Question 1

Figure 4-2
  
-Refer to the Figure 4-2. What would happen at a price of $15?

Accepted Answer

A)  There would be a shortage of 400 units. 
B)  There would be a surplus of 400 units. 
C)  There would be a shortage of 200 units. 
D)  There would be a surplus of 200 units. 
A)  There would be a shortage of 400 units. 
B)  There would be a surplus of 400 units. 
C)  There would be a shortage of 200 units. 
D)  There would be a surplus of 200 units.

Question 2

What is the price where quantity supplied equals quantity demanded?

Accepted Answer

A)  coordinating price 
B)  cooperative price 
C)  equilibrium price 
D)  balancing price 
A)  coordinating price 
B)  cooperative price 
C)  equilibrium price 
D)  balancing price

Question 3

What is an example of a perfectly competitive market?

Accepted Answer

A)  cable TV market 
B)  soybean market 
C)  tablet market 
D)  running shoe market 
A)  cable TV market 
B)  soybean market 
C)  tablet market 
D)  running shoe market

Question 4

Which of the following determines a market supply curve but not an individual supply curve?

Accepted Answer

A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology 
A)  number of sellers 
B)  expectations 
C)  input prices 
D)  technology

Question 5

What does a demand curve illustrate?

Accepted Answer

A)  the negative relationship between number of buyers and quantity demanded 
B)  the positive relationship between price and quantity demanded 
C)  the negative relationship between price and quantity demanded 
D)  the maximum quantity of two goods an economy is capable of producing with available resources and technology 
A)  the negative relationship between number of buyers and quantity demanded 
B)  the positive relationship between price and quantity demanded 
C)  the negative relationship between price and quantity demanded 
D)  the maximum quantity of two goods an economy is capable of producing with available resources and technology

Question 6

Figure 4-2
  
-Refer to the Figure 4-2. What would happen at the equilibrium price?

Accepted Answer

A)  At the equilibrium price, 200 units would be supplied and demanded. 
B)  At the equilibrium price, 400 units would be supplied and demanded. 
C)  At the equilibrium price, 600 units would be supplied and demanded. 
D)  At the equilibrium price, 600 units would be supplied, but only 200 would be demanded. 
A)  At the equilibrium price, 200 units would be supplied and demanded. 
B)  At the equilibrium price, 400 units would be supplied and demanded. 
C)  At the equilibrium price, 600 units would be supplied and demanded. 
D)  At the equilibrium price, 600 units would be supplied, but only 200 would be demanded.

Question 7

New oak tables are normal goods. What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, some buyers exit the market for oak tables, and the price of wood saws increased?

Accepted Answer

A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous 
A)  price will fall and the effect on quantity is ambiguous 
B)  price will rise and the effect on quantity is ambiguous 
C)  quantity will fall and the effect on price is ambiguous 
D)  quantity will rise and the effect on price is ambiguous

Question 8

Table 4-2
  
-Refer to the Table 4-2. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Accepted Answer

A)  space A 
B)  space B 
C)  space C 
D)  space D 
A)  space A 
B)  space B 
C)  space C 
D)  space D

Question 9

Market demand is given as QD = 40 - 2P. Market supply is given as QS = 2P. If price increases from $14 to $18, what is the price elasticity of demand?

Accepted Answer

A)  0.7 
B)  1.0 
C)  1.9 
D)  4 
A)  0.7 
B)  1.0 
C)  1.9 
D)  4

Question 10

What does the market supply curve show?

Accepted Answer

A)  the total quantity supplied at any price 
B)  the average quantity supplied at any price 
C)  a ratio between price and quantity supplied for the market 
D)  the price sellers will receive from consumers at given quantities 
A)  the total quantity supplied at any price 
B)  the average quantity supplied at any price 
C)  a ratio between price and quantity supplied for the market 
D)  the price sellers will receive from consumers at given quantities

Question 11

Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure. What could we expect to happen?

Accepted Answer

A)  the current demand for hair gel to increase 
B)  the current demand for razors to increase 
C)  the current demand for combs to increase 
D)  the current demand for hair dye for men to increase 
A)  the current demand for hair gel to increase 
B)  the current demand for razors to increase 
C)  the current demand for combs to increase 
D)  the current demand for hair dye for men to increase

Question 12

Market demand is given as QD = 200 - 3P. Market supply is given as QS = P + 10. If price increases from $35 to $40, what is the price elasticity of demand?

Accepted Answer

A)  0.3 
B)  1.3 
C)  3.0 
D)  4.4 
A)  0.3 
B)  1.3 
C)  3.0 
D)  4.4

Question 13

What is an example of substitute goods?

Accepted Answer

A)  butter and margarine 
B)  tennis balls and tennis rackets 
C)  motorhomes and tractors 
D)  peanut butter and jelly 
A)  butter and margarine 
B)  tennis balls and tennis rackets 
C)  motorhomes and tractors 
D)  peanut butter and jelly

Question 14

Figure 4-6
  
-Refer to the Figure 4-6. What happens if the demand curve shifts from D to D₁
?

Accepted Answer

A)  Firms would be willing to supply less than before. 
B)  People are less willing to buy the product at any price than before. 
C)  People are now more willing to buy the product at any price than before. 
D)  The price of the product has decreased, causing consumers to buy more of the product. 
A)  Firms would be willing to supply less than before. 
B)  People are less willing to buy the product at any price than before. 
C)  People are now more willing to buy the product at any price than before. 
D)  The price of the product has decreased, causing consumers to buy more of the product.

Question 15

When economists are interested in how markets work, what do they most often work with?

Accepted Answer

A)  the market demand curve 
B)  individuals' demand curves 
C)  individuals' demand schedules 
D)  targeted consumers' demand curves 
A)  the market demand curve 
B)  individuals' demand curves 
C)  individuals' demand schedules 
D)  targeted consumers' demand curves

Question 16

Figure 4-7
  
-Refer to the Figure 4-7. What does the movement from point B to point A on the graph show?

Accepted Answer

A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded 
A)  a decrease in demand 
B)  an increase in demand 
C)  a decrease in quantity demanded 
D)  an increase in quantity demanded

Question 17

What are the signals that guide the allocation of resources in a market economy?

Accepted Answer

A)  laws 
B)  buyers and sellers 
C)  property rights 
D)  prices 
A)  laws 
B)  buyers and sellers 
C)  property rights 
D)  prices

Question 18

Market demand is given as Qd = 150 - 3P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Accepted Answer

A)  a shortage of 25 
B)  a surplus of 25 
C)  a surplus of 105 
D)  a shortage of 105 
A)  a shortage of 25 
B)  a surplus of 25 
C)  a surplus of 105 
D)  a shortage of 105

Question 19

Market demand is Qd = 200 - 6P. Market supply is Qs = 4P. In a perfectly competitive equilibrium, what will be the price?

Accepted Answer

A)  $150 
B)  $120 
C)  $30 
D)  $20 
A)  $150 
B)  $120 
C)  $30 
D)  $20

Question 20

Fill in the accompanying table, showing whether equilibrium price and equilibrium quantity go up, down, or stay the same.

Accepted Answer

The answer of Fill in the accompanying table, showing whether...

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $15?

What is the price where quantity supplied equals quantity demanded?

What is an example of a perfectly competitive market?

Which of the following determines a market supply curve but not an individual supply curve?

What does a demand curve illustrate?

Figure 4-2 -Refer to the Figure 4-2. What would happen at the equilibrium price?

New oak tables are normal goods. What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, some buyers exit the market for oak tables, and the price of wood saws increased?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Market demand is given as QD = 40 - 2P. Market supply is given as QS = 2P. If price increases from $14 to $18, what is the price elasticity of demand?

What does the market supply curve show?

Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure. What could we expect to happen?

Market demand is given as QD = 200 - 3P. Market supply is given as QS = P + 10. If price increases from $35 to $40, what is the price elasticity of demand?

What is an example of substitute goods?

Figure 4-6 -Refer to the Figure 4-6. What happens if the demand curve shifts from D to D₁ ?

When economists are interested in how markets work, what do they most often work with?

Figure 4-7 -Refer to the Figure 4-7. What does the movement from point B to point A on the graph show?

What are the signals that guide the allocation of resources in a market economy?

Market demand is given as Qd = 150 - 3P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Market demand is Qd = 200 - 6P. Market supply is Qs = 4P. In a perfectly competitive equilibrium, what will be the price?

Fill in the accompanying table, showing whether equilibrium price and equilibrium quantity go up, down, or stay the same.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 4: The Market Forces of Supply and Demand

Figure 4-2 -Refer to the Figure 4-2. What would happen at a price of $15?

What is the price where quantity supplied equals quantity demanded?

What is an example of a perfectly competitive market?

Which of the following determines a market supply curve but not an individual supply curve?

What does a demand curve illustrate?

Figure 4-2 -Refer to the Figure 4-2. What would happen at the equilibrium price?

New oak tables are normal goods. What will happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, some buyers exit the market for oak tables, and the price of wood saws increased?

Table 4-2 -Refer to the Table 4-2. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?

Market demand is given as QD = 40 - 2P. Market supply is given as QS = 2P. If price increases from $14 to $18, what is the price elasticity of demand?

What does the market supply curve show?

Suppose that the Canadian Medical Association announces that men who shave their heads are less likely to die of heart failure. What could we expect to happen?

Market demand is given as QD = 200 - 3P. Market supply is given as QS = P + 10. If price increases from $35 to $40, what is the price elasticity of demand?

What is an example of substitute goods?

Figure 4-6 -Refer to the Figure 4-6. What happens if the demand curve shifts from D to D₁ ?

When economists are interested in how markets work, what do they most often work with?

Figure 4-7 -Refer to the Figure 4-7. What does the movement from point B to point A on the graph show?

What are the signals that guide the allocation of resources in a market economy?

Market demand is given as Qd = 150 - 3P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Market demand is Qd = 200 - 6P. Market supply is Qs = 4P. In a perfectly competitive equilibrium, what will be the price?

Fill in the accompanying table, showing whether equilibrium price and equilibrium quantity go up, down, or stay the same.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters