Question 1

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to

Accepted Answer

A)  raise the world price of gold to pay for the new machinery. 
B)  lower the world price of gold because any amount can now be produced more cheaply. 
C)  raise the world price of gold because miners' wages must double as their productivity doubles. 
D)  lower the world price of gold only if new mining companies are not allowed to enter the industry. 
A)  raise the world price of gold to pay for the new machinery. 
B)  lower the world price of gold because any amount can now be produced more cheaply. 
C)  raise the world price of gold because miners' wages must double as their productivity doubles. 
D)  lower the world price of gold only if new mining companies are not allowed to enter the industry.

Question 2

Firms often seek to borrow money to expand their capital stock,and the price they pay for the 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 3

A minimum wage law may cause unemployment among low-skill workers.

Accepted Answer

A) True 
 B)False

Question 4

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

Accepted Answer

A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price. 
A)  a decrease in price but no predictable change in output. 
B)  a decrease in output but no predictable change in price. 
C)  an increase in output but no predictable change in price. 
D)  a predictable decrease in both output and price.

Question 5

The United States typically experiences a large surplus of milk annually.This is caused by

Accepted Answer

A)  a price ceiling in the market. 
B)  not enough demand for milk. 
C)  a price floor in the market. 
D)  overproduction of milk by the cows. 
A)  a price ceiling in the market. 
B)  not enough demand for milk. 
C)  a price floor in the market. 
D)  overproduction of milk by the cows.

Question 6

When GM advertises its cars,the company is trying to cause a

Accepted Answer

A)  rightward shift in the supply. 
B)  rightward shift in the demand. 
C)  leftward shift in the supply. 
D)  leftward shift in the demand. 
A)  rightward shift in the supply. 
B)  rightward shift in the demand. 
C)  leftward shift in the supply. 
D)  leftward shift in the demand.

Question 7

The laws of supply and demand did not apply to Asian currencies.

Accepted Answer

A) True 
 B)False

Question 8

Why does quantity supplied increase when price increases?

Accepted Answer

A)  Producers find it more profitable to make the item. 
B)  People "drop out" of the market, so buyers find it more abundant. 
C)  As demand decreases with a high price, surpluses appear. 
D)  All of the above. 
A)  Producers find it more profitable to make the item. 
B)  People "drop out" of the market, so buyers find it more abundant. 
C)  As demand decreases with a high price, surpluses appear. 
D)  All of the above.

Question 9

A typical supply curve has

Accepted Answer

A)  slope equal to zero. 
B)  slope equal to infinity. 
C)  negative slope. 
D)  positive slope. 
E)  constant slope. 
A)  slope equal to zero. 
B)  slope equal to infinity. 
C)  negative slope. 
D)  positive slope. 
E)  constant slope.

Question 10

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that,after this announcement,the price of Retin-A ____ and the quantity sold ____.

Accepted Answer

A)  rose; fell 
B)  rose; rose 
C)  fell; fell 
D)  fell; rose 
A)  rose; fell 
B)  rose; rose 
C)  fell; fell 
D)  fell; rose

Question 11

During the American Revolution,the Pennsylvania legislature enacted price controls on essential commodities.The result of this legislation was

Accepted Answer

A)  a large increase in the availability of those items, ending shortages. 
B)  a severe shortage of those essential commodities. 
C)  an increase in the price of those items, thus alleviating shortages. 
D)  new efforts to increase production of those commodities. 
E)  a minor inconvenience as persons adjusted to the new law. 
A)  a large increase in the availability of those items, ending shortages. 
B)  a severe shortage of those essential commodities. 
C)  an increase in the price of those items, thus alleviating shortages. 
D)  new efforts to increase production of those commodities. 
E)  a minor inconvenience as persons adjusted to the new law.

Question 12

Figure 4-2
  
-If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

Accepted Answer

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

Question 13

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Accepted Answer

A) True 
 B)False

Question 14

Each point on the demand curve is

Accepted Answer

A)  demand for the product. 
B)  a quantity demanded at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to buy at different income levels. 
E)  All of the above are correct. 
A)  demand for the product. 
B)  a quantity demanded at that price. 
C)  the amount that people want to buy. 
D)  the amount people want to buy at different income levels. 
E)  All of the above are correct.

Question 15

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question.

Question 16

Figure 4-1
  
-If the government has stated that it will pay whatever it must to obtain 1,000 units of good X,which demand curve in Figure 4-1 is appropriate?

Accepted Answer

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

Question 17

When people suddenly want to buy something,supply increases.

Accepted Answer

A) True 
 B)False

Question 18

An upward-sloping supply curve shows that

Accepted Answer

A)  buyers are willing to pay more for a scarce product. 
B)  suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C)  buyers are unaffected by sellers' costs of production. 
D)  the price of a product is not influenced by the price buyers are willing to pay. 
E)  at higher prices, an envy effect begins to affect the demand curve. 
A)  buyers are willing to pay more for a scarce product. 
B)  suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C)  buyers are unaffected by sellers' costs of production. 
D)  the price of a product is not influenced by the price buyers are willing to pay. 
E)  at higher prices, an envy effect begins to affect the demand curve.

Question 19

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

Figure 4-26
 @#IMG-DLM& 
A sample graph is shown (

Question 20

Which of the following would cause a movement up (or leftward)along the demand curve for European autos in the United States?

Accepted Answer

A)  an increase in the price of American autos 
B)  a decrease in the price of American autos 
C)  an increase in income in the United States 
D)  an increase in the price of European cars 
A)  an increase in the price of American autos 
B)  a decrease in the price of American autos 
C)  an increase in income in the United States 
D)  an increase in the price of European cars

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to

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

A minimum wage law may cause unemployment among low-skill workers.

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

The United States typically experiences a large surplus of milk annually.This is caused by

When GM advertises its cars,the company is trying to cause a

The laws of supply and demand did not apply to Asian currencies.

Why does quantity supplied increase when price increases?

A typical supply curve has

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that,after this announcement,the price of Retin-A and the quantity sold .

During the American Revolution,the Pennsylvania legislature enacted price controls on essential commodities.The result of this legislation was

Figure 4-2 -If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Each point on the demand curve is

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Figure 4-1 -If the government has stated that it will pay whatever it must to obtain 1,000 units of good X,which demand curve in Figure 4-1 is appropriate?

When people suddenly want to buy something,supply increases.

An upward-sloping supply curve shows that

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."

Which of the following would cause a movement up (or leftward)along the demand curve for European autos in the United States?

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

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to

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

A minimum wage law may cause unemployment among low-skill workers.

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result,we can expect

The United States typically experiences a large surplus of milk annually.This is caused by

When GM advertises its cars,the company is trying to cause a

The laws of supply and demand did not apply to Asian currencies.

Why does quantity supplied increase when price increases?

A typical supply curve has

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that,after this announcement,the price of Retin-A ____ and the quantity sold ____.

During the American Revolution,the Pennsylvania legislature enacted price controls on essential commodities.The result of this legislation was

Figure 4-2 -If the government has stated that it will buy any amount of good X offered at $30,which demand curve in Figure 4-2 is appropriate?

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Each point on the demand curve is

The price for labor is the wage rate.What happens to the supply of labor if wages increase?

Figure 4-1 -If the government has stated that it will pay whatever it must to obtain 1,000 units of good X,which demand curve in Figure 4-1 is appropriate?

When people suddenly want to buy something,supply increases.

An upward-sloping supply curve shows that

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."

Which of the following would cause a movement up (or leftward)along the demand curve for European autos in the United States?

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

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that,after this announcement,the price of Retin-A and the quantity sold .