Question 1

Market demand is given as QD = 60 - P. Market supply is given as QS = 3P. If price increases from $5 to $7, what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  0.9 
C)  1.1 
D)  2.4 
A)  0.1 
B)  0.9 
C)  1.1 
D)  2.4

Question 2

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $11 to $14, what is the price elasticity of demand?

Accepted Answer

A)  0.2 
B)  0.8 
C)  1.0 
D)  2.0 
A)  0.2 
B)  0.8 
C)  1.0 
D)  2.0

Question 3

Figure 4-5
  
-Refer to the Figure 4-5. Which of the following is shown in Graph A?

Accepted Answer

A)  an increase in demand 
B)  an increase in quantity demanded 
C)  a decrease in the number of buyers 
D)  a decrease in consumer income 
A)  an increase in demand 
B)  an increase in quantity demanded 
C)  a decrease in the number of buyers 
D)  a decrease in consumer income

Question 4

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Accepted Answer

A)  $6 and 30 
B)  $9 and 60 
C)  $12 and 40 
D)  $15 and 20 
A)  $6 and 30 
B)  $9 and 60 
C)  $12 and 40 
D)  $15 and 20

Question 5

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $50 to $53, what is the price elasticity of demand?

Accepted Answer

A)  0.1 
B)  1.0 
C)  12.0 
D)  14.7 
A)  0.1 
B)  1.0 
C)  12.0 
D)  14.7

Question 6

Which of the following best resembles a perfectly competitive market?

Accepted Answer

A)  tap water market 
B)  banana market 
C)  tea market 
D)  smart phone market 
A)  tap water market 
B)  banana market 
C)  tea market 
D)  smart phone market

Question 7

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline falls, the price of steel increases, public transportation becomes more expensive and less comfortable, auto workers receive higher wages, and automobile insurance becomes less expensive?

Accepted Answer

A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous 
A)  price will rise 
B)  price will fall 
C)  price will stay exactly the same 
D)  price change will be ambiguous

Question 8

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Accepted Answer

A)  could shift either right or left 
B)  shifts right today 
C)  curve will be unaffected 
D)  shifts left today 
A)  could shift either right or left 
B)  shifts right today 
C)  curve will be unaffected 
D)  shifts left today

Question 9

Market demand is given as Qd = 120 - 2P. Market supply is given as Qs = 2P + 40. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

Accepted Answer

A)  price will be $100 and quantity will be 240 
B)  price will be $30 and quantity will be 100 
C)  price will be $20 and quantity will be 80 
D)  price will be $130 and quantity will be 300 
A)  price will be $100 and quantity will be 240 
B)  price will be $30 and quantity will be 100 
C)  price will be $20 and quantity will be 80 
D)  price will be $130 and quantity will be 300

Question 10

To find the market demand for a product, how are individual demand curves summed?

Accepted Answer

A)  vertically 
B)  diagonally 
C)  horizontally 
D)  by averaging 
A)  vertically 
B)  diagonally 
C)  horizontally 
D)  by averaging

Question 11

What happens at the equilibrium price?

Accepted Answer

A)  Buyers have an incentive to buy more. 
B)  It is possible for there to be a shortage. 
C)  Firms have an incentive to increase production. 
D)  Everyone in the market has been satisfied. 
A)  Buyers have an incentive to buy more. 
B)  It is possible for there to be a shortage. 
C)  Firms have an incentive to increase production. 
D)  Everyone in the market has been satisfied.

Question 12

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $5 to $10, what is the price elasticity of demand?

Accepted Answer

A)  0 
B)  0.2 
C)  0.9 
D)  2.0 
A)  0 
B)  0.2 
C)  0.9 
D)  2.0

Question 13

Which of the following cause and effect events are in order for a seller?

Accepted Answer

A)  an input price falls, profit falls, the supply curve shifts left 
B)  an input price falls, profit rises, the supply curve shifts right 
C)  an input price rises, profit falls, the supply curve shifts right 
D)  an input price rises, profit rises, the supply curve shifts left 
A)  an input price falls, profit falls, the supply curve shifts left 
B)  an input price falls, profit rises, the supply curve shifts right 
C)  an input price rises, profit falls, the supply curve shifts right 
D)  an input price rises, profit rises, the supply curve shifts left

Question 14

What would happen if both supply and demand increase?

Accepted Answer

A)  Equilibrium price would definitely increase. 
B)  Equilibrium price would definitely decrease. 
C)  Equilibrium quantity would definitely decrease. 
D)  Equilibrium quantity would definitely increase. 
A)  Equilibrium price would definitely increase. 
B)  Equilibrium price would definitely decrease. 
C)  Equilibrium quantity would definitely decrease. 
D)  Equilibrium quantity would definitely increase.

Question 15

Suppose that health officials have argued that eating too much sugar might be harmful to human health. As a result, there has been a significant decrease in the amount of sugar produced. Which of the following best explains the decrease in production?

Accepted Answer

A)  Sugar producers, concerned about the health of their customers, decided to produce relatively less sugar. 
B)  Government officials, concerned about consumer health, ordered sugar producers to produce relatively less sugar. 
C)  Individual consumers, concerned about their own health, decreased their demand for sugar, which lowered the relative price of sugar, making it less attractive to produce. 
D)  Anti-sugar protesters have made it difficult for both buyers and sellers of sugar to meet in the marketplace. 
A)  Sugar producers, concerned about the health of their customers, decided to produce relatively less sugar. 
B)  Government officials, concerned about consumer health, ordered sugar producers to produce relatively less sugar. 
C)  Individual consumers, concerned about their own health, decreased their demand for sugar, which lowered the relative price of sugar, making it less attractive to produce. 
D)  Anti-sugar protesters have made it difficult for both buyers and sellers of sugar to meet in the marketplace.

Question 16

If the demand for a product increases, what would we expect?

Accepted Answer

A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease 
A)  equilibrium price to increase and equilibrium quantity to decrease 
B)  equilibrium price to decrease and equilibrium quantity to increase 
C)  equilibrium price and equilibrium quantity to both increase 
D)  equilibrium price and equilibrium quantity to both decrease

Question 17

A local cable TV company might be a monopolist.

Accepted Answer

A) True 
 B)False

Question 18

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Accepted Answer

A)  a shortage of 30 
B)  a surplus of 30 
C)  a surplus of 20 
D)  a shortage of 20 
A)  a shortage of 30 
B)  a surplus of 30 
C)  a surplus of 20 
D)  a shortage of 20

Question 19

Surpluses drive price up while shortages drive price down.

Accepted Answer

A) True 
 B)False

Question 20

Figure 4-5
  
-Refer to the Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?

Accepted Answer

A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D 
A)  graph A 
B)  graph B 
C)  graph C 
D)  graph D

Market demand is given as QD = 60 - P. Market supply is given as QS = 3P. If price increases from $5 to $7, what is the price elasticity of demand?

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $11 to $14, what is the price elasticity of demand?

Figure 4-5 -Refer to the Figure 4-5. Which of the following is shown in Graph A?

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $50 to $53, what is the price elasticity of demand?

Which of the following best resembles a perfectly competitive market?

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline falls, the price of steel increases, public transportation becomes more expensive and less comfortable, auto workers receive higher wages, and automobile insurance becomes less expensive?

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Market demand is given as Qd = 120 - 2P. Market supply is given as Qs = 2P + 40. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

To find the market demand for a product, how are individual demand curves summed?

What happens at the equilibrium price?

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $5 to $10, what is the price elasticity of demand?

Which of the following cause and effect events are in order for a seller?

What would happen if both supply and demand increase?

Suppose that health officials have argued that eating too much sugar might be harmful to human health. As a result, there has been a significant decrease in the amount of sugar produced. Which of the following best explains the decrease in production?

If the demand for a product increases, what would we expect?

A local cable TV company might be a monopolist.

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Surpluses drive price up while shortages drive price down.

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?

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

Market demand is given as QD = 60 - P. Market supply is given as QS = 3P. If price increases from $5 to $7, what is the price elasticity of demand?

Market demand is given as QD = 75 - P. Market supply is given as QS = 3P + 15. If price increases from $11 to $14, what is the price elasticity of demand?

Figure 4-5 -Refer to the Figure 4-5. Which of the following is shown in Graph A?

-Refer to the Table 4-1. What would the equilibrium price and quantity be?

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $50 to $53, what is the price elasticity of demand?

Which of the following best resembles a perfectly competitive market?

New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline falls, the price of steel increases, public transportation becomes more expensive and less comfortable, auto workers receive higher wages, and automobile insurance becomes less expensive?

You have decided to purchase a new Mustang convertible. A friend tells you that Ford will stop offering a $3000 rebate on Mustangs starting next month. As a result of this information, what will happen to your demand curve for Mustangs?

Market demand is given as Qd = 120 - 2P. Market supply is given as Qs = 2P + 40. In a perfectly competitive equilibrium, what will be price and quantity traded in the market?

To find the market demand for a product, how are individual demand curves summed?

What happens at the equilibrium price?

Market demand is given as QD = 220 - 4P. Market supply is given as QS = 2P + 40. If price increases from $5 to $10, what is the price elasticity of demand?

Which of the following cause and effect events are in order for a seller?

What would happen if both supply and demand increase?

Suppose that health officials have argued that eating too much sugar might be harmful to human health. As a result, there has been a significant decrease in the amount of sugar produced. Which of the following best explains the decrease in production?

If the demand for a product increases, what would we expect?

A local cable TV company might be a monopolist.

Market demand is given as Qd = 80 - 2P. Market supply is given as Qs = 2P. What would result if the market price were $25?

Surpluses drive price up while shortages drive price down.

Figure 4-5 -Refer to the Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?

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