Question 1

If a price floor is removed , which of the following would be a result?

Accepted Answer

A) The elimination of surpluses 
B) Problems with the disposal of goods 
C) Disguised discounts to sell additional goods are offered by sellers 
D) Overinvestment in the industry 
A) The elimination of surpluses 
B) Problems with the disposal of goods 
C) Disguised discounts to sell additional goods are offered by sellers 
D) Overinvestment in the industry

Question 2

Change in the price of a good causes the demand schedule for that good to shift.

Accepted Answer

A) True 
 B)False

Question 3

If both the supply and demand curves shift to the right, then we can conclude that there will be

Accepted Answer

A) an increase in the equilibrium quantity sold and an increase in the equilibrium price. 
B) a decrease in the equilibrium quantity sold and a decrease in the equilibrium price. 
C) an increase in the equilibrium quantity sold and a decrease in the equilibrium price. 
D) an increase in the equilibrium quantity sold and an uncertain effect on the equilibrium price. 
A) an increase in the equilibrium quantity sold and an increase in the equilibrium price. 
B) a decrease in the equilibrium quantity sold and a decrease in the equilibrium price. 
C) an increase in the equilibrium quantity sold and a decrease in the equilibrium price. 
D) an increase in the equilibrium quantity sold and an uncertain effect on the equilibrium price.

Question 4

Newspaper recycling has been highly successful-perhaps too successful, given that many households gather and return their newspapers to recycling centers.  The amount of newspapers recycled has dramatically increased, along with the number of recycling plants.  Yet newspapers prefer regular newsprint over recycled newsprint, so the demand for recycled newsprint has remained essentially unchanged. The result of this for the recycled newsprint market is

Accepted Answer

A) a decrease in the supply and a higher price for recycled newsprint. 
B) an increase in the supply and a lower price for recycled newsprint. 
C) an increase in the supply and a higher price for recycled newsprint. 
D) a decrease in the supply and an increase in the demand for recycled newsprint. 
A) a decrease in the supply and a higher price for recycled newsprint. 
B) an increase in the supply and a lower price for recycled newsprint. 
C) an increase in the supply and a higher price for recycled newsprint. 
D) a decrease in the supply and an increase in the demand for recycled newsprint.

Question 5

Grapes can be used to produce wine or raisins. Which graph in Figure 4-6 best depicts the effects on the U.S. raisin market of a decline in purchases of domestic wine?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 6

Governments can eliminate market surpluses through the imposition of price floors.

Accepted Answer

A) True 
 B)False

Question 7

Last year, 1,000 cases of cough syrup were sold at $10; this year, 1,200 cases were sold at $12. The most probable interpretation of these data is that the

Accepted Answer

A) supply and demand curves are shifting to the right. 
B) supply and demand curves are shifting to the left. 
C) supply curve has shifted to the left, with no change in demand. 
D) demand curve has shifted to the right, with no change in supply. 
A) supply and demand curves are shifting to the right. 
B) supply and demand curves are shifting to the left. 
C) supply curve has shifted to the left, with no change in demand. 
D) demand curve has shifted to the right, with no change in supply.

Question 8

Figure 4-4  
 
-​Assume that Figure 4-4 shows demand for soda. An increase in the price of bottled water will change demand from

Accepted Answer

A) D  1  to D  2  . 
B) D  2  to D  1  . 
C) D  3  to D  2  . 
D) D  3  to D  1  . 
A) D  1  to D  2  . 
B) D  2  to D  1  . 
C) D  3  to D  2  . 
D) D  3  to D  1  .

Question 9

Shortages normally accompany an effective price floor.

Accepted Answer

A) True 
 B)False

Question 10

Tampering with the price mechanism

Accepted Answer

A) can be efficient for a while. 
B) cannot be attempted in a market economy. 
C) can enhance societal welfare if done properly. 
D) often produces undesired side effects. 
A) can be efficient for a while. 
B) cannot be attempted in a market economy. 
C) can enhance societal welfare if done properly. 
D) often produces undesired side effects.

Question 11

A key assumption made when a supply schedule is constructed is that

Accepted Answer

A) the only factors that matter in determining supply are price and quantity. 
B) firms only want to sell a certain amount of a product. 
C) supply is too important to be left to the marketplace. 
D) only price and quantity vary, all other determinants of supply are held constant. 
E) demand has a positive slope. 
A) the only factors that matter in determining supply are price and quantity. 
B) firms only want to sell a certain amount of a product. 
C) supply is too important to be left to the marketplace. 
D) only price and quantity vary, all other determinants of supply are held constant. 
E) demand has a positive slope.

Question 12

While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

Accepted Answer

A) True 
 B)False

Question 13

One effect of market intervention is resource misallocation.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

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.

Question 17

In the 1990s, Congress considered an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture?

Accepted Answer

A) It would decrease, because agricultural prices would fall. 
B) It would decrease, because agricultural prices would rise. 
C) It would increase, because agricultural prices would fall. 
D) It would increase, because agricultural prices would rise. 
A) It would decrease, because agricultural prices would fall. 
B) It would decrease, because agricultural prices would rise. 
C) It would increase, because agricultural prices would fall. 
D) It would increase, because agricultural prices would rise.

If a price floor is removed , which of the following would be a result?

Change in the price of a good causes the demand schedule for that good to shift.

If both the supply and demand curves shift to the right, then we can conclude that there will be

Grapes can be used to produce wine or raisins. Which graph in Figure 4-6 best depicts the effects on the U.S. raisin market of a decline in purchases of domestic wine?

Governments can eliminate market surpluses through the imposition of price floors.

Last year, 1,000 cases of cough syrup were sold at $10; this year, 1,200 cases were sold at $12. The most probable interpretation of these data is that the

Figure 4-4 -Assume that Figure 4-4 shows demand for soda. An increase in the price of bottled water will change demand from

Shortages normally accompany an effective price floor.

Tampering with the price mechanism

A key assumption made when a supply schedule is constructed is that

While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

One effect of market intervention is resource misallocation.

When a demand schedule is drawn as a graph,

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

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

In the 1990s, Congress considered an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture?

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

Exam 4: Supply and Demand: an Initial Look

If a price floor is removed , which of the following would be a result?

Change in the price of a good causes the demand schedule for that good to shift.

If both the supply and demand curves shift to the right, then we can conclude that there will be

Grapes can be used to produce wine or raisins. Which graph in Figure 4-6 best depicts the effects on the U.S. raisin market of a decline in purchases of domestic wine?

Governments can eliminate market surpluses through the imposition of price floors.

Last year, 1,000 cases of cough syrup were sold at $10; this year, 1,200 cases were sold at $12. The most probable interpretation of these data is that the

Figure 4-4 -​Assume that Figure 4-4 shows demand for soda. An increase in the price of bottled water will change demand from

Shortages normally accompany an effective price floor.

Tampering with the price mechanism

A key assumption made when a supply schedule is constructed is that

While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

One effect of market intervention is resource misallocation.

When a demand schedule is drawn as a graph,

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

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

In the 1990s, Congress considered an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture?

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

Figure 4-4 -Assume that Figure 4-4 shows demand for soda. An increase in the price of bottled water will change demand from