Question 1

The amount of a good sold in a market at a particular price cannot exceed the quantity

Accepted Answer

A) demanded at that price. 
B) supplied at that price. 
C) sold when there is a price floor. 
D) sold when there is a price ceiling. 
A) demanded at that price. 
B) supplied at that price. 
C) sold when there is a price floor. 
D) sold when there is a price ceiling. B

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 quantity of money supplied 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. B

Question 3

Demand curves can be affected by the prices of related goods.

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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 6

If price of a good rises, what happens to quantity demanded for that good?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) The answer depends upon the supply of the good. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) The answer depends upon the supply of the good.

Question 7

Suppose demand can be described with the equation Q = 900 − 5P and supply with the equation Q = 100 + 5P. Complete the following table. Determine the equilibrium price and quantity.

Accepted Answer

The answer of Suppose demand can be described with the...

Question 8

In some markets, demand can be approximated by 
  Q = 50 − 5P + 10Y 
where Q is quantity, P price per unit, and Y = buyers' income. Supply can be approximated by 
  Q = − 5 + 10P. 
a.If Y = 20, what is equilibrium price and output? 
b. If Y rises to 25, what is the new equilibrium price and output? 
​

Accepted Answer

a Equate the supply and demand equations

Question 9

Why are sellers willing to sell more at a higher price?

Accepted Answer

Only at higher price will it be profitab

Question 10

If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is

Accepted Answer

A) the market has a price ceiling in place. 
B) consumers don't really like this product. 
C) the market has a price floor in place. 
D) sellers must produce a minimum quantity of the good, regardless of the demand for the product. 
A) the market has a price ceiling in place. 
B) consumers don't really like this product. 
C) the market has a price floor in place. 
D) sellers must produce a minimum quantity of the good, regardless of the demand for the product.

Question 11

Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter. Use supply and demand analysis, including graphical and verbal explanation, for these winter "sales."

Accepted Answer

A sample graph is shown (Figure 4-26). D

Question 12

A strike at the Financial News in London shut down its production, and the sales of a competing newspaper, the Broad Street Journal, increased dramatically, with no increase in price. Based upon this, what can you say about the Broad Street Journal's supply curve?

Accepted Answer

A) Its supply curve is vertical. 
B) Its supply curve is horizontal. 
C) Its supply curve has shifted. 
D) Its supply curve has a positive slope. 
A) Its supply curve is vertical. 
B) Its supply curve is horizontal. 
C) Its supply curve has shifted. 
D) Its supply curve has a positive slope.

Question 13

In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that

Accepted Answer

A) poaching can be reduced with price supports for ivory. 
B) the supply of ivory has fallen, leading to an increase in price and reward for poaching. 
C) burning ivory decreases demand, leading to lower prices and reward for poaching. 
D) the demand for ivory is higher, leading to an increase in price and reward for poaching. 
E) burning ivory raises demand, and controlled prices will lead to even greater poaching. 
A) poaching can be reduced with price supports for ivory. 
B) the supply of ivory has fallen, leading to an increase in price and reward for poaching. 
C) burning ivory decreases demand, leading to lower prices and reward for poaching. 
D) the demand for ivory is higher, leading to an increase in price and reward for poaching. 
E) burning ivory raises demand, and controlled prices will lead to even greater poaching.

Question 14

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 15

Distinguish the terms price ceiling and price floor.

Accepted Answer

A price ceiling is a governmen

Question 16

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. This program has the same effect as a

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 17

Price supports are a form of price ceiling for agricultural products that lowers prices for consumers and enhances market efficiency.

Accepted Answer

A) True 
 B)False

Question 18

A decrease in demand will have what effect on equilibrium price and quantity?

Accepted Answer

A) Price will increase; quantity will decrease. 
B) Price will decrease; quantity will increase. 
C) Both price and quantity will increase. 
D) Both price and quantity will decrease. 
A) Price will increase; quantity will decrease. 
B) Price will decrease; quantity will increase. 
C) Both price and quantity will increase. 
D) Both price and quantity will decrease.

Question 19

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 20

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

Accepted Answer

A) Favoritism and corruption of officials and market participants 
B) Unenforceability of laws and higher costs of transactions 
C) Increasing restrictions to enforce the laws 
D) Misallocation of resources as prices no longer correspond to costs 
E) All of these responses are correct. 
A) Favoritism and corruption of officials and market participants 
B) Unenforceability of laws and higher costs of transactions 
C) Increasing restrictions to enforce the laws 
D) Misallocation of resources as prices no longer correspond to costs 
E) All of these responses are correct.

Exam 4: Supply and Demand: an Initial Look

The amount of a good sold in a market at a particular price cannot exceed the quantity

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 quantity of money supplied to

Demand curves can be affected by the prices of related goods.

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

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

If price of a good rises, what happens to quantity demanded for that good?

Suppose demand can be described with the equation Q = 900 − 5P and supply with the equation Q = 100 + 5P. Complete the following table. Determine the equilibrium price and quantity.

In some markets, demand can be approximated by Q = 50 − 5P + 10Y where Q is quantity, P price per unit, and Y = buyers' income. Supply can be approximated by Q = − 5 + 10P. a.If Y = 20, what is equilibrium price and output? b. If Y rises to 25, what is the new equilibrium price and output? ​

Why are sellers willing to sell more at a higher price?

If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is

Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter. Use supply and demand analysis, including graphical and verbal explanation, for these winter "sales."

A strike at the Financial News in London shut down its production, and the sales of a competing newspaper, the Broad Street Journal, increased dramatically, with no increase in price. Based upon this, what can you say about the Broad Street Journal's supply curve?

In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that

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

Distinguish the terms price ceiling and price floor.

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. This program has the same effect as a

Price supports are a form of price ceiling for agricultural products that lowers prices for consumers and enhances market efficiency.

A decrease in demand will have what effect on equilibrium price and quantity?

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

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

Filters

In some markets, demand can be approximated by Q = 50 − 5P + 10Y where Q is quantity, P price per unit, and Y = buyers' income. Supply can be approximated by Q = − 5 + 10P. a.If Y = 20, what is equilibrium price and output? b. If Y rises to 25, what is the new equilibrium price and output?