. 
C)  right, because gasoline and auto batteries are substitutes. 
D)  right, because gasoline and auto batteries are normally used together. 
A)  left, because gasoline and auto batteries are substitutes. 
B)  left, because gasoline and auto batteries are normally used together. 
C)  right, because gasoline and auto batteries are substitutes. 
D)  right, because gasoline and auto batteries are normally used together.

Question 18

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 these responses 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 these responses are correct.

Question 19

Distinguish between scarcity and shortage.

Accepted Answer

Scarcity implies that people want more o

Question 20

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. If the government imposes a price floor of $4 a weezil, how many weezils will be sold?

Accepted Answer

A)  5 
B)  10 
C)  12 
D)  14 
A)  5 
B)  10 
C)  12 
D)  14

The position of a demand curve is unaffected by changes in the price of the good.

A shift in the demand curve will occur when

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

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

The quantity of newspapers sold will decline if

When there is a decrease in demand,

When the price of a good increases, it

If the demand for steak shifts to the right, a likely reason is that

A government policy that prevents the price of a good or service from falling below a specified level is called a price floor and usually results in

In Figure 4-18, there would be a surplus of T-shirts if the price were

One motive for "battling the invisible hand" is

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

Higher steel prices will result in a shift in the supply curve of bicycles, and this will lead to

Governments of market-oriented economies never tamper with the price mechanism.

Very few societies have used price controls.

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

A decrease in the price of gasoline shifts the demand for auto batteries to the

A demand schedule shows

Distinguish between scarcity and shortage.

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

The position of a demand curve is unaffected by changes in the price of the good.

A shift in the demand curve will occur when

When price is above the equilibrium level, competitive price cutting will continue as long as quantity supplied exceeds quantity demanded.

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

The quantity of newspapers sold will decline if

When there is a decrease in demand,

When the price of a good increases, it

If the demand for steak shifts to the right, a likely reason is that

A government policy that prevents the price of a good or service from falling below a specified level is called a price floor and usually results in

In Figure 4-18, there would be a surplus of T-shirts if the price were

One motive for "battling the invisible hand" is

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

Higher steel prices will result in a shift in the supply curve of bicycles, and this will lead to

Governments of market-oriented economies never tamper with the price mechanism.

Very few societies have used price controls.

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

A decrease in the price of gasoline shifts the demand for auto batteries to the

A demand schedule shows

Distinguish between scarcity and shortage.

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