Question 1

An individual's demand schedule

Accepted Answer

A) provides information about what quantity a consumer is willing and able to buy at each price. 
B) tells a buyer how many other buyers will try to purchase an item. 
C) is a schedule that regulates monthly sales of scarce goods and services. 
D) is of no use without its accompanying supply schedule. 
A) provides information about what quantity a consumer is willing and able to buy at each price. 
B) tells a buyer how many other buyers will try to purchase an item. 
C) is a schedule that regulates monthly sales of scarce goods and services. 
D) is of no use without its accompanying supply schedule.

Question 2

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

Accepted Answer

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

Question 3

Supply can shift due to changes in price.

Accepted Answer

A) True 
 B)False

Question 4

Normally an increase in the supply of a good will cause

Accepted Answer

A) a shift of consumer preferences in favor of that good. 
B) consumers to use more of that good and less of others. 
C) a shift of consumer preferences away from that good. 
D) consumers to use less of that good and more of others. 
A) a shift of consumer preferences in favor of that good. 
B) consumers to use more of that good and less of others. 
C) a shift of consumer preferences away from that good. 
D) consumers to use less of that good and more of others.

Question 5

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 6

Suppose that in a free market, 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation. Without the heart, each patient will die. The government decides this price is too high and imposes a maximum price of $200,000. Everything else equal,

Accepted Answer

A) more patients will now die. 
B) fewer patients will now die. 
C) more patients will now die only if the demand curve is vertical. 
D) more patients will now die only if the demand curve is horizontal. 
A) more patients will now die. 
B) fewer patients will now die. 
C) more patients will now die only if the demand curve is vertical. 
D) more patients will now die only if the demand curve is horizontal.

Question 7

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. An economist would expect sugarcane prices to ____, and quantity sold to ____.

Accepted Answer

A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same. 
A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same.

Question 8

Use of bovine growth hormone (BGH)on cattle dramatically increases the milk output of dairy cows. Dairy farmers in Wisconsin vigorously oppose permitting the drug's use over concerns of an excess supply and a consumer reaction on the purity of food issue that could put many of them out of business. Which of the graphs in Figure 4-13 is consistent with these concerns?

Accepted Answer

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

Question 9

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Accepted Answer

A) True 
 B)False

Question 10

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 consumers decide that they want 20 percent fewer weezils at every price, the equation for the new demand curve for weezils will be

Accepted Answer

A) Q  d  = 20 − 1.6P. 
B) Q  d  = 0.2(20 − 2P). 
C) Q  d  = 0.8(20 − 2P). 
D) Q  d  = 80(20 − 2P). 
A) Q  d  = 20 − 1.6P. 
B) Q  d  = 0.2(20 − 2P). 
C) Q  d  = 0.8(20 − 2P). 
D) Q  d  = 80(20 − 2P).

Question 11

Why do airlines tend to lower ticket prices in the winter?

Accepted Answer

A) Supply is relatively variable, and a drop in demand lowers equilibrium price 
B) Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C) A drop in both supply and demand lowers equilibrium price. 
D) Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E) Demand is relatively fixed, and a drop in supply lowers equilibrium price. 
A) Supply is relatively variable, and a drop in demand lowers equilibrium price 
B) Demand is relatively variable, and a drop in supply lowers equilibrium price. 
C) A drop in both supply and demand lowers equilibrium price. 
D) Supply is relatively fixed, and a drop in demand lowers equilibrium price. 
E) Demand is relatively fixed, and a drop in supply lowers equilibrium price.

Question 12

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 13

Equilibrium in a market is

Accepted Answer

A) a situation in which there are no inherent forces that produce change. 
B) the natural state of affairs in the market. 
C) the actual price and quantity that will exist in a market. 
D) the best price and quantity that can exist in a market. 
E) All of these responses are correct. 
A) a situation in which there are no inherent forces that produce change. 
B) the natural state of affairs in the market. 
C) the actual price and quantity that will exist in a market. 
D) the best price and quantity that can exist in a market. 
E) All of these responses are correct.

Question 14

The price of coal fell and the quantity sold also fell. Everything else being equal, it is consistent that

Accepted Answer

A) the price of oil fell. 
B) coal miners received large wage increases. 
C) more efficient mining equipment was installed. 
D) consumer incomes rose. 
E) the supply of coal fell. 
A) the price of oil fell. 
B) coal miners received large wage increases. 
C) more efficient mining equipment was installed. 
D) consumer incomes rose. 
E) the supply of coal fell.

Question 15

When price is below the equilibrium level, there is a shortage of the commodity being sold.

Accepted Answer

A) True 
 B)False

Question 16

A change in the price of hamburgers will change the supply of hot dogs.

Accepted Answer

A) True 
 B)False

Question 17

What group tends to benefit from the sugar price supports?

Accepted Answer

A) Manufacturers of products that use sugar 
B) Individual consumers of sugar 
C) Producers of other agricultural products 
D) Producers of sugar 
E) All of these responses are correct. 
A) Manufacturers of products that use sugar 
B) Individual consumers of sugar 
C) Producers of other agricultural products 
D) Producers of sugar 
E) All of these responses are correct.

Question 18

Figure 4-4  
 
-​Assume that Figure 4-4 shows demand for new houses. A decrease in income of buyers will change demand from

Accepted Answer

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

Question 19

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. As a result of these changes, an economist would expect granulated sugar prices to ____, and quantity sold to ____.

Accepted Answer

A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same. 
A) rise; rise. 
B) fall; fall. 
C) rise; fall. 
D) fall; remain the same.

Question 20

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

Accepted Answer

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

An individual's demand schedule

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

Supply can shift due to changes in price.

Normally an increase in the supply of a good will cause

A demand schedule shows

Suppose that in a free market, 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation. Without the heart, each patient will die. The government decides this price is too high and imposes a maximum price of $200,000. Everything else equal,

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. An economist would expect sugarcane prices to , and quantity sold to .

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Why do airlines tend to lower ticket prices in the winter?

A shift in the demand curve will occur when

Equilibrium in a market is

The price of coal fell and the quantity sold also fell. Everything else being equal, it is consistent that

When price is below the equilibrium level, there is a shortage of the commodity being sold.

A change in the price of hamburgers will change the supply of hot dogs.

What group tends to benefit from the sugar price supports?

Figure 4-4 -Assume that Figure 4-4 shows demand for new houses. A decrease in income of buyers will change demand from

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. As a result of these changes, an economist would expect granulated sugar prices to , and quantity sold to .

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

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

An individual's demand schedule

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

Supply can shift due to changes in price.

Normally an increase in the supply of a good will cause

A demand schedule shows

Suppose that in a free market, 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation. Without the heart, each patient will die. The government decides this price is too high and imposes a maximum price of $200,000. Everything else equal,

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. An economist would expect sugarcane prices to ____, and quantity sold to ____.

"Equilibrium" is a situation in which there are no inherent forces to produce change.

Why do airlines tend to lower ticket prices in the winter?

A shift in the demand curve will occur when

Equilibrium in a market is

The price of coal fell and the quantity sold also fell. Everything else being equal, it is consistent that

When price is below the equilibrium level, there is a shortage of the commodity being sold.

A change in the price of hamburgers will change the supply of hot dogs.

What group tends to benefit from the sugar price supports?

Figure 4-4 -​Assume that Figure 4-4 shows demand for new houses. A decrease in income of buyers will change demand from

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. As a result of these changes, an economist would expect granulated sugar prices to ____, and quantity sold to ____.

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

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

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. An economist would expect sugarcane prices to , and quantity sold to .

Figure 4-4 -Assume that Figure 4-4 shows demand for new houses. A decrease in income of buyers will change demand from

Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. As a result of these changes, an economist would expect granulated sugar prices to , and quantity sold to .