Question 1

A surplus occurs when price is higher than the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 2

Price controls usually enhance efficiency in the allocation of resources.

Accepted Answer

A) True 
 B)False

Question 3

A market will experience a ____ when the price is above equilibrium and a ____ when the price is below equilibrium.

Accepted Answer

A)  shortage, shortage 
B)  surplus, surplus 
C)  shortage, surplus 
D)  surplus, shortage 
A)  shortage, shortage 
B)  surplus, surplus 
C)  shortage, surplus 
D)  surplus, shortage

Question 4

Price ceilings will likely result in the growth of black markets.

Accepted Answer

A) True 
 B)False

Question 5

Advertising has no effect on the demand schedule for a good.

Accepted Answer

A) True 
 B)False

Question 6

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)  D1 to D2. 
B)  D2 to D1. 
C)  D2 to D3. 
D)  D1 to D3. 
A)  D1 to D2. 
B)  D2 to D1. 
C)  D2 to D3. 
D)  D1 to D3.

Question 7

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

Accepted Answer

A)  the price of sausage will rise. 
B)  the price of sausage will fall. 
C)  the resources used in raising Pork will become more expensive. 
D)  the resources used in raising Pork will become less expensive. 
A)  the price of sausage will rise. 
B)  the price of sausage will fall. 
C)  the resources used in raising Pork will become more expensive. 
D)  the resources used in raising Pork will become less expensive.

Question 8

Figure 4-5
  
-If the suppliers of a good will sell any amount at $30 but there are no sales,then the market can best be represented by which graph in Figure 4-5?

Accepted Answer

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

Question 9

Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption.Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer.Considering the market for alcohol,an economist would predict a movement

Accepted Answer

A)  up the demand curve as quantity demanded falls. 
B)  up the supply curve as the demand curve shifts. 
C)  down the supply curve as the demand curve shifts. 
D)  down the demand curve as quantity falls. 
A)  up the demand curve as quantity demanded falls. 
B)  up the supply curve as the demand curve shifts. 
C)  down the supply curve as the demand curve shifts. 
D)  down the demand curve as quantity falls.

Question 10

How much the quantity of a good traded changes after a shift of the supply curve depends on

Accepted Answer

A)  the size of the shift. 
B)  the slope of the demand curve. 
C)  whether the market is subject to price controls. 
D)  All of the above are correct. 
A)  the size of the shift. 
B)  the slope of the demand curve. 
C)  whether the market is subject to price controls. 
D)  All of the above are correct.

Question 11

Who tends to benefit from the sugar price supports?

Accepted Answer

A)  users of sugar in other products 
B)  individual users of sugar 
C)  producers of other agricultural products 
D)  producers of sugar 
E)  All of the above are correct. 
A)  users of sugar in other products 
B)  individual users of sugar 
C)  producers of other agricultural products 
D)  producers of sugar 
E)  All of the above are correct.

Question 12

Consumer income changes can shift market demand.

Accepted Answer

A) True 
 B)False

Question 13

A supply curve can be thought of as

Accepted Answer

A)  a graphical display of "market potential." 
B)  a graphical representation of the information in a supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
D)  a forecasting tool. 
E)  All of the above are correct. 
A)  a graphical display of "market potential." 
B)  a graphical representation of the information in a supply schedule. 
C)  showing the maximum quantities that firms are able to produce. 
D)  a forecasting tool. 
E)  All of the above are correct.

Question 14

Figure 4-9
  
-"Moonshine" is illegal home brew made by adding sugar to accelerate corn fermentation.Ten pounds of sugar are necessary to make a gallon of moonshine.In the mid-1970s,the price of sugar tripled and the price of moonshine skyrocketed from $6 to $15 a gallon.Which graph in Figure 4-9 best illustrates this?

Accepted Answer

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

Question 15

A change in the income of buyers will normally change demand.

Accepted Answer

A) True 
 B)False

Question 16

Figure 4-20
  
-The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

Accepted Answer

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

Question 17

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.

Question 18

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

Accepted Answer

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

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-4
  
-Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

Accepted Answer

A)  D1 to D2. 
B)  D2 to D1. 
C)  D2 to D3. 
D)  D1 to D3. 
A)  D1 to D2. 
B)  D2 to D1. 
C)  D2 to D3. 
D)  D1 to D3.

A surplus occurs when price is higher than the market equilibrium.

Price controls usually enhance efficiency in the allocation of resources.

A market will experience a when the price is above equilibrium and a when the price is below equilibrium.

Price ceilings will likely result in the growth of black markets.

Advertising has no effect on the demand schedule for a good.

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

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

Figure 4-5 -If the suppliers of a good will sell any amount at $30 but there are no sales,then the market can best be represented by which graph in Figure 4-5?

Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption.Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer.Considering the market for alcohol,an economist would predict a movement

How much the quantity of a good traded changes after a shift of the supply curve depends on

Who tends to benefit from the sugar price supports?

Consumer income changes can shift market demand.

A supply curve can be thought of as

A change in the income of buyers will normally change demand.

Figure 4-20 -The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

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

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

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

Figure 4-4 -Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

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

A surplus occurs when price is higher than the market equilibrium.

Price controls usually enhance efficiency in the allocation of resources.

A market will experience a ____ when the price is above equilibrium and a ____ when the price is below equilibrium.

Price ceilings will likely result in the growth of black markets.

Advertising has no effect on the demand schedule for a good.

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

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

Figure 4-5 -If the suppliers of a good will sell any amount at $30 but there are no sales,then the market can best be represented by which graph in Figure 4-5?

Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption.Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer.Considering the market for alcohol,an economist would predict a movement

How much the quantity of a good traded changes after a shift of the supply curve depends on

Who tends to benefit from the sugar price supports?

Consumer income changes can shift market demand.

A supply curve can be thought of as

A change in the income of buyers will normally change demand.

Figure 4-20 -The presence of scalpers (people selling tickets at a price above the quoted price,P*)at a recent Super Bowl game suggests that the market for stadium seats could be represented by which graph in Figure 4-20?

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

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

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

Figure 4-4 -Assume that Figure 4-4 shows demand for MP3 players.An increase in the price of music downloads changes demand from

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

A market will experience a when the price is above equilibrium and a when the price is below equilibrium.