Question 1

Throughout history,governments have used price controls to

Accepted Answer

A)  protect buyers. 
B)  protect sellers. 
C)  serve the "public interest." 
D)  All of the above are correct. 
A)  protect buyers. 
B)  protect sellers. 
C)  serve the "public interest." 
D)  All of the above are correct.

Question 2

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

Accepted Answer

A)  demand as consumers try to economize because of the shortage. 
B)  both the supply and demand curves. 
C)  the supply curve. 
D)  the supply curve and a rightward shift in the demand curve, which will result in a higher price. 
A)  demand as consumers try to economize because of the shortage. 
B)  both the supply and demand curves. 
C)  the supply curve. 
D)  the supply curve and a rightward shift in the demand curve, which will result in a higher price.

Question 3

The quantity of goods exchanged in a market will be below the equilibrium quantity

Accepted Answer

A)  when the price is either held above or below the equilibrium price. 
B)  only when the price is held above the equilibrium price. 
C)  only when the price is held below the equilibrium price. 
D)  only when the price is rising. 
A)  when the price is either held above or below the equilibrium price. 
B)  only when the price is held above the equilibrium price. 
C)  only when the price is held below the equilibrium price. 
D)  only when the price is rising.

Question 4

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Accepted Answer

A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded. 
A)  the demand for cookies will fall. 
B)  the demand for cookies will rise. 
C)  a larger quantity of cookies will be demanded. 
D)  a smaller quantity of cookies will be demanded.

Question 5

Studies at Cornell University revealed that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop.Resultant feed savings are estimated at $60 million a year.In the chicken market,the

Accepted Answer

A)  demand curve shifts to the right. 
B)  supply curve shifts to the right. 
C)  price will rise. 
D)  quantity sold will fall. 
A)  demand curve shifts to the right. 
B)  supply curve shifts to the right. 
C)  price will rise. 
D)  quantity sold will fall.

Question 6

For more than a thousand years,the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently,the

Accepted Answer

A)  demand curve for fish shifted to the right. 
B)  demand curve for fish shifted to the left. 
C)  demand for meat decreased. 
D)  price of fish increased. 
A)  demand curve for fish shifted to the right. 
B)  demand curve for fish shifted to the left. 
C)  demand for meat decreased. 
D)  price of fish increased.

Question 7

A common misconception about supply is that

Accepted Answer

A)  supply depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct. 
A)  supply depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct.

Question 8

The slope of a demand curve is almost always

Accepted Answer

A)  positive, because when people buy more of a good the cost of producing it will rise. 
B)  positive, because the more money a person has, the more of a particular good will be bought. 
C)  negative, because when people buy more of a good the cost of producing it will fall. 
D)  negative, because with everything else equal, the same people will buy more of a good when its price is lower. 
E)  positive, because as the price rises, people want to sell more of the good. 
A)  positive, because when people buy more of a good the cost of producing it will rise. 
B)  positive, because the more money a person has, the more of a particular good will be bought. 
C)  negative, because when people buy more of a good the cost of producing it will fall. 
D)  negative, because with everything else equal, the same people will buy more of a good when its price is lower. 
E)  positive, because as the price rises, people want to sell more of the good.

Question 9

Figure 4-12
  
-The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Accepted Answer

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

Question 10

Demand shifts due to changes in price.

Accepted Answer

A) True 
 B)False

Question 11

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Accepted Answer

A) True 
 B)False

Question 12

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Accepted Answer

A) True 
 B)False

Question 13

Figure 4-22
  
-Because of falling oil prices in the past,Libya could afford fewer imported goods.Government controls were established to limit imports of cigarettes.In 1985,the market price of Marlboros rose to $70 a carton.Which graph in Figure 4-22 best depicts this situation?

Accepted Answer

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

Question 14

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

Accepted Answer

A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased. 
A)  the price of a substitute good fell. 
B)  the price of a complement rose. 
C)  income rose. 
D)  costs of inputs increased.

Question 15

A decrease in the price of VCRs will increase demand for video cassettes.

Accepted Answer

A) True 
 B)False

Question 16

A decrease in price of a certain good most likely will lead to

Accepted Answer

A)  an increase in quantity demanded and an increase in demand. 
B)  an increase in quantity demanded but no change in demand. 
C)  an increase in demand but no change in quantity demanded. 
D)  no change in demand and no change in quantity demanded. 
A)  an increase in quantity demanded and an increase in demand. 
B)  an increase in quantity demanded but no change in demand. 
C)  an increase in demand but no change in quantity demanded. 
D)  no change in demand and no change in quantity demanded.

Question 17

Explain the effect of the following changes on equilibrium price and quantity of a commodity:
(a)increase in average incomes.
(b)increase in population.

Accepted Answer

If average incomes rise,consumers will p

Question 18

Which of the following would cause an increase in demand for Toyota automobiles?

Accepted Answer

A)  an increase in the price of Toyota automobiles 
B)  a decrease in the price of Toyota automobiles 
C)  a decrease in the price of Honda automobiles 
D)  an increase in the price of Honda automobiles 
A)  an increase in the price of Toyota automobiles 
B)  a decrease in the price of Toyota automobiles 
C)  a decrease in the price of Honda automobiles 
D)  an increase in the price of Honda automobiles

Question 19

Very few societies have used price controls.

Accepted Answer

A) True 
 B)False

Question 20

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  Uncertain-economic theory has no answer to this question.

Throughout history,governments have used price controls to

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

The quantity of goods exchanged in a market will be below the equilibrium quantity

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Studies at Cornell University revealed that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop.Resultant feed savings are estimated at $60 million a year.In the chicken market,the

For more than a thousand years,the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently,the

A common misconception about supply is that

The slope of a demand curve is almost always

Figure 4-12 -The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Demand shifts due to changes in price.

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Figure 4-22 -Because of falling oil prices in the past,Libya could afford fewer imported goods.Government controls were established to limit imports of cigarettes.In 1985,the market price of Marlboros rose to $70 a carton.Which graph in Figure 4-22 best depicts this situation?

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

A decrease in the price of VCRs will increase demand for video cassettes.

A decrease in price of a certain good most likely will lead to

Explain the effect of the following changes on equilibrium price and quantity of a commodity: (a)increase in average incomes. (b)increase in population.

Which of the following would cause an increase in demand for Toyota automobiles?

Very few societies have used price controls.

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

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

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Exam 4: Supply and Demand: An Initial Look

Throughout history,governments have used price controls to

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

The quantity of goods exchanged in a market will be below the equilibrium quantity

Assume the demand schedule for cookies is downward sloping.If the price of cookies falls from $1.50 to $1.25 per dozen,

Studies at Cornell University revealed that chickens grow 2 percent larger when a red mitten is placed in their cage and Vivaldi is played in the coop.Resultant feed savings are estimated at $60 million a year.In the chicken market,the

For more than a thousand years,the Catholic Church required its members to abstain from meat on Fridays.Catholics customarily ate fish on Friday.After 1966 abstinence from meat on Fridays was no longer required.Consequently,the

A common misconception about supply is that

The slope of a demand curve is almost always

Figure 4-12 -The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also,in 2006-2008,the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Demand shifts due to changes in price.

Drawing the supply curve and the demand curve on the same graph helps show how price is determined.

Cost-reducing technological advancements allow suppliers to earn more profits but have no noticeable effect on the supply curve.

Figure 4-22 -Because of falling oil prices in the past,Libya could afford fewer imported goods.Government controls were established to limit imports of cigarettes.In 1985,the market price of Marlboros rose to $70 a carton.Which graph in Figure 4-22 best depicts this situation?

We observed that the price of a good rises and the quantity purchased also rises.Everything else being equal,it is consistent that

A decrease in the price of VCRs will increase demand for video cassettes.

A decrease in price of a certain good most likely will lead to

Explain the effect of the following changes on equilibrium price and quantity of a commodity: (a)increase in average incomes. (b)increase in population.

Which of the following would cause an increase in demand for Toyota automobiles?

Very few societies have used price controls.

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price which borrowers pay.As a result,economists expected that the quantity of money supplied would

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