Question 1

One motive for "fighting the invisible hand" is

Accepted Answer

A)  unhappiness about the prices that occur in free markets. 
B)  envy toward those who apparently benefit from certain prices. 
C)  a desire to have government "correct" some problems. 
D)  an attempt to produce justice between buyers and sellers. 
E)  All of the above are correct. 
A)  unhappiness about the prices that occur in free markets. 
B)  envy toward those who apparently benefit from certain prices. 
C)  a desire to have government "correct" some problems. 
D)  an attempt to produce justice between buyers and sellers. 
E)  All of the above are correct.

Question 2

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price that borrowers pay.As a result,economists expected demand for money to

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  be influenced by the interest rate, but with an uncertain effect. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  be influenced by the interest rate, but with an uncertain effect.

Question 3

Figure 4-3
  
-A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

Accepted Answer

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

Question 4

Which of the following will tend to occur if price floors are imposed on a product?

Accepted Answer

A)  persistent surpluses 
B)  problems of disposal of goods 
C)  disguised discounts developing to eliminate excess production 
D)  overinvestment in the industry 
E)  All of the above are correct. 
A)  persistent surpluses 
B)  problems of disposal of goods 
C)  disguised discounts developing to eliminate excess production 
D)  overinvestment in the industry 
E)  All of the above are correct.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The price for labor is the wage rate.What happens to the demand for 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 7

The position of a demand curve is unaffected by changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 8

Figure 4-16
  
-In Figure 4-16,an increase in the number of producers will shift supply from

Accepted Answer

A)  S1 to S2. 
B)  S2 to S1. 
C)  S3 to S2. 
D)  S3 to S1. 
A)  S1 to S2. 
B)  S2 to S1. 
C)  S3 to S2. 
D)  S3 to S1.

Question 9

Figure 4-20
  
-If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best 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 10

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

Accepted Answer

A) True 
 B)False

Question 11

The more firms that are attracted to an industry,the greater will be the quantity of product supplied at any given price.

Accepted Answer

A) True 
 B)False

Question 12

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result,we can expect

Accepted Answer

A)  a decrease in price and no predictable impact on output. 
B)  a definite decrease in price and increase in output. 
C)  an increase in output with no predictable change in price. 
D)  no predictable changes in either price or output. 
A)  a decrease in price and no predictable impact on output. 
B)  a definite decrease in price and increase in output. 
C)  an increase in output with no predictable change in price. 
D)  no predictable changes in either price or output.

Question 13

Rent controls encourage investment in housing because they bring stability to the market.

Accepted Answer

A) True 
 B)False

Question 14

Price controls are usually enacted in response to

Accepted Answer

A)  popular opinion. 
B)  governmental studies. 
C)  scholarly research on the effects of high prices. 
D)  laws enacted in other countries. 
E)  All of the above are correct. 
A)  popular opinion. 
B)  governmental studies. 
C)  scholarly research on the effects of high prices. 
D)  laws enacted in other countries. 
E)  All of the above are correct.

Question 15

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

Accepted Answer

A)  increase. 
B)  decrease. 
C)  not change. 
D)  not change, although the demand schedule itself will shift outward. 
A)  increase. 
B)  decrease. 
C)  not change. 
D)  not change, although the demand schedule itself will shift outward.

Question 16

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
   
where Qd is the quantity demanded, Qs 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)  Qd = 20 − 1.6P. 
B)  Qd = 0.2(20 − 2P). 
C)  Qd = 0.8(20 − 2P). 
D)  Qd = 80(20 − 2P). 
A)  Qd = 20 − 1.6P. 
B)  Qd = 0.2(20 − 2P). 
C)  Qd = 0.8(20 − 2P). 
D)  Qd = 80(20 − 2P).

Question 17

An increase in the number of nursing homes and community health centers and the expansion of home care has led to an increase in the demand for nurses.At the same time,improving opportunities for women in business have reduced the supply of nurses.Hospitals,the major employers of nurses,have resisted wage increases.The resulting situation could be described as

Accepted Answer

A)  the cost disease of the service sector. 
B)  a shortage of nurses. 
C)  the problem of auxiliary restrictions. 
D)  the wage floor problem. 
A)  the cost disease of the service sector. 
B)  a shortage of nurses. 
C)  the problem of auxiliary restrictions. 
D)  the wage floor problem.

Question 18

If the U.S.government starts to sell off its stockpile of cheese,

Accepted Answer

A)  consumers will be less willing to purchase cheese. 
B)  the equilibrium quantity demanded will rise. 
C)  farmers will hoard the cheese they produce. 
D)  the quantity of cheese that spoils before sale will rise. 
A)  consumers will be less willing to purchase cheese. 
B)  the equilibrium quantity demanded will rise. 
C)  farmers will hoard the cheese they produce. 
D)  the quantity of cheese that spoils before sale will rise.

Question 19

The law of increasing relative costs,depicted by the concavity of the production opportunities frontier,is most closely related to the

Accepted Answer

A)  downward slope of the demand curve. 
B)  upward slope of the demand curve. 
C)  downward slope of the supply curve. 
D)  upward slope of the supply curve. 
A)  downward slope of the demand curve. 
B)  upward slope of the demand curve. 
C)  downward slope of the supply curve. 
D)  upward slope of the supply curve.

Question 20

Which of the following will shift the demand curve for milk?

Accepted Answer

A)  change in the income of buyers of milk 
B)  change in the price of milk 
C)  change in input prices for milk 
D)  All of the above are correct. 
A)  change in the income of buyers of milk 
B)  change in the price of milk 
C)  change in input prices for milk 
D)  All of the above are correct.

One motive for "fighting the invisible hand" is

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price that borrowers pay.As a result,economists expected demand for money to

Figure 4-3 -A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

Which of the following will tend to occur if price floors are imposed on a product?

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

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

The position of a demand curve is unaffected by changes in the price of the good.

Figure 4-16 -In Figure 4-16,an increase in the number of producers will shift supply from

Figure 4-20 -If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best be represented by which graph in Figure 4-20?

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

The more firms that are attracted to an industry,the greater will be the quantity of product supplied at any given price.

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result,we can expect

Rent controls encourage investment in housing because they bring stability to the market.

Price controls are usually enacted in response to

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

If the U.S.government starts to sell off its stockpile of cheese,

The law of increasing relative costs,depicted by the concavity of the production opportunities frontier,is most closely related to the

Which of the following will shift the demand curve for milk?

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

One motive for "fighting the invisible hand" is

From 2007 to 2008,the Federal Reserve System reduced interest rates,the price that borrowers pay.As a result,economists expected demand for money to

Figure 4-3 -A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes.If this is correct,which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes?

Which of the following will tend to occur if price floors are imposed on a product?

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

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

The position of a demand curve is unaffected by changes in the price of the good.

Figure 4-16 -In Figure 4-16,an increase in the number of producers will shift supply from

Figure 4-20 -If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best be represented by which graph in Figure 4-20?

A change in the price of important inputs will change the quantity supplied but will not shift the supply curve.

The more firms that are attracted to an industry,the greater will be the quantity of product supplied at any given price.

The demand for computers has risen dramatically at the same time that the unit cost of production has decreased.As a result,we can expect

Rent controls encourage investment in housing because they bring stability to the market.

Price controls are usually enacted in response to

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

If the U.S.government starts to sell off its stockpile of cheese,

The law of increasing relative costs,depicted by the concavity of the production opportunities frontier,is most closely related to the

Which of the following will shift the demand curve for milk?

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