Question 1

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

Accepted Answer

A) True 
 B)False

Question 2

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

Accepted Answer

A)  all goods fell. 
B)  only cigarettes fell. 
C)  all goods rose. 
D)  only cigarettes rose. 
A)  all goods fell. 
B)  only cigarettes fell. 
C)  all goods rose. 
D)  only cigarettes rose.

Question 3

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 4

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 the above 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 the above are correct.

Question 5

Give an example of a price floor.Draw a corresponding diagram and explain why there is a continuing surplus.

Accepted Answer

The example used in the text is price su

Question 6

One effect of market intervention is resource misallocation.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces are no longer at work. 
D)  Equilibrium is a tendency, a state of perpetual motion. 
E)  Equilibrium is the best combination of price and quantity. 
A)  At equilibrium, demand equals supply. 
B)  At equilibrium, quantity demanded equals quantity supplied. 
C)  At equilibrium, market forces are no longer at work. 
D)  Equilibrium is a tendency, a state of perpetual motion. 
E)  Equilibrium is the best combination of price and quantity.

Question 9

If orange juice prices double next year,there will be a

Accepted Answer

A)  rightward shift in the demand for grapefruit juice. 
B)  rightward shift in the supply of grapefruit juice. 
C)  leftward shift in the supply of grapefruit juice. 
D)  leftward shift in the demand for grapefruit juice. 
A)  rightward shift in the demand for grapefruit juice. 
B)  rightward shift in the supply of grapefruit juice. 
C)  leftward shift in the supply of grapefruit juice. 
D)  leftward shift in the demand for grapefruit juice.

Question 10

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

Accepted Answer

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

Question 11

The supply curve of books (which are produced using paper made from trees)will shift to the left in response to

Accepted Answer

A)  a decline in college tuition. 
B)  an increase in home building. 
C)  an increase in the supply of lumberjacks. 
D)  an end to government regulations that limit timber harvesting in national forests. 
A)  a decline in college tuition. 
B)  an increase in home building. 
C)  an increase in the supply of lumberjacks. 
D)  an end to government regulations that limit timber harvesting in national forests.

Question 12

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

Accepted Answer

A)  wage floors for soldiers in the army. 
B)  bonuses for soldiers who re-enlisted. 
C)  laws to buy food for the soldiers stationed in Pennsylvania. 
D)  price controls on essential commodities. 
E)  All of the above are correct. 
A)  wage floors for soldiers in the army. 
B)  bonuses for soldiers who re-enlisted. 
C)  laws to buy food for the soldiers stationed in Pennsylvania. 
D)  price controls on essential commodities. 
E)  All of the above are correct.

Question 13

On a traditional supply and demand diagram,

Accepted Answer

A)  price is measured along the horizontal axis and quantity along the vertical axis. 
B)  price is measured along the vertical axis and quantity along the horizontal axis. 
C)  quantity demanded is measured along the horizontal axis, quantity supplied is measured along the vertical axis, and price is indicated on the contour lines. 
D)  quantity is measured along both axes and price is indicated on the contour lines. 
A)  price is measured along the horizontal axis and quantity along the vertical axis. 
B)  price is measured along the vertical axis and quantity along the horizontal axis. 
C)  quantity demanded is measured along the horizontal axis, quantity supplied is measured along the vertical axis, and price is indicated on the contour lines. 
D)  quantity is measured along both axes and price is indicated on the contour lines.

Question 14

If the price of oil,a close substitute for coal,increases then the

Accepted Answer

A)  supply curve for coal will shift to the right. 
B)  demand curve for coal will shift to the right. 
C)  equilibrium price and quantity of coal will not change. 
D)  demand curve for coal will shift to the left. 
E)  supply curve of coal will shift to the left. 
A)  supply curve for coal will shift to the right. 
B)  demand curve for coal will shift to the right. 
C)  equilibrium price and quantity of coal will not change. 
D)  demand curve for coal will shift to the left. 
E)  supply curve of coal will shift to the left.

Question 15

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal,the

Accepted Answer

A)  price of grapes will rise. 
B)  supply of grapes will fall. 
C)  quantity supplied of grapes will fall. 
D)  demand curve for grapes will shift to the right. 
A)  price of grapes will rise. 
B)  supply of grapes will fall. 
C)  quantity supplied of grapes will fall. 
D)  demand curve for grapes will shift to the right.

Question 16

Figure 4-15
  
-Recycling of newspapers has been undermined by its success.The supply of old papers,gathered diligently by those concerned with the environment,has increased dramatically,as has the number of firms that convert the material into recycled newsprint.The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint.Consequently,the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind.Which graph in Figure 4-15 best illustrates this situation?

Accepted Answer

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

Question 17

Regulations are sometimes used to "correct" the failures of a market mechanism.

Accepted Answer

A) True 
 B)False

Question 18

Economists emphasize the importance of ____ in analyzing demand.

Accepted Answer

A)  quantity 
B)  market potential 
C)  wants and needs 
D)  price 
E)  sales opportunities 
A)  quantity 
B)  market potential 
C)  wants and needs 
D)  price 
E)  sales opportunities

Question 19

Figure 4-21
  
-At price P₁ in Figure 4-21,what will tend to happen?

Accepted Answer

A)  There will be a shortage, and the price will fall. 
B)  There will be a shortage, and the price will rise. 
C)  There will be a surplus, and the price will rise. 
D)  There will be a surplus, and the price will fall. 
E)  Equilibrium will occur in the market. 
A)  There will be a shortage, and the price will fall. 
B)  There will be a shortage, and the price will rise. 
C)  There will be a surplus, and the price will rise. 
D)  There will be a surplus, and the price will fall. 
E)  Equilibrium will occur in the market.

Question 20

Since rent controls have been in effect in New York City,apartments have been more plentiful.

Accepted Answer

A) True 
 B)False

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

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

How do legal controls on prices lead to corruption?

Give an example of a price floor.Draw a corresponding diagram and explain why there is a continuing surplus.

One effect of market intervention is resource misallocation.

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

Which of the following is the correct way to describe equilibrium in a market?

If orange juice prices double next year,there will be a

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

The supply curve of books (which are produced using paper made from trees)will shift to the left in response to

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

On a traditional supply and demand diagram,

If the price of oil,a close substitute for coal,increases then the

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal,the

Regulations are sometimes used to "correct" the failures of a market mechanism.

Economists emphasize the importance of ____ in analyzing demand.

Figure 4-21 -At price P₁ in Figure 4-21,what will tend to happen?

Since rent controls have been in effect in New York City,apartments have been more plentiful.

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

Filters

Exam 4: Supply and Demand: An Initial Look

Technological advances that allow a good to be produced at a lower cost will shift the demand curve rightward.

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

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

How do legal controls on prices lead to corruption?

Give an example of a price floor.Draw a corresponding diagram and explain why there is a continuing surplus.

One effect of market intervention is resource misallocation.

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

Which of the following is the correct way to describe equilibrium in a market?

If orange juice prices double next year,there will be a

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

The supply curve of books (which are produced using paper made from trees)will shift to the left in response to

During the Revolutionary War,the Pennsylvania legislature attempted to help the Continental Army by enacting

On a traditional supply and demand diagram,

If the price of oil,a close substitute for coal,increases then the

American consumers decide to boycott grapes in support of the farm workers' union.Everything else being equal,the

Regulations are sometimes used to "correct" the failures of a market mechanism.

Economists emphasize the importance of ____ in analyzing demand.

Figure 4-21 -At price P₁ in Figure 4-21,what will tend to happen?

Since rent controls have been in effect in New York City,apartments have been more plentiful.

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

Filters